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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: March 30, 2024

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 filerAccelerated 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 May 3, 2024, there were 136,320,433 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
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 consummation and success of the proposed sale of the HRA Rare Diseases portfolio, including the risk that the parties fail to obtain the required regulatory approvals or to fulfill the other conditions to closing on the expected timeframe or at all, the occurrence of any other event, change or circumstance that could delay the transaction or result in the termination of the sale agreement or that the Company faces higher than anticipated costs in connection with the proposed sale; the risk that potential costs or liabilities incurred or retained in connection with the sale of the Company's Rx business 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 ongoing restructuring programs described herein. 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, 2023, 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 Ended
 March 30, 2024April 1, 2023
Net sales$1,082.1 $1,181.7 
Cost of sales724.4 767.9 
Gross profit357.7 413.8 
Operating expenses
Distribution24.9 28.6 
Research and development29.0 31.1 
Selling150.3 167.9 
Administration130.4 135.0 
Restructuring44.3 3.4 
Other operating expense (income), net34.0 (0.7)
Total operating expenses412.9 365.3 
Operating (loss) income(55.2)48.5 
Interest expense, net43.0 43.7 
Other (income) expense, net0.4 0.5 
Income (loss) from continuing operations before income taxes(98.6)4.3 
Income tax (benefit) expense(102.7)5.4 
Income (loss) from continuing operations4.1 (1.1)
Income (loss) from discontinued operations, net of tax(2.1)(1.9)
Net income (loss)$2.0 $(3.0)
Earnings (loss) per share
Basic
Continuing operations$0.03 $(0.01)
Discontinued operations(0.02)(0.01)
Basic earnings (loss) per share$0.01 $(0.02)
Diluted
Continuing operations$0.03 $(0.01)
Discontinued operations(0.02)(0.01)
Diluted earnings (loss) per share$0.01 $(0.02)
Weighted-average shares outstanding
Basic136.6 134.9 
Diluted137.6 134.9 

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 Ended
March 30, 2024April 1, 2023
Net income (loss)$2.0 $(3.0)
Other comprehensive income (loss):
Foreign currency translation adjustments(58.3)52.7 
Change in fair value of derivative financial instruments, net of tax10.9 (31.5)
Change in post-retirement and pension liability, net of tax(1.0)(0.5)
Other comprehensive income (loss), net of tax(48.4)20.7 
Comprehensive income (loss)$(46.4)$17.7 

See accompanying Notes to the Condensed Consolidated Financial Statements.
5

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

March 30, 2024December 31, 2023
Assets
Cash, cash equivalents and restricted cash$658.5 $751.3 
Accounts receivable, net of allowance for credit losses of $8.1 and $7.8, respectively
780.0 739.6 
Inventories1,121.3 1,140.9 
Prepaid expenses and other current assets246.6 201.1 
Total current assets2,806.4 2,832.9 
Property, plant and equipment, net911.4 916.4 
Operating lease assets176.7 183.6 
Goodwill and indefinite-lived intangible assets3,498.1 3,534.4 
Definite-lived intangible assets, net2,870.3 2,980.8 
Deferred income taxes28.0 25.8 
Other non-current assets349.4 335.2 
Total non-current assets7,833.9 7,976.2 
Total assets$10,640.3 $10,809.1 
Liabilities and Shareholders’ Equity
Accounts payable$453.7 $477.7 
Payroll and related taxes114.4 127.0 
Accrued customer programs179.1 163.5 
Other accrued liabilities359.0 335.4 
Accrued income taxes7.7 42.1 
Current indebtedness440.6 440.6 
Total current liabilities1,554.5 1,586.3 
Long-term debt, less current portion3,624.9 3,632.8 
Deferred income taxes247.7 262.3 
Other non-current liabilities526.2 559.8 
Total non-current liabilities4,398.8 4,454.9 
Total liabilities5,953.3 6,041.2 
Contingencies - Refer to Note 15
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
6,803.0 6,837.5 
Accumulated other comprehensive income(37.7)10.7 
Retained earnings (accumulated deficit)(2,078.3)(2,080.3)
Total shareholders’ equity4,687.0 4,767.9 
Total liabilities and shareholders' equity$10,640.3 $10,809.1 
Supplemental Disclosures of Balance Sheet Information
Preferred shares, issued and outstanding
  
Ordinary shares, issued and outstanding
136.3 135.5 

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, 2022134.7 $6,936.7 $(27.0)$(2,067.6)$4,842.1 
Net loss— — — (3.0)(3.0)
Other comprehensive loss— — 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 


 Ordinary Shares
Issued
Accumulated
Other
Comprehensive
Income
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 income— — (48.4)— (48.4)
Compensation for restricted stock1.2 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 

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)
Three Months Ended
 March 30, 2024April 1, 2023
Cash Flows From (For) Operating Activities
Net income (loss)$2.0 $(3.0)
Adjustments to derive cash flows:
Depreciation and amortization81.4 88.7 
Restructuring charges44.3 3.4 
Share-based compensation15.6 24.9 
Amortization of debt discount 0.4 0.7 
Gain on sale of assets (3.9)
Deferred income taxes(11.0)(9.9)
Other non-cash adjustments, net(7.4)6.4 
Subtotal125.3 107.3 
Increase (decrease) in cash due to:
Accrued income taxes(81.6)2.5 
Accounts receivable(51.9)(39.8)
Payroll and related taxes(51.6)(34.3)
Accounts payable(16.7)(29.8)
Prepaid expenses and other current assets(1.7)17.1 
Inventories10.6 (28.6)
Accrued customer programs18.2 6.8 
Accrued liabilities30.6 8.0 
Other operating, net 17.4 10.2 
Subtotal(126.7)(87.9)
Net cash (for) from operating activities(1.4)19.4 
Cash Flows From (For) Investing Activities
Additions to property, plant and equipment(25.1)(23.2)
Proceeds from sale of assets 1.8 
Proceeds from royalty rights1.6 1.8 
Net cash for investing activities(23.5)(19.6)
Cash Flows For Financing Activities
Cash dividends(37.6)(36.2)
Payments on long-term debt(9.8)(5.9)
Other financing, net(13.0)(8.6)
Net cash for financing activities(60.4)(50.7)
Effect of exchange rate changes on cash and cash equivalents(7.5)3.2 
Net decrease in cash and cash equivalents(92.8)(47.7)
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$658.5 $553.0 

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 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 3).

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 16.

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

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 have $7.0 million of restricted cash as of March 30, 2024 and December 31, 2023 in the Condensed Consolidated Balance Sheets. 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 will 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 Ended
March 30, 2024April 1, 2023
Balance at beginning of period$7.8 $6.8 
Provision for credit losses, net0.3  
Receivables written-off (0.3)
Recoveries collected0.1  
Currency translation adjustment(0.1)0.6 
Balance at end of period$8.1 $7.1 

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Perrigo Company plc - Item 1
Note 2

NOTE 2 - REVENUE RECOGNITION

The following is a summary of our net sales by category (in millions):
Three Months Ended
March 30, 2024April 1, 2023
CSCA(1)
Upper Respiratory$130.3 $153.7 
Digestive Health122.2 124.0 
Nutrition90.6 138.5 
Pain and Sleep-Aids82.6 103.4 
Healthy Lifestyle71.3 73.4 
Oral Care64.7 83.3 
Skin Care49.6 69.8 
Women's Health27.2 12.3 
Vitamins, Minerals, and Supplements ("VMS")4.2 4.5 
Other CSCA(2)
1.4 0.8 
Total CSCA$644.1 $763.7 
CSCI
Skin Care$114.7 $83.4 
Upper Respiratory69.1 84.8 
Healthy Lifestyle64.6 66.4 
Pain and Sleep-Aids51.4 49.9 
VMS44.6 47.8 
Women's Health32.0 29.1 
Oral Care28.7 29.1 
Digestive Health9.5 8.8 
Other CSCI(3)
23.3 18.8 
Total CSCI437.9 418.1 
Total net sales$1,082.1 $1,181.7 

(1) We updated our global reporting product categories as a result of legacy Rx 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 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.
(3) Consists primarily of our 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.

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 $72.2 million for the three months ended March 30, 2024, and $90.0 million for the three months ended April 1, 2023.

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 LocationMarch 30, 2024December 31, 2023
Short-term contract assetsPrepaid expenses and other current assets$25.7 $28.5 

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Perrigo Company plc - Item 1
Note 2

We generated net sales in the following geographic locations(1) (in millions):
Three Months Ended
March 30, 2024April 1, 2023
U.S.$632.3 $750.0 
Europe(2)
419.7 407.3 
All other countries(3)
30.1 24.4 
Total net sales$1,082.1 $1,181.7 
(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 $4.3 million for the three months ended March 30, 2024, and $7.3 million for the three months ended April 1, 2023.
(3) Includes net sales generated primarily in Australia and Canada.

NOTE 3 - 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.

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 15 - 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 months ended March 30, 2024.

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

NOTE 4 - INVENTORIES

Major components of inventory were as follows (in millions):
 
March 30, 2024December 31, 2023
Finished goods$642.7 $646.8 
Work in process236.0 241.9 
Raw materials242.6 252.2 
Total inventories$1,121.3 $1,140.9 

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Perrigo Company plc - Item 1
Note 5

NOTE 5 - INVESTMENTS

The following table summarizes the measurement category, balance sheet location, and balances of our equity securities (in millions):
Measurement CategoryBalance Sheet LocationMarch 30, 2024December 31, 2023
Fair value methodPrepaid expenses and other current assets$ $0.1 
Fair value method(1)
Other non-current assets$1.1 $1.3 
Equity methodOther non-current assets$59.5 $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 Ended
Measurement CategoryIncome Statement LocationMarch 30, 2024April 1, 2023
Fair value methodOther operating expense (income), net$0.1 $0.1 
Equity methodOther operating expense (income), net$0.6 $0.7 
    
NOTE 6 - LEASES

The balance sheet locations of our lease assets and liabilities were as follows (in millions):
AssetsBalance Sheet LocationMarch 30, 2024December 31, 2023
OperatingOperating lease assets$176.7 $183.6 
FinanceOther non-current assets13.4 13.7 
Total$190.1 $197.3 
LiabilitiesBalance Sheet LocationMarch 30, 2024December 31, 2023
Current
OperatingOther accrued liabilities$26.6 $27.5 
FinanceCurrent indebtedness1.9 1.9 
Non-Current
OperatingOther non-current liabilities152.5 159.6 
FinanceLong-term debt, less current portion13.0 13.2 
Total$194.0 $202.2 
    
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Perrigo Company plc - Item 1
Note 6


The below tables show our lease assets and liabilities by reporting segment (in millions):
Assets
OperatingFinancing
March 30, 2024December 31, 2023March 30, 2024December 31, 2023
CSCA$77.3 $79.3 $12.7 $12.8 
CSCI42.0 44.7 0.2 0.3 
Unallocated57.4 59.6 0.5 0.6 
Total$176.7 $183.6 $13.4 $13.7 
Liabilities
OperatingFinancing
March 30, 2024December 31, 2023March 30, 2024December 31, 2023
CSCA$79.2 $81.6 $14.1 $14.2 
CSCI45.5 47.8 0.2 0.3 
Unallocated54.4 57.7 0.6 0.6 
Total$179.1 $187.1 $14.9 $15.1 

Lease expense was as follows (in millions):
Three Months Ended
March 30, 2024April 1, 2023
Operating leases(1)
$11.6 $12.0 
Finance leases
Amortization$0.6 $1.1 
Interest0.1 0.1 
Total finance leases$0.7 $1.2 
(1) Includes short-term leases and variable lease costs, which are immaterial.
    
The annual future maturities of our leases as of March 30, 2024 are as follows (in millions):
Operating LeasesFinance LeasesTotal
2024$24.3 $1.8 $26.1 
202530.3 1.9 32.2 
202624.4 1.6 26.0 
202722.6 1.6 24.2 
202816.5 1.6 18.1 
After 202888.9 9.0 97.9 
Total lease payments$207.0 $17.5 $224.5 
Less: Interest27.9 2.6 30.5 
Present value of lease liabilities$179.1 $14.9 $194.0 

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Perrigo Company plc - Item 1
Note 6


Our weighted average lease terms and discount rates are as follows:
March 30, 2024April 1, 2023
Weighted-average remaining lease term (in years)
Operating leases9.7210.85
Finance leases9.439.49
Weighted-average discount rate
Operating leases3.3 %2.5 %
Finance leases3.5 %3.0 %

Our lease cash flow classifications are as follows (in millions):
Three Months Ended
March 30, 2024April 1, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$8.5 $9.0 
Operating cash flows for finance leases$0.1 $0.1 
Financing cash flows for finance leases$0.5 $1.0 
Leased assets obtained in exchange for new finance lease liabilities$0.3 $ 
Leased assets obtained in exchange for new operating lease liabilities$1.7 $1.4 

NOTE 7 - GOODWILL AND INTANGIBLE ASSETS

Goodwill

Changes in the carrying amount of goodwill, by reportable segment, were as follows (in millions):
December 31, 2023Currency translation adjustmentsMarch 30, 2024
CSCA(1)
$2,080.9 $(1.7)$2,079.2 
CSCI(2)
1,448.2 (34.5)1,413.7 
Total goodwill$3,529.1 $(36.2)$3,492.9 
(1) We had accumulated goodwill impairments of $6.1 million as of March 30, 2024 and December 31, 2023.
(2) We had accumulated goodwill impairments of $968.4 million as of March 30, 2024 and December 31, 2023.

15

Perrigo Company plc - Item 1
Note 7

Intangible Assets

Intangible assets and related accumulated amortization consisted of the following (in millions):
 March 30, 2024December 31, 2023
 GrossAccumulated
Amortization
GrossAccumulated
Amortization
Indefinite-lived intangibles:(1)
Trademarks, trade names, and brands$3.3 $— $3.4 $— 
In-process research and development1.9 — 1.9 — 
Total indefinite-lived intangibles$5.2 $— $5.3 $— 
Definite-lived intangibles:
Distribution and license agreements and supply agreements$88.7 $56.3 $90.8 $57.5 
Developed product technology, formulations, and product rights528.2 243.9 534.0 238.4 
Customer relationships and distribution networks1,840.7 1,112.8 1,868.1 1,108.9 
Trademarks, trade names, and brands2,453.3 627.6 2,502.0 609.3 
Non-compete agreements2.1 2.1 2.1 2.1 
Total definite-lived intangibles$4,913.0 $2,042.7 $4,997.0 $2,016.2 
Total intangible assets$4,918.2 $2,042.7 $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.

We recorded amortization expense of $58.4 million and $65.4 million for the three months ended March 30, 2024 and April 1, 2023, respectively.

NOTE 8 - FAIR VALUE MEASUREMENTS

The table below summarizes the valuation of our financial instruments carried at fair value by the applicable pricing categories (in millions):
March 30, 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 1.9   0.6  
Interest rate swap agreements 49.2   30.5  
Total assets$ $51.1 $ $0.1 $31.1 $ 
Liabilities:
Cross-currency swap$ $130.5 $ $ $172.0 $ 
Foreign currency forward contracts 2.6   2.7  
Interest rate swap agreements 4.7   11.7  
Total liabilities$ $137.8 $ $ $186.4 $ 
Measured at fair value on a non-recurring basis:
Assets:
Goodwill(1)
$ $ $ $ $ $118.9 
Total assets$ $ $ $ $ $118.9 
(1) During the year ended December 31, 2023, goodwill within our Rare Diseases reporting unit with a carrying value of $208.9 million was written down to a fair value of $118.9 million.

There were no transfers within Level 3 fair value measurements during the three months ended March 30, 2024 or the year ended December 31, 2023.

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Note 8

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.

Fixed Rate Long-term Debt    

Our fixed rate long-term debt consisted of the following (in millions):
March 30, 2024December 31, 2023
Public BondsLevel 1Level 1
Carrying value (excluding discount)$2,244.4 $2,244.4 
Fair value$2,083.8 $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 9 - 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 10), 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 10). 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 10). The interest rate swaps cover 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 December 2023, to economically hedge the interest rate risk of the Term B Loans (as defined in Note 10), 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 (as defined in Note 10). The interest rate swaps cover an interest period from December 15, 2023 through April 20, 2029, on notional balances that decline from $300 million to $229 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. The following are the terms and notional amounts outstanding:

$700 million notional amount outstanding from October 25, 2022 through December 15, 2024;
$700 million notional amount outstanding from October 25, 2022 through March 15, 2026; and
$100 million notional amount outstanding from October 25, 2022 through June 15, 2030.

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:

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Perrigo Company plc - Item 1
Note 9

$300 million notional amount outstanding from November 21, 2023 through April 20, 2027.

Foreign Currency Forwards

Notional amounts of foreign currency forward contracts were as follows (in millions):
March 30, 2024December 31, 2023
British Pound (GBP)$128.9 $72.4 
Swedish Krona (SEK)68.4 36.5 
European Euro (EUR)66.8 79.9 
Danish Krone (DKK)54.4 5.9 
United States Dollar (USD)52.4 22.1 
Canadian Dollar (CAD)38.1 7.1 
Chinese Yuan (CNH)24.2 14.1 
Polish Zloty (PLZ)18.9 3.8 
Norwegian Krone (NOK)4.2 4.4 
Hungarian Forint (HUF)3.7 3.9 
Other (1)
3.2 3.5 
Total$463.2 $253.6 
(1) Number consists of various currencies notional amounts, none of which individually exceed $10 million in either period presented.

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 LocationMarch 30, 2024December 31, 2023
Designated derivative assets:
Foreign currency forward contractsPrepaid expenses and other current assets$1.5 $ 
Foreign currency forward contractsOther non-current assets0.3 0.4 
Interest rate swap agreementsOther non-current assets49.2 30.5 
Total designated derivative assets$51.0 $30.9 
Non-designated derivative assets:
Foreign currency forward contractsPrepaid expenses and other current assets$0.1 $0.2 
Total non-designated derivative assets$0.1 $0.2 
Designated derivative liabilities:
Foreign currency forward contractsOther accrued liabilities$1.8 $ 
Cross-currency swapOther accrued liabilities59.0 75.1 
Cross-currency swapOther non-current liabilities71.5 96.9 
Interest rate swap agreements
Other non-current liabilities4.7 11.7 
Total designated derivative liabilities$137.0 $183.7 
Non-designated derivative liabilities:
Foreign currency forward contractsOther accrued liabilities$0.8 $2.7 

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Perrigo Company plc - Item 1
Note 9

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 Ended
Non-Designated DerivativesIncome Statement LocationMarch 30, 2024April 1, 2023
Foreign currency forward contractsOther (income) expense, net$(2.1)$(1.2)
Interest expense, net (0.6)
$(2.1)$(1.8)

The following tables summarize the effect of derivative instruments designated as hedging instruments in AOCI (in millions):
Gain/(Loss)
Reclassified from AOCI into EarningsRelated to Amounts Excluded from Effectiveness Testing
Amount Recorded in OCI(1)
Classification
Amount(2)
ClassificationAmount Recognized in Earnings on Derivatives
Three Months Ended March 30, 2024
Cash flow hedges
Interest rate swap agreements$33.5 Interest expense, net$7.8 Interest expense, net$ 
Foreign currency forward contracts$0.9 Net sales$0.1 Net sales$(0.3)
Cost of sales$ Cost of sales$(0.2)
Other (income) expense, net$ 
Total Cash flow hedges$34.4 $7.9 $(0.5)
Net investment hedges
Cross-currency swap$48.9 Interest expense, net$7.3 
Three Months Ended April 1, 2023
Cash flow hedges
Interest rate swap agreements$24.9 Interest expense, net$2.9 Interest expense, net$ 
Foreign currency forward contracts$(6.7)Net sales0.4 Net sales$ 
Cost of sales(0.2)Cost of sales$ 
Other (income) expense, net$0.1 
Total Cash flow hedges$18.2 $3.1 $0.1 
Net investment hedges
Cross-currency swap$(23.7)Interest expense, net$(6.5)
(1) Net income of $23.7 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 12.

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Perrigo Company plc - Item 1
Note 9

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 March 30, 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
$1,082.1 $724.4 $43.0 $0.4 
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$0.1 $ $ $ 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$(0.3)$(0.2)$ $ 
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$ $ $7.8 $ 
Three Months Ended April 1, 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
$1,181.7 $767.9 $43.7 $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 $(0.2)$ $ 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$ $