Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 29, 2019 | Aug. 02, 2019 | |
Cover page. | ||
Document type | 10-Q | |
Document Quarterly Report | true | |
Document period end date | Jun. 29, 2019 | |
Document Transition Report | false | |
Entity registrant name | Perrigo Company plc | |
Entity Incorporation, State or Country Code | L2 | |
Entity Address, Address Line One | The Sharp Building, | |
Entity Address, Address Line Two | Hogan Place, | |
Entity Address, City or Town | Dublin 2, | |
Entity Address, Country | IE | |
Entity Address, Postal Zip Code | D02 TY74 | |
Country Region | 353 | |
City Area Code | 1 | |
Local Phone Number | 7094000 | |
Title of 12(b) Security | Ordinary shares | |
Trading Symbol | PRGO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity central index key | 0001585364 | |
Entity Interactive Data Current | Yes | |
Current calendar year end date | --12-31 | |
Entity filer category | Large Accelerated Filer | |
Entity small business | false | |
Entity emerging growth company | false | |
Entity Shell Company | false | |
Entity common stock, shares outstanding | 136,054,652 | |
Entity File Number | 001-36353 | |
Document calendar year focus | 2019 | |
Document calendar period focus | Q2 | |
Amendment flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | ||
Income Statement [Abstract] | |||||
Net sales | [1] | $ 1,149 | $ 1,186.4 | $ 2,323.5 | $ 2,403.4 |
Cost of sales | 718.2 | 715.4 | 1,443.9 | 1,439.7 | |
Gross profit | 430.8 | 471 | 879.6 | 963.7 | |
Operating expenses | |||||
Distribution | 23.7 | 23.8 | 47.1 | 48.5 | |
Research and development | 43.9 | 91.9 | 84 | 130.3 | |
Selling | 140.1 | 155.2 | 288.7 | 316.5 | |
Administration | 127.2 | 96.8 | 252.3 | 204.5 | |
Impairment charges | 27.8 | 1.7 | 31.9 | 1.7 | |
Restructuring | 12.2 | 3.7 | 21.5 | 5.2 | |
Other operating expense (income) | 0.9 | 3.2 | (3.2) | 6.1 | |
Total operating expenses | 375.8 | 376.3 | 722.3 | 712.8 | |
Operating income | 55 | 94.7 | 157.3 | 250.9 | |
Change in financial assets | (5.5) | (0.6) | (15.9) | 9 | |
Interest expense, net | 31.2 | 32.1 | 59.8 | 63.5 | |
Other (income) expense, net | 2.3 | 7.9 | 5.5 | 12.1 | |
Loss on extinguishment of debt | 0 | 0 | 0 | 0.5 | |
Income before income taxes | 27 | 55.3 | 107.9 | 165.8 | |
Income tax expense | 18 | 19.1 | 35 | 48.8 | |
Net income | $ 9 | $ 36.2 | $ 72.9 | $ 117 | |
Earnings per share | |||||
Basic (in dollars per share) | $ 0.07 | $ 0.26 | $ 0.54 | $ 0.84 | |
Diluted (in dollars per share) | $ 0.07 | $ 0.26 | $ 0.54 | $ 0.84 | |
Weighted-average shares outstanding | |||||
Basic (in shares) | 136 | 138.1 | 136 | 139.5 | |
Diluted (in shares) | 136.5 | 138.7 | 136.3 | 140 | |
[1] | Derived from the location of the entity that sells to a third party. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 9 | $ 36.2 | $ 72.9 | $ 117 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 27.8 | (165.6) | 11 | (92.6) |
Change in fair value of derivative financial instruments, net of tax | 2.7 | (3.5) | 4.4 | (4.1) |
Change in post-retirement and pension liability, net of tax | 0 | (0.2) | (0.5) | (0.4) |
Other comprehensive income (loss), net of tax | 30.5 | (169.3) | 14.9 | (97.1) |
Comprehensive income (loss) | $ 39.5 | $ (133.1) | $ 87.8 | $ 19.9 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) shares in Millions, $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 1,055.7 | $ 551.1 |
Accounts receivable, net of allowance for doubtful accounts of $6.3 and $6.4, respectively | 1,117.1 | 1,073.1 |
Inventories | 940.5 | 878 |
Prepaid expenses and other current assets | 322.1 | 400 |
Total current assets | 3,435.4 | 2,902.2 |
Property, plant and equipment, net | 824.3 | 829.1 |
Operating lease assets | 135.4 | 0 |
Goodwill and indefinite-lived intangible assets | 3,967.8 | 4,029.1 |
Definite-lived intangible assets, net | 2,675.2 | 2,858.9 |
Deferred income taxes | 6.8 | 1.2 |
Other non-current assets | 383.8 | 362.9 |
Total non-current assets | 7,993.3 | 8,081.2 |
Total assets | 11,428.7 | 10,983.4 |
Liabilities and Shareholders’ Equity | ||
Accounts payable | 513.7 | 474.9 |
Payroll and related taxes | 126.3 | 132.1 |
Accrued customer programs | 385.2 | 442.4 |
Accrued liabilities | 262.7 | 201.3 |
Accrued income taxes | 104.1 | 96.5 |
Current indebtedness | 398.8 | 190.2 |
Total current liabilities | 1,790.8 | 1,537.4 |
Long-term debt, less current portion | 3,084.4 | 3,052.2 |
Deferred income taxes | 280.2 | 282.3 |
Other non-current liabilities | 546.9 | 443.4 |
Total non-current liabilities | 3,911.5 | 3,777.9 |
Total liabilities | 5,702.3 | 5,315.3 |
Commitments and contingencies - Refer to Note 15 | ||
Controlling interests: | ||
Preferred shares, $0.0001 par value per share, 10 shares authorized | 0 | 0 |
Ordinary shares, €0.001 par value per share, 10,000 shares authorized | 7,395.5 | 7,421.7 |
Accumulated other comprehensive income | 99.5 | 84.6 |
Retained earnings (accumulated deficit) | (1,768.8) | (1,838.3) |
Total controlling interest | 5,726.2 | 5,668 |
Noncontrolling interest | 0.2 | 0.1 |
Total shareholders’ equity | 5,726.4 | 5,668.1 |
Total liabilities and shareholders' equity | $ 11,428.7 | $ 10,983.4 |
Supplemental Disclosures of Balance Sheet Information | ||
Ordinary shares, issued and outstanding (in shares) | 136 | 135.9 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) $ in Millions | Jun. 29, 2019USD ($)$ / sharesshares | Jun. 29, 2019€ / shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018€ / shares |
Statement of Financial Position [Abstract] | ||||
Allowance for doubtful accounts | $ | $ 6.3 | $ 6.4 | ||
Stockholders' Equity: | ||||
Preferred shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Preferred shares, authorized | 10,000,000 | 10,000,000 | ||
Ordinary shares, par value (in EUR per share) | € / shares | € 0.001 | € 0.001 | ||
Ordinary shares, authorized | 10,000,000,000 | 10,000,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity Statement - USD ($) shares in Millions, $ in Millions | Total | Ordinary Shares Issued | Accumulated Other Comprehensive Income | Retained Earnings (Accumulated Deficit) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Adoption of new accounting standards | Adoption of new accounting standards | $ 5.3 | $ (1) | $ 6.3 | |
Beginning balance (shares) at Dec. 31, 2017 | 140.8 | |||
Balance, beginning at Dec. 31, 2017 | 6,170.5 | $ 7,892.9 | 253.1 | (1,975.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 80.8 | 80.8 | ||
Other comprehensive income (loss) | 72.2 | 72.2 | ||
Stock options exercised | 0.2 | $ 0.2 | ||
Restricted stock plan (shares) | 0.2 | |||
Compensation for stock options | 2.7 | $ 2.7 | ||
Compensation for restricted stock | 10 | 10 | ||
Cash dividends, $0.19 per share | (26.7) | (26.7) | ||
Shares withheld for payment of employees' withholding tax liability | (1.5) | $ (1.5) | ||
Repurchases of ordinary shares (shares) | (1.3) | |||
Repurchases of ordinary shares | (108.1) | $ (108.1) | ||
Ending balance (shares) at Mar. 31, 2018 | 139.7 | |||
Balance, ending at Mar. 31, 2018 | 6,205.4 | $ 7,769.5 | 324.3 | (1,888.4) |
Beginning balance (shares) at Dec. 31, 2017 | 140.8 | |||
Balance, beginning at Dec. 31, 2017 | 6,170.5 | $ 7,892.9 | 253.1 | (1,975.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 117 | |||
Other comprehensive income (loss) | (97.1) | |||
Repurchases of ordinary shares (shares) | (3.3) | |||
Ending balance (shares) at Jun. 30, 2018 | 137.7 | |||
Balance, ending at Jun. 30, 2018 | 5,897.1 | $ 7,594.3 | 155 | (1,852.2) |
Beginning balance (shares) at Mar. 31, 2018 | 139.7 | |||
Balance, beginning at Mar. 31, 2018 | 6,205.4 | $ 7,769.5 | 324.3 | (1,888.4) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 36.2 | 36.2 | ||
Other comprehensive income (loss) | (169.3) | (169.3) | ||
Stock options exercised | 0.1 | $ 0.1 | ||
Restricted stock plan (shares) | 0.1 | |||
Compensation for stock options | 2.7 | $ 2.7 | ||
Compensation for restricted stock | 6.9 | 6.9 | ||
Cash dividends, $0.19 per share | (26.1) | $ (26.1) | ||
Shares withheld for payment of employees' withholding tax liability (shares) | (0.1) | |||
Shares withheld for payment of employees' withholding tax liability | (1.9) | $ (1.9) | ||
Repurchases of ordinary shares (shares) | (2) | |||
Repurchases of ordinary shares | (156.9) | $ (156.9) | ||
Ending balance (shares) at Jun. 30, 2018 | 137.7 | |||
Balance, ending at Jun. 30, 2018 | 5,897.1 | $ 7,594.3 | 155 | (1,852.2) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Adoption of new accounting standards | Adoption of new accounting standards | (3.4) | (3.4) | ||
Beginning balance (shares) at Dec. 31, 2018 | 135.9 | |||
Balance, beginning at Dec. 31, 2018 | 5,668 | $ 7,421.7 | 84.6 | (1,838.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 63.9 | 63.9 | ||
Other comprehensive income (loss) | (15.6) | (15.6) | ||
Restricted stock plan (shares) | 0.2 | |||
Compensation for stock options | 1.8 | $ 1.8 | ||
Compensation for restricted stock | 14.2 | 14.2 | ||
Cash dividends, $0.19 per share | (25.9) | $ (25.9) | ||
Shares withheld for payment of employees' withholding tax liability (shares) | (0.1) | |||
Shares withheld for payment of employees' withholding tax liability | (2.4) | $ (2.4) | ||
Ending balance (shares) at Mar. 30, 2019 | 136 | |||
Balance, ending at Mar. 30, 2019 | 5,700.6 | $ 7,409.4 | 69 | (1,777.8) |
Beginning balance (shares) at Dec. 31, 2018 | 135.9 | |||
Balance, beginning at Dec. 31, 2018 | 5,668 | $ 7,421.7 | 84.6 | (1,838.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 72.9 | |||
Other comprehensive income (loss) | $ 14.9 | 14.9 | ||
Repurchases of ordinary shares (shares) | 0 | |||
Ending balance (shares) at Jun. 29, 2019 | 136 | |||
Balance, ending at Jun. 29, 2019 | $ 5,726.2 | $ 7,395.5 | 99.5 | (1,768.8) |
Beginning balance (shares) at Mar. 30, 2019 | 136 | |||
Balance, beginning at Mar. 30, 2019 | 5,700.6 | $ 7,409.4 | 69 | (1,777.8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 9 | 9 | ||
Other comprehensive income (loss) | 30.5 | 30.5 | ||
Stock options exercised | 0.3 | 0.3 | ||
Compensation for stock options | 1.3 | 1.3 | ||
Compensation for restricted stock | 14.2 | 14.2 | ||
Cash dividends, $0.19 per share | (28.9) | (28.9) | ||
Shares withheld for payment of employees' withholding tax liability | $ (0.8) | $ (0.8) | ||
Repurchases of ordinary shares (shares) | 0 | |||
Ending balance (shares) at Jun. 29, 2019 | 136 | |||
Balance, ending at Jun. 29, 2019 | $ 5,726.2 | $ 7,395.5 | $ 99.5 | $ (1,768.8) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends paid (in dollars per share) | $ 0.21 | $ 0.19 | $ 0.19 | $ 0.19 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Cash Flows From (For) Operating Activities | ||
Net income | $ 72.9 | $ 117 |
Adjustments to derive cash flows: | ||
Depreciation and amortization | 191.5 | 217.8 |
Share-based compensation | 28 | 22.3 |
Impairment charges | 31.9 | 1.7 |
Change in financial assets | (15.9) | 9 |
Loss on extinguishment of debt | 0 | 0.5 |
Restructuring charges | 21.5 | 5.2 |
Deferred income taxes | 9.2 | (14.2) |
Amortization of debt premium | (3) | (3.7) |
Other non-cash adjustments, net | 26.4 | 5.1 |
Subtotal | 362.5 | 360.7 |
Increase (decrease) in cash due to: | ||
Accounts receivable | (55.3) | (24.3) |
Inventories | (78.3) | (99.3) |
Accounts payable | 41.2 | 89.2 |
Payroll and related taxes | (23) | (48.4) |
Accrued customer programs | (52.8) | 33.9 |
Accrued liabilities | (19.2) | (30.4) |
Accrued income taxes | (36.7) | (20.8) |
Other, net | 19.9 | (5.9) |
Subtotal | (204.2) | (106) |
Net cash from (for) operating activities | 158.3 | 254.7 |
Cash Flows From (For) Investing Activities | ||
Proceeds from royalty rights | 1.7 | 10.3 |
Purchase of investment securities | (7.5) | |
Royalty Pharma contingent milestone payment | 250 | |
Asset acquisitions | (35) | |
Additions to property, plant and equipment | (54.7) | (33.3) |
Net proceeds from sale of business and other assets | 1.3 | |
Net cash from (for) investing activities | 162 | (29.2) |
Cash Flows From (For) Financing Activities | ||
Issuances of long-term debt | 431 | |
Payments on long-term debt | (158.9) | (457.3) |
Borrowings (repayments) of revolving credit agreements and other financing, net | 397.5 | (8.2) |
Deferred financing fees | (2.4) | |
Issuance of ordinary shares | 0.3 | |
Repurchase of ordinary shares | (265) | |
Cash dividends | (54.8) | (52.8) |
Other financing, net | (5.9) | (7.5) |
Net cash from (for) financing activities | 178.2 | (362.2) |
Effect of exchange rate changes on cash and cash equivalents | 6.1 | (15.5) |
Net increase (decrease) in cash and cash equivalents | 504.6 | (152.2) |
Cash and cash equivalents, beginning of period | 551.1 | 678.7 |
Cash and cash equivalents, end of period | $ 1,055.7 | $ 526.5 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Information The Company 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 dedicated to making lives better by bringing “ Quality, Affordable Self-Care Products™” that consumers trust everywhere they are sold. We are a leading provider of over-the-counter ("OTC") health and wellness solutions that enhance individual well-being by empowering consumers to proactively prevent or treat conditions that can be self-managed. We are also a leading producer of generic prescription pharmaceutical topical products such as creams, lotions, gels, and nasal sprays. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("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 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, 2018 . In the opinion of management, all adjustments (consisting of normal recurring accruals and other adjustments) considered necessary for a fair presentation of the unaudited Condensed Consolidated Financial Statements have been included and include our accounts and the accounts of all majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Segment Reporting Change During the three months ended March 30, 2019, we changed the composition of our operating and reporting segments. We moved our Israeli diagnostic business from the Consumer Self-Care International segment to the Prescription Pharmaceuticals segment and we made certain adjustments to our allocations between segments. These changes were made to reflect changes in the way in which management 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 . Our new reporting and operating segments are as follows: • Consumer Self-Care Americas (" CSCA ") , formerly Consumer Healthcare Americas, comprises our consumer self-care business (OTC, contract manufacturing, infant formula and animal health categories) in the U.S., Mexico and Canada. • Consumer Self-Care International (" CSCI ") , formerly Consumer Healthcare International, comprises our branded consumer self-care business primarily in Europe, our consumer-focused business in the United Kingdom and Australia, and our liquid licensed products business in the United Kingdom. • Prescription Pharmaceuticals (" RX ") comprises our Prescription Pharmaceuticals business in the U.S. and our diagnostic business in Israel, which was previously in our CSCI segment. Recent Accounting Standard Pronouncements Below are recent Accounting Standard Updates ("ASU") that we are still assessing to determine the effect on our Condensed Consolidated Financial Statements. We do not believe that any other recently issued accounting standards could have a material effect on our Condensed Consolidated Financial Statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. Recently Issued Accounting Standards Not Yet Adopted Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters ASU 2018-15: Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This guidance requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. January 1, 2020 We currently plan to adopt the standard prospectively on the effective date. Upon adoption, no impact is currently expected, however, future hosting arrangements treated as service contracts will need to be evaluated for capitalizable costs during implementation. The Consolidated Financial Statement impact will align with the presentation of the underlying hosting contracts, which will be included within Operating expenses. ASU 2018-13: Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement This guidance amends ASC 820 to add, remove, and modify certain disclosure requirements for fair value measurements. January 1, 2020 We currently plan to adopt the standard on the effective date. Upon adoption, we will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurement. We will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2018-19: Codification Improvements for Topic 326: Measurement of Credit Losses on Financial Instruments ASU 2019-05: Financial Instruments-Credit Losses: Targeted Transition Relief This guidance changes the impairment model for most financial assets and certain other instruments, replacing the current "incurred loss" approach with an "expected loss" credit impairment model, which will apply to most financial assets measured at amortized cost, and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities and off-balance sheet credit exposures such as letters of credit. January 1, 2020 We are in the process of completing our evaluation. Upon adoption, we are not expecting a material impact on the financial statements. ASU 2018-18: Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 This guidance amends ASC 808 to clarify that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. The proposed guidance would be applied retrospectively to the date of initial adoption of Topic 606. January 1, 2020 We are in the process of completing our evaluation. Upon adoption, we are not expecting a material impact on the financial statements. ASU 2018-14: Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans This guidance amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other post-retirement plans. December 31, 2020 We are currently evaluating the implications of adoption on our Consolidated Financial Statements. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Revenue is recognized when or as a customer obtains control of promised products. The amount of revenue recognized reflects the consideration we expect to be entitled to receive in exchange for these products. Disaggregation of Revenue We generated net sales in the following geographic locations (1) (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, U.S. $ 768.6 $ 772.3 $ 1,537.4 $ 1,558.7 Europe (2) 315.8 344.3 656.7 706.2 All other countries (3) 64.6 69.8 129.4 138.5 $ 1,149.0 $ 1,186.4 $ 2,323.5 $ 2,403.4 (1) Derived from the location of the entity that sells to a third party. (2) Includes Ireland net sales of $6.9 million and $12.1 million for the three and six months ended June 29, 2019 , respectively, and $5.0 million and $10.4 million for the three and six months ended June 30, 2018 , respectively. (3) Includes net sales generated primarily in Israel, Mexico, Australia and Canada. The following is a summary of our net sales by category (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, CSCA (1) Cough/cold/allergy/sinus $ 120.9 $ 109.3 $ 253.5 $ 250.8 Gastrointestinal 106.2 103.0 206.5 195.2 Infant nutritionals 85.5 109.2 181.5 212.6 Analgesics 88.2 92.2 177.0 185.9 Smoking cessation 77.0 71.2 143.8 137.1 Animal health 22.4 31.9 42.0 58.2 Vitamins, minerals and dietary supplements 3.9 4.3 7.3 7.3 Other CSCA (2) 78.0 75.8 152.3 151.4 Total CSCA 582.1 596.9 1,163.9 1,198.5 CSCI Cough/cold/allergy/sinus 74.1 84.7 169.8 183.4 Lifestyle 81.2 86.1 162.7 175.8 Personal care and derma-therapeutics 69.2 79.7 135.2 155.3 Natural health and vitamins, minerals and dietary supplements 25.6 27.9 55.4 61.1 Anti-parasites 26.0 30.4 52.7 58.5 Other CSCI (3) 51.4 49.1 102.5 101.6 Total CSCI 327.5 357.9 678.3 735.7 Total RX 239.4 231.6 481.3 469.2 Total net sales $ 1,149.0 $ 1,186.4 $ 2,323.5 $ 2,403.4 (1) Includes net sales from our OTC contract manufacturing business. (2) Consists primarily of branded OTC, diabetic care, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales. (3) Consists primarily of liquid licensed products, our distribution business and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales. While the majority of revenue is recognized at a point in time, certain of our product revenue is recognized on an over time basis. Predominately, over time customer contracts exist in contract manufacturing arrangements, which occur in both the CSCA and CSCI segments. Contract manufacturing revenue was $65.8 million and $133.1 million for the three and six months ended June 29, 2019 , respectively, and $77.1 million and $146.5 million for the three and six months ended June 30, 2018 , 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. Contract Balances The following table provides information about contract assets from contracts with customers (in millions): Balance Sheet Location June 29, December 31, Short-term contract assets Prepaid expenses and other current assets $ 16.6 $ 25.5 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS Acquisitions Completed During the Six Months Ended June 29, 2019 Generic Product Acquisition On May 17, 2019 , we purchased the Abbreviated New Drug Application ("ANDA") for a generic product used to relieve pain from osteoarthritis, for $15.7 million in cash, which we capitalized as a developed product technology intangible asset. We plan to launch the product during the third quarter of 2019 and begin amortizing it over a 20 -year useful life. Operating results attributable to the product are included within our RX segment. Budesonide Nasal Spray and Triamcinolone Nasal Spray On April 1, 2019 , we purchased product ANDAs and other records and registrations of Budesonide Nasal Spray, a generic equivalent of Rhinocort Allergy ® , and Triamcinolone Nasal Spray, a generic equivalent of Nasacort Allergy ® , from Barr Laboratories, Inc. ("Barr"), a subsidiary of Teva Pharmaceuticals, for $14.0 million in cash. We previously developed and marketed the products in collaboration with Barr under a development, marketing and commercialization agreement that originated in August 2003. Under this prior agreement, we paid Barr a percentage of net income from products sold by Perrigo in the U.S. By purchasing the assets from Barr and terminating the original development, marketing and commercialization agreement, we are now entitled to 100% of the income from sales of the product. Operating results attributable to these products are included within our CSCA segment. The intangible assets acquired are classified as developed product technology with a 10 -year useful life. Acquisitions Completed During the Year Ended December 31, 2018 Nasonex-branded products On May 29, 2018 , we entered into a license agreement with Merck Sharp & Dohme Corp. ("Merck"), which allows us to develop and commercialize an OTC version of Nasonex-branded products containing the compound, mometasone furoate monohydrate. The acquisition was accounted for as an asset acquisition based on our assessment that substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset to be used for R&D. In accordance with Accounting Standards Codification Topic 730 Research and Development, the non-refundable upfront license fee of $50.0 million was recorded in R&D expense in our CHCA segment because the intangible research and development asset acquired has no alternative use. The agreement requires us to make contingent payments if we obtain regulatory approval and achieve certain sales milestones. We will also be obligated to make royalty payments on potential future sales. The contingent consideration will be included in the measurement of the cost of the asset when the contingency is resolved and the consideration is paid or becomes payable. Consideration paid after U.S. Food and Drug Administration approval will be capitalized and amortized to cost of goods sold over the economic life of each product. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill, by reportable segment, were as follows (in millions): December 31, Transfer to assets held-for-sale Currency Translation Adjustments June 29, CSCA (1) $ 1,713.7 $ (42.2 ) $ 2.1 $ 1,673.6 CSCI (2) 1,151.3 — (9.2 ) 1,142.1 RX 1,114.8 — 4.8 1,119.6 Total goodwill $ 3,979.8 $ (42.2 ) $ (2.3 ) $ 3,935.3 (1) We had accumulated impairments of $24.5 million and $161.2 million as of June 30, 2018 and June 29, 2019 , respectively. (2) We had accumulated impairments of $868.4 million as of June 30, 2018 and June 29, 2019 . During the three months ended June 29, 2019, our RX U.S. reporting unit had an indication of potential impairment which was driven by a combination of industry and market factors and uncertainty related to the timing and associated cash flows of the projected ProAir launch. Goodwill remaining in this reporting unit was $1,119.6 million as of June 29, 2019. We prepared an impairment test as of June 29, 2019 and determined that the fair value of the RX U.S. reporting unit continued to exceed net book value by approximately 10% . The excess was lower than our annual impairment test as of October 1, 2018, in which fair value exceeded carrying value by more than 25% . While no impairment was recorded as of June 29, 2019, future developments such as deterioration in business performance or market multiples could reduce the fair value of this reporting unit and lead to impairment in a future period. In conjunction with the test performed during the three months ended June 29, 2019, we early adopted ASU 2017-04 which removes the Step 2 requirement in instances when the carrying value of a reporting unit exceeds its fair value. Prospectively, if a reporting unit’s carrying value exceeds its fair value, we will record an impairment charge in the amount of the difference, limited to the amount of goodwill attributed to that reporting unit. Intangible Assets Intangible assets and related accumulated amortization consisted of the following (in millions): June 29, 2019 December 31, 2018 Gross Accumulated Amortization Gross Accumulated Amortization Indefinite-lived intangibles : Trademarks, trade names, and brands $ 18.0 $ — $ 18.1 $ — In-process research and development 14.5 — 31.2 — Total indefinite-lived intangibles $ 32.5 $ — $ 49.3 $ — Definite-lived intangibles : Distribution and license agreements and supply agreements $ 173.7 $ 105.2 $ 178.6 $ 99.0 Developed product technology, formulations, and product rights 1,321.0 706.1 1,318.8 654.6 Customer relationships and distribution networks 1,558.5 613.9 1,586.6 566.5 Trademarks, trade names, and brands 1,266.0 219.5 1,282.4 188.5 Non-compete agreements 8.3 7.6 12.9 11.8 Total definite-lived intangibles $ 4,327.5 $ 1,652.3 $ 4,379.3 $ 1,520.4 Total intangible assets $ 4,360.0 $ 1,652.3 $ 4,428.6 $ 1,520.4 We recorded amortization expense of $73.6 million and $149.0 million for the three and six months ended June 29, 2019 , respectively, and $85.3 million and $172.4 million for the three and six months ended June 30, 2018 , respectively. During the three months ended June 29, 2019, we identified impairment indicators for a certain definite-lived asset related to changes in pricing and competition in the market, which lowered the projected cash flows we expect to generate from the asset. We determined the asset was impaired by $27.8 million in our RX segment. We recorded an impairment charge of $4.1 million on an in process R&D asset in the CSCA segment during the three months ended March 30, 2019 due to changes in projected development and regulatory timelines. |
Inventories
Inventories | 6 Months Ended |
Jun. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Major components of inventory were as follows (in millions): June 29, December 31, Finished goods $ 501.2 $ 444.9 Work in process 192.8 197.5 Raw materials 246.5 235.6 Total inventories $ 940.5 $ 878.0 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The table below summarizes the valuation of our financial instruments carried at fair value by the applicable pricing categories (in millions): June 29, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Measured at fair value on a recurring basis: Assets: Investment securities $ 2.8 $ — $ — $ 9.4 $ — $ — Foreign currency forward contracts — 4.0 — — 3.8 — Funds associated with Israeli severance liability — 14.0 — — 13.0 — Royalty Pharma contingent milestone payments — — 89.1 — — 323.2 Total assets $ 2.8 $ 18.0 $ 89.1 $ 9.4 $ 16.8 $ 323.2 Liabilities: Foreign currency forward contracts $ — $ 3.6 $ — $ — $ 9.2 $ — Contingent consideration — — 12.1 — — 15.3 Total liabilities $ — $ 3.6 $ 12.1 $ — $ 9.2 $ 15.3 Measured at fair value on a non-recurring basis: Assets: Goodwill (1) $ — $ — $ — $ — $ — $ 42.2 Indefinite-lived intangible assets (2) — — — — — 10.5 Definite-lived intangible assets (3) — — — — — 22.4 Total assets $ — $ — $ — $ — $ — $ 75.1 (1) As of December 31, 2018, goodwill with a carrying amount of $178.9 million was written down to a fair value of $42.2 million . (2) As of December 31, 2018, indefinite-lived intangible assets with a carrying amount of $46.9 million were written down to a fair value of $10.5 million . (3) As of December 31, 2018, definite-lived intangible assets with a carrying amount of $72.0 million were written down to a fair value of $22.4 million . There were no transfers among Level 1, 2, and 3 during the three and six months ended June 29, 2019 or the year ended December 31, 2018 . Royalty Pharma Contingent Milestone Payments The table below summarizes the change in fair value of the Royalty Pharma contingent milestone payments (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Beginning balance $ 83.6 $ 124.9 $ 323.2 $ 134.5 Payments received — — (250.0 ) — Change in fair value 5.5 0.6 15.9 (9.0 ) Ending balance $ 89.1 $ 125.5 $ 89.1 $ 125.5 We value our contingent milestone payments from Royalty Pharma using a modified Black-Scholes Option Pricing Model ("BSOPM"). Key inputs in the BSOPM are the estimated volatility and rate of return of royalties on global net sales of Tysabri ® that are received by Royalty Pharma until the contingent milestones are resolved. Volatility and the estimated fair value of the milestones have a positive relationship such that higher volatility translates to a higher estimated fair value of the contingent milestone payments. We assess volatility and rate of return inputs quarterly by analyzing certain market volatility benchmarks and the risk associated with Royalty Pharma achieving the underlying projected royalties. The table below represents the volatility and rate of return: Three Months Ended June 29, June 30, Volatility 30.0 % 30.0 % Rate of return 7.99 % 8.09 % The fair value of the Royalty Pharma contingent milestone payment increased by $5.5 million and $15.9 million during the three and six months ended June 29, 2019 , respectively. These adjustments were driven by higher projected global net sales of Tysabri ® and the estimated probability of achieving the earn-out. The fair value of the Royalty Pharma contingent milestone payments increased by $0.6 million during the three months ended June 30, 2018 . This increase included a $2.9 million decrease in the fair value of the 2018 contingent milestone payment, more than offset by a $3.5 million increase in the fair value of the 2020 contingent milestone payment. During the six months ended June 30, 2018 , the fair value of the Royalty Pharma contingent milestone payments decreased $9.0 million . The net changes in the fair value of the contingent milestone payments were due to the fluctuation of the projected global net sales of Tysabri ® , which were impacted by competition, namely the launch of Ocrevus ® in the U.S. and European markets. In order for us to receive the 2020 milestone payment of $400.0 million , Royalty Pharma contingent payments for Tysabri ® sales in 2020 must exceed $351.0 million . In 2018, the Royalty Pharma contingent payments for Tysabri ® were $337.5 million , which exceeded the threshold. If Royalty Pharma contingent payments for Tysabri ® sales do not meet the prescribed threshold in 2020, we will write off the $89.1 million asset as an expense. If the prescribed threshold is exceeded, we will increase the asset to $400.0 million and recognize income of $310.9 million in Change in financial assets on the Condensed Consolidated Statements of Operations. Contingent Consideration The table below summarizes the change in fair value of contingent consideration (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Beginning balance $ 12.4 $ 18.1 $ 15.3 $ 22.0 Changes in value 0.9 (1.8 ) (2.0 ) (1.4 ) Currency translation adjustments — (0.1 ) — — Settlements and other adjustments (1.2 ) — (1.2 ) (4.4 ) Ending balance $ 12.1 $ 16.2 $ 12.1 $ 16.2 Goodwill and Intangible Assets Animal Health When determining the fair value of our animal health reporting unit for the year ended December 31, 2018, we utilized a combination of comparable company market and discounted cash flow techniques. In our comparable company market approach, we considered observable market information and transactions for companies that we deemed to be of a comparable nature, scope, and size of animal health (Level 2 inputs). Our cash flow projections included revenue assumptions related to new products, product line extensions, and existing products, plus gross margin, advertising and promotion, and other operating expenses based on the growth plans (Level 3 inputs). In our discounted cash flow analysis, we utilized projected sales growth rate and discount rate assumptions of 2.5% and 9.8% , respectively. The discount rate correlates with the required investment return and risk that we believe market participants would apply to the projected growth rate. In addition, we burdened projected free cash flows with the capital spending deemed necessary to support the cash flows and applied the jurisdictional tax rate of 22.8% . We weighted indications of fair value resulting from the market approach and present value techniques, considering the reasonableness of the range of measurements and the point within the range that we determined was most representative of fair market conditions. When assessing our animal health indefinite-lived intangible asset for the year ended December 31, 2018, we utilized a multi-period excess earnings method ("MPEEM") to determine the fair value of the intangible asset. Our cash flow projections included revenue assumptions related to new products, product line extensions, and existing products. We utilized long-term growth rate and discount rate assumptions of (0.3)% and 9.8% , respectively, and we applied a jurisdictional tax rate of 22.8% . When assessing our animal health definite-lived assets for impairment for the year ended December 31, 2018, we utilized a combination of MPEEM and relief from royalty methods to determine the fair values of definite-lived assets within the asset group. The projected financial information, inputs, and assumptions utilized were consistent with those utilized in the goodwill discounted cash flow analysis described above. Generic product When measuring the impairment of a certain definite-lived asset during the three months ended June 29, 2019, we utilized a discounted cash flow technique to estimate the fair value of the asset. Significant valuation inputs and assumptions relate to our projected future cash flows, including the total market size, our estimated market share, and our average selling price. Fixed Rate Long-term Debt Our fixed rate long-term debt consisted of the following (in millions): June 29, December 31, Level 1 Level 2 Level 1 Level 2 Public Bonds Carrying Value (excluding discount) $ 2,600.0 $ 2,600.0 Fair value $ 2,533.0 $ 2,316.6 Retail bond and private placement note Carrying value (excluding premium) $ 153.5 $ 292.5 Fair value $ 167.8 $ 307.9 The fair values of our public bonds for all periods were based on quoted market prices. The fair value of our private placement note for all periods was based on interest rates offered for borrowings of a similar nature and remaining maturities. The fair value of our retail bond for the year ended December 31, 2018 was based on interest rates offered for borrowings of a similar nature and remaining maturities. On May 23, 2019, we repaid the retail bond in full (refer to Note 11 ). |
Investments
Investments | 6 Months Ended |
Jun. 29, 2019 | |
Investments [Abstract] | |
Investments | INVESTMENTS The following table summarizes the measurement category, balance sheet location, and balances of our equity securities (in millions): Measurement Category Balance Sheet Location June 29, December 31, 2018 Fair value method Prepaid expenses and other current assets $ 2.8 $ 9.4 Fair value method (1) Other non-current assets $ 2.8 $ 4.4 Equity method Other non-current assets $ 16.8 $ 15.1 (1) Measured at fair value using the Net Asset Value practical expedient. The following table summarizes the expense (income) recognized in earnings of our equity securities (in millions): Three Months Ended Six Months Ended Measurement Category Income Statement Location June 29, June 30, June 29, June 30, Fair value method Other (income) expense, net $ 1.8 $ 6.3 $ 7.9 $ 10.6 Equity method Other (income) expense, net $ (1.0 ) $ (0.9 ) $ (1.7 ) $ (0.7 ) During the three months ended June 30, 2018 , Perrigo Asia Holding Company Limited increased its investment in Zibo Xinhua - Perrigo Pharmaceutical Company Limited by $7.5 million . |
Assets held for sale
Assets held for sale | 6 Months Ended |
Jun. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale | 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. During the three months ended June 29, 2019, management committed to a plan to sell our animal health business; as a result, such assets were classified as held-for-sale. On July 8, 2019 , we completed the sale of our animal health business (refer to Note 18 ). The assets associated with our animal health business were reported in our CSCA segment. The assets held-for-sale were reported within Prepaid expenses and other current assets and liabilities held-for-sale were reported in Accrued liabilities. The amounts consisted of the following (in millions): June 29, Assets held for sale Current assets $ 29.3 Property, plant and equipment, net 10.8 Goodwill and indefinite-lived intangible assets 42.2 Definite-lived intangible assets, net 36.4 Other assets 25.7 Total assets held for sale $ 144.4 Liabilities held for sale Current liabilities $ 11.3 Other liabilities 38.3 Total liabilities held for sale $ 49.6 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES On January 1, 2019, we adopted Accounting Standards Update No. 2017-12 Targeted Improvements to Accounting for Hedge Activities ("ASU 2017-12") using a modified retrospective approach. Among other provisions, the new standard required modifications to existing presentation and disclosure requirements on a prospective basis. As such, certain disclosures for the three and six months ended June 30, 2018 below conform to the disclosure requirements prior to the adoption of ASU 2017-12. Prior to the adoption of ASU 2017-12, we were required to separately measure and reflect the amount by which the hedging instrument did not offset the changes in the fair value or cash flows of hedged items, which was referred to as the ineffective amount. We assessed hedge effectiveness on a quarterly basis and recorded the gain or loss related to the ineffective portion of derivative instruments, if any, in Other (income) expense, net on the Condensed Consolidated Statements of Operations. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness. Therefore, we no longer recognize hedge ineffectiveness separately on our Condensed Consolidated Statements of Income, but instead recognize the entire change in the fair value of: • Cash flow hedges included in the assessment of hedge effectiveness in OCI. The amounts recorded in OCI will subsequently be reclassified to earnings in the same line item on the Condensed Consolidated Statements of Operations as impacted by the hedged item when the hedged item affects earnings; and • Fair value hedges included in the assessment of hedge effectiveness in the same line item on the Condensed Consolidated Statements of Operations that is used to present the earnings effect of the hedged item. Prior to the adoption of ASU 2017-12, we excluded option premiums and forward points (excluded components) from our assessment of hedge effectiveness for our foreign exchange cash flow hedges. We recognized all changes in fair value of the excluded components in Other (income) expense, net , on the Condensed Consolidated Statements of Operations. The amendments in ASU 2017-12 continue to allow those components to be excluded from the assessment of hedge effectiveness and add cross-currency basis spread as an allowable excluded component. The provisions of ASU 2017-12 allow a policy election to either continue to recognize changes in the fair value of the excluded components currently in earnings or to recognize the initial value of the excluded component using an amortization approach. We have elected to recognize the initial value of the excluded component on a straight-line basis over the life of the derivative instrument, within the same line item on the Condensed Consolidated Statements of Operations that is used to present the earnings effect of the hedged item. The cumulative effect adjustment between Accumulated Other Comprehensive Income ("AOCI") and Retained earnings (accumulated deficit) from applying this policy on existing hedges at the date of adoption was immaterial. We record derivative instruments on the balance sheet on a gross basis as either an asset or liability measured at fair value (refer to Note 6 ). Additionally, changes in a derivative's fair value, which are measured at the end of each period, are recognized in earnings unless a derivative can be designated in a qualifying hedging relationship. Designated derivatives meet hedge accounting criteria, which means the fair value of the hedge is recorded in shareholders’ equity as a component of OCI, net of tax. The deferred gains and losses are recognized in income in the period in which the hedged item affects earnings. We have elected to recognize the fair value of the excluded component in OCI and amortize on a straight-line basis over the life of the derivative instrument, within the same line item on the Condensed Consolidated Statements of Operations that is used to present the earnings effect of the hedged item. All of our designated derivatives are assessed for hedge effectiveness quarterly. All of our designated derivatives were classified as cash flow hedges as of June 29, 2019 and December 31, 2018 . We also have economic non-designated derivatives that do not meet hedge accounting criteria. These derivative instruments are adjusted to current market value at the end of each period through earnings. Gains or losses on these instruments are offset substantially by the remeasurement adjustment on the hedged item. We are exposed to credit loss in the event of nonperformance by the counterparties on derivative contracts. It is our policy to manage our credit risk on these transactions by dealing only with financial institutions having a long-term credit rating of "Aa3" or better and by distributing the contracts among several financial institutions to diversify credit concentration risk. Should a counterparty default, our maximum exposure to loss is the asset balance of the instrument. The maximum term of our forward currency exchange contracts is 18 months. We enter into certain derivative financial instruments, when available on a cost-effective basis, to mitigate our risk associated with changes in interest rates and foreign currency exchange rates as follows: Interest rate risk management - We are exposed to the impact of interest rate changes through our cash investments and borrowings. We utilize a variety of strategies to manage the impact of changes in interest rates including using a mix of debt maturities along with both fixed-rate and variable-rate debt. In addition, we may enter into treasury-lock agreements and interest rate swap agreements on certain investing and borrowing transactions to manage our exposure to interest rate changes and our overall cost of borrowing. Foreign currency exchange risk management - We conduct business in several major currencies other than the U.S. dollar and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce cash flow volatility associated with foreign exchange rate changes on a consolidated basis to allow management to focus its attention on business operations. Accordingly, we enter into various contracts that change in value as foreign exchange rates change to protect the value of existing foreign currency assets and liabilities, commitments, and anticipated foreign currency sales and expenses. All derivative instruments are managed on a consolidated basis to efficiently net exposures and thus take advantage of any natural offsets. Gains and losses related to the derivative instruments are expected to be offset largely by gains and losses on the original underlying asset or liability. We do not use derivative financial instruments for speculative purposes. Interest Rate Swaps Interest rate swap agreements are contracts to exchange floating rate for fixed rate payments (or vice versa) over the life of the agreement without the exchange of the underlying notional amounts. The notional amounts of the interest rate swap agreements are used to measure interest to be paid or received and do not represent the amount of exposure to credit loss. The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense. There were no active designated or non-designated interest rate swaps as of June 29, 2019 and December 31, 2018 . Foreign Currency Derivatives Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows (in millions): Notional Amount June 29, December 31, Israeli Shekel (ILS) $ 340.6 $ 232.6 British Pound (GBP) 111.0 90.2 European Euro (EUR) 108.0 134.2 Swedish (SEK) 42.2 38.7 Danish Krone (DKK) 58.2 56.5 United States Dollar (USD) 46.2 39.3 Canadian Dollar (CAD) 41.9 31.7 Polish Zloty (PLZ) 33.5 18.2 Chinese Yuan (CNY) 20.0 — Norwegian Krone (NOK) 6.8 6.2 Romanian New Leu (RON) 5.9 4.4 Mexican Peso (MPX) 4.2 25.9 Other 12.6 8.7 Total $ 831.1 $ 686.6 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 outstanding derivative instruments were as follows (in millions): Asset Derivatives Fair Value Balance Sheet Location June 29, December 31, Designated derivatives: Foreign currency forward contracts Prepaid expenses and other current assets $ 1.0 $ 2.0 Non-designated derivatives: Foreign currency forward contracts Prepaid expenses and other current assets $ 3.0 $ 1.8 Liability Derivatives Fair Value Balance Sheet Location June 29, December 31, Designated derivatives: Foreign currency forward contracts Accrued liabilities $ 2.6 $ 6.4 Non-designated derivatives: Foreign currency forward contracts Accrued liabilities $ 1.0 $ 2.8 The following tables summarize the effect of derivative instruments designated as cash-flow hedging instruments in AOCI (in millions): Three Months Ended June 29, 2019 Instrument Amount of Gain/(Loss) Recorded in OCI Classification of Gain/(Loss) Reclassified from AOCI into Earnings Amount of Gain/(Loss) Reclassified from AOCI into Earnings Classification of Gain/(Loss) Recognized into Earnings Related to Amounts Excluded from Effectiveness Testing Amount of Gain/(Loss) Recognized in Earnings on Derivatives Related to Amounts Excluded from Effectiveness Testing Interest rate swap agreements Interest expense, net $ (0.4 ) Interest expense, net $ — Foreign currency forward contracts $ 1.1 Net sales 0.1 Net sales 0.1 Cost of sales (0.2 ) Cost of sales (1.1 ) $ (0.5 ) $ (1.0 ) Six Months Ended June 29, 2019 Instrument Amount of Gain/(Loss) Recorded in OCI (1) Classification of Gain/(Loss) Reclassified from AOCI into Earnings Amount of Gain/(Loss) Reclassified from AOCI into Earnings Classification of Gain/(Loss) Recognized into Earnings Related to Amounts Excluded from Effectiveness Testing Amount of Gain/(Loss) Recognized in Earnings on Derivatives Related to Amounts Excluded from Effectiveness Testing Interest rate swap agreements Interest expense, net $ (1.0 ) Interest expense, net $ — Foreign currency forward contracts $ — Net sales 0.3 Net sales — Cost of sales (1.4 ) Cost of sales (2.2 ) $ (2.1 ) $ (2.2 ) (1) Net loss of $1.6 million is expected to be reclassified out of AOCI into earnings during the next 12 months. Three Months Ended June 30, 2018 Effective Portion Instrument Amount of Gain/(Loss) Recorded in OCI Classification of Gain/(Loss) Reclassified from AOCI into Earnings Amount of Gain/(Loss) Reclassified from AOCI into Earnings Interest rate swap agreements Interest expense, net $ (0.4 ) Foreign currency forward contracts $ (4.3 ) Net sales — Cost of sales 1.6 Interest expense, net (1.1 ) Other (income) expense, net (0.1 ) $ — Six Months Ended June 30, 2018 Effective Portion Instrument Amount of Gain/(Loss) Recorded in OCI Classification of Gain/(Loss) Reclassified from AOCI into Earnings Amount of Gain/(Loss) Reclassified from AOCI into Earnings Interest rate swap agreements Interest expense, net $ (0.9 ) Foreign currency forward contracts $ (4.3 ) Net sales — Cost of sales 3.9 Interest expense, net (2.0 ) Other (income) expense, net (0.5 ) $ 0.5 The amounts of gain/(loss) recognized in earnings related to our non-designated derivatives on the Condensed Consolidated Statements of Operations were as follows (in millions): Three Months Ended Six Months Ended Non-Designated Derivatives Income Statement Location June 29, June 30, June 29, June 30, Foreign currency forward contracts Other (income) expense, net $ (4.3 ) $ 11.8 $ (13.1 ) $ 8.6 Interest expense, net 1.4 0.2 1.8 (0.7 ) Total $ (2.9 ) $ 12.0 $ (11.3 ) $ 7.9 The impact of gains and losses on foreign exchange contracts not designated as hedging instruments related to changes in the fair value of assets and liabilities denominated in foreign currencies are generally offset by net foreign exchange gains and losses, which are also included on the Condensed Consolidated Statements of Operations in Other (income) expense, net for all periods presented. When we enter into foreign exchange contracts not designated as hedging instruments to mitigate the impact of exchange rate volatility in the translation of foreign earnings, gains and losses will generally be offset by fluctuations in the U.S. Dollar-translated amounts of each Income Statement account in current and/or future periods. The classification and amount of gain/(loss) recognized in earnings on fair value and cash flow hedging relationships are as follows (in millions): Three Months Ended June 29, 2019 Net Sales Cost of Sales Interest Expense, net Other (Income) Expense, net Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded $ 1,149.0 $ 718.2 $ 31.2 $ 2.3 The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships Foreign currency forward contracts Amount of gain or (loss) reclassified from AOCI into earnings $ 0.1 $ (0.2 ) $ — $ — Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach $ 0.1 $ (1.1 ) $ — $ — Interest rate swap agreements Amount of gain or (loss) reclassified from AOCI into earnings $ — $ — $ (0.4 ) $ — Six Months Ended June 29, 2019 Net Sales Cost of Sales Interest Expense, net Other (Income) Expense, net Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded $ 2,323.5 $ 1,443.9 $ 59.8 $ 5.5 The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships Foreign currency forward contracts Amount of gain or (loss) reclassified from AOCI into earnings $ 0.3 $ (1.4 ) $ — $ — Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach $ — $ (2.2 ) $ — $ — Interest rate swap agreements Amount of gain or (loss) reclassified from AOCI into earnings $ — $ — $ (1.0 ) $ — |
Leases
Leases | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
Leases | LEASES We adopted ASU 2016-02, Leases, as of January 1, 2019, using the modified retrospective transition approach, with a cumulative-effect adjustment to the opening balance of retained earnings as of the effective date. The financial results reported in periods prior to 2019 are unchanged. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in additional operating lease liabilities and lease assets, including the transition of existing capital lease liabilities and lease assets to finance classification, of approximately $166.5 million and $164.0 million , respectively, as of January 1, 2019. Upon adoption, the difference between the lease assets and lease liabilities partially related to existing deferred lease liabilities reclassified to lease assets and the transition of capital lease assets and liabilities at their carrying values. In addition, historical build-to-suit assets and liabilities were removed on transition and recorded as an adjustment to retained earnings, net of deferred tax impact. The standard did not materially impact our consolidated net income or cash flow classification. We lease certain office buildings, warehouse facilities, vehicles, and plant, office, and computer equipment. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We evaluate arrangements at inception to determine if lease components are included. An arrangement includes a lease component if it identifies an asset and we have control over the asset. For new leases beginning January 1, 2019 or later, we have elected for all asset classes not to separate lease components from the non-lease components included in an arrangement when measuring the leased asset and leased liability. Lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for leases on a straight-line basis over the lease term. We apply the portfolio approach to certain groups of computer equipment and vehicle leases when the term, classification, and asset type are identical. The discount rate selected is the incremental borrowing rate we would obtain for a secured financing of the lease asset over a similar term. Many of our leases include one or more options to extend the lease term. Certain leases also include options to terminate early or purchase the leased property, all of which are executed at our sole discretion. Optional periods may be included in the lease term and measured as part of the lease asset and lease liability if we are reasonably certain to exercise our right to use the leased asset during the optional periods. We generally consider renewal options to be reasonably certain of execution and included in the lease term when significant leasehold improvements have been made by us to the leased assets. The depreciable lives of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include contingent rental payments based on per unit usage over contractual levels (e.g., miles driven or machine hours used) and others include rental payments adjusted periodically for market reviews or inflationary indexes. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The balance sheet location of our lease assets and liabilities were as follows (in millions): Assets Balance Sheet Location June 29, Operating Operating lease assets $ 135.4 Finance Other non-current assets 17.1 Total $ 152.5 Liabilities Balance Sheet Location June 29, Current Operating Accrued liabilities $ 32.9 Finance Current indebtedness 1.9 Non-Current Operating Other non-current liabilities 107.4 Finance Long-term debt, less current portion 11.8 Total $ 154.0 The below table shows our lease assets and liabilities by reporting segment (in millions): Assets Liabilities Operating Financing Operating Financing June 29, June 29, June 29, June 29, CSCA $ 22.7 $ 8.9 $ 22.9 $ 8.4 CSCI 42.0 6.1 42.9 3.2 RX 37.5 0.3 38.9 0.3 Unallocated 33.2 1.8 35.6 1.8 Total $ 135.4 $ 17.1 $ 140.3 $ 13.7 Lease expense was as follows (in millions): Three Months Ended Six Months Ended June 29, June 29, Operating leases (a) $ 11.2 $ 23.2 Finance leases Amortization $ 0.7 $ 1.3 Interest 0.1 0.2 Total finance leases $ 0.8 $ 1.5 (a) Includes short-term leases and variable lease costs, which are immaterial . Total operating lease expense for the three and six months ended June 30, 2018 was $14.2 million and $26.1 million , respectively. The annual future maturities of our leases as of June 29, 2019 are as follows (in millions): Operating Leases Finance Leases Total 2019 $ 19.4 $ 1.2 $ 20.6 2020 34.6 2.3 36.9 2021 24.9 3.6 28.5 2022 18.3 1.2 19.5 2023 14.0 1.0 15.0 After 2023 51.7 7.8 59.5 Total lease payments 162.9 17.1 180.0 Less: Interest 22.6 3.4 26.0 Present value of lease liabilities $ 140.3 $ 13.7 $ 154.0 ` Our weighted average lease terms and discount rates are as follows: June 29, Weighted-average remaining lease term (in years) Operating leases 6.59 Finance leases 9.43 Weighted-average discount rate Operating leases 4.19 % Finance leases 4.35 % Our lease cash flow classifications are as follows (in millions): Six Months Ended June 29, Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 23.0 Operating cash flows for finance leases $ 0.2 Financing cash flows for finance leases $ 1.4 Leased assets obtained in exchange for new finance lease liabilities $ 7.8 Leased assets obtained in exchange for new operating lease liabilities $ 12.8 |
Leases | LEASES We adopted ASU 2016-02, Leases, as of January 1, 2019, using the modified retrospective transition approach, with a cumulative-effect adjustment to the opening balance of retained earnings as of the effective date. The financial results reported in periods prior to 2019 are unchanged. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in additional operating lease liabilities and lease assets, including the transition of existing capital lease liabilities and lease assets to finance classification, of approximately $166.5 million and $164.0 million , respectively, as of January 1, 2019. Upon adoption, the difference between the lease assets and lease liabilities partially related to existing deferred lease liabilities reclassified to lease assets and the transition of capital lease assets and liabilities at their carrying values. In addition, historical build-to-suit assets and liabilities were removed on transition and recorded as an adjustment to retained earnings, net of deferred tax impact. The standard did not materially impact our consolidated net income or cash flow classification. We lease certain office buildings, warehouse facilities, vehicles, and plant, office, and computer equipment. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We evaluate arrangements at inception to determine if lease components are included. An arrangement includes a lease component if it identifies an asset and we have control over the asset. For new leases beginning January 1, 2019 or later, we have elected for all asset classes not to separate lease components from the non-lease components included in an arrangement when measuring the leased asset and leased liability. Lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for leases on a straight-line basis over the lease term. We apply the portfolio approach to certain groups of computer equipment and vehicle leases when the term, classification, and asset type are identical. The discount rate selected is the incremental borrowing rate we would obtain for a secured financing of the lease asset over a similar term. Many of our leases include one or more options to extend the lease term. Certain leases also include options to terminate early or purchase the leased property, all of which are executed at our sole discretion. Optional periods may be included in the lease term and measured as part of the lease asset and lease liability if we are reasonably certain to exercise our right to use the leased asset during the optional periods. We generally consider renewal options to be reasonably certain of execution and included in the lease term when significant leasehold improvements have been made by us to the leased assets. The depreciable lives of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include contingent rental payments based on per unit usage over contractual levels (e.g., miles driven or machine hours used) and others include rental payments adjusted periodically for market reviews or inflationary indexes. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The balance sheet location of our lease assets and liabilities were as follows (in millions): Assets Balance Sheet Location June 29, Operating Operating lease assets $ 135.4 Finance Other non-current assets 17.1 Total $ 152.5 Liabilities Balance Sheet Location June 29, Current Operating Accrued liabilities $ 32.9 Finance Current indebtedness 1.9 Non-Current Operating Other non-current liabilities 107.4 Finance Long-term debt, less current portion 11.8 Total $ 154.0 The below table shows our lease assets and liabilities by reporting segment (in millions): Assets Liabilities Operating Financing Operating Financing June 29, June 29, June 29, June 29, CSCA $ 22.7 $ 8.9 $ 22.9 $ 8.4 CSCI 42.0 6.1 42.9 3.2 RX 37.5 0.3 38.9 0.3 Unallocated 33.2 1.8 35.6 1.8 Total $ 135.4 $ 17.1 $ 140.3 $ 13.7 Lease expense was as follows (in millions): Three Months Ended Six Months Ended June 29, June 29, Operating leases (a) $ 11.2 $ 23.2 Finance leases Amortization $ 0.7 $ 1.3 Interest 0.1 0.2 Total finance leases $ 0.8 $ 1.5 (a) Includes short-term leases and variable lease costs, which are immaterial . Total operating lease expense for the three and six months ended June 30, 2018 was $14.2 million and $26.1 million , respectively. The annual future maturities of our leases as of June 29, 2019 are as follows (in millions): Operating Leases Finance Leases Total 2019 $ 19.4 $ 1.2 $ 20.6 2020 34.6 2.3 36.9 2021 24.9 3.6 28.5 2022 18.3 1.2 19.5 2023 14.0 1.0 15.0 After 2023 51.7 7.8 59.5 Total lease payments 162.9 17.1 180.0 Less: Interest 22.6 3.4 26.0 Present value of lease liabilities $ 140.3 $ 13.7 $ 154.0 ` Our weighted average lease terms and discount rates are as follows: June 29, Weighted-average remaining lease term (in years) Operating leases 6.59 Finance leases 9.43 Weighted-average discount rate Operating leases 4.19 % Finance leases 4.35 % Our lease cash flow classifications are as follows (in millions): Six Months Ended June 29, Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 23.0 Operating cash flows for finance leases $ 0.2 Financing cash flows for finance leases $ 1.4 Leased assets obtained in exchange for new finance lease liabilities $ 7.8 Leased assets obtained in exchange for new operating lease liabilities $ 12.8 |
Indebtedness
Indebtedness | 6 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Indebtedness | INDEBTEDNESS Total borrowings outstanding are summarized as follows (in millions): June 29, December 31, Revolving Credit Agreement 2018 Revolver due March 8, 2023 $ 325.0 $ — Term loan 2018 Term loan due March 8, 2020 (1) 323.4 351.3 Notes and Bonds Coupon Due 5.000% May 23, 2019 — 137.6 3.500% March 15, 2021 280.4 280.4 3.500% December 15, 2021 309.6 309.6 5.105% July 28, 2023 (1) 153.5 154.9 4.000% November 15, 2023 215.6 215.6 3.900% December 15, 2024 700.0 700.0 4.375% March 15, 2026 700.0 700.0 5.300% November 15, 2043 90.5 90.5 4.900% December 15, 2044 303.9 303.9 Total notes and bonds 2,753.5 2,892.5 Other financing 87.2 2.8 Unamortized premium (discount), net 8.9 12.2 Deferred financing fees (14.8 ) (16.4 ) Total borrowings outstanding 3,483.2 3,242.4 Current indebtedness (398.8 ) (190.2 ) Total long-term debt less current portion $ 3,084.4 $ 3,052.2 (1) Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate. We are in compliance with all covenants under our debt agreements as of June 29, 2019 . Revolving Credit Agreements On March 8, 2018, we terminated the revolving credit agreement entered into on December 5, 2014 and entered into a $1.0 billion revolving credit agreement maturing on March 8, 2023 (the "2018 Revolver"). During the three months ended June 29, 2019 , in anticipation of the Ranir Global Holdings, LLC (“Ranir”) acquisition (refer to Note 18 ), we borrowed $375.0 million under this facility. There were $325.0 million of borrowings outstanding under the 2018 Revolver as of June 29, 2019 . There were no borrowings outstanding under the 2018 Revolver as of December 31, 2018 . Term Loans On December 5, 2014 , Perrigo Finance entered into a term loan agreement consisting of a €500.0 million ( $614.3 million ) tranche, maturing on December 5, 2019. On March 8, 2018, we refinanced the €350.0 million outstanding under the term loan with the proceeds of a new €350.0 million ( $431.0 million ) term loan, maturing on March 8, 2020 (the "2018 Term Loan"). In addition, as a result of the refinancing during the three months ended March 31, 2018, we recorded a loss of $0.5 million , consisting of the write-off of deferred financing fees in Loss on extinguishment of debt on the Condensed Consolidated Statements of Operations. During the six months ended June 29, 2019 , we made $24.7 million in scheduled principal payments on the 2018 Term Loan. Notes and Bonds In connection with the Omega acquisition, on March 30, 2015 , we assumed a 5.000% retail bond due in 2019 in the amount of €120.0 million ( $130.7 million ). On May 23, 2019 we repaid the bond in full. 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". The balance outstanding under the facilities was $73.9 million at June 29, 2019 . There were no borrowings outstanding under the facilities as of December 31, 2018 . We have financing leases that are reported in the above table under "Other financing" (refer to Note 10 ). |
Earnings Per Share and Sharehol
Earnings Per Share and Shareholders' Equity | 6 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Shareholders' Equity | EARNINGS PER SHARE AND SHAREHOLDERS' EQUITY Earnings per Share A reconciliation of the numerators and denominators used in the basic and diluted earnings per share ("EPS") calculation is as follows (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Numerator: Net income $ 9.0 $ 36.2 $ 72.9 $ 117.0 Denominator: Weighted average shares outstanding for basic EPS 136.0 138.1 136.0 139.5 Dilutive effect of share-based awards 0.5 0.6 0.3 0.5 Weighted average shares outstanding for diluted EPS 136.5 138.7 136.3 140.0 Anti-dilutive share-based awards excluded from computation of diluted EPS 1.7 1.7 1.8 0.9 Shareholders' Equity Share Repurchases Following the expiration of our 2015 share repurchase plan authorization, 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. We did not repurchase any shares during the three and six months ended June 29, 2019 . During the three and six months ended June 30, 2018 , we repurchased 2.0 million and 3.3 million ordinary shares at an average repurchase price of $79.42 and $80.42 per share, for a total of $156.9 million and $265.0 million , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 29, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 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 tax Foreign Currency Translation Adjustments Post-Retirement and Pension Liability Adjustments, net of tax Total AOCI Balance at December 31, 2018 $ (15.5 ) $ 104.5 $ (4.4 ) $ 84.6 OCI before reclassifications 0.2 11.0 — 11.2 Amounts reclassified from AOCI 4.2 — (0.5 ) 3.7 Other comprehensive loss $ 4.4 $ 11.0 $ (0.5 ) $ 14.9 Balance at June 29, 2019 $ (11.1 ) $ 115.5 $ (4.9 ) $ 99.5 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The effective tax rates were as follows: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, 66.6 % 34.5 % 32.5 % 29.4 % The effective tax rate for the three months ended June 29, 2019 increased compared to the prior year period due primarily to changes in the jurisdictional mix of pre-tax book income and a $27.8 million reduction in pre-tax income due to an impairment charge related to a definite-lived intangible asset. The effective tax rate for the six months ended June 29, 2019 increased compared to the prior year period due primarily to changes in the jurisdictional mix of pre-tax book income . On October 31, 2018, we received an audit finding letter from the Irish Office of the Revenue Commissioners (“Irish Revenue”) for the years ended December 31, 2012 and December 31, 2013. The audit finding letter relates to the tax treatment of the 2013 sale of the Tysabri ® intellectual property and other assets related to Tysabri ® to Biogen Idec from Elan Pharma. The consideration paid by Biogen to Elan Pharma took the form of an upfront payment and future contingent royalty payments. Irish Revenue issued a Notice of Amended Assessment (“NoA”) on November 29, 2018 which assesses an Irish corporation tax liability against Elan Pharma in the amount of €1,636 million , not including interest or any applicable penalties. We disagree with this assessment and believe that the NoA is without merit and incorrect as a matter of law. We filed an appeal of the NoA on December 27, 2018 and will pursue all available administrative and judicial avenues as may be necessary or appropriate. As part of this strategy to pursue all available administrative and judicial avenues, Elan Pharma was, on February 25, 2019, granted leave by the Irish High Court to seek judicial review of the issuance of the NoA by Irish Revenue. The judicial review filing is based on our belief that Elan Pharma's legitimate expectations as a taxpayer have been breached, not on the merits of the NoA itself. The High Court has scheduled a hearing in this judicial review proceeding in April 2020, and we would expect a decision in this matter in the second half of 2020. If we are ultimately successful in the judicial review proceedings the NoA will be invalidated and Irish Revenue will not be able to re-issue the NoA. The proceedings before the Tax Appeals Commission have been stayed until a decision on the judicial review application has been made. On August 15, 2017, we filed a complaint in the United States District Court for the Western District of Michigan to recover $163.6 million of Federal income tax, penalties, and interest assessed and collected by the IRS, plus statutory interest thereon from the dates of payment, for the fiscal years ended June 27, 2009, June 26, 2010, June 25, 2011, and June 30, 2012 (the “2009 tax year,” “2010 tax year,” “2011 tax year,” and “2012 tax year,” respectively). The IRS audits of those years culminated in the issuances of two statutory notices of deficiency: (1) on August 27, 2014 for the 2009 and 2010 tax years and (2) on April 20, 2017 for the 2011 and 2012 tax years. The statutory notices of deficiency both included un-agreed income adjustments related principally to transfer pricing adjustments regarding the purchase, distribution, and sale of store-brand OTC pharmaceutical products in the United States. In addition, the statutory notice of deficiency for the 2011 and 2012 tax years included the capitalization of certain expenses that were deducted when paid or incurred in defending against certain patent infringement lawsuits. We fully paid the assessed amounts of tax, interest, and penalties set forth in the statutory notices and filed timely claims for refund on June 11, 2015 and June 7, 2017 for the 2009-2010 tax years and 2011-2012 tax years, respectively. Our claims for refund were disallowed by certified letters dated August 18, 2015 and July 11, 2017, for the 2009-2010 tax years and 2011-2012 tax years, respectively. The complaint was timely, based upon the refund claim denials, and seeks refunds of tax, interest, and penalties of $37.2 million for the 2009 tax year, $61.5 million for the 2010 tax year, $40.2 million for the 2011 tax year, and $24.7 million for the 2012 tax year. 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. The cumulative deferred charge as recorded on the balance sheet is $29.7 million lower than the amounts reflected above due to overpayments credited to succeeding years, such that the actual refund the company is seeking to receive will be reduced by that amount. In addition, we recently conceded a royalty due to Perrigo U.S. on all omeprazole sales that equates to a 24% of our refund claims and any omeprazole adjustments that may be asserted by the IRS for future years. On July 11, 2017, we received a draft Notice of Proposed Adjustment (“NOPA”) associated with transfer pricing positions for the IRS audit of Athena Neurosciences, Inc. (“Athena”), a subsidiary of Elan acquired in 1996, for the years ended December 31, 2011, December 31, 2012, and December 31, 2013. Athena was the originator of the patents associated with Tysabri ® prior to the acquisition of Athena by Elan in 1996. The draft NOPA asserted that when Elan took over the future funding of Athena’s in-process R&D in 1996, after it acquired Athena in 1996, it should have paid a substantially higher royalty rate for the right to exploit Athena’s intellectual property, rather than rates based on transfer pricing documentation prepared by Elan's external tax advisors. In response to the draft NOPA, we provided the IRS with substantial additional documentation supporting our position. On April 26, 2019, we received a revised NOPA from the IRS regarding transfer pricing positions related to the IRS audit of Athena for the years ended December 31, 2011, 2012 and 2013. The NOPA carries forward the theory from a 2017 draft NOPA. The revised NOPA proposes a payment of $843.0 million , which represents additional tax and a 40.0% penalty. This amount excludes consideration of offsetting tax attributes and potentially material interest. We strongly disagree with the IRS position and will pursue all available administrative and judicial remedies, including potentially those available under the U.S. - Ireland Income Tax Treaty to alleviate double taxation. No payment of the additional amounts is required until the matter is resolved administratively, judicially, or through treaty negotiation. On December 22, 2016, we received a notice of proposed adjustment for the IRS audit of Athena for the years ended December 31, 2011, December 31, 2012, and December 31, 2013. Perrigo acquired Elan in December 2013. This proposed adjustment relates to the deductibility of litigation costs. We disagree with the IRS’s position asserted in the notice of proposed adjustment and intend to contest it. We have ongoing audits in multiple other jurisdictions the resolution of which remains uncertain. These jurisdictions include, but are not limited to, the United States, Ireland and other jurisdictions in Europe. In addition to the matters discussed above, the IRS is currently auditing our fiscal years ended June 29, 2013, June 28, 2014, and June 27, 2015 (which covers the period of the Elan transaction). The Israel Tax Authority's audit of our fiscal years ended June 29, 2013 and June 28, 2014 concluded with no material impact to the financial statements and the Israel Tax Authority is now auditing our fiscal years ended December 31, 2015, December 31, 2016 and December 31, 2017. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 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 June 29, 2019 , 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 We have been named as a co-defendant with certain other generic pharmaceutical manufacturers in a number of class actions alleging that we and other manufacturers of the same product engaged in anti-competitive behavior to fix or raise the prices of certain drugs and/or allocate customers starting, in some instances, as early as June 2013. The class actions were filed on behalf of putative classes of (a) direct purchasers, (b) end payors, and (c) indirect resellers. The products in question are Clobetasol gel, Desonide, and Econazole. The same class plaintiffs have filed complaints naming us as a co-defendant, along with 27 other manufacturers, alleging an overarching conspiracy to fix or raise the prices of 15 generic prescription pharmaceutical products starting in 2011. Perrigo manufactures only two of the products at issue, Nystatin cream and Nystatin ointment. We have also been named a co-defendant along with 35 other manufacturers in a complaint filed by three supermarket chains alleging that defendants conspired to fix prices of 31 generic prescription pharmaceutical products starting in 2013. The only allegations specific to us relate to Clobetasol, Desonide, Econazole, Nystatin cream, and Nystatin ointment. On August 3, 2018, a large managed care organization filed a complaint against us alleging price-fixing and customer allocation concerning 17 different products among 27 manufacturers including Perrigo. The only allegations specific to us concern Clobetasol gel, Desonide, Econazole, Nystatin cream, and Nystatin ointment. Most recently, on January 16, 2019, a similar suit was brought by a health insurance carrier in the U.S. District Court for the District of Minnesota alleging a conspiracy to fix prices of 30 products among 30 defendants. The only allegations specific to us concern Clobetasol gel, Desonide, Econazole, Nystatin cream, and Nystatin ointment. Certain complaints listed above were amended in December 2017, January 2018, and April 2019. All of the above complaints have been consolidated for pretrial proceedings, along with complaints filed against other companies alleging price fixing with respect to more than two dozen other drugs, as part of a case captioned In re Generic Pharmaceuticals Pricing Antitrust Litigation, MDL No. 2724 in the U.S. District Court for the Eastern District of Pennsylvania. Pursuant to the court’s schedule staging various cases in phases, we moved to dismiss the complaints relating to Clobetasol and Econazole. The court issued a decision denying the motions in part in October 2018 and issued a second decision in February 2019 dismissing various state law claims, but allowing other state law claims to proceed. We filed answers to the Clobetasol gel complaints on December 31, 2018. We filed answers to the Desonide and Econazole complaints on March 15, 2019. Motions to dismiss certain other complaints listed above were filed on February 21, 2019. Plaintiffs’ oppositions were due on May 2, 2019 and defendants’ replies were filed on June 13, 2019. Certain deposition discovery is allowed to proceed as of the court’s July 15, 2019 order in all cases and documentary discovery is also proceeding. At this stage, we cannot reasonably predict the outcome of the liability, if any, associated with these claims. Securities Litigation In the United States (cases related to events in 2015-2017) On May 18, 2016, a shareholder filed a securities case against us 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.) . The plaintiff purported to represent a class of shareholders for the period from April 21, 2015 through May 11, 2016, inclusive. The original complaint alleged violations of Securities Exchange Act sections 10(b) (and Rule 10b‑5) and 14(e) against both defendants and 20(a) control person liability against Mr. Papa. In general, the allegations concerned 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 integration problems related to the Omega acquisition in the period from April 21, 2015 through May 11, 2016. On July 19, 2016, a different shareholder filed a securities class action against us and our former CEO, Joseph Papa, also in the District of New Jersey ( Wilson v. Papa, et al .). The plaintiff purported to represent a class of persons who sold put options on our shares between April 21, 2015 and May 11, 2016. In general, the allegations and the claims were the same as those made in the original complaint filed in the Roofers' Pension Fund case described above. On December 8, 2016, the court consolidated the Roofers' Pension Fund case and the Wilson case under the Roofers' Pension Fund case number. In February 2017, the court selected the lead plaintiffs for the consolidated case and the lead counsel to the putative class. In March 2017, the court entered a scheduling order. On June 21, 2017, the court-appointed lead plaintiffs filed an amended complaint that superseded the original complaints in the Roofers’ Pension Fund case and the Wilson case. In the amended complaint, the lead plaintiffs seek to represent three classes of shareholders - shareholders who purchased shares during the period April 21, 2015 through May 3, 2017 on the U.S. exchanges; shareholders who purchased shares during the same period on the Tel Aviv exchange; and shareholders who owned shares on November 12, 2015 and held such stock through at least 8:00 a.m. on November 13, 2015 (the final day of the Mylan tender offer) regardless of whether the shareholders tendered their shares. The amended complaint names 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 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. In general, the allegations concern the actions taken by us and the former 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 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. The amended complaint does not include an estimate of damages. 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 Perrigo Company plc, Joe Papa, and Judy Brown. The claims (described above) that were not dismissed relate to the integration issues regarding the Omega acquisition and the alleged price fixing activities with respect to six generic prescription pharmaceuticals. The defendants who remain in the case (the Company, Mr. Papa, and Ms. Brown) have filed answers denying liability, and the discovery stage of litigation has begun. We intend to defend the lawsuit vigorously. On November 1, 2017, Carmignac Gestion, S.A., filed a securities lawsuit against us and three individuals (former Chairman and CEO Joseph Papa, former CFO Judy Brown, and former Executive Vice President and Board member Marc Coucke). This lawsuit is not a securities class action. The case is styled Carmignac Gestion, S.A. v. Perrigo Company plc, et al. , and was filed in the U.S. District Court for the District of New Jersey. The complaint asserts claims under Securities Exchange Act sections 10(b) (and Rule 10b-5), 14(e), and 18 against all defendants as well as 20(a) control person liability against the individual defendants. In general, the plaintiff’s allegations focus on events during the period from April 2015 through April 2016. Plaintiff contends that the defendants provided inadequate disclosure throughout the period concerning the valuation and integration of Omega, the financial guidance provided by us during that period, our reporting about the generic prescription pharmaceutical business and its prospects, and the activities surrounding the efforts to defeat the Mylan tender offer during 2015. Many of the allegations in this case overlap with the allegations of the June 2017 amended complaint in the Roofers’ Pension Fund case described above. The plaintiff does not provide an estimate of damages. After the court issued its July 2018 opinion in the Roofers’ Pension Fund case (described above) the parties to this case conferred about how this case should proceed. Because this plaintiff made some factual allegations that were not asserted in the Roofers’ Pension Fund case, the parties agreed that the ruling in the Roofers’ Pension Fund case would apply equally to the common allegations in this case and the remaining defendants (the Company, Mr. Papa, and Ms. Brown) filed a motion to dismiss addressing the additional allegations in this case. On July 31, 2019, the court granted the motion to dismiss in part and denied it in part. The case is now in the discovery phase. We intend to defend the lawsuit vigorously. On January 16, 2018, Manning & Napier Advisors, LLC filed a securities lawsuit against us and three individuals (former Chairman and CEO Joseph Papa, former CFO Judy Brown, and former Executive Vice President and Board member Marc Coucke). This lawsuit is not a securities class action. The case is styled Manning & Napier Advisors, LLC v. Perrigo Company plc, et al. , and was filed in the U.S. District Court for the District of New Jersey. The complaint asserts claims under Securities Exchange Act sections 10(b) (and Rule 10b-5) and 18 against all defendants as well as 20(a) control person liability against the individual defendants. In general, the plaintiff’s allegations focus on events during the period from April 2015 through May 2017. Plaintiff contends that the defendants provided inadequate disclosure at various times during the period concerning valuation and integration of Omega, the financial guidance provided by us during that period, alleged price fixing activities with respect to six generic prescription pharmaceuticals, and alleged improper accounting for the Tysabri ® asset. Many of the allegations in this case overlap with the allegations of the June 2017 amended complaint in the Roofers' Pension Fund case described above. The plaintiff does not provide an estimate of damages. After the court issued its July 2018 opinion in the Roofers’ Pension Fund case (described above) the parties to this case conferred about how this case should proceed. Because this plaintiff made some factual allegations that were not asserted in the Roofers’ Pension Fund case, the parties agreed that the ruling in the Roofers’ Pension Fund case would apply equally to the common allegations in this case and the remaining defendants (the Company, Mr. Papa, and Ms. Brown) filed a motion to dismiss addressing the additional allegations in this case. On July 31, 2019, the court granted the motion to dismiss in part and denied it in part. The case is now in the discovery phase. We intend to defend the lawsuit vigorously. On January 26, 2018, two different plaintiff groups (the Mason Capital group and the Pentwater group) each filed a lawsuit against us and the same individuals who are defendants in the amended complaint in the securities class action case described above ( Roofers’ Pension Fund case). The same law firm represents these two plaintiff groups, and the two complaints are substantially similar. These two cases are not securities class actions. One case is styled Mason Capital L.P., et al. v. Perrigo Company plc, et al. , and was filed in the U.S. District Court for the District of New Jersey. The other case is styled Pentwater Equity Opportunities Master Fund Ltd., et al. v. Perrigo Company plc, et al. , and also was filed in the U.S. District Court for the District of New Jersey. Both cases are assigned to the same federal judge that is hearing the class action case and the other individual cases described above ( Carmignac and Manning & Napier ). Each complaint asserts claims under Securities Exchange Act sections 14(e) (related to tender offer disclosures) against all defendants as well as 20(a) control person liability against the individual defendants. In general, the plaintiffs' allegations describe events during the period from April 2015 through May 2017. Plaintiffs contend that the defendants provided inadequate disclosure during the tender offer period in 2015 and point to disclosures at various times during the period concerning valuation and integration of Omega, the financial guidance provided by us during that period, alleged price fixing activities with respect to six generic prescription pharmaceuticals, and alleged improper accounting for the Tysabri ® asset. Many of the factual allegations in these two cases overlap with the allegations of the June 2017 amended complaint in the Roofers' Pension Fund case described above and the allegations in the Carmignac case described above. The plaintiffs do not provide an estimate of damages. After the court issued its July 2018 opinion in the Roofers’ Pension Fund case (described above), the parties to these cases conferred about how these cases should proceed. The parties agreed that the ruling in the Roofers’ Pension Fund case would apply equally to the common allegations in these cases. The defendants (the Company, Mr. Papa, and Ms. Brown) filed answers denying liability, and the discovery stage of the cases has begun. We intend to defend the lawsuits vigorously. On February 13, 2018, a group of plaintiff investors affiliated with Harel Insurance Investments & Financial Services, Ltd. filed a lawsuit against us and the same individuals who are defendants in the amended complaint in the securities class action case described above ( Roofers’ Pension Fund case). This lawsuit is not a securities class action. The new complaint is substantially similar to the amended complaint in the Roofers' Pension Fund case. The relevant period in the new complaint stretches from February 2014 to May 2, 2017. The complaint adds as defendants two individuals who served on our Board prior to 2016. The case is styled Harel Insurance Company, Ltd., et al. v. Perrigo Company plc, et al. , and was filed in the U.S. District Court for the District of New Jersey and is assigned to the same federal judge that is hearing the class action cases and the four other individual cases described above ( Carmignac , Manning & Napier , Mason Capital , and Pentwater ). The Harel Insurance Company complaint asserts claims under Securities Exchange Act section 10(b) (and related SEC Rule 10b‑5) and section 14(e) (related to tender offer disclosures) against all defendants as well as 20(a) control person liability against the individual defendants. The complaint also asserts claims based on Israeli securities laws. In general, the plaintiffs' allegations describe events during the period from February 2014 through May 2017. Plaintiffs contend that the defendants provided inadequate disclosure during the tender offer events in 2015 and point to disclosures at various times during the period concerning valuation and integration of Omega, the financial guidance provided by us during that period, alleged price fixing activities with respect to six generic prescription pharmaceuticals, and alleged improper accounting for the Tysabri ® asset from February 2014 until the withdrawal of past financial statements in April 2017. Many of the factual allegations in this case overlap with the allegations of the June 2017 amended complaint in the Roofers' Pension Fund case described above and the allegations in the four opt out cases also described above. The plaintiffs do not provide an estimate of damages. After the court issued its July 2018 opinion in the Roofers’ Pension Fund case (described above), the parties to this case conferred about how this case should proceed. The parties agreed that the ruling in the Roofers’ Pension Fund case would apply equally to the common allegations in this case and the remaining defendants (the Company, Mr. Papa, and Ms. Brown) filed answers denying liability, and the discovery stage of the litigation has begun. We intend to defend the lawsuit vigorously. On February 16, 2018, First Manhattan Company filed a securities lawsuit against us and three individuals (former Chairman and CEO Joseph Papa, former CFO Judy Brown, and former Executive Vice President and Board member Marc Coucke). This lawsuit is not a securities class action. The case is styled First Manhattan Co. v. Perrigo Company plc, et al. , and was filed in the U.S. District Court for the District of New Jersey. The case was assigned to the same judge hearing the class action case and the five other opt out cases. The complaint asserts claims under Securities Exchange Act sections 10(b) (and Rule 10b-5), 14(e), and 18 against all defendants as well as 20(a) control person liability against the individual defendants. In general, the plaintiff’s allegations focus on events during the period from April 2015 through May 2017. Plaintiff contends that the defendants provided inadequate disclosure at various times during the period concerning valuation and integration of Omega, the financial guidance provided by us during that period, alleged price fixing activities with respect to six generic prescription pharmaceuticals, and alleged improper accounting for the Tysabri ® asset. This lawsuit was filed by the same law firm that filed the Manning & Napier Advisors case and the Carmignac case described above and generally makes the same factual assertions as in the Manning & Napier Advisors case. Many of the allegations in this case overlap with the allegations of the June 2017 amended complaint in the Roofers' Pension Fund case described above. The plaintiff does not provide an estimate of damages. On April 20, 2018, the plaintiff filed an amended complaint that did not materially change the factual allegations of the original complaint. After the court issued its July 2018 opinion in the Roofers’ Pension Fund case (described above), the parties to this case conferred about how this case should proceed. Because this plaintiff made some factual allegations that were not asserted in the Roofers’ Pension Fund case, the parties agreed that the ruling in the Roofers’ Pension Fund case would apply equally to the common allegations in this case and the remaining defendants filed a motion to dismiss addressing the additional allegations in this case. On July 31, 2019, the court granted the motion to dismiss in part and denied it in part. The case is now in the discovery phase. We intend to defend the lawsuit vigorously. On April 20, 2018, a group of plaintiff investors affiliated with TIAA-CREF filed a lawsuit against us and the same individuals who are the defendants in the Harel Insurance case complaint. This lawsuit is not a securities class action. The law firm representing the plaintiffs in the Harel Insurance case also represents the TIAA-CREF plaintiff entities in this case, and the new complaint is substantially similar to the Harel Insurance complaint. The relevant period in the new complaint is August 14, 2014 to May 2, 2017 inclusive. The case is styled TIAA-CREF Investment Management, LLC., et al. v. Perrigo Company plc, et al ., and was filed in the U.S. District Court for the District of New Jersey and is assigned to the same federal judge that is hearing the class action case and the six other individual cases described above ( Carmignac, Manning & Napier, Mason Capital, Pentwater, Harel Insurance, and First Manhattan ). The TIAA-CREF Investment Management complaint asserts claims under Securities Exchange Act section 10(b) (and related SEC Rule l0b-5), section 14(e) (related to tender offer disclosures) against all defendants as well as section 20(a) control person liability against the individual defendants. In general, plaintiffs' allegations describe events during the period from August 2014 through May 2017. Plaintiffs contend that the defendants provided inadequate disclosure during the tender offer events in 2015 and point to disclosures at various times during the period concerning valuation and integration of Omega, the financial guidance provided by us during that period, alleged price fixing activities with respect to six generic prescription pharmaceuticals, and alleged improper accounting for the Tysabri ® asset from August 2014 until the withdrawal of past financial statements in April 2017. Many of the factual allegations in this case also overlap with the allegations of the June 2017 amended complaint in the Roofers' Pension Fund case described above. The plaintiffs do not provide an estimate of damages. After the court issued its July 2018 opinion in the Roofers’ Pension Fund case (described above) the parties to this case conferred about how this case should proceed. The parties agreed that the ruling in the Roofers’ Pension Fund case would apply equally to this case and the remaining defendants (the Company, Mr. Papa, and Ms. Brown) filed answers denying liability, and the discovery stage of the litigation has begun. We intend to defend the lawsuit vigorously. On October 29, 2018, Nationwide Mutual Funds and Nationwide Variable Insurance Trust (both on behalf of several fund series) filed a securities lawsuit against us and two individuals (former Chairman and CEO Joseph Papa and former CFO Judy Brown). This lawsuit is not a securities class action. The case is styled Nationwide Mutual Funds, et al. v. Perrigo Company plc, et al. , and was filed in the U.S. District Court for the District of New Jersey. The case was assigned to the same judge hearing the class action case and the seven other opt out cases. The complaint asserts claims under Securities Exchange Act sections 10(b) (and Rule 10b-5), and 14(e) against all defendants as well as 20(a) control person liability against the individual defendants. In general, the plaintiffs' allegations focus on events during the period from April 2015 through May 2017 (including the period of the Mylan tender offer). Plaintiffs contend that the defendants provided inadequate disclosure at various times during the period concerning the valuation and integration of Omega, the financial guidance provided by us during that period, and alleged price fixing activities with respect to six generic prescription pharmaceuticals. This lawsuit was filed by the same law firm that filed the First Manhattan case, the Manning & Napier Advisors case, and the Carmignac case described above and generally makes the same factual assertions as in the Manning & Napier case. The complaint does not include factual allegations that the Court dismissed in the July 2018 ruling in the Roofer’s Pension Fund case also described above. Many of the allegations in this case also overlap with the allegations of the June 2017 amended complaint in the Roofers' Pension Fund case described above. The plaintiff does not provide an estimate of damages. The defendants (the Company, Mr. Papa, and Ms. Brown) filed a motion to dismiss addressing the additional allegations in this case. On July 31, 2019, the court granted the motion to dismiss in part and denied it in part. The case is now in the discovery phase. We intend to defend the lawsuit vigorously. On November 15, 2018, a group of plaintiff investors affiliated with Westchester Capital Funds filed a lawsuit against us, our former Chairman and CEO Joseph Papa and our former CFO Judy Brown. This lawsuit is not a securities class action. The same law firm that represents the plaintiffs in the Mason Capital L.P. case and the Pentwater Equity Opportunities Master Fund Ltd. case (described above) represents the affiliates of the Westchester Funds in this lawsuit. The factual allegations of the complaint are substantially similar to the factual allegations of the complaints in the Mason Capital and in the Pentwater cases described above. The case is styled WCM Alternative: Event-Drive Fund, et al. v. Perrigo Co., plc, et al. , and is filed in the U.S. District Court for the District of New Jersey. The WCM case is assigned to the same federal judge that is hearing the Roofer’s Fund class action case and the eight other individual cases described above. The complaint asserts claims under Securities Exchange Act sections 10(b) (and SEC Rule 10b‑5) and 14(e) against all defendants as well as 20(a) control person claims against the individual defendants. In general, the plaintiffs’ allegations describe events during the period from April 2015 through May 2017. Plaintiffs contend that the defendants provided inadequate disclosure during the tender offer period in 2015 as well us up through May 3, 2017. Plaintiffs identify disclosures concerning the valuation and integration of Omega, the financial guidance provided by us during that period, alleged price fixing activities with respect to six generic prescription pharmaceuticals, and alleged improper accounting for the Tysabri ® asset. Many of the factual allegations in this complaint overlap with the allegations of the June 2017 amended complaint in the Roofers’ Pension Fund case described above. The plaintiffs do not provide an estimate of damages. In view of the court’s July 2018 opinion in the Roofers’ Pension Fund case (described above), the parties to this case conferred about how this case should proceed. The parties agreed that the ruling in the Roofers’ Pension Fund case would apply equally to the common allegations in this case. The defendants (the Company, Mr. Papa, and Ms. Brown) filed answers denying liability, and the discovery stage of the cases has begun. We intend to defend the lawsuit vigorously. On November 15, 2018, a group of plaintiff investors affiliated with Hudson Bay Capital Management LP filed a lawsuit against us, our former Chairman and CEO Joseph Papa and our former CFO Judy Brown. This lawsuit is not a securities class action. The same law firm that represents the plaintiffs in the Mason Capital L.P. , the Pentwater Equity Opportunities Master Fund Ltd. , and the WCM cases (described above) represents the affiliates of Hudson Bay Capital Management in this lawsuit. The factual allegations of the complaint are substantially similar to the factual allegations of the complaints in the Mason Capital , in the Pentwater , and in the WCM cases described above. The case is styled Hudson Bay Master Fund Ltd., et al. v. Perrigo Co., plc, et al. , and is filed in the U.S. District Court for the District of New Jersey. The Hudson Bay Fund case is assigned to the same federal judge that is hearing the Roofer’s Fund class action case and the nine other individual cases described above. The complaint asserts claims under Securities Exchange Act section 14(e) against all defendants and section 20(a) control person claims against the individual defendants. In general, the plaintiffs’ allegations describe events during the period from April 2015 through May 2017. Plaintiffs contend that the defendants provided inadequate disclosure during the tender offer period in 2015 and point to disclosures at various times during the period concerning the valuation and integration of Omega, the financial guidance provided by us during that period, alleged price fixing activities with respect to six generic prescription pharmaceuticals, and alleged improper accounting for the Tysabri ® asset. Many of the factual allegations in this complaint overlap with the allegations of the June 2017 amended complaint in the Roofers’ Pension Fund case described above. The plaintiffs do not provide an estimate of damages. In view of the court’s July 2018 opinion in the Roofers’ Pension Fund case (described above), the parties to this case conferred about how this case should proceed. The parties agreed that the ruling in the Roofers’ Pension Fund case would apply equally to the common allegations in this case. The defendants (the Company, Mr. Papa, and Ms. Brown) filed answers denying liability, and the discovery stage of the cases has begun. We intend to defend the lawsuit vigorously. On January 31, 2019, Schwab Capital Trust and a variety of other Schwab entities filed a securities lawsuit against us and two individuals (former Chairman and CEO Joseph Papa and former CFO Judy Brown). This lawsuit is not a securities class action. The case is styled Schwab Capital Trust, et al. v. Perrigo Company plc, et a l., and was filed in the U.S. District Court for the District of New Jersey. The case was assigned to the same judge hearing the class action case and the ten other opt out cases. The complaint asserts claims under Securities Exchange Act sections 10(b) (and Rule 10b‑5), and 14(e) against all defendants as well as 20(a) control person liability against the individual defendants. In general, the plaintiffs’ allegations focus on events during the period from April 2015 through May 2017 (including the period of the Mylan tender offer). Plaintiffs contend that the defendants provided inadequate disclosure at various times during the period concerning the valuation and integration of Omega, the financial guidance provided by us during that period, and alleged price fixing activities with respect to six generic prescription pharmaceuticals. This lawsuit was filed by the same law firm that filed the Carmignac case, the Manning & Napier case, the First Manhattan case, and the Nationwide Mutual Funds case described above and generally makes the same factual assertions as in the Nationwide Mutual Funds case. The complaint does not include factual allegations that the court dismissed in the July 2018 ruling in the Roofer’s Pension Fund case also described above. Many of the allegations in this case also overlap with the allegations of the June 2017 amended complaint in the Roofer’s Pension Fund case described above. The plaintiff does not provide an estimate of damages. The parties have agreed that the defendants will not have to respond to the complaint until 45 days after the court decides the motion to dismiss pending in the Carmignac, Manning & Napier, First Manhattan , and Nationwide Mutua l cases described above. On July 31, 2019, the court granted in part and denied in part the motion to dismiss in the Carmignac and related cases; therefore this case has now also moved into the discovery phase. We |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Jun. 29, 2019 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | RESTRUCTURING CHARGES We periodically take action to reduce redundant expenses and improve operating efficiencies. Restructuring activity includes severance, lease exit costs, and asset impairments. The following reflects our restructuring activity (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Beginning balance $ 20.5 $ 12.4 $ 24.0 $ 21.4 Additional charges 12.2 3.7 18.1 5.2 Payments (9.0 ) (3.1 ) (18.0 ) (13.8 ) Non-cash adjustments 0.3 (0.3 ) (0.1 ) (0.1 ) Ending balance $ 24.0 $ 12.7 $ 24.0 $ 12.7 The charges incurred during the three and six months ended June 29, 2019 were primarily associated with the reorganization of our executive management team and other actions taken to streamline the organization. Of the amount recorded during the six months ended June 29, 2019 , $9.8 million related to the CSCI segment due primarily to the sales force reorganization in France. The charges incurred during the six months ended June 30, 2018 were primarily associated with continued costs from actions we took to streamline our organization as announced on February 21, 2017, as well as additional lease exit costs. All charges are recorded in Restructuring expense on the Condensed Consolidated Financial Statements. The remaining $24.0 million liability for employee severance benefits is expected to be paid within the next year. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Our segments reflect the way in which our management makes operating decisions, allocates resources, and manages the growth and profitability of the Company. The below tables show select financial measures by reporting segment (in millions): Total Assets June 29, December 31, CSCA $ 4,041.9 $ 3,571.7 CSCI 4,593.5 4,613.0 RX 2,793.3 2,798.7 Total $ 11,428.7 $ 10,983.4 Three Months Ended June 29, 2019 June 30, 2018 Net Sales Operating Income (Loss) Intangible Asset Amortization Net Sales Operating Income (Loss) Intangible Asset Amortization CSCA $ 582.1 $ 107.8 $ 9.3 $ 596.9 $ 64.6 $ 15.3 CSCI 327.5 (2.9 ) 43.0 357.9 4.0 49.2 RX 239.4 14.7 21.3 231.6 53.6 20.8 Unallocated — (64.6 ) — — (27.5 ) — Total $ 1,149.0 $ 55.0 $ 73.6 $ 1,186.4 $ 94.7 $ 85.3 Six Months Ended June 29, 2019 June 30, 2018 Net Sales Operating Income (Loss) Intangible Asset Amortization Net Sales Operating Income (Loss) Intangible Asset Amortization CSCA $ 1,163.9 $ 202.0 $ 19.3 $ 1,198.5 $ 183.2 $ 30.5 CSCI 678.3 5.1 87.1 735.7 16.3 100.3 RX 481.3 75.3 42.6 469.2 114.8 41.6 Unallocated — (125.1 ) — — (63.4 ) — Total $ 2,323.5 $ 157.3 $ 149.0 $ 2,403.4 $ 250.9 $ 172.4 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 29, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Animal health business On July 8, 2019 , we completed the sale of our animal health business to PetIQ for base consideration of $185.0 million , which we estimate will result in a pre-tax gain of $80.0 million to $90.0 million . The final purchase price and gain is subject to customary post-closing adjustments for changes to working capital compared to the target working capital on the closing date and is expected to be finalized by the fourth quarter of 2019. Generic product acquisition On July 2, 2019 , we purchased the ANDA for a generic gel product used for the treatment of Hemophilus vaginitis for $49.0 million in cash, which we capitalized as a developed product technology intangible asset. We plan to launch the product during the three months ended September 28, 2019 and begin amortizing it over a 20 -year useful life. Operating results attributable to the product will be included within our RX segment. Ranir Global Holdings, LLC On July 1, 2019 , we acquired 100% of the outstanding equity interest in Ranir, a privately-held company, for total base consideration of $750.0 million in a debt-free, cash-free transaction. We funded the transaction with cash on hand and borrowings under the 2018 Revolver (refer to Note 11 ). Ranir is headquartered in Grand Rapids, Michigan, and is a leading global supplier of private label and branded oral care products. This transaction advances our transformation to a consumer-focused, self-care company while enhancing our position as a global leader in consumer self-care solutions. Ranir operations will be reported in our CSCA segment. During the three and six months ended June 29, 2019, in connection with the acquisition, we incurred $2.2 million of general transaction costs (legal, banking and other professional fees). The amounts were recorded in Administration expenses and were not allocated to the CSCA segment. We are in the process of gathering significant relevant information needed to complete the valuation for the assets acquired and liabilities assumed. As a result, the initial accounting for the acquisition accounting is incomplete. The provisional acquisition amounts recognized for assets acquired and liabilities assumed and the supplemental pro-forma information will be included in our quarterly Report on Form 10-Q for the third quarter of 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("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 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, 2018 |
Principles of consolidation | all adjustments (consisting of normal recurring accruals and other adjustments) considered necessary for a fair presentation of the unaudited Condensed Consolidated Financial Statements have been included and include our accounts and the accounts of all majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Recently Issued Accounting Standards | Recent Accounting Standard Pronouncements Below are recent Accounting Standard Updates ("ASU") that we are still assessing to determine the effect on our Condensed Consolidated Financial Statements. We do not believe that any other recently issued accounting standards could have a material effect on our Condensed Consolidated Financial Statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. Recently Issued Accounting Standards Not Yet Adopted Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters ASU 2018-15: Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This guidance requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. January 1, 2020 We currently plan to adopt the standard prospectively on the effective date. Upon adoption, no impact is currently expected, however, future hosting arrangements treated as service contracts will need to be evaluated for capitalizable costs during implementation. The Consolidated Financial Statement impact will align with the presentation of the underlying hosting contracts, which will be included within Operating expenses. ASU 2018-13: Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement This guidance amends ASC 820 to add, remove, and modify certain disclosure requirements for fair value measurements. January 1, 2020 We currently plan to adopt the standard on the effective date. Upon adoption, we will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurement. We will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2018-19: Codification Improvements for Topic 326: Measurement of Credit Losses on Financial Instruments ASU 2019-05: Financial Instruments-Credit Losses: Targeted Transition Relief This guidance changes the impairment model for most financial assets and certain other instruments, replacing the current "incurred loss" approach with an "expected loss" credit impairment model, which will apply to most financial assets measured at amortized cost, and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities and off-balance sheet credit exposures such as letters of credit. January 1, 2020 We are in the process of completing our evaluation. Upon adoption, we are not expecting a material impact on the financial statements. ASU 2018-18: Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 This guidance amends ASC 808 to clarify that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. The proposed guidance would be applied retrospectively to the date of initial adoption of Topic 606. January 1, 2020 We are in the process of completing our evaluation. Upon adoption, we are not expecting a material impact on the financial statements. ASU 2018-14: Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans This guidance amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other post-retirement plans. December 31, 2020 We are currently evaluating the implications of adoption on our Consolidated Financial Statements. |
Derivatives instruments and hedging | On January 1, 2019, we adopted Accounting Standards Update No. 2017-12 Targeted Improvements to Accounting for Hedge Activities ("ASU 2017-12") using a modified retrospective approach. Among other provisions, the new standard required modifications to existing presentation and disclosure requirements on a prospective basis. As such, certain disclosures for the three and six months ended June 30, 2018 below conform to the disclosure requirements prior to the adoption of ASU 2017-12. Prior to the adoption of ASU 2017-12, we were required to separately measure and reflect the amount by which the hedging instrument did not offset the changes in the fair value or cash flows of hedged items, which was referred to as the ineffective amount. We assessed hedge effectiveness on a quarterly basis and recorded the gain or loss related to the ineffective portion of derivative instruments, if any, in Other (income) expense, net on the Condensed Consolidated Statements of Operations. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness. Therefore, we no longer recognize hedge ineffectiveness separately on our Condensed Consolidated Statements of Income, but instead recognize the entire change in the fair value of: • Cash flow hedges included in the assessment of hedge effectiveness in OCI. The amounts recorded in OCI will subsequently be reclassified to earnings in the same line item on the Condensed Consolidated Statements of Operations as impacted by the hedged item when the hedged item affects earnings; and • Fair value hedges included in the assessment of hedge effectiveness in the same line item on the Condensed Consolidated Statements of Operations that is used to present the earnings effect of the hedged item. Prior to the adoption of ASU 2017-12, we excluded option premiums and forward points (excluded components) from our assessment of hedge effectiveness for our foreign exchange cash flow hedges. We recognized all changes in fair value of the excluded components in Other (income) expense, net , on the Condensed Consolidated Statements of Operations. The amendments in ASU 2017-12 continue to allow those components to be excluded from the assessment of hedge effectiveness and add cross-currency basis spread as an allowable excluded component. The provisions of ASU 2017-12 allow a policy election to either continue to recognize changes in the fair value of the excluded components currently in earnings or to recognize the initial value of the excluded component using an amortization approach. We have elected to recognize the initial value of the excluded component on a straight-line basis over the life of the derivative instrument, within the same line item on the Condensed Consolidated Statements of Operations that is used to present the earnings effect of the hedged item. The cumulative effect adjustment between Accumulated Other Comprehensive Income ("AOCI") and Retained earnings (accumulated deficit) from applying this policy on existing hedges at the date of adoption was immaterial. We record derivative instruments on the balance sheet on a gross basis as either an asset or liability measured at fair value (refer to Note 6 ). Additionally, changes in a derivative's fair value, which are measured at the end of each period, are recognized in earnings unless a derivative can be designated in a qualifying hedging relationship. Designated derivatives meet hedge accounting criteria, which means the fair value of the hedge is recorded in shareholders’ equity as a component of OCI, net of tax. The deferred gains and losses are recognized in income in the period in which the hedged item affects earnings. We have elected to recognize the fair value of the excluded component in OCI and amortize on a straight-line basis over the life of the derivative instrument, within the same line item on the Condensed Consolidated Statements of Operations that is used to present the earnings effect of the hedged item. All of our designated derivatives are assessed for hedge effectiveness quarterly. All of our designated derivatives were classified as cash flow hedges as of June 29, 2019 and December 31, 2018 . We also have economic non-designated derivatives that do not meet hedge accounting criteria. These derivative instruments are adjusted to current market value at the end of each period through earnings. Gains or losses on these instruments are offset substantially by the remeasurement adjustment on the hedged item. We are exposed to credit loss in the event of nonperformance by the counterparties on derivative contracts. It is our policy to manage our credit risk on these transactions by dealing only with financial institutions having a long-term credit rating of "Aa3" or better and by distributing the contracts among several financial institutions to diversify credit concentration risk. Should a counterparty default, our maximum exposure to loss is the asset balance of the instrument. The maximum term of our forward currency exchange contracts is 18 months. We enter into certain derivative financial instruments, when available on a cost-effective basis, to mitigate our risk associated with changes in interest rates and foreign currency exchange rates as follows: Interest rate risk management - We are exposed to the impact of interest rate changes through our cash investments and borrowings. We utilize a variety of strategies to manage the impact of changes in interest rates including using a mix of debt maturities along with both fixed-rate and variable-rate debt. In addition, we may enter into treasury-lock agreements and interest rate swap agreements on certain investing and borrowing transactions to manage our exposure to interest rate changes and our overall cost of borrowing. Foreign currency exchange risk management - We conduct business in several major currencies other than the U.S. dollar and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce cash flow volatility associated with foreign exchange rate changes on a consolidated basis to allow management to focus its attention on business operations. Accordingly, we enter into various contracts that change in value as foreign exchange rates change to protect the value of existing foreign currency assets and liabilities, commitments, and anticipated foreign currency sales and expenses. All derivative instruments are managed on a consolidated basis to efficiently net exposures and thus take advantage of any natural offsets. Gains and losses related to the derivative instruments are expected to be offset largely by gains and losses on the original underlying asset or liability. We do not use derivative financial instruments for speculative purposes. |
Leases | We adopted ASU 2016-02, Leases, as of January 1, 2019, using the modified retrospective transition approach, with a cumulative-effect adjustment to the opening balance of retained earnings as of the effective date. The financial results reported in periods prior to 2019 are unchanged. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in additional operating lease liabilities and lease assets, including the transition of existing capital lease liabilities and lease assets to finance classification, of approximately $166.5 million and $164.0 million , respectively, as of January 1, 2019. Upon adoption, the difference between the lease assets and lease liabilities partially related to existing deferred lease liabilities reclassified to lease assets and the transition of capital lease assets and liabilities at their carrying values. In addition, historical build-to-suit assets and liabilities were removed on transition and recorded as an adjustment to retained earnings, net of deferred tax impact. The standard did not materially impact our consolidated net income or cash flow classification. We lease certain office buildings, warehouse facilities, vehicles, and plant, office, and computer equipment. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We evaluate arrangements at inception to determine if lease components are included. An arrangement includes a lease component if it identifies an asset and we have control over the asset. For new leases beginning January 1, 2019 or later, we have elected for all asset classes not to separate lease components from the non-lease components included in an arrangement when measuring the leased asset and leased liability. Lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for leases on a straight-line basis over the lease term. We apply the portfolio approach to certain groups of computer equipment and vehicle leases when the term, classification, and asset type are identical. The discount rate selected is the incremental borrowing rate we would obtain for a secured financing of the lease asset over a similar term. Many of our leases include one or more options to extend the lease term. Certain leases also include options to terminate early or purchase the leased property, all of which are executed at our sole discretion. Optional periods may be included in the lease term and measured as part of the lease asset and lease liability if we are reasonably certain to exercise our right to use the leased asset during the optional periods. We generally consider renewal options to be reasonably certain of execution and included in the lease term when significant leasehold improvements have been made by us to the leased assets. The depreciable lives of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include contingent rental payments based on per unit usage over contractual levels (e.g., miles driven or machine hours used) and others include rental payments adjusted periodically for market reviews or inflationary indexes. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements | As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. Recently Issued Accounting Standards Not Yet Adopted Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters ASU 2018-15: Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This guidance requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. January 1, 2020 We currently plan to adopt the standard prospectively on the effective date. Upon adoption, no impact is currently expected, however, future hosting arrangements treated as service contracts will need to be evaluated for capitalizable costs during implementation. The Consolidated Financial Statement impact will align with the presentation of the underlying hosting contracts, which will be included within Operating expenses. ASU 2018-13: Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement This guidance amends ASC 820 to add, remove, and modify certain disclosure requirements for fair value measurements. January 1, 2020 We currently plan to adopt the standard on the effective date. Upon adoption, we will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurement. We will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2018-19: Codification Improvements for Topic 326: Measurement of Credit Losses on Financial Instruments ASU 2019-05: Financial Instruments-Credit Losses: Targeted Transition Relief This guidance changes the impairment model for most financial assets and certain other instruments, replacing the current "incurred loss" approach with an "expected loss" credit impairment model, which will apply to most financial assets measured at amortized cost, and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities and off-balance sheet credit exposures such as letters of credit. January 1, 2020 We are in the process of completing our evaluation. Upon adoption, we are not expecting a material impact on the financial statements. ASU 2018-18: Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 This guidance amends ASC 808 to clarify that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. The proposed guidance would be applied retrospectively to the date of initial adoption of Topic 606. January 1, 2020 We are in the process of completing our evaluation. Upon adoption, we are not expecting a material impact on the financial statements. ASU 2018-14: Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans This guidance amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other post-retirement plans. December 31, 2020 We are currently evaluating the implications of adoption on our Consolidated Financial Statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | We generated net sales in the following geographic locations (1) (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, U.S. $ 768.6 $ 772.3 $ 1,537.4 $ 1,558.7 Europe (2) 315.8 344.3 656.7 706.2 All other countries (3) 64.6 69.8 129.4 138.5 $ 1,149.0 $ 1,186.4 $ 2,323.5 $ 2,403.4 (1) Derived from the location of the entity that sells to a third party. (2) Includes Ireland net sales of $6.9 million and $12.1 million for the three and six months ended June 29, 2019 , respectively, and $5.0 million and $10.4 million for the three and six months ended June 30, 2018 , respectively. (3) Includes net sales generated primarily in Israel, Mexico, Australia and Canada. The following is a summary of our net sales by category (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, CSCA (1) Cough/cold/allergy/sinus $ 120.9 $ 109.3 $ 253.5 $ 250.8 Gastrointestinal 106.2 103.0 206.5 195.2 Infant nutritionals 85.5 109.2 181.5 212.6 Analgesics 88.2 92.2 177.0 185.9 Smoking cessation 77.0 71.2 143.8 137.1 Animal health 22.4 31.9 42.0 58.2 Vitamins, minerals and dietary supplements 3.9 4.3 7.3 7.3 Other CSCA (2) 78.0 75.8 152.3 151.4 Total CSCA 582.1 596.9 1,163.9 1,198.5 CSCI Cough/cold/allergy/sinus 74.1 84.7 169.8 183.4 Lifestyle 81.2 86.1 162.7 175.8 Personal care and derma-therapeutics 69.2 79.7 135.2 155.3 Natural health and vitamins, minerals and dietary supplements 25.6 27.9 55.4 61.1 Anti-parasites 26.0 30.4 52.7 58.5 Other CSCI (3) 51.4 49.1 102.5 101.6 Total CSCI 327.5 357.9 678.3 735.7 Total RX 239.4 231.6 481.3 469.2 Total net sales $ 1,149.0 $ 1,186.4 $ 2,323.5 $ 2,403.4 (1) Includes net sales from our OTC contract manufacturing business. (2) Consists primarily of branded OTC, diabetic care, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales. (3) Consists primarily of liquid licensed products, our distribution business and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales. |
Contract with Customer Balances | The following table provides information about contract assets from contracts with customers (in millions): Balance Sheet Location June 29, December 31, Short-term contract assets Prepaid expenses and other current assets $ 16.6 $ 25.5 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amount of goodwill, by reportable segment, were as follows (in millions): December 31, Transfer to assets held-for-sale Currency Translation Adjustments June 29, CSCA (1) $ 1,713.7 $ (42.2 ) $ 2.1 $ 1,673.6 CSCI (2) 1,151.3 — (9.2 ) 1,142.1 RX 1,114.8 — 4.8 1,119.6 Total goodwill $ 3,979.8 $ (42.2 ) $ (2.3 ) $ 3,935.3 (1) We had accumulated impairments of $24.5 million and $161.2 million as of June 30, 2018 and June 29, 2019 , respectively. (2) We had accumulated impairments of $868.4 million as of June 30, 2018 and June 29, 2019 . |
Schedule of finite and indefinite-lived intangible assets | Intangible assets and related accumulated amortization consisted of the following (in millions): June 29, 2019 December 31, 2018 Gross Accumulated Amortization Gross Accumulated Amortization Indefinite-lived intangibles : Trademarks, trade names, and brands $ 18.0 $ — $ 18.1 $ — In-process research and development 14.5 — 31.2 — Total indefinite-lived intangibles $ 32.5 $ — $ 49.3 $ — Definite-lived intangibles : Distribution and license agreements and supply agreements $ 173.7 $ 105.2 $ 178.6 $ 99.0 Developed product technology, formulations, and product rights 1,321.0 706.1 1,318.8 654.6 Customer relationships and distribution networks 1,558.5 613.9 1,586.6 566.5 Trademarks, trade names, and brands 1,266.0 219.5 1,282.4 188.5 Non-compete agreements 8.3 7.6 12.9 11.8 Total definite-lived intangibles $ 4,327.5 $ 1,652.3 $ 4,379.3 $ 1,520.4 Total intangible assets $ 4,360.0 $ 1,652.3 $ 4,428.6 $ 1,520.4 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory, current | Major components of inventory were as follows (in millions): June 29, December 31, Finished goods $ 501.2 $ 444.9 Work in process 192.8 197.5 Raw materials 246.5 235.6 Total inventories $ 940.5 $ 878.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The table below summarizes the valuation of our financial instruments carried at fair value by the applicable pricing categories (in millions): June 29, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Measured at fair value on a recurring basis: Assets: Investment securities $ 2.8 $ — $ — $ 9.4 $ — $ — Foreign currency forward contracts — 4.0 — — 3.8 — Funds associated with Israeli severance liability — 14.0 — — 13.0 — Royalty Pharma contingent milestone payments — — 89.1 — — 323.2 Total assets $ 2.8 $ 18.0 $ 89.1 $ 9.4 $ 16.8 $ 323.2 Liabilities: Foreign currency forward contracts $ — $ 3.6 $ — $ — $ 9.2 $ — Contingent consideration — — 12.1 — — 15.3 Total liabilities $ — $ 3.6 $ 12.1 $ — $ 9.2 $ 15.3 Measured at fair value on a non-recurring basis: Assets: Goodwill (1) $ — $ — $ — $ — $ — $ 42.2 Indefinite-lived intangible assets (2) — — — — — 10.5 Definite-lived intangible assets (3) — — — — — 22.4 Total assets $ — $ — $ — $ — $ — $ 75.1 (1) As of December 31, 2018, goodwill with a carrying amount of $178.9 million was written down to a fair value of $42.2 million . (2) As of December 31, 2018, indefinite-lived intangible assets with a carrying amount of $46.9 million were written down to a fair value of $10.5 million . (3) As of December 31, 2018, definite-lived intangible assets with a carrying amount of $72.0 million were written down to a fair value of $22.4 million . |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table below summarizes the change in fair value of the Royalty Pharma contingent milestone payments (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Beginning balance $ 83.6 $ 124.9 $ 323.2 $ 134.5 Payments received — — (250.0 ) — Change in fair value 5.5 0.6 15.9 (9.0 ) Ending balance $ 89.1 $ 125.5 $ 89.1 $ 125.5 |
Schedule of Fair Value Assumptions | The table below represents the volatility and rate of return: Three Months Ended June 29, June 30, Volatility 30.0 % 30.0 % Rate of return 7.99 % 8.09 % |
Reconciliation of Level 3 Liabilities | The table below summarizes the change in fair value of contingent consideration (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Beginning balance $ 12.4 $ 18.1 $ 15.3 $ 22.0 Changes in value 0.9 (1.8 ) (2.0 ) (1.4 ) Currency translation adjustments — (0.1 ) — — Settlements and other adjustments (1.2 ) — (1.2 ) (4.4 ) Ending balance $ 12.1 $ 16.2 $ 12.1 $ 16.2 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Our fixed rate long-term debt consisted of the following (in millions): June 29, December 31, Level 1 Level 2 Level 1 Level 2 Public Bonds Carrying Value (excluding discount) $ 2,600.0 $ 2,600.0 Fair value $ 2,533.0 $ 2,316.6 Retail bond and private placement note Carrying value (excluding premium) $ 153.5 $ 292.5 Fair value $ 167.8 $ 307.9 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Investments [Abstract] | |
Equity securities | The following table summarizes the measurement category, balance sheet location, and balances of our equity securities (in millions): Measurement Category Balance Sheet Location June 29, December 31, 2018 Fair value method Prepaid expenses and other current assets $ 2.8 $ 9.4 Fair value method (1) Other non-current assets $ 2.8 $ 4.4 Equity method Other non-current assets $ 16.8 $ 15.1 (1) Measured at fair value using the Net Asset Value practical expedient. |
Equity security expense (income) | The following table summarizes the expense (income) recognized in earnings of our equity securities (in millions): Three Months Ended Six Months Ended Measurement Category Income Statement Location June 29, June 30, June 29, June 30, Fair value method Other (income) expense, net $ 1.8 $ 6.3 $ 7.9 $ 10.6 Equity method Other (income) expense, net $ (1.0 ) $ (0.9 ) $ (1.7 ) $ (0.7 ) |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and liabilities held for sale | The amounts consisted of the following (in millions): June 29, Assets held for sale Current assets $ 29.3 Property, plant and equipment, net 10.8 Goodwill and indefinite-lived intangible assets 42.2 Definite-lived intangible assets, net 36.4 Other assets 25.7 Total assets held for sale $ 144.4 Liabilities held for sale Current liabilities $ 11.3 Other liabilities 38.3 Total liabilities held for sale $ 49.6 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Foreign Currency Forward Contracts | Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows (in millions): Notional Amount June 29, December 31, Israeli Shekel (ILS) $ 340.6 $ 232.6 British Pound (GBP) 111.0 90.2 European Euro (EUR) 108.0 134.2 Swedish (SEK) 42.2 38.7 Danish Krone (DKK) 58.2 56.5 United States Dollar (USD) 46.2 39.3 Canadian Dollar (CAD) 41.9 31.7 Polish Zloty (PLZ) 33.5 18.2 Chinese Yuan (CNY) 20.0 — Norwegian Krone (NOK) 6.8 6.2 Romanian New Leu (RON) 5.9 4.4 Mexican Peso (MPX) 4.2 25.9 Other 12.6 8.7 Total $ 831.1 $ 686.6 |
Schedule of derivative instruments in statement of financial position, fair value | The balance sheet location and gross fair value of our outstanding derivative instruments were as follows (in millions): Asset Derivatives Fair Value Balance Sheet Location June 29, December 31, Designated derivatives: Foreign currency forward contracts Prepaid expenses and other current assets $ 1.0 $ 2.0 Non-designated derivatives: Foreign currency forward contracts Prepaid expenses and other current assets $ 3.0 $ 1.8 Liability Derivatives Fair Value Balance Sheet Location June 29, December 31, Designated derivatives: Foreign currency forward contracts Accrued liabilities $ 2.6 $ 6.4 Non-designated derivatives: Foreign currency forward contracts Accrued liabilities $ 1.0 $ 2.8 |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following tables summarize the effect of derivative instruments designated as cash-flow hedging instruments in AOCI (in millions): Three Months Ended June 29, 2019 Instrument Amount of Gain/(Loss) Recorded in OCI Classification of Gain/(Loss) Reclassified from AOCI into Earnings Amount of Gain/(Loss) Reclassified from AOCI into Earnings Classification of Gain/(Loss) Recognized into Earnings Related to Amounts Excluded from Effectiveness Testing Amount of Gain/(Loss) Recognized in Earnings on Derivatives Related to Amounts Excluded from Effectiveness Testing Interest rate swap agreements Interest expense, net $ (0.4 ) Interest expense, net $ — Foreign currency forward contracts $ 1.1 Net sales 0.1 Net sales 0.1 Cost of sales (0.2 ) Cost of sales (1.1 ) $ (0.5 ) $ (1.0 ) Six Months Ended June 29, 2019 Instrument Amount of Gain/(Loss) Recorded in OCI (1) Classification of Gain/(Loss) Reclassified from AOCI into Earnings Amount of Gain/(Loss) Reclassified from AOCI into Earnings Classification of Gain/(Loss) Recognized into Earnings Related to Amounts Excluded from Effectiveness Testing Amount of Gain/(Loss) Recognized in Earnings on Derivatives Related to Amounts Excluded from Effectiveness Testing Interest rate swap agreements Interest expense, net $ (1.0 ) Interest expense, net $ — Foreign currency forward contracts $ — Net sales 0.3 Net sales — Cost of sales (1.4 ) Cost of sales (2.2 ) $ (2.1 ) $ (2.2 ) (1) Net loss of $1.6 million is expected to be reclassified out of AOCI into earnings during the next 12 months. |
Amount of Gain/(Loss) Reclassified from AOCI into Earnings (Effective Portion) | Three Months Ended June 30, 2018 Effective Portion Instrument Amount of Gain/(Loss) Recorded in OCI Classification of Gain/(Loss) Reclassified from AOCI into Earnings Amount of Gain/(Loss) Reclassified from AOCI into Earnings Interest rate swap agreements Interest expense, net $ (0.4 ) Foreign currency forward contracts $ (4.3 ) Net sales — Cost of sales 1.6 Interest expense, net (1.1 ) Other (income) expense, net (0.1 ) $ — Six Months Ended June 30, 2018 Effective Portion Instrument Amount of Gain/(Loss) Recorded in OCI Classification of Gain/(Loss) Reclassified from AOCI into Earnings Amount of Gain/(Loss) Reclassified from AOCI into Earnings Interest rate swap agreements Interest expense, net $ (0.9 ) Foreign currency forward contracts $ (4.3 ) Net sales — Cost of sales 3.9 Interest expense, net (2.0 ) Other (income) expense, net (0.5 ) $ 0.5 |
Amount of Gain/(Loss) Recognized against Earnings | The amounts of gain/(loss) recognized in earnings related to our non-designated derivatives on the Condensed Consolidated Statements of Operations were as follows (in millions): Three Months Ended Six Months Ended Non-Designated Derivatives Income Statement Location June 29, June 30, June 29, June 30, Foreign currency forward contracts Other (income) expense, net $ (4.3 ) $ 11.8 $ (13.1 ) $ 8.6 Interest expense, net 1.4 0.2 1.8 (0.7 ) Total $ (2.9 ) $ 12.0 $ (11.3 ) $ 7.9 |
Classification of Gain (Loss) Recognized in Earnings on Fair Value and Cash Flow Hedging Relationships | The classification and amount of gain/(loss) recognized in earnings on fair value and cash flow hedging relationships are as follows (in millions): Three Months Ended June 29, 2019 Net Sales Cost of Sales Interest Expense, net Other (Income) Expense, net Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded $ 1,149.0 $ 718.2 $ 31.2 $ 2.3 The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships Foreign currency forward contracts Amount of gain or (loss) reclassified from AOCI into earnings $ 0.1 $ (0.2 ) $ — $ — Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach $ 0.1 $ (1.1 ) $ — $ — Interest rate swap agreements Amount of gain or (loss) reclassified from AOCI into earnings $ — $ — $ (0.4 ) $ — Six Months Ended June 29, 2019 Net Sales Cost of Sales Interest Expense, net Other (Income) Expense, net Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded $ 2,323.5 $ 1,443.9 $ 59.8 $ 5.5 The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships Foreign currency forward contracts Amount of gain or (loss) reclassified from AOCI into earnings $ 0.3 $ (1.4 ) $ — $ — Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach $ — $ (2.2 ) $ — $ — Interest rate swap agreements Amount of gain or (loss) reclassified from AOCI into earnings $ — $ — $ (1.0 ) $ — |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Leases [Abstract] | |
Balance Sheet Location of Lease Assets and Liabilities | The balance sheet location of our lease assets and liabilities were as follows (in millions): Assets Balance Sheet Location June 29, Operating Operating lease assets $ 135.4 Finance Other non-current assets 17.1 Total $ 152.5 Liabilities Balance Sheet Location June 29, Current Operating Accrued liabilities $ 32.9 Finance Current indebtedness 1.9 Non-Current Operating Other non-current liabilities 107.4 Finance Long-term debt, less current portion 11.8 Total $ 154.0 The below table shows our lease assets and liabilities by reporting segment (in millions): Assets Liabilities Operating Financing Operating Financing June 29, June 29, June 29, June 29, CSCA $ 22.7 $ 8.9 $ 22.9 $ 8.4 CSCI 42.0 6.1 42.9 3.2 RX 37.5 0.3 38.9 0.3 Unallocated 33.2 1.8 35.6 1.8 Total $ 135.4 $ 17.1 $ 140.3 $ 13.7 |
Finance Lease Maturity | The annual future maturities of our leases as of June 29, 2019 are as follows (in millions): Operating Leases Finance Leases Total 2019 $ 19.4 $ 1.2 $ 20.6 2020 34.6 2.3 36.9 2021 24.9 3.6 28.5 2022 18.3 1.2 19.5 2023 14.0 1.0 15.0 After 2023 51.7 7.8 59.5 Total lease payments 162.9 17.1 180.0 Less: Interest 22.6 3.4 26.0 Present value of lease liabilities $ 140.3 $ 13.7 $ 154.0 |
Operating Lease Liability Maturity | The annual future maturities of our leases as of June 29, 2019 are as follows (in millions): Operating Leases Finance Leases Total 2019 $ 19.4 $ 1.2 $ 20.6 2020 34.6 2.3 36.9 2021 24.9 3.6 28.5 2022 18.3 1.2 19.5 2023 14.0 1.0 15.0 After 2023 51.7 7.8 59.5 Total lease payments 162.9 17.1 180.0 Less: Interest 22.6 3.4 26.0 Present value of lease liabilities $ 140.3 $ 13.7 $ 154.0 |
Lease Expense | Lease expense was as follows (in millions): Three Months Ended Six Months Ended June 29, June 29, Operating leases (a) $ 11.2 $ 23.2 Finance leases Amortization $ 0.7 $ 1.3 Interest 0.1 0.2 Total finance leases $ 0.8 $ 1.5 (a) Includes short-term leases and variable lease costs, which are immaterial . |
Weighted Average Lease Terms and Discount Rates | Our weighted average lease terms and discount rates are as follows: June 29, Weighted-average remaining lease term (in years) Operating leases 6.59 Finance leases 9.43 Weighted-average discount rate Operating leases 4.19 % Finance leases 4.35 % |
Leease Cash Flow Classifications | Our lease cash flow classifications are as follows (in millions): Six Months Ended June 29, Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 23.0 Operating cash flows for finance leases $ 0.2 Financing cash flows for finance leases $ 1.4 Leased assets obtained in exchange for new finance lease liabilities $ 7.8 Leased assets obtained in exchange for new operating lease liabilities $ 12.8 |
Indebtedness (Tables)
Indebtedness (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Total borrowings outstanding are summarized as follows (in millions): June 29, December 31, Revolving Credit Agreement 2018 Revolver due March 8, 2023 $ 325.0 $ — Term loan 2018 Term loan due March 8, 2020 (1) 323.4 351.3 Notes and Bonds Coupon Due 5.000% May 23, 2019 — 137.6 3.500% March 15, 2021 280.4 280.4 3.500% December 15, 2021 309.6 309.6 5.105% July 28, 2023 (1) 153.5 154.9 4.000% November 15, 2023 215.6 215.6 3.900% December 15, 2024 700.0 700.0 4.375% March 15, 2026 700.0 700.0 5.300% November 15, 2043 90.5 90.5 4.900% December 15, 2044 303.9 303.9 Total notes and bonds 2,753.5 2,892.5 Other financing 87.2 2.8 Unamortized premium (discount), net 8.9 12.2 Deferred financing fees (14.8 ) (16.4 ) Total borrowings outstanding 3,483.2 3,242.4 Current indebtedness (398.8 ) (190.2 ) Total long-term debt less current portion $ 3,084.4 $ 3,052.2 (1) Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate. |
Earnings Per Share and Shareh_2
Earnings Per Share and Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | A reconciliation of the numerators and denominators used in the basic and diluted earnings per share ("EPS") calculation is as follows (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Numerator: Net income $ 9.0 $ 36.2 $ 72.9 $ 117.0 Denominator: Weighted average shares outstanding for basic EPS 136.0 138.1 136.0 139.5 Dilutive effect of share-based awards 0.5 0.6 0.3 0.5 Weighted average shares outstanding for diluted EPS 136.5 138.7 136.3 140.0 Anti-dilutive share-based awards excluded from computation of diluted EPS 1.7 1.7 1.8 0.9 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of 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 tax Foreign Currency Translation Adjustments Post-Retirement and Pension Liability Adjustments, net of tax Total AOCI Balance at December 31, 2018 $ (15.5 ) $ 104.5 $ (4.4 ) $ 84.6 OCI before reclassifications 0.2 11.0 — 11.2 Amounts reclassified from AOCI 4.2 — (0.5 ) 3.7 Other comprehensive loss $ 4.4 $ 11.0 $ (0.5 ) $ 14.9 Balance at June 29, 2019 $ (11.1 ) $ 115.5 $ (4.9 ) $ 99.5 |
Income Taxes Income Taxes (Tabl
Income Taxes Income Taxes (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | The effective tax rates were as follows: Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, 66.6 % 34.5 % 32.5 % 29.4 % |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Restructuring Charges [Abstract] | |
Restructuring and related costs | The following reflects our restructuring activity (in millions): Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, Beginning balance $ 20.5 $ 12.4 $ 24.0 $ 21.4 Additional charges 12.2 3.7 18.1 5.2 Payments (9.0 ) (3.1 ) (18.0 ) (13.8 ) Non-cash adjustments 0.3 (0.3 ) (0.1 ) (0.1 ) Ending balance $ 24.0 $ 12.7 $ 24.0 $ 12.7 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The below tables show select financial measures by reporting segment (in millions): Total Assets June 29, December 31, CSCA $ 4,041.9 $ 3,571.7 CSCI 4,593.5 4,613.0 RX 2,793.3 2,798.7 Total $ 11,428.7 $ 10,983.4 Three Months Ended June 29, 2019 June 30, 2018 Net Sales Operating Income (Loss) Intangible Asset Amortization Net Sales Operating Income (Loss) Intangible Asset Amortization CSCA $ 582.1 $ 107.8 $ 9.3 $ 596.9 $ 64.6 $ 15.3 CSCI 327.5 (2.9 ) 43.0 357.9 4.0 49.2 RX 239.4 14.7 21.3 231.6 53.6 20.8 Unallocated — (64.6 ) — — (27.5 ) — Total $ 1,149.0 $ 55.0 $ 73.6 $ 1,186.4 $ 94.7 $ 85.3 Six Months Ended June 29, 2019 June 30, 2018 Net Sales Operating Income (Loss) Intangible Asset Amortization Net Sales Operating Income (Loss) Intangible Asset Amortization CSCA $ 1,163.9 $ 202.0 $ 19.3 $ 1,198.5 $ 183.2 $ 30.5 CSCI 678.3 5.1 87.1 735.7 16.3 100.3 RX 481.3 75.3 42.6 469.2 114.8 41.6 Unallocated — (125.1 ) — — (63.4 ) — Total $ 2,323.5 $ 157.3 $ 149.0 $ 2,403.4 $ 250.9 $ 172.4 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue by Geographic Location (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | $ 1,149 | $ 1,186.4 | $ 2,323.5 | $ 2,403.4 |
U.S. | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | 768.6 | 772.3 | 1,537.4 | 1,558.7 |
Europe | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1],[2] | 315.8 | 344.3 | 656.7 | 706.2 |
All other countries | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1],[3] | 64.6 | 69.8 | 129.4 | 138.5 |
Ireland | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 6.9 | $ 5 | $ 12.1 | $ 10.4 | |
[1] | Derived from the location of the entity that sells to a third party. | ||||
[2] | Includes Ireland net sales of $6.9 million and $12.1 million for the three and six months ended June 29, 2019 , respectively, and $5.0 million and $10.4 million for the three and six months ended June 30, 2018 , respectively. | ||||
[3] | Includes net sales generated primarily in Israel, Mexico, Australia and Canada. |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Revenue by Product (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | $ 1,149 | $ 1,186.4 | $ 2,323.5 | $ 2,403.4 |
CSCA | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 582.1 | 596.9 | 1,163.9 | 1,198.5 |
CSCA | Cough/Cold/Allergy/Sinus | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 120.9 | 109.3 | 253.5 | 250.8 |
CSCA | Gastrointestinal | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 106.2 | 103 | 206.5 | 195.2 |
CSCA | Infant nutritionals | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 85.5 | 109.2 | 181.5 | 212.6 |
CSCA | Analgesics | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 88.2 | 92.2 | 177 | 185.9 |
CSCA | Smoking cessation | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 77 | 71.2 | 143.8 | 137.1 |
CSCA | Animal health | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 22.4 | 31.9 | 42 | 58.2 |
CSCA | Vitamins, Minerals and Dietary Supplements | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 3.9 | 4.3 | 7.3 | 7.3 |
CSCA | Other CSCA | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2],[3] | 78 | 75.8 | 152.3 | 151.4 |
CSCI | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 327.5 | 357.9 | 678.3 | 735.7 | |
CSCI | Cough, Cold, and Allergy | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 74.1 | 84.7 | 169.8 | 183.4 | |
CSCI | Lifestyle | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 81.2 | 86.1 | 162.7 | 175.8 | |
CSCI | Personal care and derma-therapeutics | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 69.2 | 79.7 | 135.2 | 155.3 | |
CSCI | Natural Health and Vitamins, Minerals and Dietary Supplements | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 25.6 | 27.9 | 55.4 | 61.1 | |
CSCI | Anti-Parasite | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 26 | 30.4 | 52.7 | 58.5 | |
CSCI | Other CSCI | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [4] | 51.4 | 49.1 | 102.5 | 101.6 |
RX | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 239.4 | $ 231.6 | $ 481.3 | $ 469.2 | |
[1] | Derived from the location of the entity that sells to a third party. | ||||
[2] | Includes net sales from our OTC contract manufacturing business. | ||||
[3] | Consists primarily of branded OTC, diabetic care, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales. | ||||
[4] | Consists primarily of liquid licensed products, our distribution business and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales. |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | $ 1,149 | $ 1,186.4 | $ 2,323.5 | $ 2,403.4 |
Contract manufacturing | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 65.8 | $ 77.1 | $ 133.1 | $ 146.5 | |
[1] | Derived from the location of the entity that sells to a third party. |
Revenue Recognition - Schedul_3
Revenue Recognition - Schedule of Contract Balances (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Short-term contract assets | $ 16.6 | $ 25.5 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | May 17, 2019 | Apr. 01, 2019 | May 29, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 |
Business Acquisition [Line Items] | |||||||
Research and Development Expense | $ 43.9 | $ 91.9 | $ 84 | $ 130.3 | |||
Consumer Healthcare Americas | Merck Sharp & Dohme License Agreement | |||||||
Business Acquisition [Line Items] | |||||||
Research and Development Expense | $ 50 | ||||||
Developed Product Technology | Generic Product Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire the ANDA | $ 15.7 | ||||||
Useful life of intangible assets | 20 years | ||||||
Developed Product Technology | Budesonide Nasal Spray and Triamcinolone Nasal Spray | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire the ANDA | $ 14 | ||||||
Income from sales owned by company (percent) | 100.00% | ||||||
Useful life of intangible assets | 10 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Goodwill [Roll Forward] | ||
December 31, 2018 | $ 3,979.8 | |
Transfer to assets held-for-sale | (42.2) | |
Currency Translation Adjustments | (2.3) | |
June 29, 2019 | 3,935.3 | |
CSCA | ||
Goodwill [Roll Forward] | ||
December 31, 2018 | 1,713.7 | |
Transfer to assets held-for-sale | (42.2) | |
Currency Translation Adjustments | 2.1 | |
June 29, 2019 | 1,673.6 | |
Accumulated impairments | (161.2) | $ (24.5) |
CSCI | ||
Goodwill [Roll Forward] | ||
December 31, 2018 | 1,151.3 | |
Currency Translation Adjustments | (9.2) | |
June 29, 2019 | 1,142.1 | |
Accumulated impairments | (868.4) | $ (868.4) |
RX | ||
Goodwill [Roll Forward] | ||
December 31, 2018 | 1,114.8 | |
Currency Translation Adjustments | 4.8 | |
June 29, 2019 | $ 1,119.6 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible categories (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Oct. 01, 2018 | |
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Goodwill | $ 3,935.3 | $ 3,935.3 | $ 3,979.8 | ||||
Indefinite-lived intangibles: | 32.5 | 32.5 | 49.3 | ||||
Gross | 4,327.5 | 4,327.5 | 4,379.3 | ||||
Accumulated Amortization | 1,652.3 | 1,652.3 | 1,520.4 | ||||
Total other intangible assets | 4,360 | 4,360 | 4,428.6 | ||||
Intangible assets amortization expense | 73.6 | $ 85.3 | 149 | $ 172.4 | |||
Impairment of Diclo 3% product | 27.8 | 1.7 | 31.9 | 1.7 | |||
Trademarks, trade names, and brands | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Indefinite-lived intangibles: | 18 | 18 | 18.1 | ||||
In-process research and development | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Indefinite-lived intangibles: | 14.5 | 14.5 | 31.2 | ||||
Impairment of indefinite lived intangible assets | $ 4.1 | ||||||
Distribution and license agreements and supply agreements | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Gross | 173.7 | 173.7 | 178.6 | ||||
Accumulated Amortization | 105.2 | 105.2 | 99 | ||||
Developed product technology, formulations, and product rights | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Gross | 1,321 | 1,321 | 1,318.8 | ||||
Accumulated Amortization | 706.1 | 706.1 | 654.6 | ||||
Customer relationships and distribution networks | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Gross | 1,558.5 | 1,558.5 | 1,586.6 | ||||
Accumulated Amortization | 613.9 | 613.9 | 566.5 | ||||
Trademarks and Trade Names | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Gross | 1,266 | 1,266 | 1,282.4 | ||||
Accumulated Amortization | 219.5 | 219.5 | 188.5 | ||||
Non-compete agreements | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Gross | 8.3 | 8.3 | 12.9 | ||||
Accumulated Amortization | 7.6 | 7.6 | 11.8 | ||||
RX | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Goodwill | 1,119.6 | 1,119.6 | $ 1,114.8 | ||||
Intangible assets amortization expense | $ 21.3 | $ 20.8 | $ 42.6 | $ 41.6 | |||
Fair value in excess of book value (percent) | 10.00% | 10.00% | 25.00% | ||||
RX | Generic Product Acquisition | |||||||
Finite And Indefinite Lived Assets By Major Class [Line Items] | |||||||
Impairment of Diclo 3% product | $ 27.8 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 501.2 | $ 444.9 |
Work in process | 192.8 | 197.5 |
Raw materials | 246.5 | 235.6 |
Total inventories | $ 940.5 | $ 878 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments at Fair Value (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 | |
Measured at fair value on a non-recurring basis: | |||
Goodwill carrying amount | $ 3,935.3 | $ 3,979.8 | |
Indefinite-lived intangible assets carrying value | 32.5 | 49.3 | |
Definite-lived intangible assets carrying value | 2,675.2 | 2,858.9 | |
Measured at fair value on a recurring basis | Level 1 | |||
Assets: | |||
Investment securities | 2.8 | 9.4 | |
Foreign currency forward contracts | 0 | 0 | |
Funds associated with Israeli severance liability | 0 | 0 | |
Royalty Pharma contingent milestone payments | 0 | 0 | |
Total assets | 2.8 | 9.4 | |
Liabilities: | |||
Foreign currency forward contracts | 0 | 0 | |
Contingent consideration | 0 | 0 | |
Total liabilities | 0 | 0 | |
Measured at fair value on a recurring basis | Level 2 | |||
Assets: | |||
Investment securities | 0 | 0 | |
Foreign currency forward contracts | 4 | 3.8 | |
Funds associated with Israeli severance liability | 14 | 13 | |
Royalty Pharma contingent milestone payments | 0 | 0 | |
Total assets | 18 | 16.8 | |
Liabilities: | |||
Foreign currency forward contracts | 3.6 | 9.2 | |
Contingent consideration | 0 | 0 | |
Total liabilities | 3.6 | 9.2 | |
Measured at fair value on a recurring basis | Level 3 | |||
Assets: | |||
Investment securities | 0 | 0 | |
Foreign currency forward contracts | 0 | 0 | |
Funds associated with Israeli severance liability | 0 | 0 | |
Royalty Pharma contingent milestone payments | 89.1 | 323.2 | |
Total assets | 89.1 | 323.2 | |
Liabilities: | |||
Foreign currency forward contracts | 0 | 0 | |
Contingent consideration | 12.1 | 15.3 | |
Total liabilities | 12.1 | 15.3 | |
Measured at fair value on a non-recurring basis | |||
Measured at fair value on a non-recurring basis: | |||
Indefinite-lived intangible assets carrying value | 46.9 | ||
Definite-lived intangible assets carrying value | 72 | ||
Measured at fair value on a non-recurring basis | Level 1 | |||
Assets: | |||
Total assets | 0 | 0 | |
Measured at fair value on a non-recurring basis: | |||
Goodwill | 0 | 0 | |
Indefinite-lived intangible assets | 0 | 0 | |
Definite-lived intangible assets | 0 | 0 | |
Measured at fair value on a non-recurring basis | Level 2 | |||
Assets: | |||
Total assets | 0 | 0 | |
Measured at fair value on a non-recurring basis: | |||
Goodwill | 0 | 0 | |
Indefinite-lived intangible assets | 0 | 0 | |
Definite-lived intangible assets | 0 | 0 | |
Measured at fair value on a non-recurring basis | Level 3 | |||
Assets: | |||
Total assets | 0 | 75.1 | |
Measured at fair value on a non-recurring basis: | |||
Goodwill | 0 | 42.2 | [1] |
Indefinite-lived intangible assets | 0 | 10.5 | [2] |
Definite-lived intangible assets | 0 | 22.4 | [3] |
CSCA | |||
Measured at fair value on a non-recurring basis: | |||
Goodwill carrying amount | $ 1,673.6 | 1,713.7 | |
CSCA | Measured at fair value on a non-recurring basis | |||
Measured at fair value on a non-recurring basis: | |||
Goodwill carrying amount | $ 178.9 | ||
[1] | (1) As of December 31, 2018, goodwill with a carrying amount of $178.9 million was written down to a fair value of $42.2 million . | ||
[2] | (2) As of December 31, 2018, indefinite-lived intangible assets with a carrying amount of $46.9 million were written down to a fair value of $10.5 million . | ||
[3] | (3) As of December 31, 2018, definite-lived intangible assets with a carrying amount of $72.0 million were written down to a fair value of $22.4 million . |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2018USD ($) | Mar. 30, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Transfers among level 1, 2, and 3 | $ 0 | $ 0 | |||||||
Income recognized from change is asset | 5.5 | $ 0.6 | $ 15.9 | (9) | |||||
Measured on a recurring basis | Level 3 | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Potential contingent milestone payments | 89.1 | 89.1 | $ 323.2 | ||||||
Royalty Pharma Contingent Milestone Payments | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Net sales included in calculation for milestone payment | 337.5 | ||||||||
Royalty Pharma Contingent Milestone Payments | Measured on a recurring basis | Level 3 | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Increase (decrease) in fair value of milestone payment | 5.5 | 0.6 | 15.9 | (9) | |||||
Estimated fair valued contingent milestone payment | $ 89.1 | 125.5 | $ 89.1 | $ 125.5 | $ 323.2 | $ 83.6 | $ 124.9 | $ 134.5 | |
Royalty Pharma 2018 Contingent Milestone Payments | Measured on a recurring basis | Level 3 | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Increase (decrease) in fair value of milestone payment | (2.9) | ||||||||
Royalty Pharma 2020 Contingent Milestone Payments [Member] | Measured on a recurring basis | Level 3 | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Increase (decrease) in fair value of milestone payment | $ 3.5 | ||||||||
Royalty Pharma | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Rate of return | 7.99% | 8.09% | |||||||
Measurement Input, Price Volatility | Royalty Pharma | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Volatility | 0.300 | 0.300 | 0.300 | 0.300 | |||||
Measurement Input, Long-term Revenue Growth Rate | CSCA | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Reporting Unit, Discounted Cash Flow, Measurement Input | 0.025 | ||||||||
Indefinite-lived Intangible Assets (Excluding Goodwill), Measurement Input | (0.003) | ||||||||
Measurement Input, Discount Rate | CSCA | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Reporting Unit, Discounted Cash Flow, Measurement Input | 0.098 | ||||||||
Indefinite-lived Intangible Assets (Excluding Goodwill), Measurement Input | 0.098 | ||||||||
Measurement Input, Tax Rate | CSCA | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Reporting Unit, Discounted Cash Flow, Measurement Input | 0.228 | ||||||||
Indefinite-lived Intangible Assets (Excluding Goodwill), Measurement Input | 0.228 | ||||||||
Scenario, Forecast | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Royalty Pharma contingent payment sales threshold | $ 400 | ||||||||
Scenario, Forecast | Royalty Pharma Contingent Milestone Payments | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Net sales threshold to trigger milestone payment | 351 | ||||||||
Write-off of contingent milestone payment if sales threshold is not met | 89.1 | ||||||||
Royalty Pharma contingent payment sales threshold | 400 | ||||||||
Income recognized from change is asset | $ 310.9 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Level 3 Assets and Liabilities (Details) - Measured on a recurring basis - Level 3 - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Contingent consideration | $ 12.1 | $ 12.1 | $ 15.3 | ||
Contingent Consideration | |||||
Beginning balance | 12.4 | $ 18.1 | 15.3 | $ 22 | |
Changes in value | 0.9 | (1.8) | (2) | (1.4) | |
Currency translation adjustments | 0 | (0.1) | 0 | 0 | |
Settlements and other adjustments | (1.2) | 0 | (1.2) | (4.4) | |
Ending balance | 12.1 | 16.2 | 12.1 | 16.2 | |
Royalty Pharma Contingent Milestone Payments | |||||
Royalty Pharma Contingent Milestone Payments | |||||
Beginning balance | 83.6 | 124.9 | 323.2 | 134.5 | |
Payments received | 0 | 0 | (250) | 0 | |
Change in fair value | 5.5 | 0.6 | 15.9 | (9) | |
Ending balance | $ 89.1 | $ 125.5 | $ 89.1 | $ 125.5 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fixed Rate Long-term Debt (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Public bonds | $ 2,753.5 | $ 2,892.5 |
Public bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Public bonds | 2,533 | 2,316.6 |
Retail Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Retail bond and private placement note | 167.8 | 307.9 |
Reported Value Measurement | Public bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Public bonds | 2,600 | 2,600 |
Reported Value Measurement | Retail Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Retail bond and private placement note | $ 153.5 | $ 292.5 |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | ||
Other (income) expense, net | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity securities, fair value method, other expense (income) | $ 1.8 | $ 6.3 | $ 7.9 | $ 10.6 | ||
Equity securities, equity method, other expense (income) | (1) | (0.9) | (1.7) | $ (0.7) | ||
Prepaid expenses and other current assets | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity securities, fair value method | 2.8 | 2.8 | $ 9.4 | |||
Other non-current assets | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity securities, fair value method | [1] | 2.8 | 2.8 | 4.4 | ||
Equity securities, equity method, other non-current assets | $ 16.8 | $ 16.8 | $ 15.1 | |||
Zibo Xinhua | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Increase in investment in Zibo Xinhua | $ 7.5 | |||||
[1] | (1) Measured at fair value using the Net Asset Value practical expedient. |
Assets Held for Sale (Details)
Assets Held for Sale (Details) $ in Millions | Jun. 29, 2019USD ($) |
Prepaid expenses and other current assets | |
Assets held for sale | |
Current assets | $ 29.3 |
Property, plant and equipment | 10.8 |
Goodwill and indefinite-lived intangible assets | 42.2 |
Definite-lived intangible assets, net | 36.4 |
Other assets | 25.7 |
Total assets held for sale | 144.4 |
Accrued liabilities | |
Liabilities held for sale | |
Current liabilities | 11.3 |
Other liabilities | 38.3 |
Total liabilities held for sale | $ 49.6 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Foreign Currency Forward Contracts (Details) - Foreign currency forward contracts - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | $ 831.1 | $ 686.6 |
Israeli Shekel (ILS) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 340.6 | 232.6 |
British Pound (GBP) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 111 | 90.2 |
European Euro (EUR) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 108 | 134.2 |
Swedish (SEK) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 42.2 | 38.7 |
Danish Krone (DKK) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 58.2 | 56.5 |
United States Dollar (USD) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 46.2 | 39.3 |
Canadian Dollar (CAD) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 41.9 | 31.7 |
Polish Zloty (PLZ) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 33.5 | 18.2 |
Chinese Yuan (CNY) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 20 | 0 |
Norwegian Krone (NOK) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 6.8 | 6.2 |
Romanian New Leu (RON) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 5.9 | 4.4 |
Mexican Peso (MPX) | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | 4.2 | 25.9 |
Other | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Notional amount of derivatives | $ 12.6 | $ 8.7 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Balance Sheet Location (Details) - Foreign currency forward contracts - USD ($) $ in Millions | Jun. 29, 2019 | Dec. 31, 2018 |
Designated derivatives: | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 1 | $ 2 |
Designated derivatives: | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 2.6 | 6.4 |
Non-designated derivatives: | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 3 | 1.8 |
Non-designated derivatives: | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 1 | $ 2.8 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Effect of Cash Flow Hedges Included in AOCI (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 29, 2019USD ($) | Jun. 29, 2019USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings | $ (0.5) | $ (2.1) |
Gain (Loss) from Components Excluded from Assessment of Cash Flow Hedge Effectiveness, Net | (1) | (2.2) |
Net gain expected to be reclassified out of AOCI into earnings in the next 12 months | (1.6) | (1.6) |
Interest expense, net | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Amount of gain or (loss) reclassified from AOCI into earnings - Interest rate swap agreements | (0.4) | (1) |
Amount of gain or (loss) reclassified from AOCI into earnings - Foreign currency forward contracts | 0 | 0 |
Gain (Loss) on Components Excluded from Assessment of Interest Rate Cash Flow Hedge Effectiveness | 0 | |
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | 0 | 0 |
Net Sales | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Amount of gain or (loss) reclassified from AOCI into earnings - Interest rate swap agreements | 0 | |
Amount of gain or (loss) reclassified from AOCI into earnings - Foreign currency forward contracts | 0.1 | 0.3 |
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | 0.1 | 0 |
Cost of sales | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Amount of gain or (loss) reclassified from AOCI into earnings - Interest rate swap agreements | 0 | |
Amount of gain or (loss) reclassified from AOCI into earnings - Foreign currency forward contracts | (0.2) | (1.4) |
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | (1.1) | (2.2) |
Foreign currency forward contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Amount of Gain/(Loss) Recorded in OCI | $ 1.1 | $ 0 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Other Comprehensive Income Movement (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Foreign currency forward contracts | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on (Loss) Derivatives [Line Items] | ||
Amount of Gain/(Loss) Recorded in OCI (Effective Portion) | $ (4.3) | $ (4.3) |
Designated derivatives: | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on (Loss) Derivatives [Line Items] | ||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings (Effective Portion) | 0 | 0.5 |
Designated derivatives: | Interest expense, net | Interest Rate Swap | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on (Loss) Derivatives [Line Items] | ||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings (Effective Portion) | (0.4) | (0.9) |
Designated derivatives: | Interest expense, net | Foreign currency forward contracts | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on (Loss) Derivatives [Line Items] | ||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings (Effective Portion) | (1.1) | (2) |
Designated derivatives: | Cost of sales | Foreign currency forward contracts | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on (Loss) Derivatives [Line Items] | ||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings (Effective Portion) | 1.6 | 3.9 |
Designated derivatives: | Other (income) expense, net | Foreign currency forward contracts | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on (Loss) Derivatives [Line Items] | ||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings (Effective Portion) | (0.1) | $ (0.5) |
Designated derivatives: | Sales [Member] | Foreign currency forward contracts | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on (Loss) Derivatives [Line Items] | ||
Amount of Gain/(Loss) Reclassified from AOCI into Earnings (Effective Portion) | $ 0 |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Non-designated Derivatives (Details) - Non-designated derivatives: - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized against Earnings | $ (2.9) | $ 12 | $ (11.3) | $ 7.9 |
Foreign currency forward contracts | Other (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized against Earnings | (4.3) | 11.8 | (13.1) | 8.6 |
Foreign currency forward contracts | Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized against Earnings | $ 1.4 | $ 0.2 | $ 1.8 | $ (0.7) |
Derivative Instruments and He_8
Derivative Instruments and Hedging Activities - Classification of Gain (Loss) of Cash Flow And Fair Value Hedging Relationships (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Net sales | [1] | $ 1,149 | $ 1,186.4 | $ 2,323.5 | $ 2,403.4 |
Cost of sales | 718.2 | 715.4 | 1,443.9 | 1,439.7 | |
Interest expense, net | 31.2 | 32.1 | 59.8 | 63.5 | |
Other (income) expense, net | 2.3 | $ 7.9 | 5.5 | $ 12.1 | |
Net Sales | |||||
Foreign currency forward contracts | |||||
Amount of gain or (loss) reclassified from AOCI into earnings | 0.1 | 0.3 | |||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | 0.1 | 0 | |||
Interest rate swap agreements | |||||
Amount of gain or (loss) reclassified from AOCI into earnings | 0 | ||||
Cost of sales | |||||
Foreign currency forward contracts | |||||
Amount of gain or (loss) reclassified from AOCI into earnings | (0.2) | (1.4) | |||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | (1.1) | (2.2) | |||
Interest rate swap agreements | |||||
Amount of gain or (loss) reclassified from AOCI into earnings | 0 | ||||
Interest expense, net | |||||
Foreign currency forward contracts | |||||
Amount of gain or (loss) reclassified from AOCI into earnings | 0 | 0 | |||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | 0 | 0 | |||
Interest rate swap agreements | |||||
Amount of gain or (loss) reclassified from AOCI into earnings | (0.4) | (1) | |||
Other (income) expense, net | |||||
Foreign currency forward contracts | |||||
Amount of gain or (loss) reclassified from AOCI into earnings | 0 | 0 | |||
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | 0 | 0 | |||
Interest rate swap agreements | |||||
Amount of gain or (loss) reclassified from AOCI into earnings | $ 0 | $ 0 | |||
[1] | Derived from the location of the entity that sells to a third party. |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||
Lease liabilities | $ 140.3 | $ 166.5 | |
Lease assets | $ 135.4 | $ 164 | $ 0 |
Leases - Balance Sheet Location
Leases - Balance Sheet Location of Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | |||
Operating lease assets | $ 135.4 | $ 164 | $ 0 |
Finance leases | 17.1 | ||
Right-of-Use Asset | 152.5 | ||
Present value of lease liabilities | 154 | ||
Total operating lease liabilities | 140.3 | $ 166.5 | |
Total finance lease liabilities | 13.7 | ||
Operating lease assets | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease assets | 135.4 | ||
Other non-current assets | |||
Lessee, Lease, Description [Line Items] | |||
Finance leases | 17.1 | ||
Accrued liabilities | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease liability, current | 32.9 | ||
Current indebtedness | |||
Lessee, Lease, Description [Line Items] | |||
Finance lease liability, current | 1.9 | ||
Other noncurrent liabilities | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease liability, noncurrent | 107.4 | ||
Long-term debt, less current portion | |||
Lessee, Lease, Description [Line Items] | |||
Finance lease liability, noncurrent | 11.8 | ||
CSCA | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease assets | 22.7 | ||
Finance leases | 8.9 | ||
Total operating lease liabilities | 22.9 | ||
Total finance lease liabilities | 8.4 | ||
CSCI | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease assets | 42 | ||
Finance leases | 6.1 | ||
Total operating lease liabilities | 42.9 | ||
Total finance lease liabilities | 3.2 | ||
RX | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease assets | 37.5 | ||
Finance leases | 0.3 | ||
Total operating lease liabilities | 38.9 | ||
Total finance lease liabilities | 0.3 | ||
Unallocated | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease assets | 33.2 | ||
Finance leases | 1.8 | ||
Total operating lease liabilities | 35.6 | ||
Total finance lease liabilities | $ 1.8 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | ||
Leases [Abstract] | |||||
Operating leases | [1] | $ 11.2 | $ 23.2 | ||
Finance leases | |||||
Amortization | 0.7 | 1.3 | |||
Interest | 0.1 | 0.2 | |||
Total finance leases | $ 0.8 | $ 1.5 | |||
Operating lease expense | $ 14.2 | $ 26.1 | |||
[1] | (a) Includes short-term leases and variable lease costs, which are immaterial . |
Leases - Annual Future Maturiti
Leases - Annual Future Maturities of Leases (Details) - USD ($) $ in Millions | Jun. 29, 2019 | Jan. 01, 2019 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2019 | $ 19.4 | |
2020 | 34.6 | |
2021 | 24.9 | |
2022 | 18.3 | |
2023 | 14 | |
After 2023 | 51.7 | |
Total lease payments | 162.9 | |
Less: Interest | 22.6 | |
Present value of lease liabilities | 140.3 | $ 166.5 |
Finance Lease, Liability, Payment, Due [Abstract] | ||
2019 | 1.2 | |
2020 | 2.3 | |
2021 | 3.6 | |
2022 | 1.2 | |
2023 | 1 | |
After 2023 | 7.8 | |
Total lease payments | 17.1 | |
Less: Interest | 3.4 | |
Present value of lease liabilities | 13.7 | |
Lease Liabilities, Payments, Due [Abstract] | ||
2019 | 20.6 | |
2020 | 36.9 | |
2021 | 28.5 | |
2022 | 19.5 | |
2023 | 15 | |
After 2023 | 59.5 | |
Total lease payments | 180 | |
Less: Interest | 26 | |
Present value of lease liabilities | $ 154 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Terms and Discount Rates (Details) | Jun. 29, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term - Operating leases | 6 years 7 months 2 days |
Weighted-average lease term - Finance leases | 9 years 5 months 4 days |
Weighted-average discount rate - Operating lease (percent) | 4.19% |
Weighted-average discount rate - Finance lease (percent) | 4.35% |
Leases - Lease Cash Flow Classi
Leases - Lease Cash Flow Classifications (Details) $ in Millions | 6 Months Ended |
Jun. 29, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows for operating leases | $ 23 |
Operating cash flows for finance leases | 0.2 |
Financing cash flows for finance leases | 1.4 |
Leased assets obtained in exchange for new finance lease liabilities | 7.8 |
Leased assets obtained in exchange for new operating lease liabilities | $ 12.8 |
Indebtedness - Schedule of Borr
Indebtedness - Schedule of Borrowings Outstanding (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 29, 2019 | Dec. 31, 2018 | ||
Debt Instrument [Line Items] | |||
Notes and Bonds | $ 2,753.5 | $ 2,892.5 | |
Other financing | 87.2 | 2.8 | |
Unamortized premium (discount), net | 8.9 | 12.2 | |
Deferred financing fees | (14.8) | (16.4) | |
Total borrowings outstanding | 3,483.2 | 3,242.4 | |
Current indebtedness | (398.8) | (190.2) | |
Long-term debt, less current portion | 3,084.4 | 3,052.2 | |
2018 Revolver | |||
Debt Instrument [Line Items] | |||
Long-term Line of Credit | $ 325 | 0 | |
2018 Euro-Denominated Term Loan due March 8, 2020 | |||
Debt Instrument [Line Items] | |||
Series | [1] | 2018 Term loan due March 8, 2020 | |
Term loans | $ 323.4 | 351.3 | |
5.000% Unsecured Senior notes due May 23, 2019 | |||
Debt Instrument [Line Items] | |||
Series | May 23, 2019 | ||
Interest rate, stated percentage | 5.00% | ||
Notes and Bonds | $ 0 | 137.6 | |
3.500% Unsecured Senior notes due March 15, 2021 | |||
Debt Instrument [Line Items] | |||
Series | Mar. 15, 2021 | ||
Interest rate, stated percentage | 3.50% | ||
Notes and Bonds | $ 280.4 | 280.4 | |
3.5% Senior note due December 15, 2021 | |||
Debt Instrument [Line Items] | |||
Series | Dec. 15, 2021 | ||
Interest rate, stated percentage | 3.50% | ||
Notes and Bonds | $ 309.6 | 309.6 | |
5.105% Senior note due July 28, 2023 | |||
Debt Instrument [Line Items] | |||
Series | [1] | July 28, 2023 | |
Interest rate, stated percentage | 5.105% | ||
Notes and Bonds | $ 153.5 | 154.9 | |
4.00% unsecured senior notes due November 15, 2023 | |||
Debt Instrument [Line Items] | |||
Series | Nov. 15, 2023 | ||
Interest rate, stated percentage | 4.00% | ||
Notes and Bonds | $ 215.6 | 215.6 | |
3.9% senior note due December 15, 2024 | |||
Debt Instrument [Line Items] | |||
Series | Dec. 15, 2024 | ||
Interest rate, stated percentage | 3.90% | ||
Notes and Bonds | $ 700 | 700 | |
4.375% senior note due March 15, 2026 | |||
Debt Instrument [Line Items] | |||
Series | Mar. 15, 2026 | ||
Interest rate, stated percentage | 4.375% | ||
Notes and Bonds | $ 700 | 700 | |
5.30% unsecured senior notes due November 15, 2043 | |||
Debt Instrument [Line Items] | |||
Series | Nov. 15, 2043 | ||
Interest rate, stated percentage | 5.30% | ||
Notes and Bonds | $ 90.5 | 90.5 | |
4.9% senior notes due December 15, 2044 | |||
Debt Instrument [Line Items] | |||
Series | Dec. 15, 2044 | ||
Interest rate, stated percentage | 4.90% | ||
Notes and Bonds | $ 303.9 | $ 303.9 | |
[1] | Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate. |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Details) $ in Millions | May 23, 2019USD ($) | May 23, 2019EUR (€) | Dec. 05, 2014USD ($) | Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Mar. 08, 2018USD ($) | Mar. 08, 2018EUR (€) | Dec. 05, 2014EUR (€) |
Debt Instrument [Line Items] | |||||||||||
Debt instrument, issuance date | Dec. 5, 2014 | ||||||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 0 | $ 0.5 | |||||||
Repayments of debt | 24.7 | ||||||||||
Outstanding balance | 73.9 | 73.9 | $ 0 | ||||||||
2018 Revolver | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount of debt | $ 1,000 | ||||||||||
Amount borrowed on line of credit | 375 | ||||||||||
Borrowings outstanding | $ 325 | $ 325 | $ 0 | ||||||||
2014 Term loan due December 5, 2019 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount of debt | $ 614.3 | € 350,000,000 | € 500,000,000 | ||||||||
Loss on extinguishment of debt | $ 0.5 | ||||||||||
2018 Euro-Denominated Term Loan due March 8, 2020 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount of debt | $ 431 | € 350,000,000 | |||||||||
Retail Bond | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate, stated percentage | 5.00% | 5.00% | |||||||||
Retail bond repayed in full | $ 130.7 | € 120,000,000 |
Earnings Per Share and Shareh_3
Earnings Per Share and Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Oct. 31, 2018 | |
Numerator: | |||||||
Net income | $ 9 | $ 63.9 | $ 36.2 | $ 80.8 | $ 72.9 | $ 117 | |
Denominator: | |||||||
Weighted average shares outstanding for basic EPS | 136 | 138.1 | 136 | 139.5 | |||
Dilutive effect of share-based awards (in shares) | 0.5 | 0.6 | 0.3 | 0.5 | |||
Weighted average shares outstanding for diluted EPS | 136.5 | 138.7 | 136.3 | 140 | |||
Anti-dilutive share-based awards excluded from computation of diluted EPS (shares) | 1.7 | 1.7 | 1.8 | 0.9 | |||
Stock repurchase program, authorized amount | $ 1,000 | ||||||
Repurchases of ordinary shares (shares) | 0 | 0 | |||||
Share price (in dollars per share) | $ 79.42 | $ 80.42 | |||||
Repurchase of equity amount | $ 156.9 | $ 265 | |||||
Ordinary Shares Issued | |||||||
Denominator: | |||||||
Repurchases of ordinary shares (shares) | 2 | 1.3 | 3.3 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2019 | Mar. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Balance, beginning | $ 5,700.6 | $ 5,668 | $ 6,205.4 | $ 6,170.5 | $ 5,668 | $ 6,170.5 |
Other comprehensive income (loss), net of tax | 30.5 | (15.6) | (169.3) | 72.2 | 14.9 | (97.1) |
Balance, ending | 5,726.2 | 5,700.6 | 5,897.1 | 6,205.4 | 5,726.2 | 5,897.1 |
Fair value of derivative financial instruments, net of tax | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Balance, beginning | (15.5) | (15.5) | ||||
OCI before reclassifications | 0.2 | |||||
Amounts reclassified from AOCI | 4.2 | |||||
Other comprehensive income (loss), net of tax | 4.4 | |||||
Balance, ending | (11.1) | (11.1) | ||||
Foreign Currency Translation Adjustments | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Balance, beginning | 104.5 | 104.5 | ||||
OCI before reclassifications | 11 | |||||
Amounts reclassified from AOCI | 0 | |||||
Other comprehensive income (loss), net of tax | 11 | |||||
Balance, ending | 115.5 | 115.5 | ||||
Post-Retirement and Pension Liability Adjustments, net of tax | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Balance, beginning | (4.4) | (4.4) | ||||
OCI before reclassifications | 0 | |||||
Amounts reclassified from AOCI | (0.5) | |||||
Other comprehensive income (loss), net of tax | (0.5) | |||||
Balance, ending | (4.9) | (4.9) | ||||
Accumulated Other Comprehensive Income | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Balance, beginning | 69 | 84.6 | 324.3 | 253.1 | 84.6 | 253.1 |
OCI before reclassifications | 11.2 | |||||
Amounts reclassified from AOCI | 3.7 | |||||
Other comprehensive income (loss), net of tax | 30.5 | (15.6) | (169.3) | 72.2 | 14.9 | |
Balance, ending | $ 99.5 | $ 69 | $ 155 | $ 324.3 | $ 99.5 | $ 155 |
Income Taxes (Details)
Income Taxes (Details) € in Millions, $ in Millions | Aug. 15, 2017USD ($) | Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2009USD ($) | Apr. 26, 2019USD ($) | Nov. 29, 2018EUR (€) |
Income Tax Contingency [Line Items] | |||||||||||
Asset Impairment Charges | $ 27.8 | $ 1.7 | $ 31.9 | $ 1.7 | |||||||
Effective income tax rate reconciliation, percent | 66.60% | 34.50% | 32.50% | 29.40% | |||||||
Income tax examination, penalties and interest expense | $ 163.6 | $ 24.7 | $ 40.2 | $ 61.5 | $ 37.2 | ||||||
Income tax overpayments applied to succeeding years | $ 29.7 | $ 29.7 | |||||||||
Royalty conceded on all omeprazole sales as a percent of refund claims (percent) | 24.00% | ||||||||||
IRS notice of proposed adjustment amount from 2011,2012 and 2013 audit of Athena, including penalty | $ 843 | ||||||||||
IRS notice of proposed adjustment, penalty (percent) | 40.00% | ||||||||||
Revenue Commissioners, Ireland | |||||||||||
Income Tax Contingency [Line Items] | |||||||||||
Unsettled audit assessment from income tax examination | € | € 1,636 |
Contingencies (Details)
Contingencies (Details) $ in Millions, ₪ in Billions | May 31, 2019plaintiff | Jan. 16, 2019productdefendant | Jun. 28, 2017USD ($)productdefendant | Jun. 28, 2017ILS (₪)productdefendant | Dec. 31, 2018case | Jun. 29, 2019dozens$ / ₪ | Feb. 22, 2019productplaintiffcasedefendant | Feb. 14, 2019defendant | Feb. 06, 2019productcasedefendant | Jan. 31, 2019productcasedefendant | Nov. 15, 2018productcase | Oct. 29, 2018productcasedefendant | Aug. 03, 2018productmanufacturer | Apr. 20, 2018productcase | Feb. 16, 2018casedefendant | Feb. 13, 2018productcasedefendant | Jan. 26, 2018productcomplaintplaintiffcase | Jan. 16, 2018productdefendant | Dec. 31, 2017case | Nov. 01, 2017defendant | Jun. 21, 2017productindividual | Dec. 28, 2013productsupermarketmanufacturer | Dec. 31, 2011productmanufacturer |
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of manufacturers | manufacturer | 27 | ||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | 6 | 15 | ||||||||||||||||||||
Number of products manufactured by the Company | product | 2 | ||||||||||||||||||||||
Number of dozens of other drugs | dozens | 2 | ||||||||||||||||||||||
Number of individuals | individual | 11 | ||||||||||||||||||||||
Number of plaintiff groups | plaintiff | 2 | ||||||||||||||||||||||
Number of complaints | complaint | 2 | ||||||||||||||||||||||
Number of cases | 2 | ||||||||||||||||||||||
Number of overlapped cases | 2 | ||||||||||||||||||||||
Price-Fixing Lawsuit, Supermarket Chains | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of manufacturers | manufacturer | 35 | ||||||||||||||||||||||
Number of supermarket chains | supermarket | 3 | ||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 31 | ||||||||||||||||||||||
Price-fixing Lawsuit, Managed Care Organization | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of manufacturers | manufacturer | 27 | ||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 17 | ||||||||||||||||||||||
Price-fixing Lawsuit, Health Insurance Carrier | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 30 | ||||||||||||||||||||||
Number of defendants | defendant | 30 | ||||||||||||||||||||||
Carmignac Gestion, S.A. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of co-defendants | defendant | 3 | ||||||||||||||||||||||
Manning & Napier Advisors, LLC v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | ||||||||||||||||||||||
Number of co-defendants | defendant | 3 | ||||||||||||||||||||||
Harel Insurance Company, LTD., et al. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | ||||||||||||||||||||||
Number of co-defendants | defendant | 2 | ||||||||||||||||||||||
Number of opt out cases | 4 | ||||||||||||||||||||||
First Manhattan Co. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | 6 | ||||||||||||||||||||||
Number of co-defendants | defendant | 3 | ||||||||||||||||||||||
Number of opt out cases | 5 | ||||||||||||||||||||||
TIAA-CREF Investment Management, LLC., et al. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | ||||||||||||||||||||||
Number of opt out cases | 6 | ||||||||||||||||||||||
Nationwide Mutual Funds, et al. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | ||||||||||||||||||||||
Number of co-defendants | defendant | 2 | ||||||||||||||||||||||
Number of opt out cases | 7 | ||||||||||||||||||||||
WCM Alternative: Event-Drive Fund, et al. v. Perrigo Co., plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | ||||||||||||||||||||||
Number of opt out cases | 8 | ||||||||||||||||||||||
Hudson Bay Master Fund Ltd., et al. v. Perrigo Co., plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | 6 | ||||||||||||||||||||||
Number of opt out cases | 9 | ||||||||||||||||||||||
Schwab Capital Trust, et al. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | ||||||||||||||||||||||
Number of co-defendants | defendant | 2 | ||||||||||||||||||||||
Number of opt out cases | 10 | ||||||||||||||||||||||
OZ Master Fund, Ltd., et al. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | ||||||||||||||||||||||
Number of co-defendants | defendant | 2 | ||||||||||||||||||||||
Number of opt out cases | 11 | ||||||||||||||||||||||
Highfields Capital I LP, et al. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of co-defendants | defendant | 2 | ||||||||||||||||||||||
Aberdeen Canada Funds - Global Equity Fund, et al. v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | ||||||||||||||||||||||
Number of co-defendants | defendant | 2 | ||||||||||||||||||||||
Number of additional plaintiffs | plaintiff | 30 | ||||||||||||||||||||||
Number of opt out cases | 12 | ||||||||||||||||||||||
Cases Filed in Israel | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of cases | 3 | ||||||||||||||||||||||
Number of cases dismissed | 1 | ||||||||||||||||||||||
Number of cases stayed | 1 | ||||||||||||||||||||||
Israel Elec. Corp. Employees' Educ. Fund v. Perrigo Company plc, et al. | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Number of generic prescription pharmaceuticals | product | 6 | 6 | |||||||||||||||||||||
Number of current or former directors and officers | defendant | 11 | 11 | |||||||||||||||||||||
Damages sought by plaintiff | $ 760 | ₪ 2.7 | |||||||||||||||||||||
Foreign currency exchange rate, remeasurement | $ / ₪ | 0.28 | ||||||||||||||||||||||
In re Perrigo Company plc Sec. Litig. [Member] | |||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||
Loss Contingency, Number of Defendants Added | plaintiff | 1 |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 20.5 | $ 12.4 | $ 24 | $ 21.4 |
Additional charges | 12.2 | 3.7 | 18.1 | 5.2 |
Payments | (9) | (3.1) | (18) | (13.8) |
Non-cash adjustments | 0.3 | (0.3) | (0.1) | (0.1) |
Ending balance | $ 24 | $ 12.7 | 24 | $ 12.7 |
CSCI | ||||
Restructuring Reserve [Roll Forward] | ||||
Additional charges | $ 9.8 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | ||||||
Total Assets | $ 11,428.7 | $ 11,428.7 | $ 10,983.4 | |||
Net sales | [1] | 1,149 | $ 1,186.4 | 2,323.5 | $ 2,403.4 | |
Operating Income (Loss) | 55 | 94.7 | 157.3 | 250.9 | ||
Intangible Asset Amortization | 73.6 | 85.3 | 149 | 172.4 | ||
CSCA | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Assets | 4,041.9 | 4,041.9 | 3,571.7 | |||
Net sales | [2] | 582.1 | 596.9 | 1,163.9 | 1,198.5 | |
Operating Income (Loss) | 107.8 | 64.6 | 202 | 183.2 | ||
Intangible Asset Amortization | 9.3 | 15.3 | 19.3 | 30.5 | ||
CSCI | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Assets | 4,593.5 | 4,593.5 | 4,613 | |||
Net sales | 327.5 | 357.9 | 678.3 | 735.7 | ||
Operating Income (Loss) | (2.9) | 4 | 5.1 | 16.3 | ||
Intangible Asset Amortization | 43 | 49.2 | 87.1 | 100.3 | ||
RX | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Assets | 2,793.3 | 2,793.3 | $ 2,798.7 | |||
Net sales | 239.4 | 231.6 | 481.3 | 469.2 | ||
Operating Income (Loss) | 14.7 | 53.6 | 75.3 | 114.8 | ||
Intangible Asset Amortization | 21.3 | 20.8 | 42.6 | 41.6 | ||
Unallocated | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 0 | 0 | 0 | 0 | ||
Operating Income (Loss) | (64.6) | (27.5) | (125.1) | (63.4) | ||
Intangible Asset Amortization | $ 0 | $ 0 | $ 0 | $ 0 | ||
[1] | Derived from the location of the entity that sells to a third party. | |||||
[2] | Includes net sales from our OTC contract manufacturing business. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Jul. 08, 2019 | Jul. 02, 2019 | Jul. 01, 2019 | May 17, 2019 | Jun. 29, 2019 | Jun. 30, 2018 |
Subsequent Event [Line Items] | ||||||
Net proceeds from sale of business and other assets | $ 1.3 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Net proceeds from sale of business and other assets | $ 185 | |||||
Ranir Global Holdings, LLC | ||||||
Subsequent Event [Line Items] | ||||||
General transaction costs | $ 2.2 | |||||
Ranir Global Holdings, LLC | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Outstanding equity interest acquired (percent) | 100.00% | |||||
Total base consideration | $ 750 | |||||
Minimum | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Pre-tax gain on sale of business | 80 | |||||
Maximum | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Pre-tax gain on sale of business | $ 90 | |||||
Developed Product Technology | Generic Product Acquisition | ||||||
Subsequent Event [Line Items] | ||||||
Payments to acquire the ANDA | $ 15.7 | |||||
Useful life of intangible assets | 20 years | |||||
Developed Product Technology | Generic Product Acquisition | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Payments to acquire the ANDA | $ 49 | |||||
Useful life of intangible assets | 20 years |