Perrigo Company plc Annual Report 2021

FY2021 Annual Report · Perrigo Company plc

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Perrigo Company plc
Annual Report
2021

From the CEO

“With our transformation complete,
we are poised for turbocharged
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Fellow Shareholders,

It is an exciting time for Perrigo. I am pleased to say that, with the

during the year, driven by a strong rebound in consumer demand

achievement of our three largest strategic milestones in 2021,

as illness levels of cough, cold and flu rebounded. We also took

we have completed our transformation from a healthcare to a

meaningful actions to address supply chain disruptions in the

consumer self-care company. This transformation is a testament to

U.S. during the second half of the year, allowing us to meet strong

the tremendous work carried out by our Perrigo colleagues across

fourth quarter demand from our customers, albeit at a higher cost.

the globe, and I am extremely proud of our team and how far we

Most importantly, the momentum that we carry into 2022 reflects

have come over the course of this journey.

the dedication and relentless efforts of the Perrigo team that,

I am especially proud of the fact that we accomplished our three

key strategic objectives in 2021. Specifically, we:

•

Divested the generic prescription pharmaceuticals (Rx)

business, which significantly reduces earnings volatility and

simplifies our core operations and focus;

•

Reallocated the Rx divestiture sale proceeds to acquire a star

consumer self-care asset in HRA Pharma, which significantly

advances our self-care vision, bolsters our scale in key

European markets and will turbocharge our growth; and

throughout the pandemic, has not missed a single shift in any of

our manufacturing facilities worldwide. That, too, is an incredible

achievement by the team.

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outgoing Board Chair, Rolf Classon, for his dedication and service

to the Company over the past several years. His leadership and

contributions have helped to transform Perrigo into the consumer

self-care company it is today and I admire the commitment he

has demonstrated to both our people and our shareholders. I look

forward to working closely with Orlando Ashford and the rest of the

•

Reduced uncertainty by favorably settling the Irish Tax

Board of Directors as we continue to advance our self-care strategy.

assessment, which not only removed a major overhang for the

Company, but which was also entirely funded with proceeds

from a favorable Belgian arbitration award.

I am confident in our future, and I could not be more excited to lead

our team in 2022. We have a clear vision and a winning consumer

self-care strategy. With our transformation complete, we are poised

With these actions complete, Perrigo now emerges as a focused

for turbocharged profitable growth as we make lives better by

consumer-centric self-care company with a bright future.

bringing Quality, Affordable Self-Care Products that consumers

Importantly, these strategic milestones were achieved against the

backdrop of another year of COVID-19 pandemic-related business

disruptions that impacted many consumer companies, including

Perrigo. These challenges included a historically weak cough/

cold season, which affected nearly 20% of our business to start

the year, and subsequent supply chain disruptions and material

price inflation in the second half of the year. These external factors

weighed on our full year financial results, but our team remained

resolute and found ways to continue to deliver our affordable and

reliable self-care products and, once again, grow our topline.

As we exited 2021, I was encouraged by the momentum in our

business. Sales growth improved sequentially each quarter

trust everywhere they are sold. Thank you for your partnership and

belief in our great company.

Sincerely,

Murray S. Kessler

President and Chief Executive Officer

Continuing to
Deliver Trusted
Self-Care Products
in Times of Need

At Perrigo, we are driven by our vision “To make lives better by bringing

Quality, Affordable Self-Care Products that consumers trust everywhere

they are sold.” Our vision is more important today than ever before given the

pandemic-related challenges impacting both our industry and consumers

around the globe. Since early in the pandemic, Perrigo has taken meaningful

steps to prioritize the health and safety of our colleagues and to ensure the

availability of self-care products that consumers need and trust.

As the pandemic continued to influence the way we operate, the Perrigo

team consistently met consumer demand and continued developing new

products. We also navigated new challenges this year, such as supply chain

and logistical disruptions, as we continued to work within an operating

environment complicated by the many different pandemic-related protocols

necessary to keep our people and workplaces safe. These protocols required

our teams in each region to remain flexible and assume new responsibilities

as new variants and surges impacted our communities and ways of working.

From wearing face coverings and social distancing to enhanced cleaning and

sanitation processes, our teams remained steadfastly committed to keeping

each other safe and ensuring that our facilities remained open. As a result,

our worldwide manufacturing facilities have continued to operate without a

missed shift since the start of the pandemic, making it possible for us to keep

important products that society needs flowing to customers and consumers

without interruption.

9,900

Energized team members

Our OTC Medicines provide

EXPANDED
ACCESS TO

27M

U.S. consumers and
millions more in the E.U.

Completing Our Transformation
to a Consumer Self-Care Leader

Providing self-care solutions that consumers need has been highly important

over the course of the pandemic, but it is not new for Perrigo; we have a

storied history as one of the originators of the self-care market. Since our

founding in 1887, Perrigo has been focused on providing accessible, reliable

and affordable self-care products that consumers know and trust. As the

self-care space has grown both in size and importance across the globe, we

have evolved our strategic focus to capitalize on this trend. In 2021, thanks

to the tireless work of the Perrigo team, we completed a massive three-year

transformation to become a focused, consumer-centric self-care company.

During the year, we completed the final three strategic milestones of our

transformation framework.

THREE MAJOR STRATEGIC MILESTONES ACHIEVED IN 2021

Divested Generic
Rx Business

Announced Acquisition
of HRA Pharma
Expected to close by the end of Q2 2022

Paid for with cash from a successful
arbitration in Belgium

With the completion of these initiatives, Perrigo now emerges as a focused,

consumer-centric self-care company at the forefront of the self-care

movement. The self-care industry currently represents a $450 billion

opportunity, and it is expected to see continued growth over the next decade.

Perrigo is well positioned to capitalize on these growth trends with unique

product offerings in both the U.S. and Europe. The addition of HRA Pharma,

which remains on track to close by the end of Q2 2022, will enhance our scale

and growth opportunities across multiple geographies, further advancing our

self-care leadership position.

Developing
Innovative Products

Evolution Through Innovation

To continue to grow and evolve, we must be constant

innovators. We recognize that consumers want options not only

for treatments, but they also want options for prevention and

wellness products. We believe in innovation at every level, which

translates into a wide array of concepts to help us enhance our

product portfolio.

New Products

This innovation is represented by the new

products we brought to market in 2021. We

launched Probify probiotic products across

the U.K., an entire Burt’s Bees Kids™ line of

science-based natural products in the United

States, and our hypoallergenic formulas have

helped us gain market share in the infant

formula category. Similarly, we have seen

fantastic results with our store brand oral

electrolyte products.

Bright Future Ahead

We also introduced new flavors of nicotine lozenges

and are bringing sustainability and a recycling

element to our Plackers® flossers line. Following

research and testing, we are introducing new

science into our guaifenesin-based products and

are eager to see them launched into that meaningful

category. Our team is working on a robust new

product pipeline and looks forward to offering

consumers additional innovative self-care products

in 2022 and beyond.

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Our People, Environment
and Communities

Diversity, Equity & Inclusion

Perrigo recognizes the importance of a strong, diverse team, not only for our own culture and the benefit of our employees, but also for the

diverse consumers we serve. Fiscal year 2021 was the second year of our current three-year Diversity, Equity & Inclusion (DE&I) strategy,

which remains a key priority for our team. In fact, we launched our first DE&I report to showcase the progress that we have made across our

three key areas of focus:

Education
and Awareness

We continued to inform and
educate our team through global,
company-wide events, bringing
together colleagues and leaders
of all backgrounds to learn from
one another.

Talent Management
Practices

Governance
and Metrics

Our 2021 new hire numbers
evidence our commitment to
inclusive talent practices; last year
women made up 51%, and people
of color made up 24%, of all
Perrigo new hires.

Leveraging the metrics
established in 2020, we were able
to accurately monitor progress
towards our DE&I goals and
identify areas for improvement.
Our DE&I report will be integral in

~ Providing avenues for anyone to safely raise potential concerns and issues in good

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• Operating according to applicable laws and regulations

• Protecting the personal data that has been entrusted to us

Delivering on Our Sustainability Commitment

As a leading consumer self-care company, improving the lives of consumers is core to our business. Perrigo remains committed to doing

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and transparent reporting. In 2021, we updated our Environmental, Social and Governance (ESG) goals to reflect the urgency of the issues

we face as a global community, and we remain aligned with the framework of the United Nations Sustainable Development Goals (SDGs).

Recognizing the importance of ESG, we formalized our corporate sustainability strategy back in 2015. Since that time, we have consistently set

ambitious goals to guide us in reducing our environmental impact and reinforcing sustainability across the business. Spanning the following three

key areas, these goals include:

Sustainable
Operations

By 2026 we aim to operate
all global facilities with 100%
renewable electricity, reduce
carbon dioxide (CO2) emissions by
15% and reduce energy, water and
waste by 10% (relative to a 2020
baseline). We have also set goals
to enhance our reporting to include
the use of Science Based Targets
(SBT) and scope 3 emissions.

Packaging
Sustainability

In addition to annual product
packaging weight reduction
goals, by 2025 we aim to
use 80-100% recyclable,
reusable or compostable
packaging—20-30% made from
post-consumer recycled content
(where regulations allow)—and to
eliminate polyvinyl chloride (PVC)
from all packaging.

Sustainable
Supply Chain

We are reinforcing our responsible
supply chain with ethically and
socially compliant auditing
practices and zero tolerance for
human rights abuse, and we are
currently working towards using

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packaging and palm oil.

We have executed well against these ambitious goals and are pleased

to report that we made great strides over the past year, such as:

Reduction of global carbon
emissions since 2015

Of product packaging
being recyclable

23.5%
60-75%
100%

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sourcing commitment

Expanding
How2Recycle labels
to 12 brands

Committing to using post-
consumer recycled (PCR)
content and removing all PVC
from packaging

To support our efforts to meet the UN SDGs, we continue to accommodate various ESG reporting frameworks including the Carbon

Disclosure Project (CDP). In 2021, we began reporting to the Sustainability Accounting Standards Board (SASB) and the Task Force on

Climate-related Financial Disclosures (TCFD).

Our Commitment to Compliance

With more than 135 years in business, we are proud of our heritage, and we

d faith without fear of retaliation

continue to actively protect it by embedding compliance in our structure and

strategy. Our Global Compliance Program is driven by the Global Compliance and

Privacy Team and is supported by the Board of Directors, the Audit Committee and

the Compliance and Corporate Values Committee.

Board of
Directors

Compliance &
Corporate Values
Committee

Global Ethics &
Privacy Team

Compliance
Coordinators
(representing
Perrigo sites)

Local
Compliance
Committees

Perrigo
Employees &
Contractors

The program’s components, aligned to Perrigo’s principles and values, empower our colleagues to conduct business in an

informed, responsible and ethical manner. Recent initiatives to further these goals include, among others:

Conducting external

Providing avenues

Operating according

Protecting the

Detecting risk to

assessments to

for anyone to safely

to applicable laws and

personal data

benchmark the current

raise potential

regulations

program and implement

concerns and issues

updates as appropriate

in good faith without

fear of retaliation

that has been

entrusted to us

prevent non-

compliance

Seven Principles of Our Global
Compliance Program

Our Compliance program has seven components aligned to

our principles and values. These values are supported within

Perrigo’s Code of Conduct, with which all employees are

expected to comply. Our compliance culture is supported

by continuous improvement, with a focus on training and

education, to ensure that our employees understand their

individual accountability in raising compliance issues.

Disciplinary
& Correctiv e
Actions

t
o
D
e

R
e
s

Written
P o licies &
P r o cedures

c
tiv

We remain
in a good state
of compliance,
with continuous
improvement
focus

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i

&
g
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i
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ai
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t
a
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uditing
esting &
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Our Commitment to Our Communities

Beyond our commitment to responsible business practices, Perrigo takes pride in our community giving initiatives as we strive to not only

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product donations, our generous donor matching program and cash donations, the Perrigo Company Charitable Foundation has continued to

deliver on its promise to improve access to quality health services, create educational opportunities and support the needs of the underserved in

our communities.

3
Strategic
Areas of Focus
in 2021

> Healthcare

> Education

> Supporting the
Underserved

Key FY21 Perrigo Foundation Stats

$2.6M

Cash
Donations

$640K

Healthcare
Donations

$2.8M

Product
Donations

$1.1M

Education
Donations

$31M

in cash donations
over the past 10 years

Paving the Path Forward –
Driven by Our People

Perrigo would not exist without our incredible global team.

they have stepped up, we have moved forward and transformed

The past few years have not been easy for companies and

Perrigo into a leading self-care company that makes a difference in

communities alike, and we are proud to be a team that does not

the lives of millions across the globe.

stand apart from our communities but is an active participant that

helps them thrive. We have rallied together to deliver important

products to those who need them most, working hard to create

affordable, effective self-care products that improve quality of life

for consumers and their families every day.

Throughout the pandemic, our global team has adapted well

to keep our people safe and keep our products flowing to store

shelves and consumers’ medicine cabinets. We are grateful for the

commitment and dedication our global team has shown; because

As we look ahead, we have significant opportunities for

turbocharged growth, while remaining committed to product value

and quality, our people, the environment and our communities. The

path forward is exciting, and we thank you for sharing this journey

with us.

Shareholder Information

Board of Directors
Rolf A. Classon
Chairman of the Board

Bradley A. Alford
Director; Operating Partner of Advent International
Corporation

Orlando D. Ashford
Director; Strategic Advisor, Sycamore Partners

Katherine Doyle
Director; Former Chief Executive Officer of Swanson
Health Products, Inc.

Adriana Karaboutis
Director; Chief Information and Digital Officer for
National Grid

Murray S. Kessler
Director; President and Chief Executive Officer of Perrigo
Company plc

Jeffrey B. Kindler
Director; Chief Executive Officer of Centrexion Corporation

Erica L. Mann
Director; Former President of Bayer Consumer
Health Division

Donal O’Connor
Director; Retired Partner, PwC Ireland

Geoffrey M. Parker
Director; Chief Financial Officer of Tricida, Inc.

Theodore R. Samuels
Director; Retired President of Capital Guardian
Trust Company

Perrigo Company plc
Corporate Headquarters

Sharp Building
10-12 Hogan Place
Telephone: +353 1 709 4000

Registered in Ireland

Registration Number 529592

North American Base of Operations

515 Eastern Avenue
Allegan, Michigan 49010
Telephone: (269) 673-8451

Common Stock

Stock Symbol: PRGO
Listed: New York Stock Exchange

Senior Management
Murray S. Kessler
President and Chief Executive Officer

Raymond P. Silcock
Executive Vice President and Chief Financial Officer

Svend Andersen
Executive Vice President and President, Consumer
Self-Care International

James E. Dillard III
Executive Vice President and President, Consumer Self-Care
Americas

Thomas M. Farrington
Executive Vice President and Chief Information Officer

Ronald C. Janish
Executive Vice President of Global Operations
and Supply Chain

Todd W. Kingma
Executive Vice President, General Counsel and Secretary

Grainne Quinn
Executive Vice President and Chief Medical Officer

Robert E. Willis
Executive Vice President and Chief Human Resources Officer

Independent Registered Public Accounting Firm

Ernst & Young
Grand Rapids, Michigan

Stockholder Information

Questions concerning stock ownership may be directed to
Investor Relations at Bradley.Joseph@perrigo.com.

Stock Transfer Agent

Computershare
P.O. Box 43078
Providence, RI 02940
(800) 622-6757
https://www.computershare.com

Annual Meeting of Shareholders

Friday, May 6, 2022, 5:00 a.m. (EDT) (12:00 p.m. IDT)

UNITED STATTT ES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ _ t__ o _____ ____
Commission file number 001-36353

Perrigo Company plc
(Exact name of registrant as specified in its charter)

(State or other jurisdiction of incorporation or organization)

Ireland

N/A

(I.R.S. Employer Identification No.)

The Sharp Building, Hogan Place, Dublin 2, Ireland D02 TY74
+353 1 7094000
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Ordinary shares, €0.001 par value

4.000% Notes due 2023

3.900% Notes due 2024

4.375% Notes due 2026

3.15% Notes due 2030

5.300% Notes due 2043

4.900% Notes due 2044

PRGO

PRGO23

PRGO24

PRGO26

PRGO30

PRGO43

PRGO44

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or forff
such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐
Yes ☐ No ☒

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or forff
such
shorter period that the registrant was required to submit such files).

Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and
"emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒ Accelerated filer

☐ Non-accelerated filer

☐ Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effeff ctiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public
accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

☒
Yes ☐ No ☒

The aggregate market value of the voting stock held by non-affiff liates of the registrant, based upon the closing sale price of our ordinary shares
on July 3, 2021 as reported on the New YorkYY
Stock Exchange, was $6,266,348,414. Ordinary shares held by each director or executive officer
have been excluded in that such persons may be deemed to be affiff liates. This determination of affiliate status is not necessarily a conclusive
determination for other purposes.

As of February 25, 2022, the registrant had 133,784,716 outstanding ordinary shares.

ff
The informa

tion called forff

by Part III will be incorporated by reference from the Registrant's definitive Proxy Statement for its Annual Meeting of

Shareholders to be filed pursuant to Regulation 14A or will be included in an amendment to this Form 10-K.

:
Documents incorporated by reference

PERRIGO COMPANY PLC

FORM 10-K
YEAR ENDED DECEMBER 31, 2021
TABLE OF CONTENTS

Cautionary Note Regarding Forward-Looking Statements

Part I.

Item 1.

Item 1A.

Item 1B.

Item 2.

Item 3.

Item 4.
Additional
Item.

Part II.

Item 5.

Item 6.

Item 7.

Item 7A.

Item 8.

Item 9.

Item 9A.

Item 9B.

Business

Risk Factors

Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures
Information About Our Executive Officers

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
[Reserved]

Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data

Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
Controls and Procedures

Other Information

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Part III.

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Part IV.

Directors, Executive Officers and Corporate Governance

Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence

Principal Accounting Fees and Services

Item 15.

Exhibits and Financial Statement Schedules

Page No.

44
45

157

158

160

161

162

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report are “forward-looking statements” within the meaning of Section 21E of the

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

The Company has based these forward-looking statements on its current expectations, assumptions,
estimates and projections. While the Company believes these expectations, assumptions, estimates and projections
are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and
uncertainties, many of which are beyond the Company’s control, including: the effect of the coronavirus (COVID-19)
pandemic and its variants and the associated supply chain impacts on the Company’s business; general economic,
credit, and market conditions; the outbreak of war between Russian and Ukraine, including the imposition of
sanctions related thereto, or escalation of conflict in other regions where we do business; future impairment
charges; customer acceptance of new products; competition from other industry participants, some of whom have
greater marketing resources or larger market shares in certain product categories than the Company does; pricing
pressures from customers and consumers; resolution of uncertain tax positions, including the Company’s appeal of
the draft and final Notices of Proposed Assessment (“NOPAs”) issued by the U.S. Internal Revenue Service and the
impact that an adverse result in any such proceedings would have on operating results, cash flows, and liquidity;
pending and potential third-party claims and litigation, including litigation relating to the Company’s restatement of
previously-filed financial information and litigation relating to uncertain tax positions, including the NOPAs; potential
impacts of ongoing or future government investigations and regulatory initiatives; potential costs and reputational
impact of product recalls or sales halts; the impact of tax reform legislation and healthcare policy; the timing, amount
and cost of any share repurchases; fluctuations in currency exchange rates and interest rates; the Company’s ability
to achieve the benefits expected from the sale of its RX business and the risk that potential costs or liabilities
incurred or retained in connection with that transaction may exceed the Company’s estimates or adversely affect the
Company’s business or operations; the consummation and success of the proposed acquisition of Héra SAS and
the ability to achieve the expected benefits thereof, including the risk that the parties fail to obtain the required
regulatory approvals or to fulfill the other conditions to closing on the expected timeframe or at all, the occurrence of
any other event, change or circumstance that could delay the transaction or result in the termination of the securities
sale agreement or the risks that the Company’s synergy estimates are inaccurate or that the Company faces higher
than anticipated integration or other costs in connection with the proposed acquisition; the consummation and
success of other announced and unannounced acquisitions or dispositions, and the Company’s ability to realize the
desired benefits thereof; and the Company’s ability to execute and achieve the desired benefits of announced cost-
reduction efforts and strategic and other initiatives. An adverse result with respect to the Company’s appeal of any
material outstanding tax assessments or pending litigation, including securities or drug pricing matters, could
ultimately require the use of corporate assets to pay such assessments, damages from third-party claims, and
related interest and/or penalties, and any such use of corporate assets would limit the assets available for other
corporate purposes. These and other important factors, including those discussed in this report under “Risk Factors”
and in any subsequent filings with the United States Securities and Exchange Commission, may cause actual
results, performance or achievements to differ materially from those expressed or implied by these forward-looking
statements. The forward-looking statements in this report are made only as of the date hereof, and unless otherwise
required by applicable securities laws, we disclaim any intention or obligation to update or revise any forward-
looking statements, whether as a result of new information, future events, or otherwise.

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

This report contains trademarks, trade names and service marks that are the property of Perrigo Company

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

Perrigo Company plc - Item 1
Business Overview

PART I.

ITEM 1.

BUSINESS

Perrigo Company plc was incorporated under the laws of Ireland on June 28, 2013. We became the

successor registrant to 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.

WHO WE ARE

Our vision is to make 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
are designed to enhance individual well-being and empower consumers to proactively prevent or treat conditions
that can be self-managed. We are headquartered in Ireland and sell our products primarily in North America and
Europe as well as in other markets around the world.

We endeavor to empower consumers’ self-care decisions, utilizing the Company’s core competencies to

fully take advantage of the massive global trend towards self-care. We define self-care as not just treating disease
or helping individuals feel better after taking a product, but also maintaining and enhancing their overall health and
wellness. Consistent with our vision, in 2019 Perrigo’s management and board of directors launched a three-year
strategy to transform the Company into a consumer self-care leader. We completed our transformation to a
consumer self-care company in 2021 by reconfiguring the portfolio through the divestiture of our RX business,
announcement of the acquisition of Héra SAS (“HRA Pharma”), and removal of significant uncertainty through
settlement of a tax exposure. In addition, we continue to invest in growth initiatives to drive future consistent and
sustainable results in line with consumer-packaged goods peers.

Segments

Our reporting and operating segments are as follows:

•

Consumer Self-Care Americas ("CSCA") comprises our consumer self-care business (OTC, infant
formula, and Oral care categories, our divested Animal health category, and contract manufacturing) in the
U.S., Mexico and Canada.
Consumer Self-Care International ("CSCI") comprises our consumer self-care business primarily
branded in Europe and Australia, and our store brand business in the United Kingdom and parts of Europe
and Asia. Our liquid licensed products business in the United Kingdom was divested on June 19, 2020.

We previously had an RX segment which was comprised of our prescription pharmaceuticals business in
the U.S. and other pharmaceuticals and diagnostic businesses in Israel, which have been divested. Following the
divestiture, there were no substantial assets or operations left in this segment. The RX segment was reported as
Discontinued Operations in 2021, and is presented as such for all periods in this report (refer to Item 8. Note 8).
Financial information related to our business segments can be found in Item 8. Note 21. Our segments reflect the
way in which our management makes operating decisions, allocates resources and manages the growth and
profitability of the Company.

Perrigo Company plc - Item 1
Business Overview

MAJOR DEVELOPMENTS IN OUR BUSINESS

Sale of Generic RX Pharmaceuticals Business

On March 1, 2021, we announced a definitive agreement to sell our RX business to Altaris Capital Partners,

LLC ("Altaris"). On July 6, 2021, we completed the sale of the RX business for aggregate consideration of
$1.55 billion, subject to customary adjustments for cash, debt, working capital and certain transaction expenses.
The consideration includes approximately $53.3 million of reimbursements which Altaris will be required to deliver in
cash to Perrigo pursuant to the terms of the Agreement. The sale resulted in a pre-tax gain, net of professional fees,
of $47.5 million recorded in Other (income) expense, net on the Consolidated Statement of Operations for
discontinued operations. The gain included a $159.3 million increase from the write-off of foreign currency
translation adjustment from Accumulated other comprehensive income. The sale of the RX business helped
establish Perrigo as a pure-play consumer self-care company, and was an essential milestone in our transformation
plan.

HRA Pharma Acquisition Agreement

On September 8, 2021, we and our wholly-owned subsidiary Habsont Unlimited Company (the

"Purchaser"), entered into a Put Option Agreement to acquire certain holding companies holding all of the
outstanding equity interests of HRA Pharma from funds affiliated with private equity firms Astorg and Goldman
Sachs Asset Management (collectively, the "Sellers"). Pursuant to the Put Option Agreement, following completion
of the works council consultation process required under French law, the selling shareholders exercised their put
option right under the Put Option Agreement and, on October 20, 2021, the Company, the Purchaser and the
Sellers entered into a Securities Sale Agreement in the form previously agreed by the parties (the “Purchase
Agreement”). Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the
Purchaser has agreed to acquire certain holding companies holding all of the outstanding equity interests of HRA
Pharma from the Sellers for cash. The transaction values HRA Pharma at approximately €1.8 billion, or
approximately $2.1 billion based on exchange rates as of the date of the Put Option Agreement, on an enterprise
value basis and using a lockbox mechanism set forth in the Purchase Agreement. In September 2021, we entered
into two non-designated currency option contracts to hedge the foreign currency exposure of the euro-denominated
purchase price for HRA Pharma (refer to Item 8. Note 11).

The proposed final transaction is expected to close in the first half of 2022, subject to the satisfaction of

customary closing conditions, including regulatory approvals. We intend to pay the purchase price using a
combination of cash on hand and, depending upon market conditions, either funds available under our current credit
pp
facility or funds from new debt financing. HRA Pharma is one of the fastest growing OTC companies globally, with
three category-leading self-care brands in blister care (Compeed®), women’s health (ellaOne®
gg
) and scar care
(Mederma®
presence in Europe, improve our financial profile and margins, and build on our transformation to a consumer self-
care company. Operating results are expected to be reported within both our CSCA and CSCI segments.

), and brings expertise in prescription-to-OTC switches. This acquisition is expected to strengthen our

Impact of COVID-19 Pandemic

We have been impacted by the coronavirus (COVID-19) global pandemic and the responses by

government entities to combat the virus. We currently continue to operate in all our jurisdictions and are complying
with the rules and guidelines prescribed in each jurisdiction. Refer to Item 7. Management's Discussion and Analysis
- Executive Overview for a detailed discussion of the impact of the COVID-19 pandemic to our business.

Tribunal Ruling in Claim Arising from the Omega Acquisition

As previously disclosed, we were involved in arbitration in Belgium related to our claims of fraud in
connection with the Omega acquisition. The Tribunal panel, as described in more detail under Claim Arising from
the Omega Acquisition in Item 8. Note 19, found fraud by the sellers of Omega in a ruling on August 27, 2021 and
awarded Perrigo approximately €355.0 million ($417.6 million at the time of cash receipt) including fees and costs.
The panel also ruled against the sellers and in favor of Perrigo on all the counterclaims. The sellers have paid all
amounts owed under the award, and the arbitral proceedings have now ended. The arbitration proceedings remain
confidential as required by the Share Purchase Agreement dated November 6, 2014 ("SPA") and the rules of
Belgian Centre for Arbitration and Mediation ("CEPANI"). We recorded the cash receipt as a reduction to Operating
Expenses on the Consolidated Statements of Operations.

Tax Updates

As described in Item 7. Management’s Discussion and Analysis – Recent Developments, Item 1A. Risk

Factors - Tax Related Risks, and Item 8. Note 17, we are engaged in tax disputes in several jurisdictions. The
following update notes certain material developments in such disputes since December 31, 2020, and makes use of
certain terms defined in Item 8. Note 17.

Perrigo Company plc - Item 1
Business Overview

•

IRS Audit (2013-2015 Tax Years). On January 13, 2021, the IRS issued a 30-day letter proposing, among
other modifications, certain transfer pricing adjustments regarding our profits from the distribution of
omeprazole during our 2013 to 2015 tax years in the aggregate amount of $141.6 million. We timely filed a
protest on February 26, 2021, on the grounds that certain of the government’s positions are currently the
subject of pending litigation in the Western District of Michigan with respect to refund requests relating to
our 2009 through 2012 tax years. We believe that we should prevail on the merits on the issues being
contested. However, we have reserved for taxes and interest payable on a 5.24% deemed royalty on
omeprazole, which we have conceded, through the tax year ended December 31, 2018.

In addition, the 30-day letter for the 2013-2015 tax years expanded on a Notice of Proposed Adjustment
("NOPA") issued on December 11, 2019 and proposed to disallow adjustments to gross sales income on the
sale of prescription products to wholesalers for accrued wholesale customer pipeline chargebacks where
the prescription products were not re-sold by such wholesalers to covered retailers by the end of the tax
year for the 2013-2015 tax years. We filed a protest on February 26, 2021 to request IRS Appeals
consideration. On January 20, 2022, the IRS responded to our Protest with its Rebuttal and reiterated its
position in the NOPAPP that the accrued chargebacks are not currently deductible in the tax year accrued
because all events have not occurred to establish the fact of the liability in the year deducted. If the IRS
were to prevail in its proposed adjustment, we estimate a payment of approximately $18.0 million, excluding
interest and penalties for the 2013-2015 tax years. In addition, we expect the IRS to seek similar
adjustments for future years. If those future adjustments were to be sustained, based on preliminary
calculations and subject to further analysis, we estimate this would result in a payment not to exceed $7.0
million through tax year ended December 31, 2021, excluding interest and penalties. We have fully
reserved for this issue. We strongly disagree with the IRS’s proposed adjustment and will pursue all
available administrative and judicial remedies necessary.

IRS NOPA (Interest Deductibility for 2014-2015 Tax Years). On January 13, 2021, we received a
Revenue Agent Report (“RAR”) for our 2013-2015 tax years, which retains the adjustment from the
previously disclosed NOPAPP dated May 7, 2020, which disallowed interest expense deductions of $414.7
million on $7.5 billion in debts owed by Perrigo U.S. to Perrigo Company plc for the 2014 and 2015 tax
years. We timely filed a protest to the RAR with the IRS. The RAR caps the interest rate on the debt for U.S.
federal income tax purposes at 130.0% of the Applicable Federal Rate on the stated grounds that the loans
were not negotiated on an arm's-length basis. The IRS advised on May 3, 2021, that it changed its policy for
all taxpayers and will no longer pursue the default interest of 130.0% of AFR. However, on January 20,
2022, the IRS responded to our Protest, which we filed on February 26, 2021, with its Rebuttal, and revised
its position on this interest rate issue by reasserting that implicit parental support considerations are
necessary to determine the arm's length interest rate and proposed revised interest rates that are higher
than the interest rates proposed under its 130% of AFR assertion. The blended interest rate proposed by
the IRS Rebuttal is 4.36%, an increase from the blended interest rate in the RAR of 2.57%, and lower than
the stated blended interest rate of the loans of 6.8%. We will pursue all available administrative and judicial
remedies necessary to defend the deductibility of the interest expense on this indebtedness.

Irish Revenue NoA. On November 4, 2020, the Irish High Court ruled that the NoA did not violate our
constitutional rights and legitimate expectations as a taxpayer. The Irish High Court did not review the
technical merits of the NoA under Irish law. Elan Pharma pursued further challenges in the Irish Tax Appeals
Commission, which scheduled a hearing for late 2021. Prior to the scheduled hearing, on September 29,
2021, Elan Pharma and Irish Revenue agreed to a full and final settlement of the NoA on the following
terms: (i) on a 'without prejudice basis' and, for purposes of the settlement, an alternative basis of taxation
was applied, (ii) Irish Revenue to take no further action in relation to the NoA or any Tysabri related income
or transactions, (iii) no interest or penalties applied, (iv) a total tax of €297.0 million charged as full and final
settlement of all liabilities arising from the sale of the Tysabri patents for the fiscal years 2013 to 2021, and
(v) after Irish Revenue credited taxes already paid and certain unused R&D credits against the €297.0
million charged settlement amount, the total cash payment of €266.1 million ($307.5 million) was made on

Perrigo Company plc - Item 1
Business Overview

•

October 5, 2021. We recorded the payment as a component of income tax expense on the Consolidated
Statements of Operations.

Israeli Notice of Assessment. On December 29, 2020, we received a Stage A assessment from the Israeli
Tax Authority ("ITA") for the tax years ended December 31, 2015 through December 31, 2017 in the amount
of $63.8 million relating to attribution of intangible income to Israel, income qualifying for a lower preferential
rate of tax, exemption from capital gains tax, and deduction of certain settlement payments. We timely filed
our protest on March 11, 2021 to move the matter to Stage B of the assessment process. Through
negotiations with the ITA, we resolved the audit for the tax year ended June 27, 2015 through tax year
ended December 31, 2019, by agreeing to add tax year ended December 31, 2018 and tax year ended
December 31, 2019 to the audit to reach an agreeable resolution to provide certainty for these additional
periods. The agreement with the ITATT required us to pay $19.0 million, after offset of refunds of $17.2 million,
for the five taxable years. In addition, we paid $12.5 million to resolve a tax liability indemnity for the tax
year ended December 31, 2017 relating to Perrigo API Ltd, which we disposed of in December 2017. We
recorded the payments as a component of income tax expense on the Consolidated Statements of
Operations.

IRS NOPA (Athena IPR&D Royalty Rate). Without prejudice to pursuing other administrative and judicial
remedies, on April 21 and 23, 2020, we filed requests for Competent Authority Assistance with the IRS and
Irish Revenue to alleviate potential double taxation on Tysabri income for the 2011-2013 tax years followed
by a supplemental request on October 20, 2020 related to a disputed litigation expense deduction involving
the drug Zonegran. Both requests were accepted and are under review by the Competent Authorities of the
United States and Ireland.

IRS Audit (Omeprazole Transfer Pricing Adjustments in 2009-2012 Tax Years). A trial was held during
the period May 25, 2021 to June 7, 2021 for the refund case in the United States District Court for the
Western District of Michigan. Post-trial briefings were completed on September 24, 2021 and the case is
now fully submitted for the court’s decision.

Securities Litigation Settlement

A settlement was reached in the case, In re Perrigo Company plc Securities Litigation

detail in Item 8. Note 19 under the header In the United States (cases related to Irish Tax events)
seeking approval of the class action settlement were filed on October 4, 2021. The Court issued a preliminary
approval order on October 29, 2021, which led to notices being sent to class members. The Court held a hearing on
February 16, 2022 about the settlement and issued the Final Approval Order and Judgment. As a result, the
settlement has been approved and the case has now ended. The settlement has been funded by insurance.

as described in more
. Motion papers

Share Repurchases

We did not purchase any shares during the year ended December 31, 2021.

Stock Exchange Listing

On November 22, 2021, we initiated steps to voluntarily delist our ordinary shares from trading on the Tel

Aviv Stock Exchange (“TASE”). The delisting of our ordinary shares took effect on February 23, 2022, three months
following the date of our request to the TASE pursuant to Israeli law. Our ordinary shares will continue to be listed
for trading on the New York Stock Exchange (“NYSE”), and all ordinary shares that were traded on TASE were
transferred to the NYSE where they continue to be traded.

Leadership Changes

Effective October 5, 2021, Jim Dillard was named Executive Vice President ("EVP") and President of our

CSCA segment. Mr. Dillard's supply chain, manufacturing, R&D, innovation, and regulatory experience, along with
his proven leadership skills, make him qualified to lead this segment. Before this role, Mr. Dillard served as Perrigo's
EVP and Chief Scientific Offiff cer.

Perrigo Company plc - Item 1
Business Overview

NEW PRODUCTS

We consider a product to be new if it (i) was reformulated, (ii) was a product line extension due to changes

in characteristics such as strength, flavor, or color, (iii) had a change in product status from "prescription only" ("Rx")
to OTC, (iv) was a new store brand or branded launch, (v) was provided in a new dosage form or (vi) was sold to a
new geographic area with different regulatory authorities, in all cases, within 12 months prior to the end of the period
for which net sales are being measured. During the year ended December 31, 2021, new product sales were
$130.0 million.

CONSUMER SELF-CARE AMERICAS

Overview

The CSCA segment is focused primarily on the sale of self-care products that help to grow our customers'
overall self-care portfolio in categories including Upper respiratory, Pain and sleep-aids, Digestive health, Nutrition,
Vitamins, minerals and supplements ("VMS"), Healthy lifestyle, Skincare and personal hygiene, and Oral care in the
U.S., Mexico, Canada, and South America. We are a leading provider of self-care products sold to consumers via
store brands. Consumer awareness and knowledge of the quality, value and efficacy of our products continues to
grow due to efforts made by our retailers and wholesalers. We provide our customers self-care products under both
their own brands and our brands, which are sold to consumers in store at shelf, store pickup and online. During the
year ended December 31, 2021, our CSCA segment represented approximately 65% of consolidated net sales.

The CSCA segment develops, manufactures, and markets store brand self-care products that are

comparable in quality and effectiveness to national brands. Store brand products must meet the same stringent U.S.
Food and Drug Administration ("FDA") requirements as national brands within the U.S. and the requirements of
comparable regulatory bodies outside the U.S. In most instances, our product packaging is designed to invite and
reinforce comparison to national brand products, while communicating store brand value to consumers.

The cost of store brand and our branded products to retailers is significantly lower than that of comparable

nationally advertised brand name products. Generally, retailers’ dollar profit per unit of store brand product is greater
than the dollar profit per unit of the comparable national brand product. The retailer, therefore, can price a store
brand product below the competing national brand product and realize a greater profit margin. The consumer
benefits by receiving a high-quality product at a price below the comparable national brand product. As a result, our
business model results in consumers saving money on their self-care needs.

We are dedicated to continuing to be the leader in developing and marketing new store brand and our

branded products and have a research and development ("R&D") staff that we believe is one of the most
experienced in the industry at developing products comparable in formulation and quality to national brand products.
In order to offer consumers product features or benefits that national brand companies do not offer, we have
implemented a product development strategy to differentiate store brand and our branded products from national
brands. Our R&D team also responds to changes in existing national brand products by reformulating existing
products. For example, in the OTC pharmaceutical market, certain new products are the result of changes in
product status from Rx-to-OTC. These “Rx-to-OTC switches” require FDA approval through a process initiated by
the drug innovator. The drug innovator usually begins the process by filing a New Drug Application ("NDA"), which is
often followed by a competitor filing an Abbreviated New Drug Application ("ANDA"). Global regulatory agencies
highly scrutinize any product application submitted to switch a product from physician prescribed Rx to OTC. New
drugs are also marketed through the FDA's OTC monograph process, which allows us to produce drugs that are
generally recognized as safe and effective without pre-marketing approval. In the Oral care category, we focus on
creating products that are equivalent to the national brands, and also partner with our customers to create exclusive
brands and differentiated products. We rely on both internal R&D and strategic product development agreements
with outside sources to develop new products.

The CSCA segment also develops, manufactures, and distributes certain branded products, which are

consistent with the segment's self-care strategy. Our branded products sold under brand names include
Prevacid®24HR, Good Sense®, Zephrex D®, ScarAway®, Plackers®, Rembrandt®, Steripod®, Firefly®, REACH®, Dr.
Fresh® , and Burt's Bees®.

We manufacture a significant portion of our CSCA segment's products at our plants located in the U.S.,

Mexico, and China, and we source the remaining materials and products from third parties. In addition, in order to

Perrigo Company plc - Item 1
CSCA

maximize both our capacity and sales of proprietary formulas, we engage in contract manufacturing, which involves
producing unique ANDAs and monograph products through partnerships with major pharmaceutical and direct-to-
consumer companies.

We believe the increasing age of the global population, continued rising healthcare costs, and consumers
who proactively prevent or treat conditions will drive the need for the enhanced value that our products provide to
consumers, which creates strong dynamics for U.S. OTC market growth. Another level of growth includes share
gains against store brand competitors and store brand penetration gains versus national brands. In addition, we
believe that new products, including new product innovation and products switching from Rx-to-OTC status (as
described above) will continue to drive demand for our products and market growth within the segment.

Recent Trends and Developments

•

During the third quarter of 2021, supply chain disruptions, including a significant shortage of truck drivers in
the U.S. and record delays at global shipping ports, led to higher unfulfilled customer orders and higher
input costs compared to the prior year. In the fourth quarter of 2021, we took a series of actions to improve
the situation, including reconfiguring our distribution system for short term shipments, outsourcing highly
complex product lines to a third party logistic provider, adding regional carriers for challenged shipping
lanes, hiring additional distribution center personnel, and increasing the purchase cycle as it relates to the
manufacturing process. While we believe supply chain disruptions will continue in the near-term, we are
expecting to continue to see improvements throughout 2022.

During the first half of 2021, net sales of cough and cold products decreased as a result of the very low
incidence of cough and cold related illness, which we believe is attributed to social distancing and mask
mandates put in place to combat the spread of COVID-19. However, increased consumer takeaway at our
retail customers, starting in May 2021, suggested normalizing consumer purchasing routines could be
expected in the second half of 2021. In the third quarter, we experienced higher demand for cough, cold
and pain products due primarily to the higher incidences of cough and cold illness as society returned to in-
person activities. Consumer take away continued to remain strong during the fourth quarter and, as such,
we expect sales of cough, cold and pain products to continue to increase, depending on the trajectory of the
COVID-19 pandemic moving forward (refer to Item 7. Management's Discussion and Analysis - Executive
Overview).

• On May 18, 2021, we announced a definitive agreement to sell our Latin American businesses to Advent
International. This transaction is part of our margin improvement program and Project Momentum cost
savings initiative and is expected to close in the first half of 2022. We determined that the carrying value of
these businesses exceeded their fair value less cost to sell, resulting in an impairment charge of
$162.2 million allocated to goodwill and assets held for sale (refer to Item 8. Note 9).

Perrigo Company plc - Item 1
CSCA

Products

Our CSCA segment offers products in the following categories:

Product Category
Pain and sleep-aids

Upper respiratory

Digestive health

Nutrition

Healthy lifestyle

Description
Products comprised of pain relievers, fever reducers and sleep-aids.

Products that relieve upper respiratory symptoms, including cough suppressants, expectorants,
sinus and allergy relief.

Products such as antacids, anti-diarrheal, and anti-heartburn that relieve symptoms associated
with digestive issues.

Infant formulas and nutritional beverages.
Products that help consumers live a healthy lifestyle such as smoking cessation, diabetes care,
and well-being products.

Skincare and personal
hygiene

Products for the face and body such as dermatological care, scar management, lice treatment,
and other products for various skin conditions.

Oral care

Vitamins, minerals, and
supplements

Other

Products used for oral care, including toothbrushes, toothbrush replacement heads, floss,
flossers, whitening products and toothbrush covers.

Vitamins, minerals, and supplements.

Diagnostic products and other miscellaneous self-care products.

The chart below reflects net sales by product category in the CSCA segment, which includes net sales from

our OTC contract manufacturing business for the year ended December 31, 2021.

VMS 1%

Upper respiratory 18%

Other 2%

Skincare and personal hygiene 8%

Healthy lifestyle 11%

Digestive health 18%

Oral care 12%

Pain and sleep-aids 15%

Nutrition 15%

We launched several new CSCA products in the year ended December 31, 2021, most notably a store
brand hypoallergenic infant formula, Diclofenac sodium topical gel 1%, and Esomeprazole Mini. During the year
ended December 31, 2021, new product sales in the CSCA segment were $56.1 million.

We, on our own or in conjunction with partners, received final FDA approval for one new product within the

CSCA segment in the year ended December 31, 2021, and as of December 31, 2021, we had eight new product
applications pending FDA approval.

Perrigo Company plc - Item 1
CSCA

Sales and Marketing

Our customers include major global, national, and regional retail drug, supermarket, and mass merchandise

chains such as Walmart, Costco, CVS, Target, Walgreens Boots Alliance, Kroger, Dollar General, Sam’s Club,
Topco, Padagis e-commerce stores including Amazon, and major wholesalers, including McKesson, Amerisource
Bergen, and Cardinal Health.

We seek to establish customer loyalty through superior customer service by providing a comprehensive
assortment of high quality, affordable products; timely processing, shipment and delivery of orders; assistance in
managing customer inventories; and support in managing and building the customer’s self-care market portfolio
including their store brand business, trade and digital marketing activities. The CSCA segment employs its own
sales force to service larger customers and uses industry brokers for other customers. Field sales employees, with
support from marketing and customer service team members, are assigned to specific customers in order to work
most effectively with the customer. The commercial organization provides our customers with customized in-store
and digital marketing programs for all products we supply in the customers' self-care market portfolio.

The primary objective of this management approach is to enable our retail, e-commerce, and wholesale
customers to increase sales and market share of their overall self-care portfolio. We partner with our retailers to
provide customized store brand and branded products that provide quality and value to consumers. We invite
comparison of store brand and our branded products to national brand products. Our sales and marketing personnel
assist customers in the development and introduction of new store brand and our branded products, and in the
promotion of customers’ existing store brand and our branded products by providing market information;
establishing individualized promotions and marketing programs, which may include floor displays, bonus sizes,
coupons, rebates, store signs, and promotional packs; and performing consumer research. During the year we saw
consumers seeking more of their self-care product needs online, in part due to the COVID-19 pandemic, resulting in
the growth of e-commerce as a consumer channel for our products. We have developed resources, programs and
tools to be a strategic marketing partner for our customers’ digital marketing efforts. This provides our customers
with a holistic campaign to convert shoppers to store brand whether they shop in-store or online.

In contrast to national brand manufacturers, which incur considerable advertising and marketing
expenditures targeted directly to the end user or consumer, the CSCA segment’s primary marketing efforts are
channeled through retailers and wholesalers and reach the consumer through our customers’ in-store marketing
programs and our digital media programs. Because the retail profit margin for store brand and our branded products
is generally higher than national brand products, retailers and wholesalers often commit funds for additional
promotions.

In addition to in-store marketing programs, team members in our nutrition category market products directly

to consumers and healthcare professionals.

Competition

The markets for our self-care products are highly competitive and differ for each product line and
geographic region. Our primary competitors include manufacturers, such as Dr. Reddy's Labs, LNK International,
Inc., PL Developments, Aurobindo and Sun Pharmaceuticals, and brand-name pharmaceutical and consumer
product companies, such as Johnson & Johnson, Procter & Gamble, Reckitt Benckiser, Abbott Nutrition, Bayer AG,
Sanofi and Philips. The various major categories of our CSCA business each have certain key competitors, such
that a competitor generally does not compete across all product lines. However, some competitors do have larger
sales volumes in certain of our categories. Additionally, national brand companies tend to have more resources
committed to marketing their products and could in the future manufacture store brand versions of their products at
lower prices than their national brand products. Competition is based on a variety of factors, including price, quality,
assortment of products, customer service, marketing support, and approvals for new products. Refer to Item 1A.
Risk Factors - Operational Risks for additional information and risks associated with competition.

Perrigo Company plc - Item 1
CSCI

CONSUMER SELF-CARE INTERNATIONAL

Overview

The CSCI segment is comprised of our consumer self-care business outside of North America, including our

branded business in Europe and Australia and our store brand businesses in the United Kingdom and parts of
Europe and Asia. The CSCI segment develops, manufactures, markets, and distributes many well-known European
consumer self-care brands in the Upper respiratory, Pain and sleep-aids, Digestive health, VMS, Healthy lifestyle,
Skincare and personal hygiene, and Oral care categories. The segment leverages its broad regulatory, sales, and
distribution infrastructure to innovate new products and brands, in-license and expand product lines, and sell and
distribute third-party brands. The CSCI segment sells these products through an extensive network of customers
including pharmacies, wholesalers, drug and grocery store retailers, and para-pharmacies in more than 23
countries, primarily in Europe. Many CSCI products have leading positions in the markets in which they compete.
During the year ended December 31, 2021, the CSCI segment represented approximately 35% of consolidated net
sales.

Through continued investment in R&D partnerships and new technologies, the CSCI segment strives to

offer high quality self-care products that meet consumers' needs. Internal R&D, new product development,
insourcing, acquisitions, and partnerships support the new product pipeline, both in terms of brand extensions and
product improvements. In the U.K., R&D focuses on the development of both store brand and branded products.
Additional R&D centers are located in France, Sweden, Austria, Belgium, China, the Netherlands, and Germany. In
the rest of Europe, most R&D is performed by external partners with oversight from our teams. The segment has
seven plants dedicated to manufacturing certain of its products.

The CSCI segment primarily focuses on building local and regional brands sold through mass

merchandisers, drug stores, individual and chain pharmacies, and e-commerce channels.

While the CSCI segment sells approximately 220 brands, we primarily concentrate our resources on "Focus

Brands", consisting of approximately 50 key brands and sub-brands. These are selected on the basis of their
current sales and growth potential in the self-care market. Additional resources, including R&D investments, are
allocated to these Focus Brands to strengthen their market position in high opportunity profit categories while
leveraging the same R&D efforts under smaller local brands.

Recent Trends and Developments

•

During the first half of 2021, net sales of cough and cold products decreased as a result of the very low
incidence of cough, cold and flu related illness this year. We believe the very low incidence of cough, cold
and flu related illness was attributed to COVID-19 social distancing and mask requirements. During the
second half of 2021, we experienced higher demand for cough and cold, and pain products due primarily to
the higher incidences of cough, cold and flu illness as society returned to in-person activities. The spread of
certain COVID-19 variants may have contributed to these higher incidences as their symptoms can be
similar. Further, consumer take away remained strong during the second half of 2021 led by cough and
cold, and pain products, and we expect further normalizing of consumer purchasing routines moving
forward depending on the trajectory of the COVID-19 pandemic. Refer to Item 7. Management's Discussion
and Analysis - Executive Overview.

During the third quarter, a number of EU regulators requested recalls, some at the consumer level, due to
the detection of 2-chloroethanol (“2-CE”). 2-CE has been associated with the presence of ethylene oxide, a
constituent in pesticides, which is not permitted for use in food products under food regulations in the EU.
Due to the potential presence of ethylene oxide in certain of our vitamin, minerals and supplements ("VMS")
products, we initiated recalls. We have since secured alternate sourcing of the raw material. During the year
ended December 31, 2021, these recalls resulted in a decrease in net sales of $2.6 million and a decrease
in gross profit of $5.5 million, which included obsolete inventory.

Products

Our CSCI segment offers products and Focus Brands in the following categories:

Perrigo Company plc - Item 1
CSCI

Product Category
Pain and sleep-aids

Upper respiratory

Digestive health

Healthy lifestyle

Skincare and personal hygiene

Oral care

VMS

Other

Description
Products comprised of pain relievers, fever
reducers and sleep-aids.

Products that relieve upper respiratory
symptoms, including cough suppressants,
expectorants, sinus and allergy relief.

Focus Brands
Solpadeine®
Nytol®
Aflubin®
Bronchenolo®/Bronchostop
®
®
Physiomer®r
Phytosun®
Coldrex®
®
®
Prevalin®/Beconase

Products such as antacids, anti-diarrheal, and
anti-heartburn that relieve symptoms associated
with digestive issues.

Products that help consumers live a healthy
lifestyle such as smoking cessation, weight
management, diabetes care, and well-being
products.

Products for the face and body such as
dermatological care, sun protection, scar
management, lice treatment, insect repellents,
and other products for various skin conditions.

Products used for oral care, including
toothbrushes, toothbrush replacement heads,
floss, flossers, and whitening products.

Vitamins, minerals, and supplements.

Diagnostic products and other miscellaneous
self-care products.

NiQuitin®
XLS (Medical)®
Yokebe®

ACO®
Biodermal®
Canoderm®
Dermalex®
Lactacyd®
Wartner®r
Jungle Formula®
Paranix®
Pencivir®r
Plackers®

Abtei®
Arterin®
Davitamon®
Granufink®
Zaffranax®
Probify®

The chart below reflects net sales by product category in the CSCI segment for the year ended

December 31, 2021.

Perrigo Company plc - Item 1
CSCI

Skincare and personal hygiene 27%

Digestive health 3%

Oral care 7%

Other 6%

Healthy lifestyle 12%

Upper respiratory 16%

Pain and sleep-aids 14%

VMS 15%

We launched a number of new CSCI products in the year ended December 31, 2021, most notably some
line extensions in the XLS weight management brand and ACO® brands in the Healthy lifestyle and Skincare and
personal hygiene categories, respectively. In addition, we launched various VMS line extensions and a pan
European probiotic mix under the new brand Probify®. During the year ended December 31, 2021, new product
sales in the CSCI segment were $73.9 million.

The CSCI segment has new product development across all categories, with each of its Focus Brands

having a three to five-year innovation master plan.

Sales and Marketing

Our products are sold to customers including pharmacies as well as, drug, grocery, and e-commerce stores

located primarily in Europe, such as Walgreens Boots Alliance, McKesson, AS Watson, Tesco, AS
Rossman, Carrefour, and Amazon. The CSCI segment continues to align its sales and marketing organization with
current market trends by significantly increasing resources towards e-commerce and key account management.
The segment sells its products primarily through an established pharmacy sales force to an extensive network of
individual pharmacists. Our sales representatives visit pharmacists frequently, ensuring strong in-store visibility of
our brands and facilitating pharmacist education programs. Our sales, marketing, and regulatory teams use training/
merchandising teams who work in conjunction with local sales representatives to improve our brands' presence and
recognition. During the COVID-19 pandemic, we have combined our traditional sales efforts with telesales to find
the optimal sales model and to keep employees and customers safe. We seek to attract key talent from leading
OTC, Fast Moving Consumer Goods ("FMCG"), and retailer companies to build strong local teams throughout the
countries in which the CSCI segment operates.

DA, DM,

The CSCI segment markets products using intensive broadcast and digital advertising as well as point-of-

sale promotional spending to enhance brand equity. Key marketing communication tools for the CSCI segment
include television and digital commercials, consumer leaflets, product websites, targeted promotional campaigns
and communication programs for health care professionals.

Perrigo Company plc - Item 1
CSCI

Competition

The competitive landscape of the European consumer products market in the categories in which we
compete is highly fragmented, as local companies often hold leadership positions in individual product lines in
particular countries. As a result, the relevant competition in each of the CSCI segment's markets is both local and
global. Global competitors include GSK, Sanofi, Bayer, Johnson & Johnson, Reckitt Benckiser, Teva, Viatris, Stada,
Novartis, Procter & Gamble and e-commerce companies, as well as additional regional competitors. We believe our
key advantage lies in our unique combination of best practices in sales, marketing, and product development. Refer
to Item 1A. Risk Factors - Operational Risks for additional information and risks associated with competition.

INFORMATION APPLICABLE TO ALL REPORTABLE SEGMENTS

Trademarks, Patents and Licensing Agreements

While we own certain trademarks and patents, neither our business as a whole, nor any of our segments, is

materially dependent upon our ownership of any one trademark, or patent, or group of trademarks or patents.

Materials Sourcing

Affordable, high-quality raw materials and packaging components are essential to all of our business units

due to the nature of the products we manufacture. Raw materials and packaging components are generally
available from multiple suppliers. Supplies of certain raw materials and packaging components, due to their
technical specifications and product delivery systems, may be more limited, as they are available from one or only a
few suppliers and may require extensive compatibility testing before we can use them.

Historically, we have been able to react effectively, yet not always immediately, to situations that require

alternate sourcing. Should such alternate sourcing be necessary, FDA requirements placed on products approved
through the ANDA or NDA process could substantially lengthen the approval of an alternate source and adversely
affect financial results. We believe we have good, cooperative working relationships with our suppliers and have
historically been able to capitalize on economies of scale in the purchase of materials and supplies due to our
volume of purchases. Refer to Item 1A. Risk Factors - Operational Risks for risks associated with materials
sourcing. Refer to Item 7. Management's Discussion and Analysis - Executive Overview for a detailed discussion of
the impact of the COVID-19 pandemic on our material sourcing.

Manufacturing and Distribution

Our primary manufacturing facilities are in the U.S. We also have manufacturing facilities in the U.K.,
Belgium, France, Germany, Austria, Mexico, China, and Australia, along with a joint venture in China. Refer to Item
1A. Risk Factors - Operational Risks for risks associated with our manufacturing facilities. We supplement our
production capabilities with the purchase of products from outside sources. The capacity of some facilities may be
fully utilized at certain times for various reasons, such as customer demand, the seasonality of certain product
categories (for example, our cough/cold/flu and allergy products), and new product launches. We may utilize
available capacity by performing contract manufacturing for other companies. We have logistics facilities in the U.S.,
Mexico, Australia, and numerous locations throughout Europe. We use contract freight and common carriers to
deliver our products. Refer to Item 7. Management's Discussion and Analysis - Executive Overview for a detailed
discussion of the impact of the COVID-19 pandemic on our manufacturing and distribution.

Significant Customers

We have one significant customer that represents approximately 14% of our consolidated net sales. While

we have other important customers, no other individual customer represents more than 10% of net sales. However,
the loss of one or more of our customers could be material. We believe we generally have good relationships with
our customers. Refer to Item 1A. Risk Factors - Operational Risks for risks associated with customers.

Perrigo Company plc - Item 1

Environmental

Our facilities and operations are subject to various environmental laws and regulations. We undergo

periodic internal audits relating to environmental, health and safety requirements in order to maintain compliance
with applicable laws and regulations in each of the jurisdictions in which we operate. We have made, and continue
to make, expenditures necessary to comply with applicable environmental laws; however, we do not believe that the
costs for complying with such laws and regulations have been or will be material to our business. We do not have
any material remediation liabilities outstanding.

While we believe that climate change could present risks to our business, including increased operating

costs due to additional regulatory requirements, physical risks to our facilities, water limitations, and disruptions to
our supply chain, we do not believe these risks are material to our business in the near term.

Human Capital Resources

We are passionate about making lives better. At Perrigo, we believe that the continuous personal and

professional development of our people is an important component of our ability to attract, retain, and motivate top
talent, which are all important aspects of our self-care strategy. Our global workforce consists of more than 9,900
full time and part time employees spread across 34 countries, of which approximately 21% were covered by
collective bargaining agreements as of December 31, 2021. We continuously endeavor to provide a diverse,
inclusive, and safe work environment so our colleagues can bring their best to work, every day. We are all
responsible for upholding Perrigo’s Core Values - Integrity, Respect, and Responsibility - in addition to the Perrigo
Code of Conduct which, together, form the foundation of all our policies, procedures, and practices. Together, we
drive Perrigo forward to deliver on our vision to make lives better by bringing Quality, Affordable Self-Care Products
that consumers trust everywhere they are sold.

Diversity and Inclusion

We strive for our workforce to represent the diverse consumer base we wish to serve enabling us to

continue to deliver on our self-care promise. We believe diverse representation and practicing inclusion creates
lasting benefits for Perrigo colleagues, our customers, consumers, and shareholders through enhanced team
performance, innovation, and profitable growth. To accomplish this objective, we rolled out a three-year strategy at
the beginning of 2020 that focuses on three key diversity and inclusion areas:

•
•
•

Educating our workforce on our diversity and inclusion strategy and initiatives;
Strengthening our talent management practices through a lens of equity and inclusion; and
Creating diversity and inclusion governance and accountability to establish our foundation and help us
monitor progress.

Perrigo is committed to the well-being of the communities we serve and the individuals who work with us.

Accordingly, we continue to take action to help address oppression and inequality based on multiple aspects of
diversity. We understand the devastating impact that systemic oppression, injustice, and acts of violence have on
underrepresented communities. Murray Kessler, President and CEO, has encouraged all Perrigo colleagues to
stand united and take responsibility to learn how each of us can play a role in promoting inclusion and fighting both
discrimination and implicit bias in the workplace and in our society as a whole. These efforts include open dialogues
between our Board of Directors and Executive Operating Committee on topics including diversity, equity and
inclusivity. Our Perrigo colleagues, including senior management, continually receive educational resources and
information on how to best serve as allies in support of underrepresented groups and to learn how we can
contribute to healing our society's divisions. All colleagues are encouraged to practice self-care and are provided
support resources such as our global Employee Assistance Program that includes staff members who identify with
various underrepresented communities and speak multiple languages.

Compensation, Benefits, Health, Safety, and Well-being

Perrigo’s commitment to self-care starts with our own team. Our top priority during the global COVID-19

pandemic has been, and continues to be, the safety of our colleagues. When faced with the challenges of this
pandemic, we focused on understanding and supporting each diverse individual and the unique circumstances
impacting their ability to serve as an essential worker. We have implemented safety measures to protect our on-site
essential colleagues, while asking those who can safely work from home to do so. On-site, we've implemented a

Perrigo Company plc - Item 1

multi-step pre-screening process before entry into any facility, deep-cleaning protocols, and other safety
precautions, all consistent with the rules and guidelines in each jurisdiction.

We strive to provide pay, benefits and services that support the total well-being of our people. Our total

rewards package delivers competitive pay, broad-based stock grants, cash-based annual incentives, healthcare,
retirement benefits, paid time off, and on-site services, among other benefits.

Perrigo’s total rewards complement a strong health and safety culture that continues with our global well-

being program designed to inspire colleagues to maintain and improve their health. Launched in 2016, Perrigo’s
"HEALTHYyou" well-being program continues to support colleagues and their families as they navigate their own
self-care and well-being journeys. Our colleagues highly value this program and it continues to be recognized
externally by receiving the Best and Brightest in Wellness™ Award in each year since 2017.

Growth, Development, and Engagement

We are committed to engaging our colleagues and fostering a belonging culture, where our people feel

enabled to contribute their best to Perrigo's self-care transformation. This includes initiatives supporting overall job
satisfaction, diversity and inclusion, personal and professional skill development, work/life balance, and an
environment that encourages good health and safety, while upholding our core values of Integrity, Respect, and
Responsibility.

Perrigo regularly conducts global engagement surveys to gather feedback from colleagues to identify

strengths and opportunities within our culture. We have implemented a competency model to clarify the behaviors
that reinforce our culture and lead to success at Perrigo. Additionally, we use a variety of channels to facilitate open
and direct communication, including regular open forums and town hall meetings with our executive leadership
team.

Our development philosophy focuses on a 70-20-10 approach, which provides a practical, blended

framework for learning to support individual long-term success (where individuals obtain 70% of their knowledge
from job-related experiences, 20% from interactions with others, and 10% from formal educational events). We have
significantly expanded our learning capabilities by providing access to extensive on-demand self-study content to
colleagues. We believe this model enables our people to deliver on our self-care vision by empowering them to be
their best and make a difference to Perrigo Colleagues, Customers, Consumers, Communities, and Shareholders.

Corporate Social Responsibility

We are committed to doing business in a socially, environmentally and fiscally responsible manner. That

commitment is reflected in our well-established governance, corporate responsibility and sustainability programs, as
well as by our board oversight of governance and sustainability. A summary of our environmental and social
initiatives is below, and additional details can be found in our 2021 Corporate Social Responsibility (“CSR”) Report
available on our website. In 2020, we adopted the United Nations Sustainable Development Goals (“UN SDG”) as a
global framework and committed to six goals within the UN SDG framework. In 2021, we set new specific objectives
and targets for the next five years related to each of these goals, which are detailed in our 2021 CSR report. Our
progress towards achieving these goals and objectives will be updated in our subsequent CSR reports on an annual
basis.

•

Environmental: we are committed to manufacturing our products responsibly, supporting the global drive to
reduce carbon emissions and minimize our impact on the climate. We formalized our commitment to
sustainability in 2015 by establishing a corporate sustainability strategy focused on reducing the
environmental impact of our operations, product packaging, and supply chain. In 2020, we enhanced that
strategy by committing to Goal 12: Responsible Production and Consumption and Goal 13: Climate Action,
of the UN SDG.

Social: Our vision is to make lives better, by bringing quality affordable self-care products that consumers
trust, everywhere they are sold. This puts the social impact of our business front and center. We are proud
to maintain goals and programs relating to Diversity and Inclusion, Human Capital Management, Human
Rights, and Community Engagement and Giving. In 2020, as part of our social initiatives, we committed to
Goal 3: Good Health and Well-being, Goal 4: Quality Education, Goal 5: Gender Equality, and Goal 10:
Reducing Inequality, of the UN SDG.

GOVERNMENT REGULATION AND PRICING

The manufacturing, processing, formulation, packaging, labeling, testing, storing, distributing, advertising,
and selling of our products are subject to regulation by a variety of agencies in the localities in which our products
are sold. In addition, we manufacture and market certain of our products in accordance with standards set by
various organizations. We believe that our policies, operations, and products comply in all material respects with
existing regulations to which we are subject. Refer to Item 1A. Risk Factors - Operational Risks for related risks.

Perrigo Company plc - Item 1
Regulation

United States Regulation

U.S. Food and Drug Administration

The FDA has jurisdiction over OTC drug products, API, medical devices and Infant Formula products. The
FDA’s jurisdiction extends to the manufacturing, testing, labeling, packaging, storage, distribution, and promotion of
these products. We are committed to consistently providing our customers with high quality products that adhere to
"current Good Manufacturing Practices" ("cGMP") regulations promulgated by the FDA. If the FDA or comparable
regulatory authority becomes aware of new safety information about any of our products, these authorities may
require further inspection, enhancement to manufacturing controls, labeling changes, additional testing method
requirements, restrictions on indicated uses or marketing, post-approval studies or post-market surveillance.

OTC

All facilities where OTC products are manufactured, tested, packaged, stored, or distributed for the U.S.

market must comply with FDA cGMPs and regulations promulgated by competent authorities in the countries, states
and localities where the facilities are located. All of our drug products are manufactured, tested, packaged, stored,
and distributed according to cGMP regulations. The FDA performs periodic audits to ensure that our facilities remain
in compliance with all appropriate regulations.

Many of our OTC products are regulated under the OTC monograph system and subject to certain FDA

regulations. Under this system, selected OTC drugs are generally recognized as safe and effective and do not
require the approval of an ANDA or NDA prior to marketing. Products marketed under the OTC monograph system
must conform to specific quality, formula, and labeling requirements, including permitted indications, required
warnings and precautions, allowable combinations of ingredients, and dosage levels. It is generally less costly to
develop and bring to market a product regulated under the OTC monograph system.

Under the Federal Food, Drug and Cosmetic Act, as amended ("FFDCA") (the Hatch-Waxman
amendments), a company submitting an NDA can obtain a three-year period of marketing exclusivity for an OTC
product if it performs a clinical study that is essential to FDA approval. Longer periods of exclusivity are possible for
new chemical entities, orphan drugs (those designated under section 526 of the FFDCA) and drugs under the
Generating Antibiotic Incentives Now Act. During this exclusivity period, the FDA cannot approve any ANDAs for a
similar or equivalent generic product, which can preclude another party from marketing a similar product during this
period. A company may obtain an additional six months of exclusivity if it conducts pediatric studies requested by
the FDA on the product. This exclusivity can delay both the FDA approval and sales of certain products.

Under certain circumstances, the first filer of an ANDA may be entitled to a 180-day generic exclusivity

period for certain products. This exclusivity period often follows a patent certification and litigation process whereby
the product innovator may sue for infringement. The legal action does not ordinarily result in material damages, but
it generally triggers a statutorily mandated delay in FDA approval of the ANDA for a period of up to 30 months from
when the innovator was notified of the patent challenge.

The Food and Drug Administration Safety and Innovation Act ("FDASIA") was signed into law on July 9,

2012. The law established, among other things, new user fee statutes for generic drugs and biosimilars, FDA
authority concerning drug shortages, and changes to enhance the FDA's inspection authority of the drug supply
chain. The FDASIA also reduced the time required for FDA responses to generic-blocking citizen petitions. We
implemented new systems and processes to comply with the new facility self-identification and user fee
requirements of the FDASIA, and we monitor facility self-identification and fee payment compliance to mitigate the
risk of potential supply chain interruptions or delays in regulatory approval of new applications.

The FDA Reauthorization Act of 2017 created a pathway by which the FDA may, at the request of an
applicant, designate a drug with “inadequate generic competition” as a Competitive Generic Therapy ("CGT"). At the

Perrigo Company plc - Item 1
Regulation

request of the applicant, the FDA may expedite the development and review of an ANDA for a drug designated as a
CGT. The first approved application for a drug with a CGT designation for which there are no unexpired patents or
exclusivities listed in the Orange Book at the time of original submission of the ANDA may be eligible for 180 days of
generic exclusivity.

Active Pharmaceutical Ingredients

Third parties develop and manufacture APIs for use in certain of our pharmaceutical products that are sold

in the U.S. and other global markets. API manufacturers typically submit a drug master file to the regulatory
authority that provides the proprietary information related to the manufacturing process. The FDA inspects the
manufacturing facilities to assess cGMP compliance, and the facilities and procedures must be cGMP compliant
before API may be exported to the U.S.

Medical Devices

We are subject to the Medical Device Amendments of 1976 to the FFDCA and its subsequent amendments

in the US. The regulations issued thereunder provide for regulation by the FDA of the design, manufacture and
marketing of medical devices, including some of our products marketed under our oral care and OTC businesses.
All of our current medical devices fall under Class I or Class II of the regulations. These products do not require
premarket approval but may or may not require a 510(k) premarket notification depending on whether or not the
product is 510(k) exempt. These devices are also subject to other general controls established by the FDA, such as
registration, listing, labeling, and reporting obligations.

Infant Formula

The FDA’s Center for Food Safety and Applied Nutrition is responsible for the regulation of infant formula.
The Offiff ce of Nutrition, Labeling and Dietary Supplements ("ONLDS") has labeling responsibility for infant formula,
while the Offiff ce of Food Additive Safety ("OFAS") has program responsibility for food ingredients and packaging.
The ONLDS evaluates whether an infant formula manufacturer has met the requirements under the FFDCA and
consults with the OFAS regarding the safety of ingredients in infant formula and of packaging materials for infant
formula.

All manufacturers of pediatric nutrition products must begin with safe food ingredients, which are either

generally recognized as safe or approved as food additives. The Infant Formula Act provides specific requirements
for infant formula to ensure the safety and nutrition of infant formulas, including minimum and, in some cases,
maximum levels of specified nutrients.

Before marketing a particular infant formula, the manufacturer must provide regulatory agencies assurance

of the nutritional quality of that particular formulation consistent with the FDA’s labeling, nutrient content, and
manufacturer quality control requirements. A manufacturer must notify the FDA at least 90 days before the
marketing of any infant formula that differs fundamentally in processing or in composition from any previous
formulation produced by the manufacturer. We actively monitor this process and make the appropriate adjustments
to remain in compliance with recent FDA rules regarding cGMP, quality control procedures, quality factors,
notification requirements, and reports and records for the production of infant formulas.

In addition, the FFDCA requires infant formula manufacturers to test product composition during production
and shelf-life; to keep records on production, testing, and distribution of each batch of infant formula; to use cGMP
and quality control procedures; and to maintain records of all complaints and adverse events, some of which may
reveal the possible existence of a health hazard. The FDA conducts yearly inspections of all facilities that
manufacture infant formula, inspects new facilities during early production runs, and collects and analyzes samples
of infant formula. Our infant formula manufacturing facilities have been inspected by the FDA with no corrective
actions required from the most recent inspections.

Our infant and toddler beverages are subject to the Food Safety Modernization Act ("FSMA"), which
protects the safety of U.S. foods by mandating comprehensive, prevention-based controls within the food industry.
Under FSMA, the FDA has mandatory recall authority for all food products and greater authority to inspect food
producers and is taking steps toward product tracing to enable more efficient product source identification in the
event of a safety issue.

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U.S. Department of Agriculture

The Organic Foods Production Act enacted under Title 21 of the 1990 Farm Bill established uniform national

standards for the production and handling of foods labeled as "organic." Our infant formula manufacturing sites in
Vermont and Ohio adhere to the standards of the U.S. Department of Agriculture ("USDA") National Organic
Program for production, handling, and processing to maintain the integrity of organic products and are USDA-
certified, enabling them to produce and label organic products for U.S. and Canadian markets.

U.S. Environmental Protection Agency

The U.S. Environmental Protection Agency ("EPA") is the main regulatory body in the United States
partnership with state agencies,

governing environmental regulation. Laws administered by the EPA, often in
include but are not limited to the Clean Air Act; the Clean Water Act; the Resource Conservation and Recovery Act;
the Comprehensive Environmental Response, Compensation and Liability Act; and the Federal Insecticide,
Fungicide, and Rodenticide Act.

U.S. Drug Enforcement Administration

The U.S. Drug Enforcement Administration ("DEA") regulates certain drug products containing controlled

substances, and List I chemicals, such as pseudoephedrine, pursuant to the federal Controlled Substances Act
("CSA") and the Substance Use-Disorder Prevention that Promotes Opioid Recovery Treatment for Patients and
Communities Act ("SUPPORT Act"). The CSA and DEA regulations impose registration, security, record keeping,
suspicious order monitoring, reporting, storage, manufacturing, distribution, importation and other requirements
upon legitimate handlers under the oversight of the DEA. The DEA categorizes controlled substances into
Schedules I, II, III, IV, or V, with varying qualifications for listing in each schedule. We are subject to the
requirements regarding List I chemicals. Our facilities that manufacture, distribute, import, or export any List 1
Chemicals must register annually with the DEA.

The DEA inspects all registered facilities to review security, record keeping, reporting, and handling prior to

issuing a controlled substance registration, and it also periodically inspects facilities for compliance with the CSA
and its regulations. Failure to maintain compliance with applicable requirements, particularly as manifested in the
loss or diversion of DEA regulated substances, can result in enforcement action, such as civil penalties, refusal to
renew necessary registration, or the initiation of proceedings to revoke those registrations. In certain circumstances,
violations could lead to criminal prosecution. We are also subject to state laws regulating the manufacture and
distribution of certain products.

Federal Healthcare Programs and Drug Pricing Regulation

In the U.S., government healthcare programs such as Medicaid are important third-party payers for patients
treated with our products. While these programs may cover OTC products under some circumstances, utilization of
our products under these programs is limited. When covering our products, these programs regulate the amount
pharmacies and other healthcare providers are paid for our products. We participate in the following programs, and
are subject to associated price reporting, payment, and other compliance obligations:

• Medicaid Drug Rebate Program (“MDRP”)—We are required to report pricing data to the Centers for
Medicare & Medicaid Services (“CMS”) on a monthly and quarterly basis, and to pay rebates to state
Medicaid programs on units of our drugs covered by such programs.

•

340B Drug Pricing Program—We are required to charge certain healthcare providers, known as 340B
“covered entities,” no more than the statutorily-defined 340B “ceiling price” for our covered outpatient drugs,
and must report the 340B ceiling price to the government.

Department of Veterans Affairs (“VA”) Federal Supply Schedule (“FSS”)—We anticipate participating in the
FSS contracting program, which would require us to charge certain agencies (the VA, Department of
Defense, Public Health Service and Coast Guard) no more than a statutory Federal Ceiling Price for certain
drugs. FSS contracts include extensive disclosure and certification requirements and standard government
terms and conditions with which we would have to comply. We would also expect to enter into an
agreement to pay rebates on innovator drug prescriptions dispensed to TRICARE beneficiaries by
TRICARE network retail pharmacies.

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Calculations of the data we must submit under the foregoing programs are governed by statutory and
regulatory requirements that are complex, vary among products and programs, can change over time, and are
subject to interpretation by us, governmental or regulatory agencies, and the courts. Failure to comply with program
obligations may result in civil monetary penalties and other punitive measures and liability, such as exclusion from
some programs. We cannot be certain that our submissions will not be found by the government to be incomplete or
incorrect. Refer to the risk factors under the heading “If we fail to comply with the reporting and payment obligations
under the MDRP or other governmental purchasing and rebate programs, we could be subject to fines or penalties,
which could be material" in Item 1A. Risk Factors - Operational Risks.

Medicare Part D “Coverage Gap” Rebates

If we market certain innovator products, we will have to provide rebates with respect to utilization by certain
Medicare Part D beneficiaries while those patients are within the Part D benefit “coverage gap.” The rebate amount
is calculated by CMS based on Part D plans “negotiated prices” paid to pharmacies.

Other Price Regulation and State Regulation

Drug pricing has come under increasing public scrutiny. Congress is considering various amendments to
federal drug pricing laws and new forms of pricing regulation which would increase the financial and compliance
burdens associated with our participation in the federal programs. Several states have enacted laws that, among
other things, require manufacturers to report information concerning drug pricing or marketing practices or to
provide advance notice of price actions or applications for regulatory approvals. These laws provide for penalties in
case of errors or failure to comply. Refer to the risk factors under the headings "Limitations on reimbursement,
continuing healthcare reforms, and changes to reimbursement methods in the U.S. and other counties may have an
adverse effect on our financial condition and results of operations" and “If we fail to comply with the reporting and
payment obligations under the MDRP or other governmental purchasing and rebate programs, we could be subject
to fines or penalties, which could be material” in Item 1A. Risk Factors - Operational Risks.

Other U.S. Regulations and Organizations

We are subject to various other federal, state, non-governmental, and local agency rules and regulations.

Compliance with the laws and regulations regarding the manufacture and sale of our current products and the
discovery, development, and introduction of new products requires substantial effort, expense and capital
investment. Other regulatory agencies, organizations, legislation, regulations and laws that may impact our
business include, but are not limited to:

•

Sunshine Act and Similar State Laws - This act and similar state laws require certain

Physician Payment
pharmaceutical manufacturers to engage in extensive tracking of payments or transfers of value to
physicians and teaching hospitals, maintenance of a payment database and public reporting of the payment
data.

Foreign Corrupt Practices Act of 1977 ("FCPA")
companies and their intermediaries from providing money or anything of value to offiff cials of foreign
governments, foreign political parties or international organizations with the intent to obtain or retain
business or seek a business advantage.

- This act and other similar anti-bribery laws prohibit

Federal Trade Commission ("FTC") - This agency oversees the advertising and other promotional practices
of consumer products marketers. The FTC considers whether a product’s claims are substantiated, truthful
and not misleading. The FTC also reviews mergers and acquisitions of companies exceeding specified
thresholds and investigates certain business practices relevant to the healthcare industry.

International Organization for Standardization ("ISO") - The ISO Standards specify requirements for a
Quality Management System that demonstrates the ability to consistently provide products that meet
customer and applicable regulatory standards and includes processes to ensure continuous improvement.
Our infant formula manufacturing sites are ISO 9001-2008 Certified for Quality Management Systems. ISO
inspections are conducted at least annually.

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•

United States Pharmacopoeia Convention, Inc. ("USP") - The USP is a non-governmental, standard-setting
organization. By reference, the FFDCA incorporates the USP quality and testing standards and monographs
as the standard that must be met for the listed drugs, unless compliance with those standards is specifically
disclaimed on the product’s labeling. USP standards exist for most Rx and OTC pharmaceuticals and many
nutritional supplements. The FDA typically requires USP compliance as part of cGMP compliance.

Health Insurance Portability and Accountability Act ("HIPAA") - HIPAA is a set of regulations designed to
protect personal information and data collected and stored in medical records. It established a national
standard to be used in all doctors' offices, hospitals and other businesses where personal medical
information is stored. In addition to protecting personal medical information, HIPAA also gives patients the
right to view their medical records and request changes if the data is incorrect. We could be subject to
criminal penalties if we knowingly obtain individually identifiable health information from a covered entity in a
manner that is not authorized or permitted by HIPAA or for aiding and abetting the violation of HIPAA.AA

Consumer Product Safety Commission ("CPSC") - The CPSC has published regulations requiring child
resistant packaging on certain products including pharmaceuticals and dietary supplements. The
manufacturer of any product that is subject to any CPSC rule, ban, standard or regulation must certify that,
based on a reasonable testing program, the product complies with CPSC requirements.

California Safe Drinking Water and Toxic Enforcement Act ("Prop 65") - Prop 65 is a toxic right-to-know
warnings law that allows the state attorney general and private enforcers to sue on behalf of the public
claiming the products in question sold in California violate the law by exposing consumers to chemicals in
levels above those allowed by regulation without carrying warnings.

California Consumer Privacy Act ("CCPA") - CCPAPP went into effective on January 1, 2020, which enhanced
the data protection rights of residents in California. This law increases our responsibility and potential
liability related to personal data of California residents that we process.

• Other State Agencies - We are subject to regulation by numerous other state health departments, insurance
departments, boards of pharmacy, state controlled substance agencies, state consumer health and safety
regulations, and other comparable state agencies, each of which have license requirements and fees that
vary by state.

Regulation Outside the U.S.

We develop and manufacture products and market third-party manufactured products in regions outside the
U.S., including Europe, Canada, Mexico, Australia, Asia, South America, and the Middle East, each of which has its
own regulatory environment. The majority of our sales outside the U.S. are in the following categories: OTC
pharmaceuticals, infant formulas, medical devices, dietary supplements, cosmetics, biocides and oral care products.
Other regulatory agencies, organizations and legislation that may impact our business include, but are not limited to:

•

Privacy Regulations - We are subject to numerous global laws and regulations designed to protect personal
data, such as the European General Data Protection Regulation (“GDPR”). The GDPR introduced more
stringent data protection requirements in the EU, as well as substantial fines for breaches of the data
protection rules. The GDPR increased our responsibility and potential liability in relation to personal data
that we process, and we have put in place appropriate mechanisms to comply with the GDPR.

Transparency Laws - In various jurisdictions in which we operate, we are subject to the laws and
regulations aimed at increasing transparency of financial relationships between healthcare professionals
and pharmaceutical/medical device manufacturers. These acts require certain pharmaceutical
manufacturers to engage in extensive tracking of payments or transfers of value to healthcare
professionals.

Anti-Bribery Laws - Various jurisdictions in which we operate have laws and regulations, including the U.K.
Bribery Act 2010 and the Irish Criminal Justice (Corruption Offenses) Act 2018, aimed at preventing and
penalizing corrupt and anticompetitive behavior.

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•

Rules and Regulations Infant Formula - Outside of the U.S., country-specific regulations define the
requirements that we must comply with regarding the manufacturing, testing, labeling, packaging, storage,
distribution, and promotion of infant formula. We are subject to ongoing periodic inspection through these
complex regulations, including by the FDA and other regulatory agencies such as the Canadian Food
Inspection Agency ("CFIA").

European Union

On July 14, 2021, the European Commission adopted a set of proposals to ensure polices are aligned with

the goal of reducing net greenhouse gas emissions by at least 55% by 2030 – the EU Green Deal. There is a
growing focus on environmental impact of self-care products, their ingredients, components, packaging,
manufacturing, and disposal. This focus could lead to new requirements and restrictions in the coming years across
all product categories described below.

OTC

The European pharmaceutical industry is highly regulated and much of the legislative and regulatory
framework is driven by the European Parliament and the European Commission. This has many benefits, including
the potential to harmonize standards across the complex European market. However, obtaining regulatory
agreement across member states presents complex challenges that can lead to delays in the regulatory process.

In the EU, as well as many other locations around the world, the manufacture and sale of medicinal

products are regulated in a manner substantially similar to that of the U.S. requirements, which generally prohibit
the handling, manufacture, marketing, and importation of any medicinal product unless it is properly registered in
accordance with applicable law. The registration file relating to any particular product must contain data related to
product efficacy and safety, including results of clinical testing and/or references to medical publications, as well as
detailed information regarding production methods and quality control. Health ministries are authorized to cancel the
registration of a product if it is found to be harmful or ineffective or if it is manufactured or marketed other than in
accordance with registration conditions.

The legislation governing the European pharmaceutical industry is subject to an ongoing consultation and

extensive review. Updates to the existing pharmaceutical law are anticipated to be implemented in 2023. These
updates could bring opportunity in terms of increased flexibility in some areas but also risk as certain aspects of the
law are made more restrictive.

Between 1995 and 1998, the over-arching regulation that governs medicinal products was revised in an
attempt to simplify and harmonize product registration. This revised legislation introduced the mutual recognition
procedure (“MRP”), whereby after approval of a marketing authorization by regulatory authorities in the reference
member state (“RMS”), additional marketing authorizations could be submitted to other concerned member states to
obtain a product license. In November 2005, the medicinal product legislation was further revised to introduce the
decentralized procedure (“DCP”), whereby marketing authorizations are submitted simultaneously to the RMS and
select concerned member states. In 2005, the EMA also opened up the centralized procedure to sponsors of
marketing authorizations for generic medicinal products. Unlike the MRP and DCP, the centralized procedure results
in a single marketing authorization and product labeling across all member states that will allow a sponsor to file for
individual country reimbursement and make the medicine available in all the EU countries listed on the application.
Marketing authorizations and subsequent product licenses are granted to applicants only after the relevant health
authority issues a positive assessment of quality, safety and efficacy of the product.

In addition to obtaining marketing authorization for each product, all member states require that a
manufacturer’s facilities obtain approval from an EU Regulatory Authority. The EU has a code of GMP that each
manufacturer must follow and comply with. Regulatory authorities in the EU may conduct inspections of the
manufacturing facilities to review procedures, operating systems and personnel qualifications. We believe that our
policies, operations and products comply in all material respects with existing regulations to which our operations
are subject.

In 2011, it was first proposed that the EU Member States had to transition to the European Falsified
Medicines Directive (the “Directive”). The Directive was subsequently written into national law on January 2, 2013.
The Directive made reference to a Delegated Act (the Delegated Act lists the detailed requirements for

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manufacturers). The Delegated Act was finalized and published in February 2017, and it provided for a two-year
implementation period. We are in compliance with the Delegated Act. The provisions of the Directive are intended to
reduce the risk of counterfeit medicines entering the supply chain and also to ensure the quality of API
manufactured outside of the EU. The Directive required the serialization of all Rx and some OTC products, similar to
the DSCSA in the U.S.

The European Commission passed legislation requiring new product packaging ‘safety features’ to prevent

falsification of medicinal products primarily within the prescription medicines sector. All marketing authorization
holders in the EU member states and EEA members Norway, Iceland, Liechtenstein and Switzerland were required
to introduce the necessary changes by February 9, 2019 (or risk forfeiting their product licenses). However,
manufacturers based out of Greece, Belgium and Italy have an extended timeline until February 9, 2025 to
implement the serialization guidelines as they already feature similar requirements on their current drug packages.

Data exclusivity provisions exist in many countries, although the application is not uniform. In general, these

exclusivity provisions prevent the approval and/or submission of generic drug applications to the health authorities
for a fixed period of time following the first approval of the brand-name product in that country. As these exclusivity
provisions operate independently of patent exclusivity, they may prevent the submission of generic drug applications
for some products even after the patent protection has expired.

The requirements deriving from European pharmacovigilance regulation are constantly expanding due to

increasing guidance on good vigilance practices and increased communication on inspectors’ expectations.
Pharmacovigilance fee regulation became effective in late 2014 to support health authority assessment of
pharmacovigilance safety evaluation reports, study protocols for post authorization safety studies and referrals.
Once approved, the advertising of pharmaceuticals in the EU is governed by national regulations and guidelines.
Within certain member states this is overseen by a self-certification process whereas in others national governance
bodies approve material prior to release.

The wholesale distribution channel is an important activity in the integrated supply chain management for

medical products. The quality and the integrity of medicinal products can be affected by a lack of adequate control.
To this end, the EU Commission has published guidelines on Good Distribution Practice of Medicinal Products for
Human Use in 2013. The present guidelines are based on Articles 84 and 85b(3) of medicinal products for human
use directive.

Medical Devices

The EU has enacted into law numerous directives and adopted many harmonizing standards pertaining to a

wide range of industrial products, including medical devices. Medical devices that comply with the requirements of
applicable directives are entitled to bear the CE marking of conformity, which indicates that the device conforms to
the applicable requirements of the directives and, accordingly, can be commercially distributed throughout Europe.
The method of assessing conformity varies depending on the class of the product, but normally involves a
combination of self-assessment by the manufacturer and a third-party assessment by a Notified Body, an
organization accredited by a member state. Assessment by a Notified Body includes an audit of the manufacturer’s
quality system and may also include specific testing of the product. This assessment is a prerequisite for a
manufacturer to commercially distribute the product throughout the EU. On May 25, 2017, the EU’s Medical Device
Regulation (the “MDR”) became effective, with a three year transitional period until full application. The date of
application of the MDR, and as a result the date of repeal of the existing Medical Device Directives (the "MDDs"),
was deferred by 12 months to May 26, 2021 due to the COVID-19 pandemic. All Class I (low risk) medical devices
needed to comply with the MDR by May 26, 2021, and all medical devices sold in the EU will need to be approved
under the MDR by May 26, 2025. Notified Bodies, which are organizations accredited by a member state, were able
to approve medical devices under the MDDs until May 26, 2021. Beginning on May 27, 2021, Notified Bodies are no
longer able to approve new medical devices under the MDDs or approve notifications of “substantial” design
changes, including changes to labeling/packaging, changes to the manufacturing process, or the addition of new
features and functionality, to medical devices that were approved under the MDDs.

Only Notified Bodies that have been designated under the MDR can carry out conformity assessment

procedures, and only for certain types of devices listed by the product codes in their designation. This designation
process is a lengthy and costly process, resulting in a shortage of certified notified bodies, which has created
bottlenecks due to an insufficient number of designated Notified Bodies and trained personnel, constraining the
availability of medical devices. Stricter guidelines for substance-based devices (classification rules; interpretation of
the definitions of pharmacological, immunological, or metabolic means) under the MDR are expected.

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We can expect possible divergence on the medical device regulatory framework from non-EU markets such

as the UK after Brexit. In addition, in 2021, the mutual recognition agreement between EU and Switzerland on
medical devices has ceased.

u
Dietary Supplements

Complying with the legislative framework for dietary supplements in the EU remains challenging as a result

of changing EU regulations, diverging national regulations from EU regulations, and diverging regulations between
EU member states.

Dietary supplements are subject to several regulations that inform the selection of ingredient levels and how
products can be described on packaging and in advertising. These regulations include: Food Supplements Directive
2002/46/EC, Food Information to Consumers Regulation (EU) No 1169/2011, Permitted Vitamins and Minerals
Regulation (EC) 1170/2009, Food Additives Regulation (EC) 1333/2008, Nutritional & Health Claims Regulation
(EC) No 1924/2006, the Foods Intended for Particular Nutritional Uses Directive 2009/39/EC, and Regulation (EU)
609/2013.

EU rules on nutrition and health claims, which were established by Regulation EC 1924/2006, apply to any

nutritional or health claim by a manufacturer. The objective of the regulation is to ensure that claims made in food
labeling or advertising are clear, accurate and based on scientific evidence. The European Food Safety Authority, an
advisory panel to the European Commission, performs all scientific assessments of health claims on food and
supplement labels. An EU register of nutrition and health claims exists to document approved, pending, and rejected
claims.

Increased scrutiny from the EU Commission is likely to result in further ingredient reviews that could trigger

additional market measures and reformulations. Ingredients under growing scrutiny, such as nanomaterials and
food additives, are likely to be subject to review and stricter measures, as well as their use in certain vulnerable
population groups.

Cosmetics

Cosmetic products in the EU market must comply with Regulation EC No. 1223/2009. This regulation
requires manufacturers to prepare a product safety report prior to placing a cosmetic product in the market. In
addition, for each cosmetic product placed in the market, a “responsible person” must be designated to oversee
compliance with the regulation’s reporting requirements. Commission Regulation EU No. 655/2013 establishes the
common criteria and justification for claims to be used in the packaging and advertising of cosmetics products. A
revision of the existing regulation is currently under consultation and is expected to be implemented by the end of
2022. It is anticipated that additional restriction criteria would be included in the revised regulation, thus expanding
the scope of ingredients that could have their use in cosmetics restricted.

Increased scrutiny from the EU Commission is likely to result in further ingredient reviews that could trigger
additional market measures and reformulations. Reviews are also likely in relation to the EU Green Deal (as defined
below) a review regarding microplastics is ongoing as well as ingredients in sunscreens, endocrine disruptors,
nanomaterials, and skin sensitisers.

Biocides

Biocides in the EU market must comply with Regulation EU No. 528/2012 ("EU BPR") overseen by the

European Chemicals Agency. Contrary to medicines, biocides are not exempted from chemical legislation such as
the Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals No. 1907/2006 and the
Regulation on Classification, Labelling and Packaging Regulation of substances and mixtures EC No. 1272/2008.
The EU BPR improves the functioning of the biocidal products market in the EU, while ensuring a high level of
protection for humans and the environment through the implementation of a harmonized system at Union level.
Biocides are currently transitioning from a national-based system to a European system. The transition involves the
gradual integration and approval or re-approval of existing active substances, followed by the pre-market
authorization of biocidal finished products. This means all biocidal products will need to complete the reauthorization
process, with the assessment focusing on efficacy and safety of the biocides on the European market.

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General Product Safety Directive

The General Product Safety Directive (2001/95/EC) complements sector-specific legislation such as rules

that apply to electrical and electronic goods, chemicals, and other specific product groups. Together, the General
Product Safety Directive and sector specific legislation ensure the safety and traceability of products in the market
(other than pharmaceuticals, medical devices, and food which are regulated under separate legislation). If our
products fail to meet the General Product Safety Directive, we may incur fines.

The current directive is due to be repealed and replaced with a regulation with additional and stricter

requirements for products being placed on the EU market. Publication is expected in 2022 and entry would likely
become effective six months after publication. It is anticipated that the changes to be introduced by the Regulation
will affect products in the Oral care category.

Additional Global Regulations and Considerations

We must comply with a variety of U.S. laws related to doing business outside of the U.S., including but not
limited to, Office of Foreign Asset Controls; United Nations and EU sanctions; the Iran Threat Reduction and Syria
Human Rights Act of 2012; rules relating to the use of certain “conflict minerals” under Section 1502 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act; and regulations enforced by the U.S. Customs and Border
Patrol. Changes in laws, regulations, and practices affecting the pharmaceutical industry and the healthcare system,
including imports, exports, manufacturing, quality, cost, pricing, reimbursement, approval, inspection, and delivery of
healthcare, may affect our business and operations. International sanctions and boycotts of our products could also
impact our sales and ability to export our products.

In recent years, there has been growing concern about the use and misuse of opioids and related products

in the United States and around the world. Natural and synthetic opioids have analgesic and sedative effects, and
are commonly prescribed by medical professionals for the temporary management of pain. Clinically weaker opioid
analgesics, such as products containing codeine, are available from pharmacists in certain jurisdictions without a
doctor’s prescription. However, a number of jurisdictions have implemented or are considering restrictions on OTC
products containing codeine. For example, in 2018, Australia reclassified codeine to require a prescription, and
regulators in Ireland and the UK may be evaluating similar actions. Certain formulations of the branded pain
medications we sell in certain non-U.S. jurisdictions contain codeine. Restrictions or prohibitions on the sale of OTC
products containing codeine could affect our CSCI segment in future periods.

Tax Regulations

Recent Changes to Tax Laws, Regulations and Related Interpretations

The Organization for Economic Co-operation and Development (“OECD”), which represents a coalition of
member countries, has recommended changes to numerous long-standing tax principles relating to Base Erosion
and Profit Shifting ("BEPS"). These changes are being adopted and implemented by many of the countries in which
we do business and may increase our tax expense in these countries. Building on the first BEPS project, the OECD
began a new project in 2019, which has evolved into a two Pillar approach to address the pressure put on the
current international tax system due to digitalization and globalization. The current project, referred to as BEPS 2.0,
is being conducted through the G20/OECD Inclusive Framework, which now counts 141 participating countries.
Pillar One of the project focuses on development of new nexus and profit allocation rules to assign more taxing
rights to market countries. Pillar Two focuses on development of new global minimum tax rules. On December 20,
2021, the OECD released the Model Rules on Pillar Two Global Minimum Tax. Implementation of the Model Rules
will lead to significant changes to the overall international tax rules under which companies operate. The new rules
will subject large multinational corporations to a global minimum corporation tax of 15% and introduce new filing
obligations that will impose onerous data gathering requirements and additional internal reporting processes and
systems. On December 22, 2021, the European Commission issued a draft Directive to implement Pillar 2 in the
European Union. The Commission proposes that the Directive be finalized by mid-2022 and transposed into
domestic law of the member states to be effeff ctive January 1, 2023.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES
Act”). The CARES Act allowed for an increased interest expense limitation and depreciation deductions resulting in
a reduction of income tax expense of approximately $36.6 million for tax years 2019 and 2020. Additionally,
Treasury and the IRS issued Proposed and Final Regulations in 2020 regarding interest expense limitations under
Section 163(j). These regulations adjust the definition of interest expense and items allowable in adjusted taxable

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income to calculate the annual interest deduction limitation. Perrigo applied the updated regulations resulting in a
reduction of income tax expense of approximately $8.9 million during 2020.

On December 28, 2021, the U.S. Treasury and the IRS released final foreign tax credit regulations

addressing various aspects of the foreign tax credit (“FTC”) regime. These regulations finalize, among other
guidance, provisions relating to the disallowance of a credit or deduction for foreign income taxes with respect to
dividends eligible for a dividends-received deduction; the allocation and apportionment of interest expense, foreign
income tax expense; the definition of a foreign income tax and a tax in lieu of an income tax; transition rules relating
to the impact on loss accounts of net operating loss carrybacks; the definition of foreign branch category income;
and the time at which foreign taxes accrue and can be claimed as a credit. The regulations also contain clarifying
rules relating to foreign-derived intangible income (FDII). These regulations are, generally, effective on March 7,
2022, with some provisions having retroactive effect. For the year ended December 31, 2021, we evaluated whether
these final FTC regulations would have any effect on our income tax reporting for the year ended December 31,
2021, and applicable prior periods, and concluded that these final FTC regulations do not result in any material
changes to our income tax reporting for the year ended December 31, 2021 or for any prior periods. We will
continue to evaluate the effects of these final FTC regulations on future accounting periods.

Foreign Incorporation Considerations

Although we are incorporated in Ireland, the IRS may not agree with the conclusion that we are treated as a
foreign corporation for U.S. federal tax purposes. For Perrigo Company plc to be treated as a foreign corporation for
U.S. federal tax purposes under section 7874 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”),
either (i) the former stockholders of Perrigo Company must own (within the meaning of section 7874 of the Code)
less than 80% (by both vote and value) of our stock by reason of holding shares in Perrigo Company (the
"ownership test") as of the closing of the Elan acquisition or (ii) we must have substantial business activities in
Ireland after the Elan acquisition (taking into account the activities of our expanded affiliated group). Upon our
acquisition of Elan, Perrigo Company stockholders held 71% (by both vote and value) of our shares. We believe
that under current law, we should be treated as a foreign corporation for U.S. federal tax purposes. However, we
cannot assure that the IRS will agree with our position that the ownership test is satisfied. There is limited guidance
regarding the section 7874 provisions, including the application of the ownership test. Based on the limited guidance
available, we currently expect that Section 7874 of the Code likely will limit our and our U.S. affiliates’ ability to use
certain U.S. taxable income, if any, generated by the
ff
their U.S. tax attributes, such as net operating losses, to offset
Elan acquisition or certain specified transactions for a period of time following the Elan acquisition. Refer to Item 8.
Note 17.

Available Information

Our principal executive offices are located at The Sharp Building, Hogan Place, Dublin 2, D02 TY74, and

our North American base of operations is located at 515 Eastern Avenue, Allegan, Michigan 49010. Our telephone
number is +353 1 7094000. Our website address is www.perrigo.com
, where we make available free of charge our
p
reports on Forms 10-K, 10-Q and 8-K, including any amendments to these reports, as soon as reasonably
practicable after they are electronically filed with or furnished to the U.S. Securities and Exchange Commission
("SEC"). These filings are also available to the public at www.sec.govg .

ITEM 1A.

RISK FACTORS

SUMMARY OF RISK FACTORS

Operational Risks

• We face competition from other pharmaceutical and consumer packaged goods companies, which may threaten

the demand for and pricing of our products.

• If we do not continue to develop, manufacture, and market innovative products, introduce new line extensions,

and expand into adjacent categories that meet customer demands, our net sales may be negatively impacted and
we may lose market share.

• We operate in highly regulated industries, and any inability to timely meet current or future regulatory

requirements could have a material adverse effect on our business and operating results.

• Limitations on reimbursement, continuing healthcare reforms, and changes to reimbursement methods in the

United States and other countries may have an adverse effect on our financial condition and operating results.

Perrigo Company plc - Item 1A
Risk Factors

• If we fail to comply with the reporting and payment obligations under the Medicaid rebate program or other

governmental purchasing and rebate programs, we could be subject to fines or penalties, which could be material.

• Unfavorable publicity or consumer perception of the safety, quality, and efficacy of our products could have a

material adverse effect on our business.

• Lack of availability, or significant increases in the cost, of raw materials used in manufacturing our products could

have a material adverse effect on our profit margins and operating results.

• The COVID-19 global pandemic and the public health and governmental actions in response continues to have an
adverse impact on our operations and could have an adverse impact on our business and financial condition in
the future.

• Disruption of our supply chain, including as a result of the COVID-19 pandemic, could have an adverse effect on

our businesses, financial condition, results of operations and cash flows.

• A disruption at any of our main manufacturing facilities could have a material adverse effect on our business,

financial position, and results of operations.

• Our business could be negatively affected by the performance of our collaboration partners and suppliers, and

any such adverse impact could be material.

• Our business depends upon certain customers for a significant portion of our sales, therefore our business would
be adversely affected by a disruption of our relationship with these customers or any material adverse change in
these customers' businesses. The risk of such impacts would be increased by continued consolidation in the
sector in which our customers operate.

• Our businesses could be adversely affected by deteriorating economic conditions in the countries in which we

operate, and our results may be volatile due to these or other circumstances beyond our control.

• A cyber security breach, disruption or misuse of our information systems, or our external business partners’

information systems could have a material adverse effect on our business.

• We are dependent on the services of certain key personnel.
• Management transition creates uncertainties, and any difficulties we experience in managing such transitions may

negatively impact our business.

g
Strategic Risks

• We may not realize the benefits of business acquisitions, divestitures, and other strategic transactions, which

could have a material adverse effect on our operating results.

• We have acquired significant assets that could become impaired or subject us to losses and may result in an

adverse impact on our results of operations.

• There can be no assurance that our strategic initiatives will achieve their intended effects.

Global Risks

• Our business, financial condition, and results of operations are subject to risks arising from the international scope

of our operations.

• We operate in jurisdictions that could be affected by economic and geopolitical instability, which could have a

material adverse effect on our business.

• The international scope of our business exposes us to risks associated with foreign exchange rates.

Litigation and Insurance Risks

• We are or may become involved in lawsuits and may experience unfavorable outcomes of such proceedings.
• Increased scrutiny on pricing practices and competition in the pharmaceutical industry, including antitrust

enforcement activity by government agencies and class action litigation, may have an adverse impact on our
business and operating results.

• Third-party patents and other intellectual property rights may limit our ability to bring new products to market and

may subject us to potential legal liability, which could have a material adverse effect on our business and
operating results.

• The success of certain of our products depends on the effectiveness of measures we take to protect our

intellectual property rights and patents.

• Our ability to achieve operating results in line with published guidance is inherently subject to numerous risks and
other factors beyond our control. Publishing earnings guidance subjects us to risks, including increased stock
volatility, that could lead to potential lawsuits by investors.

Perrigo Company plc - Item 1A
Risk Factors

• Significant increases in the cost or decreases in the availability of the insurance we maintain could adversely

impact our operating results and financial condition. Disputes with insurers on the scope of existing policies may
limit the coverage available under such policies.

Tax Related Risks

• The resolution of uncertain tax positions, including the Notices of Proposed Adjustments and ongoing disputes

with U.S. and foreign tax authorities, could be unfavorable, which could have an adverse effect on our business.

• Changes to tax laws and regulations or the interpretation thereof could have a material adverse effect on our

results of operations and the ability to utilize cash in a tax efficient manner.

• Our effective tax rate or cash tax payment requirements may change in the future, which could adversely impact

our future results of operations.

q
Capital and Liquidity Risks

• Our indebtedness could adversely affect our ability to implement our strategic initiatives.
• We cannot guarantee that we will buy back our ordinary shares pursuant to our announced share repurchase plan

or that our share repurchase plan will enhance long-term shareholder value.

• Any additional shares we may issue could dilute your ownership in the Company.
• We are incorporated in Ireland; Irish law differs from the laws in effect in the United States and may afford less

protection to, or otherwise adversely affect, our shareholders.
• We may be limited in our ability to pay dividends in the future.

Operational Risks

We face competition from other pharmaceutical and consumer packaged goods companies, which may
threaten the demand for and pricing of our products.

Our Perrigo-branded products compete against store brand, generic, and branded health and wellness

products. In addition, our products sold under labels of others (store brand) compete against other store brands,
generic, and branded health and wellness products. If we or our store brand customers are unable to compete
successfully, our business may lose customers or face negative pricing pressures. In particular:

• Our CSCA and CSCI segments experience direct competition from other drug companies, including brand
name companies, that may try to prevent, discourage or delay the use of our products through various
measures, including introduction of new products, legislative initiatives, changing dosage forms or dosing
regimens, regulatory processes, filing new patents or patent extensions, lawsuits, citizens’ petitions, and
attempts to generate negative publicity prior to our introduction of a new competitive product. Moreover,
other companies may produce the same products as us, sometimes sold at dramatically lower margins in
order to gain market share. Other companies may also introduce new drugs or drug delivery techniques that
make our current products less desirable.
The FDA's increasing acceptance of in vitro studies, rather than human clinical studies, to support
bioequivalence of generic products may lead to increased production of products that compete with
Perrigo's generic product portfolio.

•

• Our competitors may be able to adapt more quickly to changes in customer requirements or develop

products comparable or superior to those offered by us at more competitive prices.

•

Competition in the pharmaceutical space may also be impacted by changes in regulations and government
pricing programs that may give certain competitors an advantage.

Perrigo Company plc - Item 1A
Risk Factors

If we do not continue to develop, manufacture, and market innovative products, introduce new line
extensions, and expand into adjacent categories that meet customer demands, our net sales may be
negatively impacted and we may lose market share.

The growth of our business is due in large part to our ability to develop, manufacture, and market products
that meet customer requirements for quality, safety, efficacy, and cost-effectiveness. Margins for existing products
tend to decline over time due to aging product life cycles, changes in consumer preferences, pricing pressure from
customers, and increased competition. Accordingly, our business model relies heavily on the continuous
introduction of innovative products and new product categories. If we do not continue to develop, manufacture, and
market new products, or if we fail to stay current with the latest manufacturing information, and packaging
technology, we could lose market share, and our net sales may be negatively affected.

The development and commercialization process, particularly with respect to innovative products, is both
time consuming and costly, and subject to a high degree of business risk. Products currently under development
may require re-design to meet evolving regulatory standards, may not perform as expected, may not pass required
bioequivalence studies, or may be the subject of intellectual property challenges. Necessary regulatory approvals
may not be obtained in a timely manner, if at all. Even if we are successful in developing a product, our customers'
failure to launch one of our products successfully, or delays in manufacturing developed products, could adversely
affect our operating results. In addition, regulatory agencies may impose higher standards or additional
requirements, as a condition to clearing new products, such as requiring more supporting data and clinical data than
previously required, which could negatively impact our net sales. In our CSCA segment, we must prove that the
regulated generic drug products are bioequivalent to their branded counterparts, which may require bioequivalence
studies, and, in the case of topical products, even more extensive clinical endpoint trials to demonstrate their
efficacy, and the failure to do so could also negatively impact our sales.

We operate in highly regulated industries, and any inability to timely meet current or future regulatory
requirements could have a material adverse effect on

our business and operating results.

We operate in highly regulated industries in numerous countries and are subject to the regulations of a

variety of U.S. and non-U.S. agencies related to the manufacturing, processing, formulation, packaging, labeling,
testing, storing, distribution, import, export, advertising, and sale (including cost, pricing and reimbursement) of our
products, as described in detail in Item 1. Business - Government Regulation and Pricing. Changes in laws,
regulations, and practices in the countries in which we operate, which may be impacted by political pressure and
other factors outside of our control, may be difficult or expensive for us to comply with, could restrict or delay our
ability to manufacture, distribute, sell or market our products, and may adversely affect our revenue, operating
results, and financial condition or impose significant administrative burdens. Divergence in regulatory approach from
country to country, and between the EU and individual member states, adds cost and complexity to the compliance
framework; and differences in requirements and/or implementation dates in different jurisdictions may provide
competitive advantages to manufacturers that operate in other locations. If our products fail to meet regulatory
requirements, our sales may be adversely affected, we may incur fines and penalties, and our exposure to liability
relating to product-based claims may increase. Below are some examples of ways in which regulatory risk may
impact us:

•

As described in Item 1. Business - Government Regulation and Pricing, on July 14, 2021, the European
Commission adopted a set of proposals to ensure polices are aligned with the goal of reducing net
greenhouse gas emissions by at least 55% by 2030 (the "EU Green Deal"). There is a growing focus on
environmental impact of self-care products, their ingredients, components, packaging, manufacturing, and
disposal. This focus could lead to new requirements and restrictions in the coming years across all product
categories.

•

• We must obtain approval from the appropriate regulatory agencies in order to manufacture and sell our
products in the regions in which we operate. Obtaining this approval can be time consuming and costly.
When we submit an application for market authorization, there can be no assurance that the regulator will
approve that application on a timely basis or at all.
U.S. law encourages generic competition by providing eligibility for first generic marketing exclusivity if
certain conditions are met. If we are granted generic exclusivity, the exclusivity may be shared with other
generic OTC companies, including authorized generics; or we may forfeit 180-day exclusivity if we fail to
obtain regulatory approval and begin marketing within the statutory requirements. If we are not the first to
file our ANDA, the FDA may grant 180-day exclusivity to another company, thereby effectively delaying the
launch of our product and/or possibly reducing our market share.

Perrigo Company plc - Item 1A
Risk Factors

• Global regulatory agencies regularly inspect our manufacturing facilities and the facilities of our third-party
suppliers. The failure of one of these facilities to comply with applicable laws and regulations may lead to a
breach of representations made to our customers, or to regulatory or government action against us related
to the products made in that facility, including suspension of or delay in regulatory approvals and product
seizure, injunction, recall, suspension of production or distribution of our products, loss of licenses or other
governmental penalties, or civil or criminal prosecution, which could result in increased cost, lost revenue,
or reputational damage.

•

In 2020, regulatory agencies globally, including the FDA and EMA, issued guidance on assessing and
controlling nitrosamine impurities in medicine products. We are continuing to undertake a review of our
product portfolio in accordance with regulatory guidance to assess the risk of the presence of nitrosamine
impurities. Any finding of nitrosamine impurities exceeding levels set by regulatory authorities may require
us to adopt modified product sourcing and/or manufacturing processes or to initiate product withdrawal.

Rx-to-OTC switches are critical to our future growth. If regulatory agencies fail to approve Rx-to-OTC
switches in new product categories or reassess the terms of existing OTC classifications, our growth
prospects and product mix would be impaired. Further, regulatory agencies may reassess the terms of OTC
classification if they perceive a shift in the previously assessed benefit/risk profile. Any such reassessment
could lead to OTC products reverting to prescription.

• Our infant formula products may be subject to barriers or sanctions imposed by countries or international

organizations limiting international trade and dictating the content of such products. If governments enhance
regulations on the infant formula industry by, for example, requiring additional testing or compulsory batch-
by-batch inspection, our sales and operating margins in this category could be adversely affected.

•

The regulation of List I chemicals complicate our supply chain, and adverse regulatory actions may result in
temporary or permanent interruption of distribution of our products, withdrawal of our products from the
market, or other penalties. If we are unable to obtain necessary quotas for List I chemicals, we risk having
delayed product launches or failing to meet commercial supply obligations.

As described in Item 1. Government Regulation and Pricing, beginning on May 26, 2025, all medical
devices sold in the EU will need to be approved under the MDR, with certain device categories requiring
compliance sooner, and there is currently a shortage in the number of Notified Bodies authorized to carry
out conformity assessments required thereunder. If we fail to secure a notified body certificate under MDR,
this will impact our ability to keep our medical devices in the EU market.
Increased scrutiny of product classifications by government agencies can result in investigations and
prosecutions, which carry the risk of significant civil and criminal penalties, including but not limited to,
debarment from government business and prohibition to continue the business. For example, the Company
is a defendant in a lawsuit initiated by the French Directorate General for Competition, Consumer Affairs
and Repression of Fraud ("DGCCRF”) regarding the classification of our XLS Medical weight management
product range in France. While the Company believes it has substantial defenses in this matter, it is not
feasible to predict the ultimate outcome.

Limitations on reimbursement, continuing healthcare reforms, and changes to reimbursement methods in
the United States and other countries may have an adverse effect on our financial condition and operating
results.

Increasing healthcare expenditures have received considerable public attention in many of the countries in

which we operate. In the U.S., government programs such as Medicaid, as well as private insurers, have been
focused on cost containment. In some markets in the EU and outside the U.S., the government provides healthcare
at low direct cost to consumers and regulates pharmaceutical prices or patient reimbursement levels to control costs
for the government-sponsored healthcare system. Both private and governmental entities are seeking ways to
reduce or contain healthcare costs through legislative and regulatory efforts, as further described in Item 1.
Business - Federal Healthcare Programs and Drug Pricing Regulation, which could place further pricing pressure on
our products and could negatively impact our operating results.

Under the MDRP, a number of our products are considered non-innovator products and therefore subject to

Medicaid federal upper limits ("FUL"), which restrict the amount state Medicaid programs reimburse for non-
innovator covered outpatient drugs. While utilization of our products under the Medicaid program is limited, our
products generally are subject to state Medicaid program payment methodologies, and may be subject to
reimbursement pressures beyond our control.

Perrigo Company plc - Item 1A
Risk Factors

If we fail to comply with the reporting and payment obligations under the Medicaid rebate program or other
governmental purchasing and rebate programs, we could be subject
material.

to fines or penalties, which could be

As described in Item 1. Business - Federal Healthcare Programs and Drug Pricing Regulation, we
participate in various U.S. government healthcare programs and are subject to associated price reporting, payment,
and other compliance obligations. Calculations of the data we must submit under the foregoing programs are
governed by statutory and regulatory requirements that are complex, vary among products and programs, can
change over time, and are subject to interpretation by us, governmental or regulatory agencies, and the courts.
Failure to comply with the program obligations may result in civil monetary penalties and other punitive measures
and liability, such as exclusion from some programs. We cannot be certain that our submissions will not be found by
the government to be incomplete or incorrect. Requirements under state drug price transparency programs, such as
price reporting to state agencies, also present such inherent risks, including potential imposition of civil monetary
penalties.

If we enter into an FSS contract or TRICARE agreement and inadvertently overcharge the government in

connection with either, we would be required to refund the difference. Failure to make necessary disclosures and/or
to identify contract overcharges can result in False Claims Act allegations or potential violations of other laws and
regulations. Unexpected refunds to the government, and responses to a government investigation or enforcement
action, are expensive and time-consuming, and could have a material adverse effect on our business, financial
condition, results of operations, and growth prospects.

Unfavorable publicity or consumer perception of the safety, quality, and efficacy of our products could have
a material adverse effect on

our business.

We are dependent upon consumers' perception of the safety, quality, and efficacy of our products. Negative

consumer perception may arise from media reports, social media posts, product liability claims, regulatory
investigations, or recalls affecting our products or our industry, any of which may reduce demand.

• Our products involve risks such as product contamination, spoilage, mislabeling, and tampering that could
require us to recall one or more of our products. Serious product quality concerns could also result in
governmental actions against us that, among other things, could result in the suspension of production or
distribution of our products, product seizures, loss of certain licenses, delays in the issuance of
governmental approvals for new products, or other governmental penalties.

• We cannot guarantee that counterfeiting, imitation or other tampering with our products will not occur or that
we will be able to detect and resolve it, which could lead to death or injury of consumers and negatively
impact our reputation.

• Our nutritional product category is subject to certain consumer preferences and health and nutrition-related

concerns, including the number of mothers who choose to use infant formula products rather than
breastfeed their babies, which could change based on factors including increased promotion of the benefits
of breastfeeding over the use of infant formula by private, public and government sources and changes in
the number of families that are provided with infant formula by the U.S. federal government through the
Women, Infants and Children program which we do not participate in.

• Our CSCI segment's financial success is dependent on positive brand recognition, which results in part from
large investments in marketing over a period of years. The success of our brands may suffer if we do not
continue to invest in marketing, or if our marketing plans or product initiatives are unsuccessful. In addition,
an issue with one of our products could negatively affect the reputation of other products, potentially hurting
our financial results.

• With respect to our powdered infant formula products, a risk of contamination or deterioration may exist at
each stage of the production cycle, including the purchase and delivery of raw materials, the processing
and packaging of food products, and the use and handling by consumers, hospital personnel, and
healthcare professionals. If certain of our infant formula products are found or alleged to have suffered
contamination or deterioration, whether or not under our control, our reputation and our infant formula
product category sales could be materially adversely affected.

•

Negative social media posts or comments about us, store brands or generic pharmaceuticals, or our
products could damage our reputation and adversely affect our business. Negative posts or comments

Perrigo Company plc - Item 1A
Risk Factors

about our products could result in increased pharmacovigilance reporting requirements, which may give rise
to liability if we fail to fully comply with such requirements.

Lack of availability, or significant increases in the cost, of raw materials used in manufacturing our
products could have a material adverse effect on our profit margins and operating results.

We rely on third parties to source many of our raw materials and to manufacture certain dosage forms that

we distribute, such as inhalers and sterile injectables. Refer to Item 1. Business - Materials Sourcing. Certain raw
materials may experience rapid cost increases due to increased labor, relevant commodities, energy costs and
other inflationary pressures, and this may have a material negative impact on our financial results, whether or not
we are able to pass on such increases to our customers. We maintain several single-source supplier relationships,
either because alternative sources are not available or because the relationship is advantageous due to regulatory,
performance, quality, support, or price considerations. Unavailability or delivery delays of single-source components
or products could adversely affect our ability to ship the related product in a timely manner, a particularly severe
effect for higher volume or more profitable products. It can take substantial time and investment to qualify an
alternative supplier or material sources and establish reliable supply.

We maintain a strict program of verification and product testing throughout the ingredient sourcing and

manufacturing process to identify potential counterfeit ingredients, adulterants, and toxic substances. Nevertheless,
discovery of previously unknown problems with raw materials, product manufacturing processes, or new data
suggesting an unacceptable safety risk associated therewith, could result in a voluntary or mandatory withdrawal of
the contaminated product from the marketplace, either temporarily or permanently. Any future recall or removal
would result in additional costs and lost revenue, harm our reputation, and may give rise to product liability litigation.

Changes in regulation could impact the supply of the API and certain other raw materials used in our

products. For example, the EU promulgated new standards requiring all API imported into the EU be certified as
complying with Good Manufacturing Practices established by the EU. The regulations placed the certification
requirement on the regulatory bodies of the exporting countries, which led to an API supply shortage in Europe as
certain governments were not willing or able to comply with the regulation in a timely fashion, or at all. A shortage in
API or other raw ingredients could cause us to have to cease manufacture of certain products, or to incur costs and
delays to qualify other suppliers to substitute for those API manufacturers who are unable to export. This could have
a material adverse effect on our business, results of operations, financial condition, and cash flow.

Moreover, our infant formula products require certain key raw ingredients that are derived from raw milk,

which is influenced by factors beyond our control including seasonal and environmental factors, governmental
agricultural and environmental policy, and global demand. Due to these factors, we cannot guarantee that there will
be sufficient supplies of these key ingredients to produce infant formula.

The COVID-19 global pandemic and the public health and governmental actions in response continues to
have an adverse impact on our operations and could have an adverse impact on our business and financial
condition in the future.

As the COVID-19 pandemic and its variants continue to spread across the globe, the outbreak of the

y impacted over the past year by COCOVID-19 pandemic

ramatic reduction in cough, cold, and flu illnesses in the ffi

disease and the actions to slow its spread have had, and continues to have an adverse impact on our operations.
As described in Item 7 - Executive Overview - Impact of COVID-19 Pandemic,
have been negatively
compete
dramatic reduction in cough, cold, and flu
disruptions. SSt
couraged to see a sharp rebound in consumer
arting in the second quarter
takeaway in the U.S. and Europe in almost all categories, as these countries began to remove restrictions and
takeaway in the U.S. and Europe in almost all categories, as these countries began to remove restrictions and
reopen and the incidences of cough and cold related illnesses begin to increase. Despite increased consumer
reopen and the incidences of cough and cold related illnesses begin to increase.
purchases, net sales for the second quarter of 2021 significantly lagged this consumer takeaway, which we primarily
significantly lagged this consumer takeaway, which we primarily
attribute to yyear ove yr year reductions in customer inventories. CCon
quarter and
in the SU.S. and record delays at global shipping ports, our net sales were negatively impacted because of
inability to ship products.

y
record delays at global shipping ports, our net sales were negatively impacted because of the

f
related factors
f
e year, higher input costs, and supply chain

sumer take-away remained strong in the third
g

we saw a surge in orders. However, due to supply chain disruptions,

the self-care markets in which we

fof 2021, we were en

lack of truck drivers

rst half of th y
f

including the

including, a

g
y

g
f

Going forward, the continued spread of the disease and the actions to slow it could have an adverse impact

on our financial condition, our supply chains and other operations, our results of operations, consumer demand for
our products and our ability to access capital. The magnitude of any such adverse impacts are not determinable, but
could be material, depending on: the duration, intensity, and continued spread of the disease, including the

Perrigo Company plc - Item 1A
Risk Factors

emergence of new strains or variants of the virus, some of which may be more contagious or more severe; the
imposition or reimposition of business or movement restrictions in various jurisdictions; the
timing of widespread availabilityy and acceptance of vaccines and the efficacy
timing of widespread
strains or
e virus the severity and duration of any economic downturn resulting from the pandemic; the
f
effect of global supply chain and shipping challenges on the Company; the effectiveness of the Company's efforts at
mitigation; and other factors, both known and unknown, many of which are likely to be outside our control. It is also
possible that a change in the course of the pandemic may affect consumer demand for products or impact our
operations in future periods in ways we do not currently anticipate.

current vaccines against evolving
g

ce of vaccines and the efficacy fof

variants of th

;

Disruption of our supply chain, including as a result of the COVID-19 pandemic, could have an adverse
effect on our business, financial condition, results of operations and cash flows.

Our ability to manufacture, deliver and sell our products is critical to our success. Damage or disruption to

our collective supply or distribution capabilities resulting from pandemics (including the COVID-19 pandemic and
government responsive actions), labor shortages, border closures, weather conditions, freight carrier availability,
any potential effects of climate change, natural disasters, strikes or other labor unrest or other reasons could impair
our ability to source inputs or ship, sell or timely deliver our products. Competitors can be affected differently by any
of these events depending on a number of factors, including the location of their suppliers and operations. Failure to
take adequate steps to reduce the likelihood or mitigate the potential impact of any of these events, or to effectively
manage such events if they occur, particularly when a commodity or raw material is sourced from or a product is
manufactured at a single location, could adversely affect our business, financial condition, results of operations and
cash flows and require additional resources to restore our supply chain.

During 2021, we experienced supply chain disruptions, including the lack fof truck dr

record delays at global shipping ports, which negatively impacted our net sales becau
g
products. These supply chain disruptions led to a
series of actions to improve the current situation,
g
shipments, outsourcing highly complex product lines to a th
challenged shipping lanes, hiring additional distribution center personnel, and increasing th
g
relates to the manufacturing process.
however, there can be no assuran
ese supply chain disruptions worsen, our results of operations could be further impacted.
Moreover, if these supply chain disruptions worsen, our results of operations could be further impacted.

y
increase in unfulfilled customer orders. We have taken a
glarge
f
reconfiguring our distribution system ffor short term
including reconfiguring our distribution system
ird party glogistic provider, adding regional carriers for
stic provider, adding regional carriers for
e purchase cycle as it
y

ces that we will be able to meet demand due to supply chain constraints.

e manufacturing process. While we believe these action

s will continue to improve our ability to ship,

g g y

se of th
f

ivers in the U.S. and
e inability to ship
y

A disruption at any of our main manufacturing facilities could have a material adverse effect on our
business, financial position, and results of operations.

Our manufacturing operations are concentrated in a few locations. Refer to Item 1. Business -
Manufacturing and Distribution for more information. A significant disruption at one or more of these facilities,
whether due to fire, natural disaster, power loss, intentional acts of vandalism, climate change, war, terrorism,
insufficient quality, or pandemic could materially and adversely affect our business.

Additionally, regulatory authorities routinely inspect all of our manufacturing facilities for current GMP

compliance. While our manufacturing sites are current GMP compliant, if a regulatory authority were to identify
serious adverse findings not corrected in follow up inspections, we may be required to issue product recalls,
shutdown manufacturing facilities, and take other remedial actions. If any manufacturing facility were forced to
cease or limit production, our business could be adversely affected.

Perrigo Company plc - Item 1A
Risk Factors

Our business could be negatively affected by the performance of our collaboration partners and suppliers,
and any such adverse impact could be material.

We have entered into strategic alliances with partners and suppliers to develop, manufacture, market and/or

distribute certain products, or components of our products in various markets. We commit substantial effort, funds
and other resources to these various collaborations. There is a risk that our investments in these collaborative
arrangements will not generate financial returns. While we believe our relationships with our partners and suppliers
generally are successful, disputes, conflicting priorities or regulatory or legal intervention could be a source of delay
or uncertainty as to the expected benefit of the collaboration. Refer to Item 8. Note 1. A failure or inability of our
partners or suppliers to fulfill their collaboration obligations, or the occurrence of any of the risks above, could have
an adverse effect on our business, financial condition, and results of operations.

Our business depends upon certain customers for a significant portion of our sales, therefore our business
would be adversely affected by a disruption of our relationship with these customers or any material
adverse change in these customers' businesses. The risk of such impacts would be increased by continued
consolidation in the sector in which our customers operate.

We have one significant customer that represents approximately 14% of our consolidated net sales. While

we have other important customers, no other individual customer represents more than 10% of net sales. However,
the loss of one or more of our customers could be material. We believe we have good relationships with all our
customers. If our relationship with any of our significant customers, including the terms of doing business with the
customers, changes significantly, it could have a material adverse impact on us. Refer to Item 1. Business -
Significant Customers.

Additionally, if we are unable to maintain adequately high levels of customer service over time, customers

may choose to assess penalties (where such penalties are contractually permitted), obtain alternate sources for
products, and/or end their relationships with us.

Our businesses could be adversely affected by deteriorating economic conditions in the countries in which
we operate, and our results may be volatile due to these or other circumstances beyond our control.

Our customers could be adversely impacted if economic conditions worsen in the U.S. or other countries in

which we operate. In the U.S., our consumer self-care business does not advertise our store brand products like
national brand companies and thus is largely dependent on retailer promotional activities to drive sales volume and
increase market share. If our customers do not have the ability to invest in store brand promotional activities, our
sales may suffer. Additionally, while we actively review the credit worthiness of our customers and suppliers, we
cannot fully predict to what extent they may be negatively impacted by slowing economic growth. Our stock price
may decline due to any earnings release or guidance that does not meet market expectations or other
circumstances beyond our control, such as the severity, length and timing of the cough/cold/flu and allergy seasons,
the timing of new product approvals and introductions by us and our competitors, and the timing of retailer
promotional programs.

A cyber security breach, disruption or misuse of our information systems, or our external business
partners’ information systems could have a material adverse effect on our business.

Our business operations are increasingly dependent upon information technology systems that are highly

complex, interrelated with our external business partners, and may contain confidential information (including
personal data, trade secrets or other intellectual property, or proprietary business information). The nature of digital
systems, both internally and externally, makes them potentially vulnerable to disruption or damage from human
error and/or security breaches, which include, but are not limited to, ransomware, data theft, denial of service
attacks, sabotage, industrial espionage, interruptions or other system issues, unauthorized access and computer
viruses. Such events may be difficult to detect, and once detected, their impact may be difficult to assess and
address.

Cyber-attacks have become increasingly common. We have experienced immaterial business disruption,
monetary loss and data loss as a result of phishing, business email compromise and other types of attacks. While
we continue to employ resources to monitor our systems and protect our infrastructure, these measures may prove
insufficient, and that could subject us to significant risks, including, without limitation:

Perrigo Company plc - Item 1A
Risk Factors

•

Ransomware attacks, other cyber breaches or disruptions that impair our ability to develop products, meet
regulatory approval requirements or deadlines, produce or ship products, take or fulfill orders, and/or collect
or make payments on a timely basis;

System issues, whether as a result of an intentional breach, a natural disaster or human error that damage
our reputation and cause us to lose customers, experience lower sales volume, and/or incur significant
liabilities;
Significant expense to remediate the results of any attack or breach and to ensure compliance with any
required disclosures mandated by the numerous global privacy and security laws and regulations; and

Interruptions, security breaches, or loss, misappropriation, or unauthorized access, use or disclosure of
confidential information,

which, individually or collectively, could result in financial, legal, business or reputational harm to us and could have
a material adverse effect on our business, financial condition and results of operations.

We are also subject to numerous laws and regulations designed to protect personal data, such as the
California Consumer Privacy Act in the U.S. and the European General Data Protection Regulation ("GDPR").
These data protection laws introduced more stringent data protection requirements and significant potential fines, as
well as increased our responsibility and potential liability in relation to personal data that we process and possess.
We have put mechanisms in place to ensure compliance with applicable data protection laws but there can be no
guarantee of their effectiveness.

We are dependent on the services of certain key personnel.

We are dependent on the services of certain key personnel, and our future success will depend in large part

upon our ability to attract and retain highly skilled employees. Key functions for us include executive managers,
operational managers, R&D scientists, information technology specialists, financial and legal specialists, regulatory
professionals, quality compliance specialists, and sales/marketing personnel. If we are unable to attract or retain
key qualified employees, our future operating results may be adversely impacted.

Management transition creates uncertainties, and any difficulties we experience in managing such
transitions may negatively impact our business.

Effective October 4, 2021, Jim Dillard was named EVP and President of our CSCA segment. Changes in

executive management create uncertainty. Moreover, changes in our company as a result of management transition
could have a disruptive impact on our ability to implement, or result in changes to, our strategy and could negatively
impact our business, financial condition and results of operations.

g
Strategic Risks

We may not realize the benefits of business acquisitions, divestitures, and other strategic transactions,
which could have a material adverse effect on

our operating results.

In the normal course of business, we engage in discussions relating to possible acquisitions, divestitures,

and other strategic transactions, some of which may be significant in size or impact. Transactions of this nature
create substantial demands on management, operational resources, technology, and financial and internal control
systems, and can be subject to government approvals or other closing conditions beyond the parties' control. In the
case of acquisitions, including the acquisition of HRA Pharma, we may face difficulties with integrating these
businesses, managing expanded operations, achieving operating or financial synergies in expected timeframes or in
new products or geographic markets. In the case of divestitures, including the separation of the RX business, we
may face difficulty in effeff ctively transferring contracts, obligations, facilities, and personnel to the purchaser, while
minimizing continued exposure to risks and liabilities of the divested business.

There are inherent uncertainties involved in identifying and assessing the value, strengths, and profit

potential, as well as the weaknesses, risks, and contingent and other liabilities of acquisition targets, which can be
affected by changes in business, industry, market or general economic conditions. Moreover, the financing of any
acquisition can have a material impact on our liquidity, credit ratings and financial position. Alternatively, issuing
equity to pay all or a portion of acquisition purchase price would dilute our existing shareholders.

On September 8, 2021, we and the Purchaser entered into a Put Option Agreement to acquire certain
holding companies holding all of the outstanding equity interests of HRA Pharma from funds affiliated with the

Perrigo Company plc - Item 1A
Risk Factors

Sellers. On October 20, 2021, the Company, the Purchaser and the Sellers entered into the Purchase Agreement.
Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Purchaser has agreed
to acquire certain holding companies holding all of the outstanding equity interests of HRA Pharma from the Sellers
for cash. The proposed final transaction is subject to the satisfaction of customary closing conditions, including
regulatory approvals. Other events, changes or circumstances could delay the transaction or result in the
termination of the Purchase Agreement. There can be no assurances as to the Company’s ability to fulfill the
conditions to closing in the expected timeframe, or at all, or the ability to achieve the expected benefits of the
acquisition. Moreover, anticipated integration or other costs in connection with the proposed acquisition may
change.

Acquisitions and divestitures, also involve costs, including fees and expenses of financial advisors, lawyers,

accountants, and other professionals, and can involve retention bonuses and other additional compensation of
employees or increase turnover in personnel. Any of these risks or expenses could have a negative effect on our
financial condition or results of operations.

We have acquired significant assets that could become impaired or subject us to losses and may result in
an adverse impact on our results of operations.

We have recorded significant goodwill and intangible assets on our balance sheet as a result of previous

acquisitions, which could become impaired and lead to material charges in the future.

We perform an impairment analysis on intangible assets subject to amortization when there is an indication

that the carrying amount of any individual asset may not be recoverable. Any significant change in market
conditions, estimates or judgments used to determine expected future cash flows that indicates a reduction in
carrying value may give rise to impairment in the period that the change becomes known. Goodwill, indefinite-lived
intangible asset, and definite-lived intangible asset impairments are recorded in Impairment charges on the
Consolidated Statement of Operations. As of December 31, 2021, the net book value of our goodwill and intangible
assets were $3.0 billion and $2.2 billion, respectively. In the past three years, we have recognized a total of
$186.9 million in asset impairments, across all segments and asset categories.

Refer to Item 8. Note 4 for additional information related to our goodwill and intangible assets.

There can be no assurance that our strategic initiatives will achieve their intended effects.

We are in the process of implementing certain initiatives designed to increase operational efficiency and

improve our return on invested capital by globalizing our supply chain through global shared service arrangements,
streamlining our organizational structure, making key executive employee changes, performing a strategic portfolio
review, and disposing of certain assets. Furthermore, while we have completed our transformation into a consumer-
focused, self-care company, there can be no assurance that such transformation will receive the level of market
support that we expect or that we will be able to achieve the anticipated operational, strategic and other benefits.
Moreover, our business is now less diversified with a narrower focus, which could make us more susceptible to
changing market conditions.

We believe these initiatives will enhance our net sales, operating margins, and earnings; however, certain of
these initiatives require substantial upfront costs, and there can be no assurance any of these initiatives will produce
the anticipated benefits. Any delay or failure to achieve the anticipated benefits could have a material adverse effect
on our projected results.

Perrigo Company plc - Item 1A
Risk Factors

Global Risks

Our business, financial condition, and results of operations are subject
international scope of our operations.

to risks arising from the

We manufacture, source raw materials, and sell our products in a number of countries. The percentage of

our business outside the U.S. has been increasing. We are subject to risks associated with international
manufacturing and sales, including: changes in regulatory requirements. Refer to Item 1. Business - Government
Regulations and Pricing, for changes to tax and import/export laws and trade and customs policies (including the
enactment of tariffs on goods imported into the U.S., including but not limited to, goods imported from China),
problems related to markets with different cultural biases or political systems, possible difficulties in enforcing
agreements, longer payment cycles and shipping lead-times, difficulties obtaining export or import licenses, and
imposition of withholding or other taxes.

Additionally, we are subject to periodic reviews and audits by governmental authorities responsible for
administering import and export regulations. To the extent that we are unable to successfully defend against an
audit or review, we may be required to pay assessments, penalties, and increased duties.

Certain of our facilities operate in a special purpose sub-zone established by the U.S. Department of

Commerce Foreign Trade Zone Board, which allows us certain tax advantages on products and raw materials
shipped through these facilities. If the Foreign Trade Zone Board were to revoke the sub-zone designation or limit
our use, we could be subject to increased duties.

Although we believe that we conduct our business in compliance with applicable anti-corruption, anti-bribery

and economic sanctions laws, if we are found to not be in compliance with such laws or other anti-corruption laws,
we could be subject to governmental investigations, legal or regulatory proceedings, substantial fines, and/or other
legal or equitable penalties. This risk increases in locations outside of the U.S., particularly in locations that have not
previously had to comply with the FCPA, U.K. Bribery Act 2010, Irish Criminal Justice (Corruption Offenses) Act
2018, and similar laws.

We operate in jurisdictions that could be affected
have a material adverse effect on our business.

by economic and geopolitical instability, which could

Our operations and supply partners could be affected by economic or political instability, embargoes,
military hostilities, unstable governments and legal systems, and inter-governmental disputes as well as travel
restrictions, terrorist acts, and other armed conflicts. The global nature of our business involves the following risks,
among others:

•

The U.S. Department of State and other governments have at times issued advisories regarding travel to
certain countries in which we do business, causing regulatory agencies to curtail or prohibit their inspectors
from traveling to inspect facilities. If these inspectors are unable to inspect our facilities, the regulatory
agencies could withhold approval for new products intended to be produced at those facilities.

• On June 23, 2016, the UK electorate voted in a referendum to voluntarily depart from the EU, known as

"Brexit". The UK Government subsequently approved a withdrawal agreement and left the EU on January
31, 2020. The UK left the EU customs union and the single market for a transition period that expired on
December 31, 2020. The Trade and Cooperation Agreement ("TCA") was signed on December 30, 2020,
was applied provisionally as of January 1, 2021 and entered into force on May 1, 2021. The TCA provides
for free trade in goods and limited mutual market access in services, as well as for cooperation mechanisms
in a range of policy areas and UK participation in some EU programs. It is for indefinite duration but is
subject to review every 5 years and may be terminated on 12 months’ notice. Uncertainty relating to the
Ireland/Northern Ireland protocol remains. It is unclear whether the flexible solutions proposed by the EU
Commission to ensure uninterrupted supply of medicines from Great Britain to Northern Ireland will be
implemented. However, significant political and economic uncertainty remains as to aspects of the future
relationship between the UK and the EU. Future trading terms between the UK and other trading partners,
including the United States, are also unknown. Although the TCA is in place, the full extent of any disruption
on imports and exports, for example relating to increased regulatory complexities, is unknown. The UK now
has an ability to diverge from EU regulation (the UK Government’s stated aim), which could enable the UK
to seek competitive regulatory advantage. However, the EU could respond by withdrawing benefits under
the TCA. These complexities may impair the ability of our operations in the EU to transact business in the
UK in the future, and similarly the ability of our UK operations to transact business in the future in the EU. In

Perrigo Company plc - Item 1A
Risk Factors

addition, Brexit could lead to legal uncertainty and potentially different national laws and regulations as the
UK determines which EU laws to replace or replicate. Any of the above mentioned effects of Brexit, and
others we cannot anticipate, could adversely affect our business, business opportunities, operations, and
financial results.

Moreover, financial volatility and geopolitical instability outside the U.S. may impact our operations or affect
global markets. For example, the outbreak of war between Russia and Ukraine and the resulting sanctions by U.S.
and European governments, together with any additional future sanctions by them, could have a larger impact that
expands into other markets where we do business, including our supply chain, business partners and customers in
the broader region, which could result in lost sales, supply shortages, increase manufacturing costs and lost
efficiencies. Further, the conflict may adversely impact macroeconomic conditions and increase volatility in and
affect our ability to access capital markets and external financing sources on acceptable terms or at all. Given the
international scope of our operations, any of the above mentioned effects of war between Russia and Ukraine, and
others we cannot anticipate, could adversely affect our business, business opportunities, operations, and financial
results.

The international scope of our business exposes us to risks associated with foreign exchange rates.

We report our financial results in U.S. dollars. However, a significant portion of our net sales, assets,

indebtedness and other liabilities, and costs are denominated in foreign currencies. These currencies include,
among others, the Euro, Indian rupee, British pound, Canadian dollar, Australian dollar, and Mexican peso. Our
Branded Consumer Self-care business ("BCS") is a euro-denominated business that represents a significant portion
of our net sales, net earnings and net assets. Fluctuations in currency exchange rates, including as a result of
inflation, central bank monetary policies, currency controls or other currency exchange restrictions have had, and
could continue to have, an adverse impact on our financial performance. We may seek to mitigate the risk of such
impacts through hedging, but such hedging activities may be costly and may not be effective.

In addition, emerging market economies in which we operate may be particularly vulnerable to the impact of
rising interest rates, inflationary pressures, weaker oil and other commodity prices, and large external deficits. Risks
in one country can limit our opportunities for portfolio growth and negatively affect our operations in another country
or countries. Such conditions or developments could have an adverse impact on our operations. In addition, we may
be exposed to credit risks in some of those markets.

Litigation and Insurance Risks

We are or may become involved in lawsuits and may experience unfavorable outcomes of such
proceedings.

We may become involved in lawsuits arising from a wide variety of commercial, manufacturing,

development, marketing, sales and other business-related matters, including, but not limited to, competitive issues,
pricing, contract issues, intellectual property matters, false advertising, antitrust or unfair competition, taxation
matters, workers' compensation, product quality/recall, environmental remediation, securities law, disclosure,
product liability and regulatory issues. Litigation is unpredictable and could result in potentially significant monetary
damages, and we could incur substantial legal expenses, even if a claim against us is unsuccessful. We intend to
vigorously defend against any lawsuits, however, we cannot predict how the cases will be resolved. Adverse results
in, or settlements of, such cases could result in substantial monetary judgments. No assurance can be made that
litigation will not have a material adverse effect on our reputation, financial position or results of operations in the
future. Refer to Item 8. Note 19.

The actual or alleged presence of certain hazardous substances or petroleum products on, under or in our
currently or formerly owned property, or from a third-party disposal facility that we may have used, or the failure to
remediate them, could have adverse effects, including, for example, substantial investigative or remedial obligations
and limitations on our ability to sell or rent affected property or to borrow funds using affected property as collateral.
There can be no assurance that environmental liabilities and costs will not have a material adverse effect on us.
Refer to Item 1. Business - Information Applicable to All Reportable Segments - Environmental for more information
related to environmental remediation matters.

Perrigo Company plc - Item 1A
Risk Factors

Increased scrutiny on pricing practices and competition in the pharmaceutical industry, including antitrust
enforcement activity by government agencies and class action litigation, may have an adverse impact on
our business and operating results.

There has been increased scrutiny regarding sales, marketing, and pricing practices in the pharmaceutical

industry, including criminal antitrust investigations regarding drug pricing, civil False Claims Act investigations
relating to drug pricing and marketing, multiple civil antitrust litigation initiated by governmental and private plaintiffsff
against pharmaceutical manufacturers and individuals, and related media reports.

On May 2, 2017, we disclosed that search warrants were executed at several Perrigo facilities and other

locations in connection with the Antitrust Division’s ongoing investigation related to drug pricing in the
pharmaceutical industry. Perrigo has also been served with and responded to a civil investigative demand in
connection with a related civil False Claims Act investigation by the Civil Division of the Department of Justice.
Although no charges or other related civil claims have been brought to date against Perrigo or any of our current
employees (or, to the best of our knowledge, former employees), by the Department of Justice, we take the
investigation very seriously.

If criminal antitrust charges are filed involving Perrigo, we would incur substantial litigation and other costs,

and could face substantial monetary penalties, injunctive relief, negative publicity and damage to our reputation.
Regardless of the ultimate outcome, responding to those charges would divert management’s time and attention
and could impair our operations. Further, we cannot predict whether legislative or regulatory changes may result
from the ongoing public scrutiny of our industry, what the nature of any such changes might be, or what impact they
may have on Perrigo. Any of these developments could have a material adverse impact on our business, results of
operations, and reputation. While we intend to defend Perrigo's conduct at issue in these investigations vigorously,
any adverse decision could have a material adverse impact on our business, results of operations and reputation.

In addition, we have been named as a co-defendant with certain other generic pharmaceutical
manufacturers in a number of class action, individual plaintiff direct action, State Attorney General, and county
lawsuits alleging that we engaged in anti-competitive behavior to fix or raise the prices of certain drugs starting, in
some instances, as early as calendar year 2010. Refer to Item 8. Note 19. While we intend to defend these lawsuits
vigorously, any adverse decision could have a material adverse impact on our business, results of operations and
reputation.

Third-party patents and other intellectual property rights may limit our ability to bring new products to
market and may subject us to potential legal liability, which could have a material adverse effect on
business and operating results.

our

The manufacture, use and sale of new products that are the subject of conflicting patent rights have been

the subject of substantial litigation in the pharmaceutical industry.

•

As a manufacturer of generic pharmaceutical products, the ability of our CSCA and CSCI segments to
bring new products to market is often limited by third-party patents or proprietary rights and regulatory
exclusivity periods awarded on products. Launching new products prior to resolution of intellectual property
issues may result in us incurring legal liability if the related litigation is later resolved against us. The cost
and time for us to develop prescription and Rx-to-OTC switch products is significantly greater than the rest
of the new products that we introduce. Any failure to bring new products to market in a timely manner could
cause us to lose market share, and our operating results could suffer.

• We could have to defend against charges that we infringed patents or violated proprietary rights of third

parties. This could require us to incur substantial expense and could divert significant effort of our technical
and management personnel. If we are found to have infringed rights of others, we could lose our right to
develop or manufacture some products or could be required to pay monetary damages or royalties to
license proprietary rights from third parties. Additionally, if we choose to settle a dispute through licensing or
similar arrangements, the costs associated with these arrangements may be substantial and could include
ongoing royalties. An adverse determination in a judicial or administrative proceeding or failure to obtain
necessary licenses could prevent us from manufacturing and selling a number of our products.
At times, our CSCA segment may seek approval to market drug products before the expiration of a third
party's patents for therapeutically-equivalent products, based upon our belief that such patents are invalid,
unenforceable or would not be infringed by our products. In these cases, we may face significant patent
litigation. Depending upon a complex analysis of a variety of legal and commercial factors, we may, in

•

Perrigo Company plc - Item 1A
Risk Factors

certain circumstances, elect to market a store brand or generic pharmaceutical product while litigation is
pending, before any court decision, or while an appeal of a lower court decision is pending, known as an "at
risk" launch. The risk involved in an "at risk" launch can be substantial because, if a patent holder ultimately
prevails, the remedies available to the patent holder may include, among other things, damages measured
by the profits lost by the holder, which are often significantly higher than the profits we make from selling the
generic version of the product. By electing to proceed in this manner, we could face substantial damages if
we receive an adverse final court decision. In the case where a patent holder is able to prove that our
infringement was "willful" or "exceptional," under applicable law, the patent holder may be awarded up to
three times the amount of its actual damages or we may be required to pay attorneys’ fees.

The success of certain of our products depends on the effectiveness of measures we take to protect our
intellectual property rights and patents.

If we fail to adequately protect our intellectual property, competitors may manufacture and market similar

products.

• We have been issued patents covering certain of our products, and we have filed, and expect to continue to
file, patent applications seeking to protect newly developed technologies and products in various countries.
Any existing or future patents issued to or licensed by us may not provide us with any significant
competitive advantages for our products or may even be challenged, invalidated, or circumvented by
competitors. In addition, patent rights may not prevent our competitors from developing, using, or
commercializing non-infringing products that are similar or functionally equivalent to our products.

• We also rely on trade secrets, unpatented proprietary know-how, and continuing technological innovation
that we seek to protect, in part by confidentiality agreements with licensees, suppliers, employees, and
consultants. If these agreements are breached, we may not have adequate remedies for any such breach.
Disputes may arise concerning the ownership of intellectual property or the applicability of confidentiality
agreements. Furthermore, trade secrets and proprietary technology may otherwise become known or be
independently developed by competitors or, if patents are not issued with respect to products arising from
research, we may not be able to maintain the value of such intellectual property rights.

Our ability to achieve operating results in line with published guidance is inherently subject to numerous
risks and other factors beyond our control. Publishing earnings guidance subjects us to risks, including
increased stock volatility, that could lead to potential lawsuits by investors.

Because we publish earnings guidance, we are subject to several risks. Earnings guidance is inherently

uncertain and subject to factors beyond our control. Actual results may vary from the guidance we provide investors
from time to time, such that our stock price may decline following, among other things, any earnings release or
guidance that does not meet market expectations.

It has become increasingly commonplace for investors to file lawsuits against companies following a rapid

decrease in market capitalization. We have been in the past, are currently, and may be in the future, named in these
types of lawsuits. These types of lawsuits can be costly and divert management attention and other resources away
from our business, regardless of their merits, and could result in adverse settlements or judgments. The inherent
uncertainty of earnings guidance and related lawsuits could have a material impact on us.

Significant increases in the cost or decreases in the availability of the insurance we maintain could
adversely impact our operating results and financial condition. Disputes with insurers on the scope of
existing policies may limit the coverage available under such policies.

To protect us against various potential liabilities, we maintain a variety of insurance programs, including

property, general, product, and directors' and officers' liability. We may reevaluate and change the types and levels
of insurance coverage that we purchase. Insurance costs, including deductible or retention amounts, may increase,
or our coverage could be reduced, which could lead to an adverse effect on our financial results depending on the
nature of a loss and the level of insurance coverage we maintained. Moreover, we are self-insured when insurance
is not available, not offered at economically reasonable premiums or does not adequately cover claims brought
against us. Our business inherently exposes us to claims, and an unanticipated payment of a large claim may have
a material adverse effect on our business.

Perrigo Company plc - Item 1A
Risk Factors

Disputes with insurers on the scope of existing policies may reduce the coverage available under such
policies. In May 2021, insurers on multiple policies of D&O insurance filed an action in the High Court in Dublin
against us and our current and former directors and officers seeking declaratory judgments on certain coverage
issues. If successful, such claims would limit the policies available to Perrigo for certain pending securities claims,
as well as claims for legal expenses relating to certain matters that were previously resolved, and could reduce
substantially Perrigo’s total insurance coverage for such claims.

Tax Related Risks

The resolution of uncertain tax positions, including the Notices of Proposed Adjustments and ongoing
disputes with U.S. and foreign tax authorities, could be unfavorable, which could have an adverse effect on
our business.

Although we believe our tax estimates are reasonable and our tax filings are prepared in accordance with
applicable tax laws, the final determination with respect to any tax audit or any related litigation could be materially
different from our estimates or from our historical income tax provisions and accruals. The results of an audit or
litigation could have a material effect on operating results or cash flows in the periods for which that determination is
made and in future periods after the determination. In addition, future period earnings may be adversely impacted
by litigation costs, settlements, penalties or interest assessments.

We are currently involved in several audits and adjustment-related disputes and related litigation, including
the NOPAs, as described more fully in Item 8. Note 17. Based on a review of the relevant facts and circumstances,
we believe that these matters will not result in a material impact on our consolidated financial position, results of
operations or cash flows. However, while we believe that our position in these matters is correct, there can be no
assurance of ultimate favorable outcomes, and if one or more matters are ultimately resolved unfavorably it would
have a material adverse impact on us, including a material adverse impact on our financial position, liquidity, capital
resources, and strategy. In addition, an adverse result with respect to any of such matters could ultimately require
the use of corporate assets to pay assessments and related interest, penalties, or other amounts, and any such use
of corporate assets would limit the assets available for other corporate purposes. We will consider the financial
statement impact of any additional facts as they become available.

Changes to tax laws and regulations or the interpretation thereof could have a material adverse effect on
our results of operations and the ability to utilize cash in a tax efficient manner.

Although we are incorporated in Ireland, the IRS may assert that we should be treated as a U.S. corporation

(and, therefore, a U.S. tax resident) for U.S. federal tax purposes pursuant to section 7874 of the U.S. Internal
Revenue Code of 1986, as amended ("Code"). For U.S. federal tax purposes, a corporation generally is considered
a tax resident in the jurisdiction of its organization or incorporation. Because we are an Irish incorporated entity, we
would generally be classified as a foreign corporation (and, therefore, a non-U.S. tax resident) under these rules.
Section 7874 of the Code provides an exception under which a foreign incorporated entity may, in certain
circumstances, be treated as a U.S. corporation for U.S. federal tax purposes. Refer to Item 1. Business -
Government Regulation and Pricing.

We believe that under current law, we should be treated as a foreign corporation for U.S. federal tax
purposes. However, there is limited guidance regarding the section 7874 provisions. An unfavorable determination
on Perrigo Company plc’s treatment as a foreign corporation under section 7874 of the Code or changes to the
inversion rules in section 7874 of the Code, the IRS Treasury regulations promulgated thereunder, or other IRS
guidance and legislative proposals aimed at expanding the scope of U.S. corporate tax residence could adversely
affect our status as a foreign corporation for U.S. federal tax purposes, which could have a material impact on our
Consolidated Financial Statements in future periods.

Additionally, we are subject to tax laws in various jurisdictions globally. Refer to Item 1. Business -

Government Regulation and Pricing for a discussion of recent changes to U.S. and EU tax laws. Any of these
changes could have a prospective or retroactive application to us, our shareholders, and affiliates, and could
adversely affect us by changing our effective tax rate and limiting our ability to utilize cash in a tax efficient manner.

Perrigo Company plc - Item 1A
Risk Factors

Our effective tax rate or cash tax payment requirements may change in the future, which could adversely
impact our future results of operations.

A number of factors may adversely impact our future effective tax rate or cash tax payment requirements,

which may impact our future results and cash flows from operations. Refer to Item 8. Note 17. These factors
include, but are not limited to: changes to income tax rates, to tax laws or the interpretation of such tax laws
(including additional proposals for fundamental international tax reform globally); the jurisdictions in which our profits
are determined to be earned and taxed; changes in the valuation of our deferred tax assets and liabilities;
adjustments to estimated taxes upon finalization of various tax returns; adjustments to our interpretation of transfer
pricing standards, treatment or characterization of intercompany transactions, changes in available tax credits,
grants and other incentives; changes in stock-based compensation expense; changes in U.S. generally accepted
accounting principles; expiration or the inability to renew tax rulings or tax holiday incentives; and divestitures of
current operations.

q
Capital and Liquidity Risks

Our indebtedness could adversely affect our ability to implement our strategic initiatives.

Our business requires continuous capital investments, and there can be no assurance that financial capital

will always be available on favorable terms or at all. Additionally, our leverage and debt service obligations could
adversely affect the business. At December 31, 2021, our total indebtedness outstanding was $3.5 billion.

• Our senior credit facilities, the agreements governing our senior notes, and agreements governing our other
indebtedness contain a number of restrictions and covenants that limit our ability to make distributions or
other payments to our investors and creditors, or repurchase our shares, unless certain financial tests or
other criteria are satisfied. These covenants include specified financial ratios and tests, which could affect
our ability to operate our business or limit our ability to take advantage of potential business opportunities,
such as acquisitions. If we do not comply with the covenants and restrictions contained in the agreements
governing our indebtedness, we could be in default under those agreements, and the debt, together with
accrued interest, could then be declared immediately due and payable. For example, d
months ended December 31, 2021, we received a wai
of December 3, 2021 from the lenders under both credit ffacilities and entered into an amendment to
rm Loan. Under such amendments, the maximum leverage ratio was
the 2018 Revolver and 2019 Te
increased to 5.75 to 1.00 ffor th fe fourth quarter
g
1.00
beginning with the second quarter
fourth quarter of 2021 or any
of 2021 or any
increase to 4.00 to 1.00 for such quarter.
A default under certain indebtedness could lead to an acceleration of debt under other debt instruments
that contain cross-acceleration or cross-default provisions. If our indebtedness is accelerated, there can be
no assurance that we would be able to repay or refinance our debt or obtain sufficient new financing.

22, returning to 3.75 to
g
f
we consummate certain qualifying acquisitions in the
of 2022. If we consummate certain qualifying acquisitions in the
subsequent quarter during the term of the loan, the maximum ratio would

e leverage covenant as
each of
f

guring the three
g

ver for non-compliance with th

of 2021 and the fir

st quarter of 20

•

During the third quarter of 2021, our credit ratings were downgraded by Moody’s and S&P Global Ratings to
Ba1 (negative) and BB (stable), respectively, which are not investment grade ratings. On December 31,
2021, our credit rating was BBB- (negative) by Fitch Ratings Inc., which is an investment grade rating.
Future downgrades to our credit ratings may limit our access to capital and materially increase borrowing
costs on current or future financing, including via trade payables with vendors. Customers' inclination to
purchase goods from us may also be affected by the publicity associated with deterioration of our credit
ratings.
There are various maturity dates associated with our credit facilities, senior notes, and other debt facilities.
There is no assurance that cash, future borrowings or equity financing will be available for the payment or
refinancing of our indebtedness. Further, there is no assurance that any future refinancing or renegotiation
of our senior credit facilities, senior notes or other debt facilities, or additional agreements will not have
materially different or more stringent terms. Refer to Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations.

Perrigo Company plc - Item 1A
Risk Factors

We cannot guarantee that we will buy back our ordinary shares pursuant to our announced share
repurchase plan or that our share repurchase plan will enhance long-term shareholder value.

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. During the year ended December 31, 2021, we did not repurchase
any shares under such authorization. The specific timing and amount of additional buybacks under the
authorization, if any, will depend upon several factors, including market and business conditions, the trading price of
our ordinary shares, the nature of other investment opportunities and the availability of our distributable reserves. In
particular, following our credit agreement amendments in December 2021, until June 30, 2022, we are limited to
repurchasing $50.0 million of common shares unless our leverage ratio for the trailing four quarters does not exceed
3.75 to 1. In addition, our ability to repurchase shares may be limited in the future under Irish law, if at any time we
do not have sufficient distributable reserves.

Buybacks of our ordinary shares could affect the market price of our ordinary shares, increase their volatility

or diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future
strategic opportunities and acquisitions. Although our share repurchase plan is intended to enhance long-term
shareholder value, there is no assurance that it will do so, and short-term share price fluctuations could reduce the
plan’s effectiveness.

Any additional shares we may issue could dilute your ownership in the Company.

Under Irish law, our authorized share capital can be increased by an ordinary resolution of our

shareholders, and the directors may issue new ordinary or preferred shares up to a maximum amount equal to the
authorized but unissued share capital, without shareholder approval, once authorized to do so by the articles of
association or by an ordinary resolution of our shareholders.

Subject to specified exceptions, Irish law grants statutory preemption rights to existing shareholders to
subscribe for new issuances of shares for cash, but allows shareholders to authorize the waiver of the statutory
preemption rights either in our articles of association or by way of a special resolution. Such disapplication of these
preemption rights can either be generally applicable or be in respect of a particular allotment of shares.

At our annual general meeting of shareholders in May 2021, our shareholders authorized our Board of
Directors to issue up to a maximum of 33% of our issued ordinary capital on that date for a period of 18 months
from the passing of the resolution. At the annual general meeting, our shareholders also authorized our Board of
Directors to issue ordinary shares on a nonpreemptive basis in the following circumstances: (i) an issuance of
shares in connection with any rights issuance and (ii) an issuance of shares for cash, if the issuance is limited to up
to 5% of the Company’s issued ordinary share capital (with the possibility of issuing an additional 5% of the
Company’s issued ordinary share capital provided the Company uses it only in connection with an acquisition or a
specified capital investment that is announced contemporaneously with the issuance, or which has taken place in
the preceding six-month period and is disclosed in the announcement of the issuance), bringing the total acceptable
limit for nonpreemptive share issuances for cash to 10% of the Company’s issued ordinary share capital.

We are incorporated in Ireland; Irish law differs from the laws in effect in the United States and may afford
less protection to, or otherwise adversely affect, our shareholders.

As an Irish company, we are governed by the Irish Companies Act 2014 (the "Act"). The Act differs in some

material respects from laws generally applicable to U.S. corporations and shareholders, including the provisions
relating to interested directors, mergers, amalgamations and acquisitions, takeovers, shareholder lawsuits, and
indemnification of directors.

•

Under Irish law, the duties of directors and officers of a company are generally owed to the company only.
As a result, shareholders of Irish companies do not have the right to bring an action against the directors or
officers of a company for the breach of such duties, except in limited circumstances.

Shareholders may be subject to different or additional tax consequences under Irish law as a result of the
acquisition, ownership and/or disposition of ordinary shares, including, but not limited to, Irish stamp duty,
dividend withholding tax, Irish income tax, and capital acquisitions tax.

There is no treaty between Ireland and the U.S. providing for the reciprocal enforcement of foreign
judgments. Before a foreign judgment would be deemed enforceable in Ireland, the judgment must be (i) for
a definite sum, (ii) provided by a court of competent jurisdiction and (iii) final and conclusive. An Irish High

Perrigo Company plc - Item 1A
Risk Factors

•

Court may exercise its right to refuse to recognize and enforce a foreign judgment if the foreign judgment
was obtained by fraud, if it violated Irish public policy, if it is in breach of natural justice, or if it is
irreconcilable with an earlier judgment.

An Irish High Court may stay proceedings if concurrent proceedings are being brought elsewhere.
Judgments of U.S. courts of liabilities predicated upon U.S. federal securities laws may not be enforced by
Irish High Courts if deemed to be contrary to public policy in Ireland.
It could be more difficult for us to obtain shareholder approval for a merger or negotiated transaction than if
we were a U.S. company because the shareholder approval requirements for certain types of transactions
differ, and in some cases are greater, under Irish law.

Additionally, under the Irish Takeover Panel Act, 1997, Takeover Rules, 2013, the Board of Directors is not
permitted to take any action that might frustrate an offer for our ordinary shares, including issuing additional
ordinary shares or convertible equity, making material acquisitions or dispositions, or entering into contracts
outside the ordinary course of business, once the Board of Directors has received an approach that may
lead to an offer or has reason to believe that such an offer is or may be imminent, subject to certain
exceptions. These provisions may give the Board of Directors less ability to control negotiations with hostile
offerors and protect the interests of holders of ordinary shares than would be the case for a corporation
incorporated in a jurisdiction of the United States.

We may be limited in our ability to pay dividends in the future.

A number of factors may limit our ability to pay dividends, including, among other things:

• Our ability to receive cash dividends and distributions from our subsidiaries;

Compliance with applicable laws and debt covenants;

•
• Our financial condition, results of operations, capital requirements, general business conditions, and other

•

factors that our Board of Directors may deem relevant; and
The availability of our distributable reserves, being profits of the company available for distribution to
shareholders.

Under Irish law, distributable reserves are the accumulated realized profits so far as not previously utilized

by distribution or capitalization, less accumulated realized losses so far as not previously written off in a reduction or
a reorganization of capital duly made. In addition, no distribution or dividend may be made if, at the time of the
distribution or dividend, our net assets are not, or would not be, after giving effect to such distribution or dividend, be
equal to, or in excess of, the aggregate of our called-up share capital plus undistributable reserves.

While we currently expect to continue paying dividends, significant changes in our business or financial

condition such as asset impairments, sustained operating losses and the selling of assets, could impact the amount
of distributable reserves available to us. We could seek to create additional distributable reserves through a
reduction in our share premium, which would require 75% shareholder approval and the approval of the Irish High
Court. The Irish High Court's approval is a matter for the discretion of the court, and there can be no assurances
that such approval would be obtained. In the event that additional distributable reserves are not created in this way,
dividends, share repurchases or other distributions would generally not be permitted under Irish law until such time
as we have created sufficient distributable reserves in our audited statutory financial statements as a result of our
business activities.

Additionally, we are subject to financial covenants in our 2018 Revolver and 2019 Term Loan, including a

maximum leverage ratio covenant. Recent amendments to the 2018 Revolver and 2019 Term Loan modified certain
provisions related to restricted payments to account for an amended leverage ratio covenant. Refer to Item 7.
Management's Discussion and Analysis under Waiver and Amendment of Debt Covenants, for more information.
Under such modifications, prior to June 30, 2022, we are required to meet a leverage ratio of 3.75 to 1.0 before
making certain payments concerning our equity interests, such as dividends (except our regular dividend) or share
repurchases.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2.

PROPERTIES

Our world headquarters is located in Dublin, Ireland, and our North American base of operations is located

in Allegan, Michigan. We manufacture products at 20 worldwide locations and have R&D, logistics, and office
support facilities in many of the regions in which we operate. We own approximately 80% of our facilities and lease
the remainder. Our primary facilities by geographic area were as follows at December 31, 2021:

Perrigo Company plc - Item 2

Country
Ireland

Number of
Facilities
1

Segment(s) Supported
CSCA, CSCI

United States

CSCA, CSCI

Mexico

France

United Kingdom

China
Belgium

Austria
Germany

Australia

CSCA

CSCI

CSCA, CSCI

CSCI

We believe that our production facilities are adequate to support the business, and our property and
equipment are well maintained. Our manufacturing plants are suitable for their intended purposes and have
capacities for current and near term projected needs of our existing products.

ITEM 3.

LEGAL PROCEEDINGS

Information regarding our current legal proceedings is presented in Item 8. Note 19.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

Perrigo Company plc - Additional Item
Executive Officers

ADDITIONAL ITEM. INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Our executive officers and their ages and positions as of February 25, 2022 were:

Svend Andersen

James E. Dillard III

Title and Business Experience
Mr. Andersen was named Executive Vice President and President, Consumer Self-Care
International in February 2017. Prior to joining Perrigo in May 2016, Mr. Andersen served as
Executive Vice President - Europe for LEO-Pharma from December 2015 to May 2016. Prior to
that, he was Regional President and Corporate officer at Hospira, Inc.’s Europe, Middle East
and Africa (“EMEA”) business for five years, was Executive Vice President responsible for the
Western European division’s pharmaceuticals, generics, OTC and hospital products businesses
at Actavis from 2008 to 2015 including leading Alpharma’s EMEA businesses prior to its
acquisition by Actavis, and prior to that, spent 10 years with Ferrosan (A Novo Nordisk
Subsidiary) specialized in OTC and consumer health products as Vice President for Global
Commercial Operations.
James E. Dillard III was named Executive Vice President and President, Consumer Self-Care
International in October 2021. Mr. Dillard previously served as Executive Vice President, Chief
Scientific Officer from January 2019 until October 2021. Mr. Dillard joined Perrigo from Altria
Group, Inc., where he served as Senior Vice President, Research, Development and Sciences
and Chief Innovation Officer from January 2009 to May 2018. During his tenure with Altria
Group, Mr. Dillard led the creation of the Regulatory Affairs function in 2009 and also served as
Chief Innovation Officer for Altria Client Services and Senior Vice President of Research,
Development & Regulatory Affairs for Altria Group. He held science and technology leadership
roles with U.S. Smokeless Tobacco Company, an Altria Group Inc. operating company, from
2001 to 2009. Mr. Dillard worked for the U.S. Food and Drug Administration between 1987 and
2001 as Director of the Division of Cardiovascular and Respiratory Devices, as well as in
various leadership roles in the Center for Devices and Radiological Health and the Office of
Device Evaluation.

Ronald C. Janish

Murray S. Kessler

Thomas M. Farrington Mr. Farrington was named Executive Vice President and Chief Information Officer in November
2015. He formerly served as Senior Vice President and Chief Information Officer from October
2006 to November 2015.
Mr. Janish was named Chief Transformation Officer in January 2019 and Executive Vice
President of Global Operations and Supply Chain in October 2015. He served as Senior Vice
President of International and RX Operations from 2012 until 2015 and as Managing Director of
Perrigo’s Australian operations from 2010 to 2012. Previously, he held Senior Vice President
roles for Perrigo in International Market Development, China Business Development and Global
Procurement.
Mr. Kessler was appointed President, Chief Executive Officer and Board Member of Perrigo
Company plc, effective October 8, 2018. Before joining Perrigo, Mr. Kessler served as the
Chairman of the Board of Directors, President and Chief Executive Officer of Lorillard, Inc. from
2010 to 2015. He served as Vice Chair of Altria, Inc. in 2009 and President and CEO of UST,
Inc. from 2000 to 2009, a wholly owned subsidiary. Previous to his time at UST, MTT
r. Kessler had
over 18 years of consumer-packaged goods experience with companies including Vlasic Foods
International, Campbell Soup and The Clorox Company. In addition to his board service at
Lorillard, Mr. Kessler previously served on the board of directors of Reynolds-American, Inc.
from 2015 to 2017. Mr. Kessler has served as voluntary President of the United States
Equestrian Federation from 2015 to January 2021.
Mr. Kingma was named Executive Vice President, General Counsel and Secretary in May 2006.
He served as Vice President, General Counsel and Secretary from August 2003 to May 2006.
Dr. Quinn was named Executive Vice President in July 2016 and has served as Chief Medical
Officer since November 2015. Prior to that she served as Vice President and Head of Global
Patient Safety from January 2014 until November 2015. Dr. Quinn was Vice President and
Head of Global Pharmacovigilance and Risk Management for Elan from April 2009 until
December 2013 when the Company acquired Elan.
Mr. Silcock was named Executive Vice President and Chief Financial Officer in March 2019.
Prior to joining Perrigo, Mr. Silcock served as Chief Financial Officer at INW Holdings from 2018
to 2019 and as Executive Vice President and Chief Financial Officer of CTI Foods from 2016 to
2018. In March 2019, CTI Foods filed a voluntary petition under Chapter 11 of the U.S.
Bankruptcy Code in U.S. Bankruptcy Court in Delaware. From 2013 until the company’s sale in
2016, Mr. Silcock was Executive Vice President and Chief Financial Officer of Diamond Foods,
Inc. and previously held Chief Financial Officer roles at UST, Inc., Swift & Co. and Cott
Corporation. He also served on the board of Pinnacle Foods, Inc. from 2008 until the company
was sold in 2018. His early career was highlighted by an 18-year tenure in positions of
increasing responsibility at Campbell Soup Company. Mr. Silcock is a Fellow of the Chartered
Institute of Management Accountants (UK).

Raymond P. Silcock

Todd W. Kingma

Grainne Quinn

Robert Willis

Mr. Willis was named Executive Vice President and Chief Human Resources Officer in March
2019 after serving as Vice President of Human Resources Global Businesses for nearly six
years. Prior to joining Perrigo, Mr. Willis gained more than 20 years of experience in Human
Resources leadership through roles with Fawaz Alhokair Group in the Middle East, GE Capital
in the UK and Ireland, DoubleClick in North America and internationally, and Norkom
Technologies in Europe and North America. He also was a Partner and Founding Member of
the Black & White Group.

Age
60

Perrigo Company plc - Additional Item
Executive Offiff cers

PART II.

ITEM 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Prior to June 6, 2013, our common equity traded on the Nasdaq Global Select Market under the symbol
PRGO. Since June 6, 2013, our common equity has traded on the New York Stock Exchange under the symbol
PRGO.

In association with the acquisition of Agis Industries (1983) Ltd., our common equity had been trading on

the Tel Aviv Stock Exchange (“TASE”) since March 16, 2005 under the same symbol. As a result of the RX
business divestiture, we initiated steps to voluntarily delist our ordinary shares from trading on the TASE on
November 22, 2021. The delisting of our ordinary shares took effect on February 23, 2022.

As of February 25, 2022, there were 133,784,716 record holders of our ordinary shares.

The graph below shows a comparison of our cumulative total return with the cumulative total returns for the
S&P 500 Index and the S&P Pharmaceuticals Index. The graph assumes an investment of $100 at the beginning of
the period and the reinvestment of any dividends. Information in the graph is presented for the years ended
December 31, 2015 through December 31, 2021.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG PERRIGO COMPANY PLC, THE S&P 500 INDEX, AND THE S&P PHARMACEUTICALS INDEX

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Perrigo Company, the S&P 500 Index
and the S&P Pharmaceuticals Index

$250

$200

$150

$100

$50

12/16

12/17

12/18

12/19

12/20

12/21

Perrigo Company

S&P 500

S&P Pharmaceuticals

$100 invested on December 31, 2016 - in stock or index - including reinvestment of dividends. Indexes calculated on month-end basis.

In October 2015, the Board of Directors approved a three-year share repurchase plan of up to $2.0 billion

((the "2015 Authorization"). Following the expiration of our 2015 share repurchase plan authorization in October
22018, our Board of Directors authorized up to $1.0 billion of share repurchases with no expiration date, subject to
tthe Board of Directors’ approval of the pricing parameters and amount that may be repurchased under each specific
sshare repurchase program (the "2018 Authorization"). We did not repurchase any shares during the year ended

Perrigo Company plc - Item 5

December 31, 2021 or December 31, 2019. During the year ended December 31, 2020, we repurchased 3.4 million
ordinary shares at an average purchase price of $48.28 per share for a total of $164.2 million under the 2018
Authorization. As of December 31, 2021 the approximate value of shares available for purchase under the 2018
Authorization was $835.8 million.

ITEM 6.

[RESERVED]

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis ("MD&A") is intended to provide readers with an

understanding of our financial condition, results of operations, and cash flows by focusing on changes in certain key
measures from year to year. This MD&A is provided as a supplement to, and should be read in conjunction with, our
Consolidated Financial Statements and accompanying Notes found in Item 8 of this report. See also "Cautionary
Note Regarding Forward-Looking Statements."

EXECUTIVE OVERVIEW

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.

Our vision is to make lives better by bringing Quality, Affordable Self-Care Products that consumers trust

We endeavor to empower consumers’ self-care decisions, utilizing the Company’s core competencies to

fully take advantage of the massive global trend towards self-care. We define self-care as not just treating disease
or helping individuals feel better after taking a product, but also maintaining and enhancing their overall health and
wellness. Consistent with our vision, in 2019 Perrigo’s management and board of directors launched a three-year
strategy to transform the Company into a consumer self-care leader. We completed our transformation to a
consumer self-care company in 2021 by reconfiguring the portfolio through the divestiture of our RX business,
announcement of the acquisition of HRA Pharma, and removal of significant uncertainty through settlement of a tax
exposure. In addition, we continue to invest in growth initiatives to drive future consistent and sustainable results in
line with consumer-packaged goods peers.

Our fiscal year begins on January 1 and ends on December 31 of each year. We end our quarterly

accounting periods on the Saturday closest to the end of the calendar quarter, with the fourth quarter ending on
December 31 of each year.

Our Segments

Our reporting and operating segments are as follows:

•

Our segments reflect the way in which our management makes operating decisions, allocates resources

and manages the growth and profitability of the Company.

Perrigo Company plc - Item 7
Executive Overview

For information on each segment, our business environment, and competitive landscape, refer to Item 1.
Business. For results by segment and geographic locations see below "Segment Results" and Item 8. Note 2 and
Note 21.

Strategy

Our objective is to grow our business by responsibly bringing our self-care vision to life. We aim to

accomplish this by leveraging our global infrastructure to expand our product offerings, thereby providing new
innovative products and product line extensions to existing consumers and servicing new consumers through entry
into adjacent product categories, new geographies and new channels of distribution. Critical to this strategy is
investing in and continually improving all aspects of our five strategic pillars which we call the Perrigo Advantage:

•
•
•
•
•

High quality;
Superior customer service;
Leading innovation;
Best cost; and
Empowered people,

while remaining true to our three core values, Integrity - we do what is right; Respect - we demonstrate the value we
hold for one another; and Responsibility - we hold ourselves accountable for our actions. While delivering on our
strategy, we remain committed to our corporate responsibility and sustainability programs, which include
environmental and social initiatives, as summarized in Item 1. Business - Corporate Social Responsibility.

We utilize shared services and Research and Development ("R&D") centers of excellence in order to help

ensure consistency in our processes around the world, and to maintain focus on our five strategic pillars.

We continually reinvest in our R&D pipeline and work with partners as necessary to strive to be first-to-

market with new products. Our organic growth has been driven by successful new product launches across all our
segments and expansion in new channels like e-commerce. We expect to continue to grow inorganically through
expansion into adjacent products, product categories, and channels, as well as potentially through entry into new
geographic markets. We evaluate potential acquisition targets using an internally developed 12-point scale that is
weighted towards accretive revenue growth which is highly correlated with increases in shareholder value.

Competitive Advantage

We are a fast-moving consumer goods company with the supply chain breadth necessary to support
customers in the markets we serve. These durable business model competencies align with our five strategic pillars
and we believe provide us a competitive advantage in the marketplace. We fully integrate quality in our operational
systems across all products. Our ability to manage our supply chain complexity across multiple dosage forms,
formulations, and stock-keeping units, as well as acquisitions, integrations, and hundreds of global partners
provides value to our customers. Product development capacity and life cycle management are at the core of our
operational investments. Globally we have 20 manufacturing plants that are all in good regulatory compliance
standing and have systems and structures in place to guide our continued success. Our leadership team is fully
engaged in aligning all our metrics and objectives around sustainable compliance with industry associations and
regulatory agencies.

Among other things, we believe the following give us a competitive advantage and provide value to our

customers:

Leadership in first-to-market product development and product life cycle management;
Turn-key regulatory and promotional capabilities;

•
•
• Management of supply chain complexity and utilizing economies of scale;
• Quality and cost effectiveness throughout the supply chain creating a sustainable, low-cost network;
•
•
•

Deep understanding of consumer needs and customer strategies;
Industry leading e-commerce support; and
Expansive pan-European commercial infrastructure, brand-building capabilities, and a diverse product
portfolio.

Perrigo Company plc - Item 7
Executive Overview

Recent Highlights

Year Ended December 31, 2021

•

Effective October 5, 2021, Jim Dillard was named Executive Vice President ("EVP") and President of our
CSCA segment. Mr. Dillard's supply chain, manufacturing, R&D, innovation, and regulatory experience,
along with his proven leadership skills, make him uniquely qualified to lead this segment. Before this role,
Mr. Dillard served as Perrigo's EVP and Chief Scientific Officer.

• On September 8, 2021, we announced a definitive agreement to acquire the outstanding equity interests of
HRA Pharma for approximately €1.8 billion, or approximately $2.1 billion at the time. The proposed final
transaction is expected to close in the first half of 2022, subject to the satisfaction of customary closing
conditions, including regulatory approvals. See below under “HRA Pharma Acquisition Agreement” for
further details.

• On July 6, 2021, we completed the sale of the RX business for aggregate consideration of $1.55 billion,
subject to customary adjustments for cash, debt, working capital and certain transaction expenses. See
below under “RX Business Divestiture" for further details.

• On March 1, 2021, CEO & President Murray S. Kessler signed a three-year contract extension until October
8, 2024 to guide Perrigo in successfully executing our transformation to a consumer-focused, self-care
company.

Year Ended December 31, 2020

•

During the year ended December 31, 2020, we completed strategic acquisitions and a divestiture that
advanced our self-care transformation. We acquired the oral care assets of High Ridge Brands ("Dr.
Fresh"), three Eastern European OTC dermatological brands from Sanofi, entered a strategic investment in
and long-term supply agreement with Kazmira LLC, and divested our U.K.- based Rosemont
Pharmaceuticals business. For additional details on these and other asset acquisitions and the divestiture
refer to the "Recent Trends and Developments" discussion in the CSCA and CSCI sections below.

During the year ended December 31, 2020, we repurchased $164.2 million worth of shares at an average
purchase price of $48.28 as part of our authorized share repurchase plan.

Effective December 15, 2020, our board of directors appointed Orlando D. Ashford to serve as a director of
the Company and a member of its Remuneration Committee.

• On October 27, 2020, we announced that we will be establishing a new North American headquarters in
Grand Rapids, Michigan. We signed an agreement to lease space located in Michigan State University's
Grand Rapids Innovation Park and expect the building to be ready for occupancy in mid-2022. This new
location will help us support cross-functional collaboration and position us to routinely interact with a
statewide education and research network within the Grand Rapids Medical Mile. This expansion is
consistent with our self-care transformation and will advance our self-care vision.

•

Effective July 29, 2020, our board of directors appointed Katherine C. Doyle to serve as a director of the
Company and a member of its Audit Committee.

• On June 19, 2020, we, through our subsidiary, issued $750.0 million in aggregate principal amount of

3.150% Senior Notes due 2030 (the "2020 Notes") and received net proceeds of $737.1 million after fees
and market discount. On July 6, 2020, we used a portion of the proceeds to fund the redemption of
$280.4 million of our 3.500% Senior Notes due March 15, 2021 and $309.6 million of our 3.500% Senior
Notes due December 15, 2021.

Perrigo Company plc - Item 7
Consolidated

RESULTS OF OPERATIONS

CONSOLIDATED

Consolidated Financial Results

(in millions, except
percentages)
Net sales
Gross profit
Gross profit %
Operating income
Operating income %

December 31,
2021
4,138.7
1,416.2

$
$

Year Ended
December 31,
2020
4,088.2
1,494.9

$
$

December 31,
2019
3,869.9
1,433.7

$
$

34.2 %

36.6 %

37.0 %

410.4

265.2

174.7

9.9 %

6.5 %

4.5 %

Total Net Sales by Segment for the
Year Ended December 31, 2021

Total Net Sales by Geography for the
Year Ended December 31, 2021*

CSCA
65%

U.S.
62%

Rest of World
4%

Europe
34%

CSCI
35%

Total net sales by geography is derived from the location of the entity that sells to a third party.

Year Ended December 31, 2021

vs. December 31, 2020

Net sales increased $50.5 million, or 1%, due to:

•

$78.4 million increase due primarily to:

•

$60.9 million increase from favorable foreign currency translation; and

$46.2 million increase from our acquisitions of the three Eastern European Brands in October 2020
and Dr. Fresh in April 2020; partially offset by

$28.7 million decrease due to our now-divested Rosemont pharmaceuticals business previously
included in our CSCI segment.

•

$27.9 million, or 0.7%, net decrease in the base business due primarily to a decline of $68.3 million in sales of
cough and cold products due to the low incidence of related illness during the first half of the year. Additional
decreases were due primarily to a decrease in demand of certain products due primarily to COVID-19
restrictions, inventory reductions at our retail customers in the U.S. compared to the prior year, and
$38.4 million of discontinued products. These decreases were partially offset by the incremental impact of
$130.0 million in sales of new products, recognition of contract manufacturing sales to the now-divested RX
business, and positive pricing.

Operating income increased $145.2 million, or 55%, due to:

•

$78.7 million decrease in gross profit due primarily to unfavorable plant overhead absorption due to lower
production volumes resulting from the weak cough cold season in the first half of the year, and by higher input
and freight costs. Gross profit as a percentage of net sales decreased 240 basis points due to these same
factors, as well as unfavorable product mix.

Perrigo Company plc - Item 7
Consolidated

•

$223.9 million decrease in operating expenses due primarily to:

•

$226.5 million decrease in other operating expenses due primarily to:

•

$417.6 million award received for the claim arising from the Omega Acquisition, as described
in Item 8. Note 19; partially offset by

$173.1 million of impairment charges primarily on goodwill and held for sale assets related to
the Latin American businesses and goodwill related to our Oral Care International business;

$13.7 million increase in restructuring expenses primarily associated with actions taken to
streamline the organization; and

$4.0 million increase for the absence of an insurance reimbursement received in the prior
year period.

•

$2.6 million increase in selling, distribution, R&D, and administration expenses due primarily to:

•

$7.8 million increase in distribution expenses due primarily to increased warehouse costs;
and

$3.5 million increase in administration expenses due primarily to a reduction in an insurance
recovery receivable related to litigation contingencies, and an increase in legal and
professional fees, partially offset by our Project Momentum cost savings initiative and
transitional service agreement ("TSA") income from the acquirer of our former RX business;
partially offset by

$9.1 million decrease in selling, advertising and promotion expenses due primarily to
decreased spend in our OTC business within CSCA and negative consumption trends in the
cough and cold and parasite products within CSCI.

Year Ended December 31, 2020 vs. December 31, 2019

Net sales increased $218.3 million, or 6%, due to:

•

$299.4 million, or 8%, net increase due primarily to an increase in the CSCA segment of $252.1 million and
CSCI segment of $47.4 million.

•

CSCA growth of $252.1 million included $168.2 million from the acquisitions of Ranir and Dr. Fresh for
sales in periods of 2020 with no comparable sales in 2019, and net sales growth of $83.9 million
driven primarily by certain OTC product categories. OTC growth was due primarily to favorable
consumer conversion to products in our Digestive health category, the increase of consumer
COVID-19 related demand experienced in the first half of 2020 in the Pain and sleep aids category,
and the incremental impact of new product sales, all of which benefited from strong e-commerce
performance. These were partially offset by a $38.6 million reduction in sales from the weak start to
the cough cold season in late 2020, and normal pricing pressure.

In our CSCI segment, net sales increased $47.4 million due primarily to the Ranir, Dr. Fresh and
Eastern European dermatology brands acquisitions contributing $45.3 million in sales for periods of
2020 with no comparable sales in 2019, net positive pricing, the incremental impact of new product
sales, and an increase in demand for certain products in our Pain and sleep-aids and Vitamins,
minerals and supplements ("VMS") categories due to pandemic-related factors. These increases
were partially offset by a decrease in sales of certain products in our Skincare and personal hygiene
and Healthy lifestyle categories due to pandemic-related factors, a decrease in sales of $24.1 million
from the weak start to the cough cold season in late 2020, and discontinued products of $10.0 million.

•

$81.2 million decrease due primarily to:

•

$84.0 million decrease due to our divested animal health business previously included in our CSCA
segment, and our divested Rosemont pharmaceuticals business and Canoderm prescription product,
both previously included in our CSCI segment; and

$6.4 million decrease due to $10.5 million unfavorable foreign currency translation in the Mexican
Peso, net of a $4.1 million increase from favorable foreign currency translation primarily related to the
Euro; partially offset by

Perrigo Company plc - Item 7
Consolidated

•

$9.2 million increase due to the absence of the Ranitidine retail market withdrawal included in the
prior year.

Operating income increased $90.5 million, or 52%, due to:

•

$61.2 million increase in gross profit due primarily to increased net sales as described above, which was
partially offset by infant nutrition operational inefficiencies, increased labor and overhead costs associated
with the COVID-19 pandemic, and an increase in commodity costs for a certain OTC brand. Gross profit as a
percentage of net sales decreased 40 basis points due primarily to these same factors, unfavorable product
mix mainly due to the Oral care acquisitions, and normal pricing pressures, partially offset by the absence of
the Ranitidine retail market withdrawal included in 2020.

•

$29.3 million decrease in operating expenses due primarily to:

•

$22.8 million decrease in restructuring expenses related primarily to the prior year reorganization of
our sales force in France and reorganization of our executive management team;

The absence of $13.8 million of impairment charges primarily for goodwill and certain definite-lived
intangible assets in our CSCI segments taken in the prior year;

The absence of a $7.1 million asset abandonment charge related to our waste water treatment plant
in Vermont taken in the prior year; partially offset by

$7.0 million increase in selling and administration expenses due primarily to the inclusion of expenses
from our acquisitions of Ranir and Dr. Fresh, an increase in insurance expense, an increase in
employee incentive compensation expense, and incremental COVID-19 related operating costs,
including employee bonuses and costs related to measures implemented to keep employees safe,
partially offset by the absence of expenses from the divested animal health and Rosemont
pharmaceutical businesses, the absence of acquisition and integration-related charges related to the
acquisition of Ranir, and savings from our current Project Momentum cost savings initiative.

Recent Trends and Developments

Operating Trends

The self-care markets in which we compete have been highly dynamic over the past couple of years. These

markets were negatively impacted by the COVID-19 pandemic related factors including, a dramatic reduction in
cough, cold, and flu illnesses in the first half of the year, higher input costs, and more recently supply chain
disruptions. Starting in the second quarter of 2021, we saw a sharp rebound in U.S. and European consumer
takeaway in almost all categories we operate as these countries began to remove restrictions and reopen and the
incidences of cough, cold and flu related illnesses began to increase. Despite increased consumer purchases, net
sales for the second quarter of 2021 significantly lagged this rebound in consumer takeaway, which we primarily
attribute to year-over-year reductions in customer inventories. Consumer take-away remained strong in the third
quarter and we saw a surge in orders from customers. However, due to supply chain disruptions, including the
significant shortage of truck drivers in the U.S. and record delays at global shipping ports, our third quarter net sales
were negatively impacted because of the inability to ship product. These supply chain disruptions led to a large
increase in unfulfilled customer orders. In the fourth quarter we took a series of actions to improve the situation,
including reconfiguring our distribution system for short term shipments, outsourcing highly complex product lines to a
third party logistic provider, adding regional carriers for challenged shipping lanes, hiring additional distribution center
personnel, and increasing the purchase cycle as it relates to the manufacturing process. Our actions improved our
ability to ship and meet increasing market demands, albeit at a higher cost.

Higher input costs were somewhat offset by price increases initiated in the second quarter of 2021. We
continue to take steps in order to mitigate the challenges of the current global operating environment, including further
pricing actions and reducing discretionary costs. While we believe these trends will continue in the near-term, we are
expecting an improvement throughout 2022. However, this will depend on the trajectory of the COVID-19 pandemic
and worldwide supply chain challenges, as discussed below, and it is possible some of these factors may increase or
decrease more than others, and could also negatively affect consumer purchases in the jurisdictions in which we
operate.

Perrigo Company plc - Item 7
Consolidated

Impact of COVID-19 Pandemic

We, along with many other global consumer companies, have been and continue to be impacted by the

COVID-19 global pandemic and the responses by government entities to combat the virus. We continue to operate in
all our jurisdictions and comply with the rules and guidelines set in each jurisdiction. We continue to closely monitor
the impact of COVID-19 on all aspects of our business in all our global locations and have continued our COVID-19
safety protocols for employees. To date, these arrangements have not materially affected our ability to maintain our
business operations, including the operation of financial reporting systems, internal control over financial reporting,
and disclosure controls and procedures. However, the pandemic and actions to slow its spread have impacted our
day-to-day operations, including through increased absenteeism and increased costs of raw materials and finished
goods, although most of our facilities have continued to produce at high levels despite these challenges. Moreover,
our global operations have been negatively impacted by the worldwide supply chain challenges, which have increased
costs and delays.

As many jurisdictions have relaxed COVID-19 related restrictions, a number of those jurisdictions have

experienced increases in COVID-19 cases, including more contagious variants of the virus and in some cases have
begun implementing new or renewed restrictions. In addition, as conditions worldwide continue to evolve, uncertainty
remains about the timing of widespread availability and acceptance of vaccines and the efficacy of current vaccines
against evolving strains or variants of the virus. As such, if the pandemic continues or intensifies, it is possible that
these or other challenges may begin having a larger impact on our operations. Additionally, future volatility in financial
and other capital markets may continue to adversely impact our stock price and our ability to access capital markets.
The situation surrounding COVID-19 remains fluid, and we continue to actively manage our response and assess
potential impacts to our financial condition, supply chains and other operations, employees, results of operations,
consumer demand for our products, and our ability to access capital. The magnitude of any such adverse impact
cannot currently be determined due to a number of uncertainties surrounding COVID-19.

As mentioned above, during the first half of 2021, our segments experienced a sharp decline in net sales for
cough and cold products in our Upper respiratory and Pain and sleep aid categories, due to the very low incidence of
cough, cold and flu related illness during that time. We believe the low incidence of cough, cold and flu related illness
was due to social distancing measures and mask mandates put in place by many of the jurisdictions where we
compete to combat the spread of COVID-19. As many of these markets relaxed restrictions and reopened, consumer
behavior began to return to normal, and the incidences of cough, cold and flu related illnesses increased. The spread
of certain COVID-19 variants may have contributed to these higher incidences as their symptoms can be similar. This
resulted in rebounding consumer takeaway in the second quarter, including for cough, cold and flu products, although
factory shipments lagged consumption. During the third quarter of 2021, consumer takeaway strengthened in both the
U.S. and Europe for cough, cold and flu products. However, we also experienced supply chain disruptions, including a
significant shortage of truck drivers in the U.S. and record delays at global shipping ports, which led to higher
unfulfilled customer orders compared to the prior year. In the fourth quarter of 2021, we took a series of actions to
improve the situation, including reconfiguring our distribution system for short term shipments, outsourcing highly
complex product lines to a third party logistic provider, adding regional carriers for challenged shipping lanes, hiring
additional distribution center personnel, and increasing the purchase cycle as it relates to the manufacturing process.
Moreover, we continue to incur additional operating costs related to COVID-19, due primarily to increased material
costs and increased costs driven by pandemic-related global supply chain disruptions as well as costs related to our
ongoing employee safety protocols.

While the current trend of increased consumer takeaway suggests that the volatility in consumer behavior

during the pandemic is improving, the emergence and spread of new disease variants or additional outbreaks in these
or other jurisdictions could result in new restrictions or cause these trends to change, slow or reverse. Moving forward,
it remains uncertain if the consumer and customer behavior surrounding COVID-19 that has impacted net sales will
continue to normalize or change and if the increase in operating costs and supply chain disruptions will continue or
change. Any change in these trends will likely depend on the duration and severity of the COVID-19 pandemic,
including the emergence of new strains of the virus that are more contagious or harmful, each individual country's
evolving response to the pandemic, as well as the availability and efficacy of the COVID-19 vaccines and
therapeutics. Given our financial strength, we expect to continue to maintain sufficient liquidity as we continue to
operate through the pandemic.

Perrigo Company plc - Item 7
Consolidated

RX Business Divestiture

On March 1, 2021, we announced a definitive agreement to sell our RX business to Altaris. On July 6, 2021,

we completed the sale of the RX business for aggregate consideration of $1.55 billion, subject to customary
adjustments for cash, debt, working capital and certain transaction expenses. The consideration included
approximately $53.3 million of reimbursements, which Altaris will be required to deliver in cash to Perrigo pursuant to
the terms of the Agreement. The sale resulted in a pre-tax gain, net of professional fees, of $47.5 million recorded in
Other (income) expense, net on the Statement of Operations for discontinued operations. The gain included a $159.3
million increase from the write-off of foreign currency translation adjustment from Accumulated other comprehensive
income.

The sale of the RX business helped establish Perrigo as a pure-play consumer self-care company, and was

an essential milestone in our transformation plan. The financial results of the RX business, which were previously
reported as part of our RX segment, have been classified as discontinued operations in the Consolidated Statements
of Operations, as there were no substantial assets or operations left in this segment. Unless otherwise noted,
amounts and disclosures throughout this Management’s Discussion and Analysis relate to our continuing operations.
Refer to Item 8. Note 8 for additional information regarding discontinued operations.

HRA Pharma Acquisition Agreement

On September 8, 2021, we and the Purchaser entered into a Put Option Agreement to acquire certain holding

companies holding all of the outstanding equity interests of HRA Pharma from funds affiliated with the Sellers.
Pursuant to the Put Option Agreement, following completion of the works council consultation process required under
French law, the selling shareholders exercised their put option right under the Put Option Agreement and, on October
20, 2021, the Company, the Purchaser and the Sellers entered into the Purchase Agreement. Pursuant to the terms
and subject to the conditions set forth in the Purchase Agreement, the Purchaser has agreed to acquire certain
holding companies holding all of the outstanding equity interests of HRA Pharma from the Sellers for cash. The
transaction values HRA Pharma at approximately €1.8 billion, or approximately $2.1 billion based on exchange rates
as of the date of the Put Option Agreement, on an enterprise value basis and using a lockbox mechanism set forth in
the Purchase Agreement. In September 2021, we entered into two non-designated currency option contracts to hedge
the foreign currency exposure of the euro-denominated purchase price for HRA Pharma (refer to Item 8. Note 11).

The proposed final transaction is expected to close in the first half of 2022, subject to the satisfaction of

), and brings expertise in prescription-to-OTC switches. This acquisition is expected to strengthen our

Irish Revenue Notice of Amended Assessment

On October 30, 2018, we received an audit findings letter from the Irish Office of the Revenue Commissioners

(“Irish Revenue”) for the tax years ended December 31, 2012 and December 31, 2013. The audit findings letter
related to the tax treatment of the 2013 sale of the Tysabri® intellectual property and related assets to Biogen Idec by
Elan Pharma. The consideration paid by Biogen Idec to Elan Pharma took the form of an upfront payment and future
contingent royalty payments. Elan Pharma recognized such receipts as trading income in its tax returns filed with Irish
Revenue, consistent with Elan Pharma's historical practice relating to its active management of intellectual property
rights.

In its audit findings letter, Irish Revenue proposed to charge Elan Pharma tax on the net chargeable gain

realized by Elan Pharma on the Tysabri® transaction in 2013 at a rate of 33%, rather than the 12.5% tax rate applied
to trading income. On November 29, 2018, Irish Revenue issued a Notice of Amended Assessment (“NoA”) for the tax
year ended December 31, 2013, in the amount of €1,643 million, and claiming tax payable in the amount of
€1,636 million, not including any interest or applicable penalties.

Accordingly, we filed an appeal of the NoA on December 27, 2018 with the Irish Tax Appeals Commission

("TAC"), which is the statutory body charged with considering whether the NoA was properly founded as a matter of
Irish tax law. Separately, we were also granted leave by the Irish High Court on February 25, 2019 to seek judicial
review of the issuance of the NoA by Irish Revenue.

Perrigo Company plc - Item 7
Consolidated

On November 4, 2020, the High Court ruled that the Irish Revenue's decision to issue the NoA did not violate
Elan Pharma's constitutional rights and legitimate expectations as a taxpayer. The Irish High Court did not rule on the
merits of the NoA under Irish tax law.

We strongly believe that Elan Pharma’s tax position was correct and ultimately would have been confirmed

through judicial process. However, in light of the risks and delays inherent in any litigation, on April 26, 2021, Perrigo,
through its tax adviser, made a without prejudice written offer of settlement to Irish Revenue detailing a possible
framework to resolve the dispute, which applied an alternative basis of taxation than the respective positions taken by
Irish Revenue in the NoA and by Elan Pharma in its tax returns. On May 31, 2021, Irish Revenue issued a formal
response to Perrigo's tax adviser indicating that the written settlement offer would not be accepted as presented.
However, Irish Revenue did indicate that they would remain available for further discussion without prejudice and the
Company's representatives continued to meet and correspond with Irish Revenue throughout the summer.

On July 9, 2021, Irish Revenue issued a letter acknowledging that not all relevant facts were known to them
when they issued the NoA in 2018 and, accordingly, they would not object if the Appeal Commissioner were to make
certain adjustments reducing Irish Revenue’s original assessment. Such adjustments would reflect contingent royalty
payments that were never received by Elan Pharma, deductions for acquisition and development costs incurred, and
allowable losses and reliefs, and would, if allowed, result in an aggregate reduction of more than €660.0 million from
the income taxes claimed in the NoA as issued.

On September 29, 2021, Elan Pharma reached an agreement with Irish Revenue providing for full and final

settlement of the NoA. Elan Pharma and Irish Revenue agreed to a full and final settlement of the NoA on the
following terms: (i) on a 'without prejudice basis' and, for purposes of the settlement, the alternative basis of taxation
was applied, (ii) Irish Revenue to take no further action in relation to the NoA or any Tysabri related income or
transactions, (iii) no interest or penalties applied, (iv) a total tax of €297.0 million charged as full and final settlement of
all liabilities arising from the sale of the Tysabri patents for the fiscal years 2013 to 2021, and (v) after Irish Revenue
credited taxes already paid and certain unused R&D credits against the €297.0 million charged settlement amount,
the total cash payment of €266.1 million ($307.5 million) was made on October 5, 2021. We recorded the payment as
a component of income tax expense on the Consolidated Statements of Operations (refer to Item 8. Note 17).

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

As described in more detail in Item 8. Note 17, Perrigo Company, our U.S. subsidiary ("Perrigo U.S."), is

engaged in a series of tax disputes in the U.S. relating primarily to transfer pricing adjustments including income in
connection with the purchase, distribution, and sale of store-brand OTC pharmaceutical products in the United States,
including the heartburn medication omeprazole. The trial of the refund case relating to the dispute of the amount of
taxable income on Omeprazole sales was held during the period May 25, 2021 to June 7, 2021 in the United States
District Court for the Western District of Michigan. Post-trial briefings were completed on September 24, 2021 and the
case is now fully submitted for the court's decision.

On May 7, 2020, we received final Notices of Proposed Adjustment ("NOPA") from the IRS regarding the

deductibility of interest related to the IRS audit of Perrigo U.S. for the years ended June 28, 2014 and June 27, 2015.
The NOPAPP capped the interest rate on the debts for U.S. federal tax purposes at 130.0% of the Applicable Federal
Rate (a blended rate reduction of 4.0% per annum) on the stated ground that the loans were not negotiated on an
arms’-length basis. On May 3, 2021, the IRS notified us that it will no longer pursue the 130.0% of AFR position as
indicated in the NOPAPP due to a change in IRS policy. On January 20, 2022, the IRS responded to our Protest, which
we filed on February 26, 2021, with its Rebuttal, and revised its position on this interest rate issue by reasserting that
implicit parental support considerations are necessary to determine the arm's length interest rate and proposed
revised interest rates that are higher than the interest rates proposed under its 130.0% of AFR assertion. The blended
interest rate proposed by the IRS Rebuttal is 4.36%, an increase from the blended interest rate in the RAR of 2.57%,
and lower than the stated blended interest rate of the loans of 6.8%. We will pursue all available administrative and
judicial remedies necessary to defend the deductibility of the interest expense on this indebtedness.

In addition, the 30-day letter for the 2013-2015 tax years expanded on a NOPA issued on December 11, 2019

and proposed to disallow adjustments to gross sales income on the sale of prescription products to wholesalers for
accrued wholesale customer pipeline chargebacks where the prescription products were not re-sold by such
wholesalers to covered retailers by the end of the tax year for the 2013-2015 tax years. The IRS' NOPAPP asserts that
the reduction of gross sales income of such chargebacks is an impermissible method of accounting. The IRS
proposed a change in accounting method that would defer the reduction in gross sales income until the year the
prescription products were re-sold to covered retailers. The NOPAPP proposes an increase in sales revenue of
approximately $99.5 million for the 2013-2015 tax years. We filed a protest on February 26, 2021 to request IRS

Perrigo Company plc - Item 7
Consolidated

Appeals consideration. On January 20, 2022, the IRS responded to our Protest with its Rebuttal and reiterated its
position in the NOPA that the accrued chargebacks are not currently deductible in the tax year accrued because all
events have not occurred to establish the fact of the liability in the year deducted. If the IRS were to prevail in its
proposed adjustment, we estimate a payment of approximately $18.0 million, excluding interest and penalties for the
2013-2015 tax years. In addition, we expect the IRS to seek similar adjustments for future years. If those future
adjustments were to be sustained, based on preliminary calculations and subject to further analysis, we estimate this
would result in a payment not to exceed $7.0 million through tax year ended December 31, 2021, excluding interest
and penalties. We have fully reserved for this issue. We strongly disagree with the IRS’s proposed adjustment and will
pursue all available administrative and judicial remedies necessary.

On December 2, 2021, the IRS commenced an audit of our federal income tax returns for the tax years ended

December 31, 2015, through December 31, 2019.

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

On April 26, 2019, we received a revised NOPAPP from the IRS regarding transfer pricing positions related to the

IRS audit of Athena for the years ended December 31, 2011, December 31, 2012 and December 31, 2013. The
dispute involves the royalties payable to Athena for its early-stage intellectual property in several in-process products,
including the Multiple Sclerosis drug Tysabri. To avoid double taxation of Tysabri income in the U.S. and Ireland,
Athena made requests for Competent Authority Assistance with the IRS and Irish Revenue on April 21 and 23, 2020,
which were accepted. Supplemental requests for Competent Authority assistance to resolve a dispute with the IRS
over the deductibility of a litigation expense payment for the drug Zonegran were also accepted. An opening
conference with the IRS was held on May 6, 2021 with a follow-up conference held on December 3, 2021. An opening
conference with Irish Revenue was held on July 23, 2021 (refer to Item 8. Note 17). The respective Competent
Authorities will attempt to reach a resolution that avoids double taxation on both issues.

Israeli Notice of Assessment

On December 29, 2020, we received a Stage A assessment from the Israeli Tax Authority for the tax years

ended December 31, 2015 through December 31, 2017 in the amount of $63.8 million relating to attribution of
intangible income to Israel, income qualifying for a lower preferential rate of tax, exemption from capital gains tax, and
deduction of certain settlement payments. We timely filed our protest on March 11, 2021 to move the matter to Stage
B of the assessment process. Through negotiations with the ITA, we resolved the audit for the tax year ended June
27, 2015 through tax year ended December 31, 2019, by agreeing to add tax year ended December 31, 2018 and tax
year ended December 31, 2019 to the audit to reach an agreeable resolution to provide certainty for these additional
periods. The agreement with the ITATT required us to pay $19.0 million, after offset of refunds of $17.2 million, for the
five taxable years. In addition, we paid $12.5 million to resolve a tax liability indemnity for the tax year ended
December 31, 2017 relating to Perrigo API Ltd, which we disposed of in December 2017.

Refer to Item 1A. Risk Factors - Tax Related Risks and Item 8. Note 17 for additional information on tax

related matters.

Tribunal Ruling in Claim Arising from the Omega Acquisition

As previously disclosed, we were involved in arbitration in Belgium related to our claims of fraud in connection

with the Omega Acquisition. The Tribunal panel, as described in more detail under Claim Arising from the Omega
Acquisition in Item 8. Note 19, found fraud by the sellers of Omega in a ruling on August 27, 2021 and awarded
Perrigo approximately €355.0 million ($417.6 million at the time of cash receipt) including fees and costs. The panel
also ruled against the sellers and in favor of Perrigo on all the counterclaims. The sellers have paid all amounts owed
under the award, and the arbitral proceedings have now ended. The arbitration proceedings remain confidential as
required by the SPAPP and the rules of CEPANI. We recorded the cash receipt as a reduction to Operating Expenses on
the Consolidated Statements of Operations.

Securities Litigation Settlement

A settlement was reached in the case, In re Perrigo Company plc Securities Litigation

detail in Item 8. Note 19 under the header In the United States (cases related to Irish Tax events)
seeking approval of the class action settlement were filed on October 4, 2021. The Court issued a preliminary
approval order on October 29, 2021, which led to notices being sent to class members. The Court held a hearing on
February 16, 2022 regarding the settlement and issued the Final Approval Order and Judgment. As a result, the
settlement has been approved and the case has now ended. The settlement has been funded by insurance.

as described in more
. Motion papers

Perrigo Company plc - Item 7
Consolidated

Impairments

During the years ended December 31, 2021 and December 31, 2019, we identified impairment indicators for

various assets across our different segments, and therefore, we performed impairment testing. Below is a summary of
the impairment charges recorded by segment (in millions):

Year Ended

December 31, 2021
CSCI(2)

CSCA(1)

Total

Goodwill

Assets held-for-sale

IPR&D

6.1

10.0

16.1

156.1

—

0.9

156.1

0.9

162.2

10.9

173.1

(1) Relates to an impairment associated with our Latin American divestiture.

(2) Relates to our goodwill within our Oral Care International reporting unit and certain IPR&D.

Year Ended

December 31, 2019
CSCI(1)

CSCA

Total

Definite-lived intangible assets

IPR&D

— $

9.7

—

9.7

4.1

9.7

13.8

4.1

(1) Relates primarily to an intangible asset for certain pain relief products that we license from a third party.

CONSUMER SELF-CARE AMERICAS

Recent Trends and Developments

•

During the third quarter of 2021, supply chain disruptions, including a significant shortage of truck drivers in
the U.S. and record delays at global shipping ports, led to higher unfulfilled customer orders and higher input
costs compared to the prior year. In the fourth quarter of 2021, we took a series of actions to improve the
situation, including reconfiguring our distribution system for short term shipments, outsourcing highly complex
product lines to a third party logistic provider, adding regional carriers for challenged shipping lanes, hiring
additional distribution center personnel, and increasing the purchase cycle as it relates to the manufacturing
process. While we believe supply chain disruptions will continue in the near-term, we are expecting to
continue to see improvements throughout 2022.

During the first half of 2021, net sales of cough and cold products decreased as a result of the very low
incidence of cough and cold related illness, which we believe is attributed to social distancing and mask
mandates put in place to combat the spread of COVID-19. However, increased consumer takeaway at our
retail customers, starting in May 2021, suggested normalizing consumer purchasing routines could be
expected in the second half of 2021. In the third quarter, we experienced higher demand for cough, cold and
pain products due primarily to the higher incidences of cough and cold illness as society returned to in-person
activities. Consumer take away continued to remain strong during the fourth quarter and, as such, we expect
sales of cough, cold and pain products to continue to increase, depending on the trajectory of the COVID-19
pandemic moving forward. Refer to "Impact of COVID-19 Pandemic" above.

• On May 18, 2021, we announced a definitive agreement to sell our Latin American businesses to Advent

International. This transaction is part of our margin improvement program and our Project Momentum cost
savings initiative and is expected to close in the first half of 2022. We determined that the carrying value of
these businesses exceeded their fair value less cost to sell, resulting in an impairment charge of
$162.2 million allocated to goodwill and assets held for sale (refer to Item 8. Note 9).

Segment Financial Results

Year Ended December 31, 2021

vs. December 31, 2020

Perrigo Company plc - Item 7
CSCA

(in millions, except percentages)
Net sales

Gross profit

Gross profit %

Operating income

Operating income %

Year Ended

December 31,
2021

December 31,
2020

2,693.1

765.1

28.4 %

206.5

7.7 %

2,693.0

853.5

31.7 %

465.0

17.3 %

Net sales increased $0.1 million, or 0% due to:

•

Higher net sales in the Oral care, Skincare and personal hygiene, and Other categories offset decreases in
Healthy lifestyle, Pain and sleep-aids, and Upper respiratory categories. Favorable Mexican peso foreign
currency translation drove a 0.2%, or $4.9 million increase.

(in millions, except percentages)

Upper respiratory
Digestive health

Pain and sleep-aids
Nutrition
Oral care
Healthy lifestyle
Skincare and personal hygiene
Vitamins, minerals, and supplements

Other CSCA

Total CSCA

Sales in each category were driven primarily by:

Year Ended
December 31, 2021
$ Change

Sales

% Change

483.1

475.1

405.4

401.9

311.9

297.7

219.2

31.7

67.1

2,693.1

(22.7)

3.8

(29.1)

13.6

23.7

(54.7)

18.6

4.7

42.2

0.1

(4.5)%

0.8 %

(6.7)%

3.5 %

8.2 %

(15.5)%

9.3 %

17.4 %

169.5 %

—%

•

Upper respiratory: Net sales of $483.1 million decreased 4.5% due primarily to the historically weak 2020-
2021 cough and cold season and the recall of an allergy product in the third quarter of 2021. Increased pricing
and new products partially offset these declines;

Digestive health: Net sales of $475.1 million increased 0.8% due primarily to sales of unique 'national brand
better' products, new products and e-commerce. These drivers were mostly offset by competition for a proton
pump inhibitor and the re-launch of a national brand acid reducer, which gained market share from competing
store brand products;

Pain and sleep-aids: Net sales of $405.4 million decreased 6.7% due primarily to the historically weak 2020-
2021 cough and cold season, partially offset by higher sales of store brand diclofenac 1%;

Nutrition: Net sales of $401.9 million increased 3.5% driven by new products, including in the infant formula
contract manufacturing business, and continued growth in oral electrolytes. These drivers were partially offset
by lower sales in U.S. store brand infant formula due primarily to supply constraints earlier in the year;

• Oral care: Net sales of $311.9 million increased 8.2% due primarily to one quarter of inorganic growth

stemming from the April 2020 acquisition of Dr. Fresh and strong growth in the overall business during the first
half of 2021. These drivers were partially offset by delayed receipt of product manufactured outside the U.S.
in the second half, leading to unfulfilled customer orders;

•

Healthy lifestyle: Net sales of $297.7 million decreased 15.5% due primarily to the discontinuation of diabetes
products and lost distribution of certain smoking cessation products that annualized in the fourth quarter;

Perrigo Company plc - Item 7
CSCA

•

Skincare and personal hygiene: Net sales of $219.2 million increased 9.3% due primarily to higher sales in
the minoxidil franchise and the ScarAway® brand, partially offset by lower sales of creams for topical fungal
infections; and

VMS and Other: Net sales of $98.8 million increased 90.4% due primarily to contract manufacturing sales to
the divested RX business.

Operating income decreased $258.5 million, or 56%, due primarily to:

•

$88.4 million decrease in gross profit due primarily to unfavorable plant overhead absorption as a result of
lower OTC production volumes resulting from the weak cough cold season, higher freight and input costs, and
a product recall related to an allergy product. Gross profit as a percentage of net sales decreased
330 basis points due primarily to unfavorable plant overhead absorption and the higher freight and input
costs; and

•

$170.1 million increase in operating expenses due primarily to:

•

$173.7 million increase in other operating expenses due primarily to:

▪

$162.2 million of impairment charges on goodwill and held for sale assets related to the Latin
American businesses;

$4.0 million increase for the absence of an insurance reimbursement received in the prior
year period; and

$7.1 million increase in restructuring costs related primarily with actions taken to streamline
the organization and business integrations; partially offset by

•

$3.6 million decrease in distribution, R&D, selling, and administration expenses due to:

▪

$10.6 million decrease in administrative expenses due primarily to a decrease in legal and
professional fees; and

$4.5 million decrease in selling due primarily to a decrease in branded OTC business spend.;
partially offset by

$11.8 million increase in distribution costs related primarily to increased warehouse costs.

Year Ended December 31, 2020 vs. December 31, 2019

(in millions, except
percentages)
Net sales

Gross profit

Gross profit %

Operating income

Operating income %

Year Ended

December 31,
2020

December 31,
2019

2,693.0

853.5

31.7 %

465.0

17.3 %

2,487.7

794.2

31.9 %

406.7

16.3 %

Net sales increased $205.3 million, or 8%, due primarily to:

•

$252.1 million, or 10%, net increase due primarily to an increase of $178.2 million in our Oral care category
and from demand-driven growth in certain of our OTC product categories. CSCA continued to benefit from
robust e-commerce growth.

• Oral care net sales increased $168.2 million due to the acquisitions of Ranir and Dr. Fresh for sales in
periods of 2020 with no comparable sales for 2019. In periods with comparable sales in 2019 and
2020, net sales grew $10.0 million driven by the incremental impact of new product sales and growth
in the Plackers® brand. These increases were partially offset by declines in sales of travel-sized
products related to COVID-19 travel restrictions.

• OTC net sales increased $75.5 million due primarily to favorable consumer conversion to product

s in

our Digestive health category, the increase of consumer COVID-19 related demand experienced in
the first half of 2020 in the Pain and sleep aids category, and the incremental impact of new product

Perrigo Company plc - Item 7
CSCA

sales led by Prevacid®, Diclofenac sodium topical gel 1%, and Esomeprazole Mini. These increases
were partially offset by a decline of $38.6 million in sales of certain products in the Upper respiratory
and Pain and sleep aids categories, primarily in the fourth quarter of 2020, resulting from the weak
start to the cough cold season, and normal pricing pressure on certain products.

•

Nutrition net sales decreased $2.6 million due primarily to the decrease in infant formula product
sales resulting from the prior year pre-build of contract pack inventory, operational challenges that led
to a shortfall in achieving normal customer service levels, multi-year pricing contracts, and
$5.7 million in discontinued products. These decreases were partially offset by new product sales
from an infant formula launch at a major retailer in the prior year.

•

$46.8 million decrease due primarily to:

•

$43.7 million decrease due to our divested animal health business; and

$10.5 million decrease from unfavorable Mexican peso foreign currency translation; partially offset by

$7.4 million increase due to the absence of the Ranitidine retail market withdrawal impact included in
the prior year.

Operating income increased $58.3 million, or 14%, due primarily to:

•

$59.3 million increase in gross profit due primarily to increased net sales as described above, partially offset
by operating inefficiencies at one of our infant nutrition facilities as well as increased labor and overhead costs
associated with the COVID-19 pandemic. Gross profit as a percentage of net sales decreased 20 basis points
due primarily to the operating inefficiencies described above and pricing pressure on certain products,
partially offset by the absence of the Ranitidine retail market withdrawal included in the prior year, and
favorable product mix; further offset by

•

$1.0 million increase in operating expenses due primarily to:

•

$14.3 million increase in selling and administration expenses due primarily to the inclusion of
expenses from our acquisitions of Ranir and Dr. Fresh and an increase in promotional expenses on
branded products in advance of their pending market launches, partially offset by the absence of
expenses from the divested animal health business and savings from our current Project Momentum
cost savings initiative; partially offset by

The absence of a $7.1 million asset abandonment charge related to our waste water treatment plant
in Vermont taken in the prior year; and

$4.0 million legal settlement received in 2020.

CONSUMER SELF-CARE INTERNATIONAL

Recent Trends and Developments

•

During the first half of 2021, net sales of cough and cold products decreased as a result of the very low
incidence of cough, cold and flu related illness this year. We believe the very low incidence of cough, cold and
flu related illness was attributed to COVID-19 social distancing and mask requirements. During the second
half of 2021, we experienced higher demand for cough and cold, and pain products due primarily to the higher
incidences of cough, cold and flu illness as society returned to in-person activities. The spread of certain
COVID-19 variants may have contributed to these higher incidences as their symptoms can be similar.
Further, consumer take away remained strong during the second half of 2021 led by cough and cold, and pain
products and we expect further normalizing of consumer purchasing routines moving forward depending on
the trajectory of the COVID-19 pandemic. Refer to "Impact of COVID-19 Pandemic".

During the third quarter, a number of EU regulators requested recalls, some at the consumer level, due to the
detection of 2-chloroethanol (“2-CE”). 2-CE has been associated with the presence of ethylene oxide, a
constituent in pesticides, which is not permitted for use in food products under food regulations in the EU. Due
to the potential presence of ethylene oxide in certain of our VMS products, we initiated recalls. We have since
secured alternate sourcing of the raw material. During the year ended December 31, 2021, these recalls
resulted in a decrease in net sales of $2.6 million and a decrease in gross profit of $5.5 million, which
included obsolete inventory.

Segment Financial Results

Year Ended December 31, 2021

vs. December 31, 2020

Perrigo Company plc - Item 7
CSCI

(in millions, except
percentages)
Net sales

Gross profit

Gross profit %

Operating income

Operating income %

Year Ended

December 31,
2021

December 31,
2020

1,445.6

651.1

45.0 %

36.1

2.5 %

1,395.2

641.1

45.9 %

32.3

2.3 %

Net sales increased $50.4 million, or 4% due to:

•

Higher net sales in the Skincare and personal hygiene category offset decreases in Upper respiratory
category and Other. Favorable foreign currency translation drove a 4.0%, or $56.0 million increase.

(in millions, except percentages)

Skincare and personal hygiene

Upper respiratory
Vitamins, minerals, and supplements

Pain and sleep-aids
Healthy lifestyle
Oral care
Digestive health

Other CSCI

Total CSCI

Sales in each category were driven primarily by:

Year Ended
December 31, 2021
$ Change

Sales

% Change

394.3

226.2

217.4

201.8

179.3

95.8

38.4

92.4

1,445.6

42.5

(28.9)

16.4

11.4

13.9

(2.0)

11.9

(14.8)

50.4

12.1 %

(11.3)%

8.2 %

6.0 %

8.4 %

(2.0)%

44.9 %

(13.8)%

3.6 %

•

Skincare and personal hygiene: Net sales of $394.3 million increased 12.1% driven primarily by the October
30, 2020 acquisition of three Eastern European OTC Dermatology Brands, increased market share in the
ACO skincare franchise and new product launches in the Sebamed skincare portfolio. These drivers were
partially offset by a decline in the anti-parasite portfolio and lower sales in Australia;

Upper respiratory: Net sales of $226.2 million decreased 11.3% due primarily to the historically weak 2020-
2021 cough and cold season, partially offset by new products;

VMS: Net sales of $217.4 million increase of 8.2% due primarily to a strong performance of Granufink, herbal
medicines to keep bladder function healthy, and the launch of the Probify line of probiotics;

leep-aids: Net sales of $201.8 million increased 6.0% due to higher sales of U.K.store brand and

Pain & s
Tiger Balm were partially offset by declines in other pain products due primarily to the historically weak 2020-
2021 cough and cold season;

Healthy lifestyle: Net sales of $179.3 million increased 8.4% as growing demand for NiQuitin smoking
cessation products and higher net sales in Australia were partially offset by lower net sales in the XLS Medical
weight management franchise due primarily to lower category consumption;

• Oral care: Net sales of $95.8 million decreased 2.0% due primarily to delayed receipt of product

manufactured outside the E.U. in the second half of the year, leading to unfulfilled customer orders;

•

Digestive health att
sales in Europe partially offset by higher sales in Australia.

nd Other: Net sales of $130.8 million decreased 2.2% due primarily to lower distribution

Perrigo Company plc - Item 7
CSCI

Operating income increased $3.8 million, or 12%, due to:

•

$10.0 million increase in gross profit due primarily to greater operating efficiencies, positive pricing and foreign
currency translation, partially offset by an increase in lower margin product sales, the now-divested Rosemont
pharmaceuticals business, and the VMS product recall. Gross profit as a percentage of net sales decreased
90 basis points due primarily to unfavorable product mix and the VMS product recall, partially offset by greater
operating efficiencies; and

•

$6.2 million increase in operating expenses due primarily to:

•

$10.9 million of impairment charges related to Oral Care International goodwill and certain IPR&D
assets;
$4.6 million increase in restructuring expenses associated with actions taken to streamline the
organization; partially offset by
$4.5 million decrease in selling, advertising and promotion ("A&P") expenses due primarily to
negative consumption trends in the cough and cold and parasite products; and
$3.9 million decrease in distribution expense due primarily to lower volumes in the cough and cold
products.

Year Ended December 31, 2020 vs. December 31, 2019

(in millions, except
percentages)
Net sales

Gross profit

Gross profit %

Operating income

Operating income %

Year Ended

December 31,
2020

December 31,
2019

1,395.2

641.1

45.9 %

32.3

2.3 %

1,382.2

639.5

46.3 %

19.6

1.4 %

Net sales increased $13.0 million, or 1%, due primarily to:

•

$47.4 million, or 3%, net increase due primarily to the increase of $45.3 million in sales from our acquisitions
of Ranir, Dr. Fresh and Eastern European dermatology brands for periods of 2020 with no comparable sales
in 2019, and the incremental impact of new product sales including line extensions in the ACO dermatology
product line and the XLS Forte-Five weight management brand in the Skincare and personal hygiene and
Healthy lifestyle categories, respectively. The segment also benefited from an increase in demand for
products in our Pain and sleep-aids and VMS categories due to pandemic-related consumer behavior in favor
of immune support, and an increase in sales from our U.K. store brand business. These increases were
partially offset by a decrease in sales of certain products in our Skincare and personal hygiene and Healthy
lifestyle categories due to pandemic-related consumer behavior, school closings, social distancing measures
and country lock-downs, a decline of $24.1 million for products in the Upper respiratory category from the
weak start to the cough cold season experienced in the fourth quarter of 2020, and discontinued products of
$10.0 million.

•

$34.4 million decrease due primarily to:

•

$40.3 million decrease due to our divested Rosemont pharmaceuticals business and Canoderm
prescription product previously included in the Nordic region; partially offset by

$4.1 million increase from favorable foreign currency translation primarily related to the Euro; and

$1.8 million increase due to the absence of the Ranitidine retail market withdrawal impact included in
the prior year.

Operating income increased $12.7 million, or 65%, due to:

Perrigo Company plc - Item 7
CSCI

•

$1.6 million increase in gross profit due primarily to increased net sales as described above, partially offset by
higher commodity costs forff
40 basis points due primarily to the addition of the Oral care category and improved performance in the U.K.
store brand business which both have a relatively lower gross margins than the overall portfolio, the impact
from divested businesses, and an increase in commodity costs forff
absence of the Ranitidine retail market withdrawal included in the prior year; and

a certain OTC brand. Gross profit as a percentage of net sales decreased

a certain OTC brand, partially offset by the

•

$11.1 million decrease in operating expenses due primarily to:

•

$9.7 million decrease in impairment charges due to an impairment taken in the prior year on a certain
definite-lived intangible asset; and

$8.3 million decrease due primarily to the absence of restructuring expenses related to the
reorganization of our sales force in France included in the prior year; partially offset by

$4.7 million increase in R&D expenses towards continued innovation efforts; and

$1.1 million increase in selling and administration expenses due primarily to unfavorable Euro foreign
currency translation, and the inclusion of expenses from our acquisitions of Ranir and Dr. Fresh,
partially offset by a reduction in selling, advertising and promotional expenses, the absence of
expenses from the divestiture of our Rosemont pharmaceuticals business, and savings from our
current Project Momentum cost savings initiative.

Unallocated Expenses

Unallocated expenses are comprised of certain corporate services not allocated to our reporting segments

and are recorded above Operating income on the Consolidated Statements of Operations. Unallocated expenses
were as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

(167.8) $

232.4

251.6

The decrease of $400.2 million in unallocated expenses during the year ended December 31, 2021 compared

to the prior year period was due primarily to the award in the claim arising from the Omega Acquisition, as described
6 million, TSA income from the acquirer of our former RX business, decreased employee
in Item 8. Note 19, for $417.
compensation expense, and Project Momentum cost savings initiative. This was partially offset by an increase in legal
and professional fees, a reduction in an insurance recovery receivable related to litigation contingencies, and an
increase in restructuring expenses.

The $19.2 million increase for the year ended December 31, 2020 compared to the prior year was due

primarily to the absence of $15.6 million in acquisition and integration-related charges related to the acquisition of
Ranir, a $14.8 million decrease in legal and consulting fees in part due to our current Project Momentum cost savings
initiative, and a $12.6 million decrease in Restructuring expense related primarily to the reorganization of our
executive management team. These decreases were partially offset by an increase of $15.7 million in employee
incentive compensation expenses, which included COVID-19 bonuses for production employees, and an increase of
$8.0 million in insurance-related expenses.

Change in Financial Assets, Interest expense, net, Other (income) expense, net and Loss on extinguishment
of debt (Consolidated)

Perrigo Company plc - Item 7
Unallocated, Interest, Other, and Taxes

(in millions)
Change in financial assets

Interest expense, net

Other (income) expense, net

Loss on extinguishment of debt

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

— $

125.0

26.7

— $

95.3

127.7

16.3

20.0

(22.1)

117.5

(68.9)

0.2

Change in Financial Assets

The proceeds from our 2017 sale of the Tysabri® financial asset to Royalty Pharma consisted of $2.2 billion in
upfront cash and up to $250.0 million and $400.0 million in contingent milestone payments related to 2018 and 2020,
respectively.

During the year ended December 31, 2020, Royalty Pharma payments from Biogen for Tysabri® sales, as

defined in the agreement between the parties, did not exceed the 2020 global net sales threshold of $351.0 million.
Therefore, we are not entitled to receive the remaining contingent milestone payment of $400.0 million and,
accordingly, wrote off tff he entire fair value of the remaining milestone payment related to 2020 of $95.3 million in
Change in financial assets on the Consolidated Statements of Operations (refer to Item 8. Note 7). As of December
31, 2020, there were no contingent milestone payments outstanding.

During the year ended December 31, 2019 the fair value of the contingent milestone payment related to 2020

increased by $22.1 million to $95.3 million. These adjustments were driven by higher projected global net sales of
Tysabri® and the estimated probability of achieving the earn-out. The Royalty Pharma payments from Biogen for
Tysabri® were $337.5 million in 2018, which triggered the $250.0 million milestone payment received during the year
ended December 31, 2019.

xx
Interest Expense, net

The $2.7 million decrease during the year ended December 31, 2021 compared to the prior year was due

primarily to a reduction in interest expense related to our 2018 Revolver (as defined below).

The $10.2 million increase during the year ended December 31, 2020 compared to the prior year was due

primarily to the addition of interest expense on our 2020 Notes and two promissory notes related to our equity method
investment in Kazmira, as well as a reduction of interest income.

Other (Income) Expense, Net

The $10.4 million increase in expense during the year ended December 31, 2021 compared to the prior year

was due primarily to unfavorable changes in revaluation of monetary assets and liabilities held in foreign currencies
partially offset by the absence of an $18.7 million pre-tax loss on the divestiture of our Rosemont Pharmaceuticals
business.

The $85.2 million change from income to expense during the year ended December 31, 2020 compared to
the prior year was due primarily to the absence of the pre-tax gain of $71.7 million on the sale of our animal health
business and the $21.1 million pre-tax loss on the divestiture of our Rosemont Pharmaceuticals business, partially
offset by a decrease of $2.6 million in unfavorable changes from the revaluation of monetary assets and liabilities held
in foreign currencies (refer to Item 8. Note 3).

Loss on Extinguishment of Debt

During the year ended December 31, 2020, we recorded a loss of $20.0 million as a result of the early

Perrigo Company plc - Item 7
Unallocated, Interest, Other, and Taxes

redemption of the 3.500% Senior Notes due March 15, 2021 and 3.500% Senior Notes due December 15, 2021,
consisting of the premium on debt repayments, the write-off off
remaining bond discounts (refer to Item 8. Note 13).

f deferred financing fees, and the write-off off

f the

Income Taxes (Consolidated)

The effective tax rates were as follows:

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

150.6 %

(655.8)%

(7.2)%

The effective tax rate for the year ended December 31, 2021 as compared to December 31, 2020 increased

primarily due to the settlement of the Irish Notice of Assessment recorded in 2021.

The effecff

tive tax rate for the year ended December 31, 2020 as compared to December 31, 2019 decreased

primarily due to the pre-tax profit mix between jurisdictions with varying tax rates along with U.S. CARES Act and
Proposed and Final Section 163(j) interest expense limitation effects.

FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES

We finance our operations with internally generated funds, supplemented by credit arrangements with third

parties and capital market financing. We routinely monitor current and expected operational requirements and
financial market conditions to evaluate other available financing sources including term and revolving bank credit and
securities offerings. In determining our future capital requirements, we regularly consider, among other factors, known
trends and uncertainties, such as the Notices of Proposed Adjustment ("NOPAs") from the IRS, the current COVID-19
pandemic, the conflict in Ukraine, and other contingencies. We note that no payment of the additional amounts
proposed by the IRS in the NOPAs is currently required, and no such payment is expected to be required, unless and
until a settlement or other final determination of the matter is reached that is adverse to us. Refer to Item 8. Note 17
for additional information on the NOPAs. Based on the foregoing, management believes that our operations and
borrowing resources are sufficient to provide for our short-term and long-term capital requirements, as described
below. However, an adverse result with respect to our appeal of any material outstanding tax assessments or
litigation, including securities or drug pricing matters and product liability cases, damages resulting from third-party
claims, and related interest and/or penalties, could ultimately require the use of corporate assets to pay such
assessments and any such use of corporate assets would limit the assets available for other corporate purposes. As
such, we continue to evaluate the impact of the above factors on liquidity and may determine that modifications to our
capital structure are appropriate if market conditions deteriorate, favorable capital market opportunities become
available, or any change in conditions relating to the NOPAs, the COVID-19 pandemic, the conflict in Ukraine or other
contingencies have a material impact on our capital requirements.

We previously had an RX segment which was comprised of our prescription pharmaceuticals business in the
U.S. and other pharmaceuticals and diagnostic businesses in Israel, which have been divested. The RX segment was
reported as Discontinued Operations in 2021, and is presented as such for all periods in this report. Cash flows from
discontinued operations are reported within the consolidated statement of cash flows, and select cash flow information
related to discontinued operations are presented in Item 8. Note 8. We received $1.5 billion in cash upon the
completion of the RX business sale on July 6, 2021. We intend to use a portion of these proceeds to fund the
acquisition of HRA Pharma (refer to Item 8. Note 3).

We also received $417.6 million relating to the claim arising from the Omega Acquisition in September 2021.

A portion of these proceeds were used for the settlement of the NoA dispute with Irish Revenue.

Cash and Cash Equivalents

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

$1,864.9

s
n
o

i
l
l
i

$1,027.7

$910.0

$631.5

December 31, 2021

December 31, 2020

Cash and cash equivalents
Working capital *

* Working capital represents current assets less current liabilities, excluding cash and cash equivalents, assets and liabilities held for sale, and excluding current
indebtedness.

Cash, cash equivalents, cash flows from operations, and borrowings available under our credit facilities are

expected to be sufficient to finance our liquidity and capital expenditures in both the short and long term. Although our
lenders have made commitments to make funds available to us in a timely fashion under our revolving credit
agreements and overdraft facilities, if economic conditions worsen, including due to the COVID-19 pandemic, or new
information becomes publicly available impacting the institutions’ credit rating or capital ratios, these lenders may be
unable or unwilling to lend money pursuant to our existing credit facilities. Should our outlook on liquidity requirements
change substantially from current projections, we may seek additional sources of liquidity in the future.

Cash Generated by (Used in) Operating Activities

$636.2

$387.8

$248.4

$156.3

s
n
o

i
l
l
i

$(479.9)

December 31, 2021 December 31, 2020 December 31, 2019

2021 vs 2020

2020 vs 2019

Year Ended December 31, 2021

vs. December 31, 2020

The $479.9 million decrease in operating cash inflow was due primarily to:

•

$253.7 million decrease in cash flow from the change in net earnings after adjustments for items including
impairment charges, deferred income taxes, restructuring charges, changes in our financial assets, share-based
compensation, amortization of debt premium, loss (gain) on sale of businesses, loss on extinguishment of debt,
and depreciation and amortization;

$328.6 million decrease in cash flow from the change in accounts receivable, due primarily to our discontinued
operations and timing of sales and receipt of payments;

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

•

$63.8 million decrease in cash flow from the change in accrued payroll and related taxes, due primarily to the
timing of payroll and the increase in annual management and employee bonus payments compared to the prior
year period; and

$40.7 million decrease in cash flow from the change in accrued income taxes, due primarily to the cash escrow
payment to the Israel Tax Authority relating to their review of a 2009 transaction (for which no formal
assessment or notice of deficiency has been filed); partially offset by

$168.2 million increase in cash flow from the change in inventory, due primarily to inventory increases in the
prior year period which did not persist in the current year. Inventory increases in the prior year were partially
related to inventory builds to improve customer service, combined with lower demand for certain products and
customers lowering their inventories.

$44.7 million increase in cash flow from the change in accrued customer programs, due primarily to pricing
dynamics and timing of rebate and chargeback payments related to our discontinued operations.

Year Ended December 31, 2020 vs. December 31, 2019

The $248.4 million increase in operating cash flow was due primarily to:

•

$309.6 million increase in cash from the change in accounts receivable, due primarily to timing of sales and
receipt of payments;

$67.5 million increase in cash from the change in accrued income taxes, due primarily to the CARES Act and
adoption of final and proposed 163(j) regulations, as well as the absence of tax liabilities on the Royalty Pharma
contingent milestone payment received in the prior year and Israeli withholding tax paid in the prior year; and

$14.5 million increase in cash from the change in accrued payroll and related taxes, due primarily to the CARES
Act payroll tax payment deferrals; partially offset by

$103.6 million decrease in cash from the change in inventory, due primarily to the buildup of inventory levels to
improve customer service levels in the CSCA and CSCI segments, as well as higher inventory levels due to a
reduction in sales for certain products and an increase in inventory for new product launches in the CSCI
segment, partially offset by the current year launch of new products in our discontinued operations;

$31.6 million decrease in cash from the change in other, due primarily to the $29.4 million change in prepaid
expenses, mainly from payments made for annual prepaid expenses, a payment made for a transitional service
agreement, an increase in the cost of our directors and officers prepaid insurance, and the absence of a
litigation related settlement received in the prior year, partially offset by payments received related to our cross
currency swap; and

$19.7 million decrease in cash from the change in accounts payable, due primarily to the timing of payments
and mix of payment terms.

Cash Generated by (Used in) Investing Activities

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

$1,275.8

s
n
o

i
l
l
i

$1,463.6

$408.3

$(187.8)

$(596.1)

December 31, 2021 December 31, 2020 December 31, 2019

2021 vs 2020

2020 vs 2019

Year Ended December 31, 2021

vs. December 31, 2020

The $1,463.6 million increase in cash from investing cash flow was due primarily to:

•

$1,304.1 million increase in cash flow due to the proceeds from the RX business sale, which substantially
exceeded the proceeds from the prior year divestiture of our Rosemont Pharmaceuticals business (refer to Item
8. Note 3);

$168.5 million increase in cash flow due to the absence of cash paid in the prior year for the acquisitions of Dr.
Fresh forff
$106.2 million and Eastern European dermatology brands for $62.3 million the payment made in the
prior year for the acquisition of Dr. Fresh (refer to Item 8. Note 3);

$15.0 million increase in cash flow due to the absence of the payment made in the prior year for the purchase of
our equity method investment in Kazmira LLC; and

$18.3 million increase in cash flow due to the change in capital spending, due primarily to reduced spending as
a result of current year divestitures; partially offset by

$35.4 million decrease in cash flow due to the increase in spending on asset acquisitions, primarily related to
the payment for an ANDA for a generic topical gel for $16.4 million and the purchase of an ANDA for a generic
topical lotion for $53.3 million, which exceeded prior year acquisitions for the Steripod® brand for $25.1 million
and the Dexsil® brand for approximately $8.0 million (refer to Item 8. Note 3).

Capital expenditures for the next twelve months are anticipated to be between $100.0 million and

$140.0 million, depending on the progression of project timelines, related to manufacturing productivity and efficiency
upgrades, infant formula plant investments, software and technology initiatives, and general plant maintenance. We
expect to fund these estimated capital expenditures with funds from operating cash flows.

Year Ended December 31, 2020 vs. December 31, 2019

The $408.3 million decrease in cash used in investing cash flow was due primarily to:

•

$579.2 million decrease in cash used due to the absence of the payment made in the prior year for the
acquisition of Ranir for $747.7 million, partially offset by the cash paid for the acquisitions of Dr. Fresh for
$106.2 million and Eastern European dermatology brands for $62.3 million (refer to Item 8. Note 3);

$113.9 million decrease in cash used due to the decrease in spending on asset acquisitions, as payments made
in the prior year to purchase the Steripod® brand for $25.1 million and the Dexsil® brand for approximately
$8.0 million, represented a decline in spending compared to the cash used in prior year acquisitions, including
for the branded OTC rights to Prevacid®24HR for $61.7 million, two ANDAs for generic products forff

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

$15.7 million and $49.0 million, and Budesonide Nasal Spray and Triamcinolone Nasal Spray for $14.0 million
(refer to Item 8. Note 3); and

$5.3 million increase in cash due primarily to the net proceeds from the sale of our Rosemont pharmaceuticals
business, which exceeded the proceeds from the prior year's sale of our animal health business (refer to Item 8.
Note 3); partially offset by

$250.0 million decrease in cash flow due to the absence of the Royalty Pharma contingent milestone proceeds
received in the prior year (refer to Item 8. Note 7);

$32.7 million decrease in cash due to a net increase in capital spending, used primarily to increase tablet and
infant formula capacity, plant efficiency projects, investments in our Oral care business, and for software and
technology initiatives; and

$15.0 million decrease in cash for the purchase of our equity method investment in Kazmira (refer to Item 8.
Note 10).

•

Cash Generated by (Used in) Financing Activities

$1.8

$2.4

s
n
o

i
l
l
i

$(178.7)

$(181.1)

$(182.9)

December 31, 2021 December 31, 2020 December 31, 2019

2021 vs 2020

2020 vs 2019

Year Ended December 31, 2021

vs. December 31, 2020

The $2.4 million increase in financing cash flow was due primarily to:

•

$590.0 million increase due to payments on long-term debt in 2020 that were not made in 2021;

$164.2 million increase due to share repurchases in 2020 that were not made in 2021; and

$19.0 million increase due to the payment of premiums in the prior year related to the early redemption of the
2021 Notes that were not made in 2021; partially offset by

$743.8 million decrease due to absence of the debt issuance completed in the prior year; and

$26.7 million decrease due primarily to the payment made on the promissory notes related to our Kazmira
investment.

Year Ended December 31, 2020 vs. December 31, 2019

The $182.9 million decrease in financing cash flow was due primarily to:

•

$164.2 million decrease in cash due to share repurchases;

$114.0 million decrease in cash due to the increase in payments on long-term debt;

$19.0 million decrease in cash due to the payment of premiums on the early redemption of the 3.500% Senior
Notes due March 15, 2021 and 3.500% Senior Notes due December 15, 2021;

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

•

$11.5 million decrease in cash due to an increase in dividend payments;

$5.7 million decrease in cash due to an increase in deferred financing fees related to the issuance of long-term
debt; and

$4.4 million decrease in cash due primarily to the payment made on the November 2020 portion of the Kazmira
promissory notes; partially offset by

$143.8 million increase in cash for the issuance of long-term debt (refer to Item 8. Note 13).

Share Repurchases

In October 2015, the Board of Directors approved a three-year share repurchase plan of up to $2.0 billion.

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 year ended December 31, 2021 or December 31, 2019. During the year ended
December 31, 2020, we repurchased 3.4 million ordinary shares at an average purchase price of $48.28 per share for a
total of $164.2 million under the 2018 Authorization.

Dividends

In January 2003, the Board of Directors adopted a policy of paying quarterly dividends. We paid dividends as

follows:

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

Dividends paid (in millions)

Dividends paid per share

129.6

0.96

123.9

0.90

112.4

0.82

The declaration and payment of dividends, if any, is subject to the discretion of our Board of Directors and will
depend on our earnings, financial condition, availability of distributable reserves, capital and surplus requirements, and
other factors our Board of Directors may consider relevant.

Borrowings and Capital Resources

Long-term debt, less current
indebtness

Current indebtness

$3,527.6

$603.8

$2,916.7

s
n
o

i
l
l
i

s
n
o

i
l
l
i

December 31, 2021

December 31, 2020

December 31, 2021

December 31, 2020

$37.3

Term Loans, Notes and Bonds

Total Term Loans, Notes and Bonds outstanding are summarized as

follows (in millions):

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

Term loan

2019 Term loan due August 15, 2022

Notes and bonds

Couponp

Due
5.105% July 28, 2023

4.000% November 15, 2023

3.900% December 15, 2024

4.375% March 15, 2026

3.900% June 15, 2030

5.300% November 15, 2043

4.900% December 15, 2044

Total notes and bonds

Year Ended

December 31,
2021

December 31,
2020

600.0

153.5

215.6

700.0

750.0

90.5

303.9

164.9

215.6

700.0

750.0

90.5

303.9

2,913.5

2,924.9

Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate.

On June 19, 2020, Perrigo Finance Unlimited Company, an indirect wholly-owned finance subsidiary of Perrigo

("Perrigo Finance"), issued $750.0 million in aggregate principal amount of 3.150% Senior Notes due 2030 (the “2020
Notes"). Due to a credit ratings downgrade by S&P and Moody's in the third quarter of 2021, the interest of the 2020
Notes has stepped up from 3.150% to 3.900%, starting with the interest payment due on December 15, 2021.

On July 6, 2020, the proceeds of the 2020 Notes were used to fund the redemption of Perrigo Finance's $280.4

million of 3.500% Senior Notes due March 15, 2021 and $309.6 million of 3.500% Senior Notes due December 15,
2021. As a result of the early redemption of the $280.4 million of 3.500% Senior Notes and $309.6 million of 3.500%
Senior Notes, during the year ended December 31, 2021, we recorded a loss of $20.0 million in Loss on extinguishment
of debt on the Consolidated Statements of Operations, consisting of the premium on debt repayments, the write-off of
he remaining bond discounts.
deferred financing fees, and the write-off of t

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

On May 23, 2019, we repaid our 5.000% retail bond due in 2019 in the amount of €120.0 million

($130.7 million), which we assumed in connection with the Omega acquisition.

Refer to Item 8. Note 13 for additional details regarding our debt financing transactions.

Overdraft Facilities

We have overdraft facilities available that we use to support our cash management operations. We report any

balances outstanding in "Other Financing" in Item 8. Note 13. There were no borrowings outstanding under the facilities
as of December 31, 2021 and December 31, 2020.

Leases

We had $199.1 million and $187.7 million of lease liabilities and $194.8 million and $184.5 million of lease

assets as of December 31, 2021 and December 31, 2020, respectively.

Accounts Receivable Factoring

During the year ended December 31, 2020, we had accounts receivable factoring arrangements with non-

related third-party financial institutions (the “Factors”). Pursuant to the terms of the arrangements, we sell to the Factors
certain of our accounts receivable balances on a non-recourse basis for credit approved accounts. An administrative fee
per invoice is charged on the gross amount of accounts receivables assigned to the Factors, and interest is calculated
at the applicable EUR LIBOR rate plus a spread. At December 31, 2020, the total amount factored on a non-recourse
basis and excluded from accounts receivable was $6.9 million. During the year ended December 31, 2021, the factoring
program was discontinued and there were no amounts factored on a non-recourse basis and excluded from accounts
receivable.

Revolving Credit Agreement

On March 8, 2018, we entered into a $1.0 billion revolving credit agreement maturing on March 8, 2023 (the

"2018 Revolver"). There were no orrowings outstanding under the 2018 Revolver as
December 31, 2020.

of December 31, 2021 or

Waiver and Amendment of Debt Covenants

We are subject to financial covenants in the 2018 Revolver and 2019 Term Loan, including a maximum leverage

ratio covenant, which previously required us to maintain a ratio of Consolidated Net Indebtedness to Consolidated
EBITDA (as such terms are defined in such credit agreements) of not more than 3.75 to 1.00 at the end of each fiscal
quarter. During the year ended December 31, 2021, we received a waiver for non-compliance with such covenants as of
July 3, 2021, from the lenders under both such credit facilities and entered into amendments to each of the 2018
Revolver and 2019 Term Loan. Due to the waiver and amendment described above, our leverage ratios at the end of
the second and third quarters of 2021 do not prevent us from drawing under the 2018 Revolver. Additionally, on
December 3, 2021, we, Perrigo Finance, each lender party thereto, and JPMorgan Chase Bank, N.A. as administrative
agent, entered into Amendment No. 2 to the Company’s 2019 Term Loan (the “Term Loan Amendment”) and
Amendment No. 3 to the Company’s 2018 Revolver (the “Revolver Amendment”) with the lenders under each such
facility, pursuant to which the maximum leverage ratio was increased to 5.75 to 1.00 for the fourth quarter of 2021 and
the first quarter of 2022, returning to 3.75 to 1.00 beginning with the second quarter of 2022. If we consummate certain
qualifying acquisitions in the second quarter of 2022 or any subsequent quarter during the term of the loan, the
maximum ratio would increase to 4.00 to 1.00 for such quarter. The amendments also modified certain provisions
related to restricted payments to account for the amended leverage ratio covenant. Finally, the Revolver Amendment
contains amendments related to the replacement of LIBOR with the Sterling Overnight Index Average (SONIA) as the
benchmark for borrowings under the 2018 Revolver in Pounds Sterling. During the year ended December 31, 2021, we
incurred amendment and arrangement fees of $1.4 million in connection with these amendments, which were
capitalized and will be amortized over the life of the debt. As of December 31, 2021, we are in compliance with all the
covenants under our debt agreements.

Other Financing

On June 17, 2020, we incurred debt of $34.3 million related to our equity method investment in Kazmira

pursuant to two promissory notes, with $3.7 million, $5.8 million and $24.8 million to be settled in November 2020, May
2021 and November 2021, respectively (refer to Item 8. Note 10). On December 8, 2020, we repaid the $3.7 million
balance due on the November 2020 portion of the Promissory Notes. During the year ended December 31, 2021, we
repaid the $5.8 million balance due on the May 2021 portion of the Promissory Notes and the $24.8 million balance due
on the November 2021 portion, settling the debt in full.

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

Credit Ratings

During the third quarter of 2021, our credit ratings were downgraded by Moody’s and S&P Global Ratings to

Ba1 (negative) and BB (stable), respectively, which are not investment grade ratings. On December 31, 2021, our credit
rating was BBB- (negative) by Fitch Ratings Inc., which is an investment grade rating.

Credit rating agencies review their ratings periodically and, therefore, the credit rating assigned to us by each

agency may be subject to revision at any time. Accordingly, we are not able to predict whether current credit ratings will
remain as disclosed above. Factors that can affect our credit ratings include changes in operating performance, the
economic environment, our financial position, and changes in business strategy. If changes in our credit ratings were to
occur, they could impact, among other things, future borrowing costs, access to capital markets, and vendor financing
terms. A security rating is not a recommendation to buy, sell or hold securities.

Off-Balance Sheet Arrangements

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

Contractual Obligations

Our enforceable and legally binding obligations as of December 31, 2021 are set forth in the following table.

Some of the amounts included in this table are based on management’s estimates and assumptions about these
obligations, including the duration, the possibility of renewal, anticipated actions by third parties and other factors.
Because these estimates and assumptions are necessarily subjective, the enforceable and legally binding obligations
actually paid in future periods may vary from the amounts reflected in the table (in millions):

2022

2023-2024

2025-2026

After 2026

Total

Payment Due

Short and long-term debt (1)

726.1

1,286.6

823.6

1,575.8

4,412.1

Finance lease obligations
Purchase obligations (2)
Operating leases (3)
Other contractual liabilities reflected on the
consolidated balance sheets:

Deferred compensation and benefits (4)
Other (5)

Total

5.6

862.6

29.9

6.3

3.0

41.9

—

22.3
1,646.5

18.4
1,356.2

4.3

—

32.2

—

9.2
869.3

13.7

—

94.9

72.5

—
1,756.9

29.9

865.6

198.9

72.5

49.9
5,628.9

(1) Short-term and long-term debt includes interest payments, which were calculated using the effeff ctive interest rate at December 31, 2021.
(2) Consists of commitments for both materials and services.
(3) Used in normal course of business, principally for warehouse facilities and computer equipment.
(4)

Includes amounts associated with non-qualified plans related to deferred compensation, executive retention and post-employment benefits. Of
this amount, we have funded $38.4 million, which is recorded in Other non-current assets on the balance sheet. These amounts are assumed
payable after five years,

although certain circumstances, such as termination, would require earlier payment.

(5) Primarily includes consulting fees, legal settlements, restructuring accruals, insurance obligations, and electrical and gas purchase contracts,

which were accrued in Other current liabilities and Other non-current liabilities at December 31, 2021 for all years.

We fund our U.S. qualified profit-sharing and investment plan in accordance with the Employee Retirement
Income Security Act of 1974 regulations for the minimum annual required contribution and Internal Revenue Service
regulations for the maximum annual allowable tax deduction. We are committed to making the required minimum
contributions, which we expect to be approximately $36.5 million over the next 12 months. Future contributions are
dependent upon various factors, including employees’ eligible compensation, plan participation and changes, if any, to

Perrigo Company plc - Item 7
Financial Condition, Liquidity and Capital Resources

current funding requirements. Therefore, no amounts were included in the Contractual Obligations table above. We
generally expect to fund all future contributions with cash flows from operating activities.

As of December 31, 2021, we had approximately $452.3 million of liabilities for uncertain tax positions, including

interest and penalties. These unrecognized tax benefits have been excluded from the Contractual Obligations table
above due to uncertainty as to the amounts and timing of settlement with taxing authorities.

Net deferred income tax liabilities were $232.8 million as of December 31, 2021. This amount is not included in

the Contractual Obligations table above because we believe this presentation would not be meaningful. Net deferred
income tax liabilities are calculated based on temporary differences between the tax basis of assets and liabilities and
their book basis, which will result in taxable amounts in future years when the book basis is settled. The results of these
calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods. As a result,
scheduling net deferred income tax liabilities as payments due by period could be misleading because this scheduling
would not relate to liquidity needs.

Critical Accounting Estimates

The determination of certain amounts in our financial statements requires the use of estimates. These estimates

are based upon our historical experiences combined with management’s understanding of current facts and
circumstances. Although the estimates are considered reasonable based on the currently available information, actual
results could differ from the estimates we have used. Management considers the below accounting estimates to require
the most judgment and to be the most critical in the preparation of our financial statements. These estimates are
reviewed by the Audit Committee.

Revenue Recognition

Net product sales include estimates of variable consideration for which accruals and allowances are

established. Variable consideration for product sales consists primarily of rebates and other incentive programs
recorded on the Consolidated Balance Sheets as Accrued customer programs. Where appropriate, these estimates take
into consideration a range of possible outcomes in which relevant factors, such as historical experience, current
contractual and statutory requirements, specific known market events and trends, industry data and forecasted
customer buying and payment patterns, are either probability-weighted to derive an estimate of expected value or the
estimate reflects the single most likely outcome. Overall, these reserves reflect the best estimates of the amount of
consideration to which we are entitled based on the terms of the contract. Actual amounts of consideration ultimately
received may differ from our estimates. If actual results in the future vary from the estimates, these estimates are
adjusted, which would affect revenue and earnings in the period such variances become known.

Income Taxes

Our tax rate is subject to adjustment over the balance of the year due to, among other things, income tax rate
changes by governments; the jurisdictions in which our profits are determined to be earned and taxed; changes in the
valuation of our deferred tax assets and liabilities; adjustments to estimated taxes upon finalization of various tax
returns; adjustments to our interpretation of transfer pricing standards; changes in available tax credits, grants and other
incentives; changes in stock-based compensation expense; changes in tax laws or the interpretation of such tax laws;
changes in U.S. generally accepted accounting principles; expiration of or the inability to renew tax rulings or tax holiday
incentives; and the repatriation of earnings with respect to which we have not previously provided taxes. For the year
ended December 31, 2021, we recorded a net increase in valuation allowances of $35.9 million, comprised primarily of
an increase of valuation allowance for deferred tax assets related to our Latin American businesses included as held for
sale.

Although we believe our tax estimates are reasonable and we prepare our tax filings in accordance with all

applicable tax laws, the final determination with respect to any tax audit, and any related litigation, could be materially
different from our estimates or from our historical income tax provisions and accruals. The results of an audit or litigation
could have a material effect on operating results and/or cash flows in the periods for which that determination is made.
In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest
assessments (refer to Item 8. Note 17).

Perrigo Company plc - Item 7
Critical Accounting Estimates

Legal Contingencies

We are involved in product liability, patent, commercial, regulatory and other legal proceedings that arise in the
normal course of business. We record a liability when a loss is considered probable and the amount can be reasonably
estimated. If the reasonable estimate of a probable loss is a range and no amount within that range is a better estimate,
the minimum amount in the range is accrued. If a loss is not probable or a probable loss cannot be reasonably
estimated, no liability is recorded. We have established reserves for certain of our legal matters (refer to Item 8. Note
19). We do not incorporate insurance recoveries into our reserves for legal contingencies. We separately record
receivables for amounts due under insurance policies when we consider the realization of recoveries for claims to be
probable, which may be different than the timing in which we establish the loss reserves.

Acquisition Accounting

We account for acquired businesses using the acquisition method of accounting, which requires that assets
acquired and liabilities assumed be recorded at fair value, with limited exceptions. Any excess of the purchase price
over the fair value of the specifically identified assets is recorded as goodwill. If the acquired net assets do not constitute
a business, or substantially all of the fair value is in a single asset or group of similar assets, the transaction is
accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, acquired IPR&D with no
alternative future use is charged to expense at the acquisition date.

Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective

useful lives. The acquired intangible assets can include customer relationships, trademarks, trade names, brands,
developed product technology and IPR&D assets. For acquisitions accounted for as business combinations, IPR&D is
considered to be an indefinite-lived intangible asset until the research is completed, at which point it then becomes a
definite-lived intangible asset, or is determined to have no future use and is then impaired. There are several methods
that can be used to determine the fair value of our intangible assets. We typically use an income approach to value the
specifically identifiable intangible assets which is based on forecasts of the expected future cash flows. We have
historically used a relief from royalty or multi-period excess earnings methodology. The fair value estimates are based
on available historical information and on future expectations and assumptions deemed reasonable by management but
are inherently uncertain. We typically consult with an independent advisor to assist in the valuation of these intangible
assets. Significant estimates and assumptions inherent in the valuations include discount rates, revenue growth
assumptions and expected profit margins. We consider marketplace participant assumptions in determining the amount
and timing of future cash flows along with the length of our customer relationships, the attrition, product or technology
life cycles, barriers to entry and the risk associated with the cash flows in concluding upon our discount rate. While we
use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition
date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, we
may record adjustments to the purchase accounting. In addition, unanticipated market or macroeconomic events and
circumstances may occur that could affect the accuracy or validity of the estimates and assumptions.

Determining the useful life of an intangible asset also requires judgment, as different types of intangible assets

will have different useful lives and certain assets may even be considered to have indefinite useful lives. With the
exception of certain trademarks, trade names, and brands and IPR&D, the majority of our acquired intangible assets are
expected to have determinable useful lives. Our assessment as to the useful lives of these intangible assets is based on
a number of factors including competitive environment, market share, trademark, brand history, underlying product life
cycles, operating plans and the macroeconomic environment of the countries in which the trademarked or branded
products are sold. Definite-lived intangible assets are amortized to expense over their estimated useful life.

Goodwill

Goodwill represents amounts paid for an acquisition of a business in excess of the fair value of net assets

received. We perform annual goodwill impairment testing on the first day of the fourth quarter. In the fourth quarter of
2021, we reorganized the reporting structure within our CSCI operating segment which resulted in the Oral Care
International, CSC UK and Australia, and BCS reporting units being combined into a new CSCI reporting unit. Following
the CSCI reorganization, we have two reporting units as of December 31, 2021. Impairment tests were performed for
the legacy reporting units prior to the reorganization and for the CSCI reporting unit immediately after the
reorganization.

The impairment test we performed for the legacy Oral Care International reporting unit prior to the
reorganization discussed above resulted in a carrying value in excess of the estimated fair value by $10.0 million,
therefore, we recognized an impairment. The change in fair value from previous estimates was driven by reduced

Perrigo Company plc - Item 7
Critical Accounting Estimates

projections of future cash flows resulting from increased costs throughout the global supply chain. During the year
ended December 31, 2021, we also performed impairment testing related to our Latin America disposal group on its
classification as held-for-sale and recorded a goodwill impairment loss of $6.1 million. We recorded goodwill impairment
losses in Impairment charges on the Consolidated Statements of Operations.

The test for impairment requires us to make several significant assumptions that impact our estimate of the fair

value of a reporting unit, including revenue growth, operating margins, and discount rate. These assumptions are
considered critical due to the sensitivity of changes in these assumptions to the related estimate of fair value. The
discount rates used in testing each of our reporting units’ goodwill for impairment during our testing were based on the
weighted average cost of capital determined for each of our reporting units. In our annual impairment test as of
October 3, 2021, discount rates ranged from 7.75% to 9.75%, and perpetual revenue growth rates were 2.0%. In our
annual impairment test as of September 27, 2020, discount rates ranged from 7.25% to 9.25%, and perpetual revenue
growth rates were 2.0%.

The cash flow forecasts used for our reporting units include assumptions about future activity levels in the near

term and longer-term. If growth in our reporting units is lower than expected, we may experience deterioration in our
cash flow forecasts that may indicate goodwill in one or more reporting units is impaired in future impairment tests. An
increase in the discount rate could negatively impact the estimated fair value of the reporting units and lead to future
impairment. Certain macroeconomic factors which are not controlled by the reporting units, such as rising inflation or
interest rates, could cause an increase in the discount rate to occur. Deterioration in performance of our reporting units,
such as lower than expected revenue or profitability that has a sustained impact on future periods, could also represent
potential indicators of impairment requiring further analysis.

rr
We performed

sensitivity analyses on the discounted cash flow valuations that were prepared to estimate the
fair value of each reporting unit. Discount rates and perpetual revenue growth rates were increased and decreased by
increments of 25 or 50 basis points. For the CSCI reporting unit, the fair value exceeds our carrying amount by less than
10%. Therefore, a 50 basis point increase in the discount rate, or a 25 basis point increase in the discount rate
combined with a 25 basis point decrease in the residual growth rate, would indicate potential impairment for this
reporting unit. Our sensitivities assume a corresponding decrease in market valuation multiples. Based on the sensitivity
of the discount rate assumptions on these analyses, an increase in the discount rate over the next twelve months could
negatively impact the estimated fair value of the reporting units and lead to a future impairment. Certain macroeconomic
factors which are not controlled by the reporting units, such as rising inflation or interest rates, could cause an increase
in the discount rate to occur. Deterioration in performance of our reporting units over the next twelve months, such as
lower than expected revenue or profitability that has a sustained impact on future periods, could also represent potential
indicators of impairment requiring further impairment analysis.

We continue to monitor the progress of our reporting units and assess them for potential impairment should

impairment indicators arise, as applicable, and at least annually during our fourth quarter impairment testing.

See Item 8. Note 4 and Note 7 for further information.

Recently Issued Accounting Standards Pronouncements

See Item 8. Note 1 for information regarding recently issued accounting standards.

Perrigo Company plc - Item 7A

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange Risk

We are a global company with operations primarily throughout North America, Europe, Australia, and Mexico.

We transact business in each location's local currency and in foreign currencies, thereby creating exposures to changes
in exchange rates. Our largest exposure is the movement of the U.S. dollar relative to the euro. In addition, our U.S.
operations continue to expand their export business, primarily in Canada, China, and Europe, and are subject to
fluctuations in the respective exchange rates relative to the U.S. dollar.

Due to different sales and cost structures, certain segments experience a negative impact and certain segments

a positive impact as a result of changes in exchange rates. We estimate the translation effect of a ten percent
devaluation of the U.S. dollar relative to the other foreign currencies in which we transact business would have
increased operating income of our non-U.S. operating units by approximately $33.2 million for the year ended
December 31, 2021. This sensitivity analysis has inherent limitations. The analysis disregards the possibility that rates
of multiple foreign currencies will not always move in the same direction relative to the value of the U.S. dollar over time
and does not account for foreign exchange derivatives that we utilize to mitigate fluctuations in exchange rates.

In addition, we enter into certain purchase commitments for materials that, although denominated in U.S.

dollars, are linked to foreign currency valuations. These commitments generally contain a range for which the price of
materials may fluctuate over time given the value of a foreign currency.

The translation of the assets and liabilities of our non-U.S. dollar denominated operations is made using local
currency exchange rates as of the end of the year. Translation adjustments are not included in determining net income
but are disclosed in Accumulated Other Comprehensive Income ("AOCI") within shareholders’ equity on the
Consolidated Balance Sheets until a sale or substantially complete liquidation of the net investment in the subsidiary
takes place. In certain markets, we could recognize a significant gain or loss related to unrealized cumulative translation
adjustments if we were to exit the market and liquidate our net investment. As of December 31, 2021, cumulative net
currency translation adjustments increased shareholders’ equity by $67.4 million.

We are also subject to currency exchange risk related to the euro-denominated purchase price for our planned

acquisition of HRA Pharma for €1.8 billion. In September 2021, we entered into two non-designated currency option
contracts to hedge the foreign currency exposure of the euro-denominated purchase price for HRA Pharma for a total
notional value of $1.1 billion that will mature in the third quarter of 2022.

We monitor and strive to manage risk related to foreign currency exchange rates. Exposures that cannot be

naturally offset within a local entity to an immaterial amount are often hedged with foreign exchange derivatives or
netted with offsetting exposures at other entities. We cannot predict future changes in foreign currency movements and
fluctuations that could materially impact earnings.

Interest Rate Risk

We are exposed to interest rate changes primarily as a result of interest income earned on our investment of

cash on hand and interest expense on borrowings. We have in the past, and may in the future, enter into certain
derivative financial instruments related to the management of interest rate risk, when available on a cost-effective basis.
These instruments are managed on a consolidated basis to efficiently net exposures and thus take advantage of any
natural offsets. Gains and losses on hedging transactions are offset by gains and losses on the underlying exposures
being hedged. We do not use derivative financial instruments for speculative purposes.

Inflation Risk

Inflationary factors such as increases in the cost of our products and overhead costs may adversely affect our

operating results. A high rate of inflation in the future may have an adverse effect on our ability to maintain current levels
of gross margin and selling and administration expenses if the selling prices of our products do not increase with these
increased costs.

Refer to Item 8. Note 11 and Note 1 for further information regarding our derivative instruments and hedging

activities.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE NO.

Perrigo Company plc - Item 8

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Shareholders' Equity

Notes to Consolidated Financial Statements

1 Summary of Significant Accounting Policies

2 Revenue Recognition

3 Acquisitions and Divestitures

4 Goodwill and Intangible Assets

5 Accounts Receivable Factoring

6 Inventories

7 Fair Value Measurements

8 Discontinued Operations

9 Assets held for Sale

10 Investments

11 Derivative Instruments and Hedging Activities

12 Leases

13 Indebtedness

14 Earnings per Share and Shareholders' Equity

15 Share-Based Compensation Plans

16 Accumulated Other Comprehensive Income (Loss)

17 Income Taxes

18 Post-Employment Plans

19 Commitments and Contingencies

20 Restructuring Charges

21 Segment and Geographic Information

Management’s Annual Report on Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm

104

106

109

112

113

118

120

123

124

128

136

140

155

156

157

159

Perrigo Company plc - Item 8

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Perrigo Company plc

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Perrigo Company plc (the Company) as of
December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss),
shareholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the
related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the
“consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with
U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on
criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2022 expressed an
unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of
the financial
statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which
they relate.

Description of
the Matter

Valuation of Goodwill
At December 31, 2021, the Company’s goodwill was $2,999.4 million. As discussed in
Note 1 of the consolidated financial statements, goodwill is not amortized but rather is
tested for impairment at least annually at the reporting unit level. The Company’s
goodwill is initially assigned to its reporting units as of the acquisition date.

Auditing management’s goodwill
tests was complex and highly
impairment
judgmental due to the significant measurement uncertainty in determining the fair
value of the reporting units. In particular, the fair value estimates were sensitive to
significant assumptions such as revenue growth, operating margins, and discount
rate, which are affected by expected future market or economic conditions.

Perrigo Company plc - Item 8

How We
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over
impairment assessment
process. For example, we tested controls over the Company’s forecast process as
well as controls over management’s review of the significant assumptions discussed
above in estimating the fair values of the reporting units.

the Company’s goodwill

To test the fair value of the Company’s reporting units, our audit procedures included,
among others, assessing methodologies used and testing the significant assumptions
discussed above as well as the completeness and accuracy of the underlying data
used by the Company. For example, we compared the significant assumptions used
by management to current industry and economic trends, changes in the Company’s
business model, customer base or product mix and other relevant
factors. We
performed sensitivity analyses of the significant assumptions to evaluate the change
in the fair value of the reporting unit resulting from changes in the assumptions. We
also reviewed the reconciliation of the fair value of the reporting units to the market
capitalization of the Company and evaluated the implied control premium. We also
assessed the historical accuracy of the significant assumptions used by management
to determine the fair value of its reporting units. The evaluation of the Company’s
methodology and significant assumptions was performed with the assistance of our
valuation specialists.

Uncertain Tax Positions

As described in Note 17 to the consolidated financial statements, the Company
operates in multiple jurisdictions with complex tax policy and regulatory environments
and establishes reserves for uncertain tax positions in accordance with the
accounting guidance governing uncertainty in income taxes. Uncertainty in a tax
position may arise because tax laws are subject to interpretation. The Company uses
significant judgment to (1) determine whether, based on the technical merits, a tax
position is more likely than not to be sustained and (2) measure the amount of tax
benefit
the Company had
liabilities of $347.2 million, excluding interest and penalties, relating to uncertain tax
positions.

that qualifies for recognition. At December 31, 2021,

Auditing the measurement of the Company’s uncertain tax positions was challenging
because the evaluation of whether a tax position is more likely than not
to be
the benefit of various tax positions can be
sustained and the measurement of
complex, involves significant judgment, and is based on interpretations of tax laws
and legal rulings.

Description of
the Matter

Perrigo Company plc - Item 8

How We
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over the Company’s accounting process for uncertain tax
positions. For example, we tested controls over management’s identification of
uncertain tax positions and its application of
the recognition and measurement
principles for uncertain tax positions.

third-party advice obtained by the Company. To test

Our audit procedures
included, among others, assessing the Company’s
correspondence with the relevant tax authorities and evaluating income tax opinions
or other
the Company’s
assessment and measurement of uncertain tax positions, we involved our tax
professionals to assess whether
the uncertain tax positions identified by the
Company are more-likely-than-not to be sustained upon audit and, if so, to assist in
testing the assumptions made by the Company in measuring the amount of tax
benefit that qualifies for recognition. We also used our knowledge of, and experience
with, the application of domestic and international income tax laws by the relevant
income tax authorities to evaluate the Company’s assessments of whether the
uncertain tax position is more-likely-than-not to be sustained and, if so, the potential
outcomes that could occur upon an audit by a taxing authority. We tested the
completeness and accuracy of
the data and calculations used to determine the
the
amount of
Company’s disclosures to the consolidated financial statements in relation to these
matters.

to recognize. We also evaluated the adequacy of

tax benefit

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2008.

Grand Rapids, Michigan
March 1, 2022

Perrigo Company plc - Item 8

PERRIGO COMPANY PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

4,138.7

4,088.2

2,722.5

1,416.2

2,593.3

1,494.9

Net sales

Cost of sales

Gross profit

Operating expenses

Distribution

Research and development

Selling

Administration

Impairment charges

Restructuring

Other operating expense (income)

Total operating expenses

Operating income

Change in financial assets

Interest expense, net

Other (income) expense, net
Loss on extinguishment of debt

Income from continuing operations before income taxes

Income tax expense (benefit)

Income (loss) from continuing operations
Income (loss) from discontinued operations, net of tax

Net income (loss)

Earnings (loss) per share

Basic

Continuing operations
Discontinued operations

Basic earnings per share

Diluted

Continuing operations
Discontinued operations

Diluted earnings per share

Weighted-average shares outstanding

Basic

Diluted

1,229.7

1,259.0

3,869.9

2,436.2

1,433.7

82.0

119.2

538.7

476.5

3.8

25.9

2.9

174.7

(22.1)

117.5
(68.9)

0.2
148.0

(10.7)
158.7
(12.6)

146.1

1.16
(0.09)
1.07

136.0

136.5

93.0

122.0

536.4

482.0

173.1

16.9

(417.6)

1,005.8

410.4

—

125.0
26.7

—
258.7

389.6
(130.9)
62.0

85.1

121.7

545.5

478.5

—

3.2

(4.3)

265.2

95.3

127.7
16.3

20.0
5.9

(38.3)
44.2
(206.8)

$
$
$

)
(68.9) $
(
)
(

(
(162.6) $
(

)
)

(0.98) $
0.46
$
)
(0.52) $
(
)
(

$
0.32
(1.52) $
)
(
)
(
(1.20) $

$
0.32
(1.51) $
)
(
)
(
(1.19) $

133.6

136.1

137.2

See accompanying Notes to Consolidated Financial Statements.

PERRIGO COMPANY PLC
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)

Assets

Cash and cash equivalents
Accounts receivable, net of allowance for credit losses of $7.2 and $6.5, respectively
Inventories
Prepaid expenses and other current assets
Current assets held for sale

Total current assets

Property, plant and equipment, net
Operating lease assets
Goodwill and indefinite-lived intangible assets
Definite-lived intangible assets, net
Deferred income taxes
Non-current assets held for sale
Other non-current assets

Total non-current assets
Total assets

Liabilities and Shareholders’ Equity

Accounts payable
Payroll and related taxes
Accrued customer programs
Other accrued liabilities
Accrued income taxes
Current indebtedness
Current liabilities held for sale

Total current liabilities

Long-term debt, less current portion
Deferred income taxes
Non-current liabilities held for sale
Other non-current liabilities

Total non-current liabilities
Total liabilities

Commitments and contingencies - Refer to Note 19
Shareholders’ equity

Controlling interests:

Preferred shares, $0.0001 par value per share, 10 shares authorized
Ordinary shares, €0.001 par value per share, 10,000 shares authorized
Accumulated other comprehensive income
Retained earnings (accumulated deficit)
Total shareholders’ equity
Total liabilities and shareholders' equity

Supplemental Disclosures of Balance Sheet Information

Preferred shares, issued and outstanding
Ordinary shares, issued and outstanding

December 31,
2021

December 31,
2020

1,864.9
652.9
1,020.2
305.8
16.1
3,859.9
864.1
166.9
3,004.7
2,146.1
6.5
—
377.5
6,565.8
10,425.7

411.2
118.5
125.6
279.4
16.5
603.8
32.9
1,587.9
2,916.7
239.3
—
530.1
3,686.1
5,274.0

631.5
593.5
1,059.4
182.2
666.9
3,133.5
864.6
154.7
3,102.7
2,481.5
40.6
1,364.0
346.8
8,354.9
11,488.4

451.6
152.9
128.5
183.1
9.0
37.3
419.6
1,382.0
3,527.6
276.2
108.3
539.2
4,451.3
5,833.3

—
7,043.2
35.5
(1,927.0)
5,151.7
10,425.7

—
7,118.2
395.0
(1,858.1)
5,655.1
11,488.4

—
133.8

—
133.1

See accompanying Notes to Consolidated Financial Statements.

Perrigo Company plc - Item 8

PERRIGO COMPANY PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

Net income (loss)

(68.9) $

(162.6) $

146.1

Other comprehensive income (loss):

Foreign currency translation adjustments

Change in fair value of derivative financial instruments

Change in post-retirement and pension liability

Other comprehensive income (loss), net of tax

(339.9)

(21.3)

1.7

(359.5)

274.4

(13.4)

(5.4)

255.6

28.4

28.2

(1.8)

54.8

Comprehensive income (loss)

(
(428.4) $
(

)
)

93.0

200.9

See accompanying Notes to Consolidated Financial Statements.

Perrigo Company plc - Item 8

PERRIGO COMPANY PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

December 31,
2021

Year Ended
December 31,
2020

December 31,
2019

(68.9) $

(162.6) $

146.1

Cash Flows From (For) Operating Activities

Net income (loss)
Adjustments to derive cash flows:
Depreciation and amortization
Loss (Gain) on sale of business
Share-based compensation
Impairment charges
Change in financial assets
Loss on extinguishment of debt
Restructuring charges
Deferred income taxes
Amortization of debt premium
Other non-cash adjustments, net

Subtotal

Increase (decrease) in cash due to:

Accounts receivable
Inventories
Accounts payable
Payroll and related taxes
Accrued customer programs
Accrued liabilities
Accrued income taxes
Other, net
Subtotal

Net cash from (for) operating activities

Cash Flows From (For) Investing Activities

Proceeds from royalty rights
Acquisitions of businesses, net of cash acquired
Asset acquisitions
Purchase of equity method investment
Proceeds from the Royalty Pharma contingent milestone
Additions to property, plant and equipment
Net proceeds from sale of businesses
Other investing, net

Net cash from (for) investing activities

Cash Flows From (For) Financing Activities

Borrowings (repayments) of revolving credit agreements and other financing, net
Issuances of long-term debt
Payments on long-term debt
Premiums on early debt retirement
Deferred financing fees
Issuance of ordinary shares
Repurchase of ordinary shares
Cash dividends
Other financing, net

Net cash from (for) financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents of continuing operations, beginning of period
Cash and cash equivalents held for sale, beginning of period
Less cash and cash equivalents held for sale, end of period
Cash and cash equivalents of continuing operations, end of period

312.2
(47.5)
60.1
173.1
—
—
16.9
9.4
(3.8)
0.2
451.7

(159.7)
(2.4)
(7.9)
(53.0)
1.4
(21.4)
(47.7)
(4.7)
(295.4)
156.3

3.8
—
(70.6)
—
—
(152.1)
1,491.9
2.8
1,275.8

(30.6)
—
—
—
—
—
—
(129.6)
(18.5)
(178.7)
(15.6)
1,237.8
631.5
10.0
(14.4)
1,864.9

384.8
20.9
58.5
346.8
96.4
20.0
3.5
(54.5)
(2.4)
(6.0)
705.4

168.9
(170.6)
(2.7)
10.8
(43.3)
(23.1)
(7.0)
(2.2)
(69.2)
636.2

4.1
(168.5)
(35.2)
(15.0)
—
(170.4)
187.8
9.4
(187.8)

(3.9)
743.8
(590.0)
(19.0)
(6.7)
—
(164.2)
(123.9)
(17.2)
(181.1)
19.9
287.2
344.5
9.8
(10.0)
631.5

396.5
(71.7)
52.2
184.5
(22.1)
0.2
26.3
(43.9)
(4.4)
37.6
701.3

(140.7)
(67.0)
17.0
(3.7)
(48.6)
(23.2)
(74.5)
27.2
(313.5)
387.8

2.9
(747.7)
(149.1)
—
250.0
(137.7)
182.5
3.0
(596.1)

0.5
600.0
(476.0)
—
(1.0)
0.9
—
(112.4)
(10.2)
1.8
9.7
(196.8)
541.9
9.2
(9.8)
344.5

Supplemental Disclosures of Cash Flow Information

Cash paid/received during the year for:

Interest paid
Interest received
Income taxes paid
Income taxes refunded

Perrigo Company plc - Item 8

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

$
$
$
$

133.0
8.0
448.0
17.1

$
$
$
$

145.8
12.1
81.2
38.3

$
$
$
$

136.8
15.1
136.2
28.0

See accompanying Notes to Consolidated Financial Statements.

Perrigo Company plc - Item 8

PERRIGO COMPANY PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in millions, except per share amounts)

Ordinary Shares
Issued

Amount

Accumulated
Other
Comprehensive
Income

Retained
Earnings
(Accumulated
Deficit)

Total

Balance at December 31, 2018

Adoption of new accounting standards
Net income
Other comprehensive loss
Issuance of ordinary shares under:

Stock options
Restricted stock plan

Compensation for stock options
Compensation for restricted stock
Cash dividends, $0.82 per share
Shares withheld for payment of employees'

withholding tax liability

Balance at December 31, 2019

Net income
Other comprehensive income
Issuance of ordinary shares under:

Restricted stock plan

Compensation for stock options
Compensation for restricted stock
Cash dividends, $0.90 per share
Shares withheld for payment of employees'

withholding tax liability

Repurchases of ordinary shares
Purchase of subsidiary's minority interest

Balance at December 31, 2020

Net loss
Other comprehensive income
Issuance of ordinary shares under:

Restricted stock plan

Compensation for stock options

Compensation for restricted stock
Cash dividends, $0.96 per share
Shares withheld for payment of employees'

withholding tax liability

Balance at December 31, 2021

135.9
—
—
—

7,421.7
—
—
—

84.6
—
—
54.8

(1,838.3) $
(3.3)
146.1
—

—
0.3
—
—
—

0.9
—
4.7
50.6
(112.4)

(0.1)
136.1

(5.6)
7,359.9

—
—

0.6
—
—
—

(0.2)
(3.4)

—
133.1

—
—

1.0

—
—
—

—
—

—
2.0
56.5
(123.9)

(10.7)
(164.2)

(1.4)
7,118.2

—
—

—

0.9
66.9
(129.6)

—
—
—
—
—

—
139.4

—
255.6

—
—
—
—

—
—

—
395.0

—
(359.5)

—

—
—
—

—
—
—
—
—

—
(1,695.5)

(162.6)
—

—
—
—
—

—
—

—
(1,858.1)

(68.9)
—

—

—
—
—

(0.3)
133.8

(13.2)
7,043.2

—
35.5

—
(
(1,927.0) $
(

)
)

5,668.0
(3.3)
146.1
54.8

0.9
—
4.7
50.6
(112.4)

(5.6)
5,803.8

(162.6)
255.6

—
2.0
56.5
(123.9)

(10.7)
(164.2)

(1.4)
5,655.1

(68.9)
(359.5)

—

0.9
66.9
(129.6)

(13.2)
5,151.7

See accompanying Notes to Consolidated Financial Statements.

Perrigo Company plc - Item 8
Note 1

NOTE 1 - 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

Our vision is to make lives better by bringing Quality, Affordable Self-Care Products that consumers trust

Basis of Presentation

Our fiscal year begins on January 1 and ends on December 31 of each year. We end our quarterly

accounting periods on the Saturday closest to the end of the calendar quarter, with the fourth quarter ending on
December 31 of each year.

Segment Reporting

Our reporting and operating segments are as follows:

•

We previously had an RX segment which was comprised of our prescription pharmaceuticals business in

the U.S., and other pharmaceuticals and diagnostic business in Israel, which have been divested. Following the
divestiture, there were no substantial assets or operations left in this segment. The RX segment was reported as
Discontinued Operations in 2021, and is presented as such for all periods in this report (refer to Note 8).

Our segments reflect the way in which our 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 21.

Principles of Consolidation

The consolidated financial statements include our accounts and accounts of all majority-owned subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

Unconsolidated Variable Interest Entities

We have arrangements with certain companies that we determined to be variable interest entities ("VIEs").

We did not consolidate the VIEs in our financial statements because we lack the power to direct the activities that
most significantly impact their economic performance and thus are not considered the primary beneficiaries of these
entities.

Perrigo Company plc - Item 8
Note 1

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles

("GAAP") requires management to make estimates and assumptions, which affect the reported earnings, financial
position and various disclosures. Although the estimates are considered reasonable, actual results could differ from
the estimates.

Non-U.S. Operations

We translate our non-U.S. dollar-denominated operations’ assets and liabilities into U.S. dollars at current

rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the
reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative
translation account, a component of Accumulated other comprehensive income (loss) ("AOCI"). Gains or losses
from foreign currency transactions are included in Other (income) expense, net.

Revenue

Product Revenue

We generally recognize product revenue for our contract performance obligations at a point in time, typically

upon shipment or delivery of products to customers. For point in time customers for which control transfers on
delivery to the customer due to free on board destination terms (“FOB”), an adjustment is recorded to defer revenue
recognition over an estimate of days until control transfers at the point of delivery. Where we recognize revenue at a
point in time, the transfer of title is the primary indicator that control has transferred. In other limited instances,
primarily relating to those contracts that relate to contract manufacturing performed for our customers and certain
store branded products, control transfers as the product is manufactured. Control is deemed to transfer over time for
these contracts as the product does not have an alternative use and we have a contractual right to payment for
performance completed to date. Revenue for contract manufacturing contracts is recognized over the transfer
period using an input method that measures progress towards completion of the performance obligation as costs
are incurred. For store branded product revenue recognized over time, an output method is used to recognize
revenue when production of a unit is completed because product customization occurs when the product is
packaged as a finished good under the store brand label of the customer.

Net product sales include estimates of variable consideration for which accruals and allowances are

established. Variable consideration for product sales consists primarily of rebates and other incentive programs
recorded on the Consolidated Balance Sheets as Accrued customer programs. Where appropriate, these estimates
take into consideration a range of possible outcomes in which relevant factors, such as historical experience,
current contractual and statutory requirements, specific known market events and trends, industry data and
forecasted customer buying and payment patterns, are either probability weighted to derive an estimate of expected
value or the estimate reflects the single most likely outcome. Overall, these reserves reflect the best estimates of
the amount of consideration to which we are entitled based on the terms of the contract. Actual amounts of
consideration ultimately received may differ from our estimates. If actual results in the future vary from the
estimates, these estimates are adjusted, which would affect revenue and earnings in the period such variances
become known. Accrued customer programs and allowances were $125.8 million and $147.5 million at
December 31, 2021 and December 31, 2020, respectively.

Other Revenue Policies

We receive payments from our customers based on billing schedules established in each contract.
Amounts are recorded as accounts receivable when our right to consideration is unconditional. In most cases, the
timing of the unconditional right to payment aligns with shipment or delivery of the product and the recognition of
revenue; however, for those customers where revenue is recognized at a time prior to shipment or delivery due to
over time revenue recognition, a contract asset is recorded and is reclassified to accounts receivable when it
becomes unconditional under the contract upon shipment or delivery to the customer.

Our performance obligations are generally expected to be fulfilled in less than one year. Therefore, we do

not provide quantitative information about remaining performance obligations.

Perrigo Company plc - Item 8
Note 1

We do not assess whether a contract has a significant financing component if the expectation at contract

inception is such that the period between payment by the customer and the transfer of the promised products to the
customer will be one year or less, which is the case with substantially all customers.

Taxes collected from customers relating to product sales and remitted to governmental authorities are

excluded from revenue.

Shipping and handling costs billed to customers are included in Net sales. Conversely, shipping and

handling expenses we incur are included in Cost of sales.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of demand deposits and other short-term investments with

maturities of three months or less at the date of purchase. The carrying amount of cash and cash equivalents
approximates its fair value.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in first-

out method. Costs include material and conversion costs. Inventory related to research and development ("R&D") is
expensed when it is determined the materials have no alternative future use.

We maintain reserves for estimated obsolete or unmarketable inventory based on the difference between
the cost of the inventory and its estimated net realizable value. In estimating the reserves, management considers
factors such as excess or slow-moving inventories, product expiration dating, products on quality hold, current and
future customer demand and market conditions. Changes in these conditions may result in additional reserves (refer
to Note 6).

Investmentstt

Fair Value Method Investments

Equity investments in which we own less than a 20% interest and cannot exert significant influence are

recorded at fair value with unrealized gains and losses included in net income. For equity investments without
readily determinable fair values, we may use the Net Asset Value ("NAV") per share as a practical expedient to
measure the fair value, if eligible. If the NAV practical expedient cannot be applied, we may elect to use a
measurement alternative until the investment’s fair value becomes readily determinable. Under the alternative
method, the equity investments are accounted for at cost, less any impairment, plus or minus changes resulting
from observable price changes in an orderly transaction for an identical or similar investment of the same issuer.

Equity Method Investments

The equity method of accounting is used for unconsolidated entities over which we have significant
influence; generally, this represents ownership interests of at least 20% and not more than 50%. Under the equity
method of accounting, we record the investments at carrying value and adjust for a proportionate share of the profits
and losses of these entities each period. We evaluate our equity method investments for recoverability. If we
determine that a loss in the value of an investment is other than temporary, the investment is written down to its
estimated fair value. Evaluations of recoverability are based primarily on projected cash flows.

For more information on our investments, refer to Note 10.

Derivative Instruments

We recognize the entire change in the fair value of the effective portion of derivatives designated as:

•

Cash flow hedges in Other Comprehensive Income ("OCI"). The amounts recorded in OCI will subsequently
be reclassified to earnings in the same line item on the Consolidated Statements of Operations as impacted
by the hedged item when the hedged item affeff cts earnings;

Perrigo Company plc - Item 8
Note 1

•

Fair value hedges in the same line item on the Consolidated Statements of Operations that is used to
present the earnings effect of the hedged item; and

Net investment hedges in OCI classified as a currency translation adjustment. When the net investment in
foreign operations is sold or substantially liquidates, the amounts recorded in AOCI are reclassified to
earnings.

We exclude option premiums, forward points, and cross-currency basis spread from our assessment of

hedge effectiveness, as allowable excluded components from certain of our cash flow and net investment hedges.
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 Consolidated Statements of Operations that is used to
present the earnings effect of the hedged item.

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 7). 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. All realized and unrealized gains and losses are included within operating activities in the Consolidated
Statements of Cash Flows.

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. All of our designated derivatives are assessed for hedge
effectiveness quarterly.

We also have economic non-designated derivatives that we have not elected hedge accounting. 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 60 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,
anticipated foreign currency sales and expenses, and net investments in foreign operations.

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.

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 Consolidated Statements of Operations in
Other (income) expense, net for all periods presented. When we enter into foreign exchange contracts not

Perrigo Company plc - Item 8
Note 1

designated as hedging instruments to mitigate the impact of exchange rate volatility in the translation of foreign
U.S. dollar-translated amounts of each
earnings, gains and losses will generally be offset by fluctuations in the
Income Statement account in current and/or future periods. Net foreign exchange losses totaled $26.8 million,
$0.3 million, and $3.2 million for the years ended December 31, 2021, December 31, 2020, and December 31,
2019, respectively. The 2021 loss includes a loss of $20.9 million for the change in fair value of the option contracts
to hedge the foreign currency exposure of the euro-denominated purchase price for HRA Pharma.

For more information on our derivatives, refer to Note 11.

y,yy
Property
y, Pyy
p

lant and Equipment, ntt

q p

Property, plant and equipment, net is recorded at cost and is depreciated using the straight-line method.
Useful lives for financial reporting range from 3 to 10 years for machinery and equipment and 10 to 45 years for
buildings. We capitalize certain computer software and development costs, included in machinery and equipment,
when incurred in connection with developing or obtaining computer software for internal use. Capitalized software
costs are amortized over the estimated useful lives of the software, which range from 3 to 10 years. Maintenance
and repair costs are charged to earnings, while expenditures that increase asset lives are capitalized. Depreciation
expense includes amortization of assets recorded under finance leases and totaled $86.8 million, $75.6 million, and
$77.5 million for the years ended December 31, 2021, December 31, 2020, and December 31, 2019, respectively.

We held the following property, plant and equipment, net (in millions):

Land
Buildings
Machinery and equipment
Gross property, plant and equipment
Less: accumulated depreciation
Property, plant and equipment, net

December 31,
2021

December 31,
2020

51.3
537.6
1,186.8
1,775.7
(911.6)
864.1

52.2
516.1
1,157.2
1,725.5
(860.9)
864.6

Leases

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
obligation to make lease payments arising from the lease.

lease term and lease liabilities represent our

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 not to separate lease components from the non-lease components
included in an arrangement when measuring the leased asset and leased liability for all asset classes.

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 portfolioff
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.

approach to certain groups of computer equipment and vehicle leases when the 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.

Perrigo Company plc - Item 8
Note 1

For more information on our leases, refer to Note 12.

Goodwill and Intangible Assets

Goodwill

Goodwill represents amounts paid for an acquisition in excess of the fair value of net assets acquired.

Goodwill is tested for impairment annually on the first day of our fourth quarter, or more frequently if changes in
circumstances or the occurrence of events suggest an impairment exists.

The test for impairment requires us to make several estimates about fair value, most of which are based on
projected future cash flows and market valuation multiples. The estimates associated with the goodwill impairment
tests are considered critical due to the judgments required in determining fair value amounts, including projected
discounted future cash flows. Changes in these estimates may result in the recognition of an impairment loss. We
have two reporting units that are evaluated for impairment as of December 31, 2021.

Intangible Assets

We have intangible assets that we have acquired through various business acquisitions and include
trademarks, trade names and brands, in-process research and development ("IPR&D"), developed product
technology/formulation and product rights, distribution and license agreements, customer relationships and
distribution networks, and non-compete agreements. The assets are typically valued initially using the relief from
royalty method or the multi-period excess earnings method ("MPEEM").

We test indefinite-lived trademarks, trade names, and brands for impairment annually, or more frequently if
changes in circumstances or the occurrence of events suggest impairment exists, by comparing the carrying value
of the assets to their estimated fair values. An impairment loss is recognized if the carrying amount of the asset
exceeds its fair value.

Definite-lived intangible assets consist of a portfolio of developed product technology/formulation and

product rights, distribution and license agreements, customer relationships, non-compete agreements, and certain
trademarks, trade names, and brands. The assets are amortized on either a straight-line basis or proportionately to
the benefits derived from those relationships or agreements. Useful lives vary by asset type and are determined
based on the period over which the intangible asset is expected to contribute directly or indirectly to our future cash
flows. We also review all other long-lived assets that have finite lives and that are not held for sale for impairment
when indicators of impairment are evident by comparing the carrying value of the assets to their estimated future
undiscounted cash flows.

IPR&D assets are recognized at fair value and are classified as indefinite-lived assets until the successful
completion or abandonment of the associated R&D efforts. If the associated R&D is completed, the IPR&D asset
becomes a definite-lived intangible asset and is amortized over the asset's assigned useful life. If it is abandoned,
an impairment loss is recorded.

Goodwill, indefinite-lived intangible asset, and definite-lived intangible asset impairments are recorded in

Impairment charges on the Consolidated Statement of Operations. See Note 4 for further information on our
goodwill and intangible assets.

Share-Based Awards

We measure and record compensation expense for all share-based awards based on estimated grant date
fair values. For awards with only service conditions that are based on graded vesting schedules, we recognize the
compensation expense on a straight-line basis over the entire award. Forfeitures on share-based awards are
recognized in compensation expense in the period in which they occur.

Perrigo Company plc - Item 8
Note 1

We estimate the fair value of stock option awards granted based on the Black-Scholes option pricing model,
which requires the use of subjective and complex assumptions. These assumptions include estimating the expected
term that awards granted are expected to be outstanding, the expected volatility of our stock price for a period
commensurate with the expected term of the related options, and the risk-free rate with a maturity closest to the
expected term of the related awards. Restricted stock and restricted stock units are valued based on our stock price
on the day the awards are granted. The estimated fair value of outstanding Relative Total Shareholder Return
performance units (“RTSR”) is based on the grant date fair value of RTSR awards using a Monte Carlo simulation,
which includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends
(refer to Note 15).

Income Taxes

We record deferred income tax assets and liabilities on the balance sheet as noncurrent based upon the

difference between the financial reporting and the tax reporting basis of assets and liabilities using the enacted tax
rates. To the extent that available evidence raises doubt about the realization of a deferred income tax asset, a
valuation allowance is established.

We have provided for income taxes for undistributed earnings of certain foreign subsidiaries which have not

been deemed to be permanently reinvested. For those foreign subsidiaries we have deemed to be permanently
reinvested, we have provided no further tax provision.

We record reserves for uncertain tax positions to the extent it is more likely than not the tax return position
will be sustained on audit, based on the technical merits of the position. Periodic changes in reserves for uncertain
tax positions are reflected in the provision for income taxes. We include interest and penalties attributable to
uncertain tax positions and income taxes as a component of our income tax provision (refer to Note 17).

Legal Contingencies

We are involved in product liability, patent, commercial, regulatory and other legal proceedings that arise in

the normal course of business. We record a liability when a loss is considered probable and the amount can be
reasonably estimated. If the reasonable estimate of a probable loss is a range and no amount within that range is a
better estimate, the minimum amount in the range is accrued. If a loss is not probable or a probable loss cannot be
reasonably estimated, no liability is recorded. We have established reserves for certain of our legal matters (refer to
Note 19). We do not incorporate insurance recoveries into our reserves for legal contingencies. We separately
record receivables for amounts due under insurance policies when we consider the realization of recoveries for
claims to be probable, which may be different than the timing in which we establish the loss reserves.

Research and Development

All R&D costs, including payments related to products under development and research consulting

agreements, are expensed as incurred. We incur costs throughout the development cycle, including costs for
research, clinical trials, manufacturing validation, and other pre-commercialization approval costs that are included
in R&D. We may continue to make non-refundable payments to third parties for new technologies and for R&D work
that has been completed. These payments may be expensed at the time of payment depending on the nature of the
payment made. R&D expense was $122.0 million, $121.7 million, and $119.2 million, for the years ended
December 31, 2021, December 31, 2020 and December 31, 2019, respectively.

We actively collaborate with other companies to develop, manufacture and market certain products or
groups of products. We may choose to enter into these types of agreements to, among other things, leverage our or
others’ scientific research and development expertise or utilize our extensive marketing and distribution resources.
Our policy on accounting for costs of strategic collaborations determines the timing of the recognition of certain
development costs. In addition, this policy determines whether the cost is classified as a development expense or
capitalized as an asset. Management is required to form judgments with respect to the commercial status of such
products in determining whether development costs meet the criteria for immediate expense or capitalization. For
example, when we acquire certain products for which there is already an Abbreviated New Drug Application
("ANDA") or New Drug Application ("NDA") approval directly related to the product, and there is net realizable value
based on projected sales for these products, we capitalize the amount paid as an intangible asset. If we acquire
product rights that are in the development phase and as to which we have no assurance that the third party will
successfully complete its development milestones, we expense the amount paid.

Perrigo Company plc - Item 8
Note 1

We enter into a number of collaboration agreements in the ordinary course of business. Terms of such

agreements may require us to make or receive milestone payments upon the achievement of certain product
research and development objectives and pay or receive royalties on the future sale, if any, of commercial products
resulting from the collaboration. Milestone and up-front payments made, and other research and development costs
or reimbursements related to collaboration agreements, are generally recorded in research and development
expense if the payments relate to drug candidates that have not yet received regulatory approval. Milestone and up-
front payments made related to approved drugs will generally be capitalized and amortized to cost of goods sold
over the economic life off
generally reflected as cost of goods sold.

f the product. Royalties received are generally reflected as revenue, and royalties paid are

Advertising Costs

Advertising costs relate primarily to print advertising, direct mail, on-line advertising, social media
communications, and television advertising and are expensed as incurred. For the year ended December 31, 2021,
90% of advertising expense was attributable to our CSCI segment. Advertising costs were as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

130.9

130.5

142.8

)
"EPS")
(
Earnings per Share (

g p

Basic EPS is calculated using the weighted-average number of ordinary shares outstanding during each
period. It excludes both the dilutive effects of additional common shares that would have been outstanding if the
shares issued under stock incentive plans had been exercised and the dilutive effect of restricted share units, to the
extent those shares and units have not vested. Diluted EPS is calculated including the effects of shares and
potential shares issued under stock incentive plans, following the treasury stock method.

Defined Benefit Plans

We operate a number of defined benefit plans for employees globally.

Two significant assumptions, the discount rate and the expected rate of return on plan assets, are important

elements of expense and liability measurement. We evaluate these assumptions annually. Other assumptions
involve employee demographic factors, such as retirement patterns, mortality, turnover, and the rate of
compensation increase.

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value

of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit
obligation is calculated periodically by independent actuaries using the projected unit credit method. The present
value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest
rates of either high quality corporate bonds or long term government bonds depending on the depth and liquidity of
the high quality corporate bond market in the different geographies where we have pension liabilities. The bonds are
denominated in the currency in which the benefits will be paid and have terms to maturity approximating the terms
of the related pension liability.

Actuarial gains and losses are recognized on the Consolidated Statement of Operations using the corridor

method. Under the corridor method, to the extent that any cumulative unrecognized net actuarial gain or loss
exceeds 10% of the greater of the present value of the defined benefit obligation and the fair value of the plan
assets, that portion is recognized over the expected average remaining working lives of the plan participants.
Otherwise, the net actuarial gain or loss is recorded in OCI. We recognize the funded status of benefit plans on the
Consolidated Balance Sheets. In addition, we recognize the gains or losses and prior service costs or credits that
arise during the period but are not recognized as components of net periodic pension cost of the period as a
component of OCI (refer to Note 18).

Perrigo Company plc - Item 8
Note 1

Allowance for Credit Losses

Expected credit losses on trade receivables and contract assets are measured collectively by geographic

location. The estimate of expected credit losses considers historical credit loss information that is adjusted for
current conditions and for reasonable and supportable forecasts. Historical credit loss experience provides the
primary basis for estimation of expected credit losses. Adjustments to historical loss information may be made for
significant changes in a geographic location’s economic conditions. Receivables that do not share risk
characteristics are evaluated on an individual basis. These receivables are not included in the collective evaluation.

The allowance for credit losses is a valuation account that is deducted from the instruments’ cost basis to

present the net amount expected to be collected. Trade receivables and contract assets are charged off aff gainst the
allowance when the balance is no longer deemed collectible.

The following table presents the allowance for credit losses activity (in millions):

Balance at beginning of period

Provision for credit losses, net

ff
Receivables written-off

Transfer to held for sale

Currency translation adjustment

Balance at end of period

Year Ended

December 31,
2021

December 31,
2020

6.5

4.0

(

0.7)

(1.4)

(1.2)

7.2

6.0

2.3

(2.2)

—

0.4

6.5

Recent Accounting Standard Pronouncements

Below are recent Accounting Standard Updates ("ASU") that we are assessing to determine the effect on

our Consolidated Financial Statements. We do not believe that any other recently issued accounting standards
could have a material effect on our 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
ASU 2021-08:
Business
Combinations (Topic
805): Accounting forff
Contract Assets and
Contract Liabilities
from Contracts with
Customers

Description
This guidance amends ASC 805 to
add contract assets and contract
liabilities to the list of exceptions to
the recognition and measurement
principles that apply to business
combinations and to require
acquiring entities to apply Topic 606
to recognize and measure contract
assets and contract liabilities in a
business combination. Under
current GAAP, anP
recognizes such items at fair value
at acquisition date.

acquirer generally

NOTE 2 - REVENUE RECOGNITION

Effective Date
January 1, 2023

Effect on the Financial Statements or Other
Significant Matters
Upon adoption on the effective date, the amendments will
be applied prospectively to business combinations. Early
adoption is permitted in an interim period; however,
retrospective application is required forff
occurring after the beginning of the fiscal year that
includes the interim period of early application. We are
currently assessing the adoption impact of this standard;
however, we do not anticipate a material impact from
applying the recognition and measurement principles of
Topic 606 to contract assets or liabilities acquired as part
of a business combination.

any acquisitions

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) during each of the periods presented below

(in millions):

Perrigo Company plc - Item 8
Note 2

December 31,
2021

Year Ended
December 31,
2020

December 31,
2019

U.S.
Europe(2)
All other countries(3)
Total net sales

2,565.9 $
1,393.0
179.8
4,138.7 $

2,579.0 $
1,350.6
158.6
4,088.2 $

2,360.3
1,335.8
173.8
3,869.9

(1) The net sales by geography is derived from the location of the entity that sells to a third party.
(2)

Includes Ireland net sales of $23.7 million, $29.8 million, and $23.4 million for the years ended December 31, 2021, December 31, 2020,
and December 31, 2019, respectively.
Includes revenue generated primarily in Mexico, Australia, and Canada.

(3)

Product Category

The following is a summary of our net sales by category (in millions):

CSCA(1)

Upper respiratory

Digestive health

Pain and sleep-aids

Nutrition

Oral care

Healthy lifestyle

Skincare and personal hygiene

Vitamins, minerals, and supplements

Animal health
Other CSCA(2)

Total CSCA

CSCI

Skincare and personal hygiene

Upper respiratory

Vitamins, minerals, and supplements

Pain and sleep-aids

Healthy lifestyle

Oral care

Digestive health
Other CSCI(3)

Total CSCI

Total net sales

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

483.1

505.8

475.1

405.4

401.9

311.9

297.7

219.2

31.7

—

67.1

471.3

434.5

388.3

288.2

352.4

200.6

27.0

—

24.9

529.3

429.2

390.9

395.3

111.7

356.1

191.3

28.6

43.7

11.6

2,693.1

2,693.0

2,487.7

394.3

226.2

217.4

201.8

179.3

95.8

38.4

92.4

1,445.6

351.8

255.1

201.0

190.4

165.4

97.8

26.5

107.2

1,395.2

4,138.7

4,088.2

371.6

276.8

180.2

167.9

173.8

51.2

27.1

133.6

1,382.2

3,869.9

Includes net sales from our OTC contract manufacturing business.

(1)
(2) Consists primarily of product sales and royalty income related to supply and distribution agreements, 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.

Perrigo Company plc - Item 8
Note 2

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 $299.7 million,
$261.4 million, and $285.3 million for the years ended December 31, 2021, December 31, 2020, an
2019, respectively.

d December 31,

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):

Short-term contract assets Prepaid expenses and other current assets $

40.2

19.7

Balance Sheet Location

December 31,
2021

December 31,
2020

NOTE 3 - ACQUISITIONS AND DIVESTITURES

Acquisitions During the Year Ended December 31, 2021

Héra SAS (“HRA Pharma”) Acquisition Agreement

On September 8, 2021, we and our wholly-owned subsidiary Habsont Unlimited Company (the

"Purchaser"), entered into a Put Option Agreement to acquire certain holding companies holding all of the
outstanding equity interests of HRA Pharma from funds affiliated with private equity firms Astorg and Goldman
Sachs Asset Management (collectively, the "Sellers"). Pursuant to the Put Option Agreement, followin
of the works council consultation process required under French law, the selling shareholders exercised their put
option right under the Put Option Agreement and, on October 20, 2021, the Company, the Purchaser and the
Sellers entered into a Securities Sale Agreement in the form previously agreed by the parties (the “Purchase
Agreement”). Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the
Purchaser has agreed to acquire certain holding companies holding all of the outstanding equity interests of HRA
Pharma from the Sellers for cash
approximately $2.1 billion based on exchange rates as of the date of the Put Option Agreement, on an enterprise
value basis and using a lockbox mechanism set forth in the Purchase Agreement. In September 2021, we entered
into two non-designated currency option contracts to hedge the foreign currency exposure of the euro-denominated
purchase price for HRA Pharma (refer to Note 11).

. The transaction values HRA Pharma at approximately €1.8 billion, or

g completion

The proposed final transaction is expected to close in the first half of 2022, subject to the satisfaction of

Perrigo Company plc - Item 8
Note 3

Acquisitions During the Year Ended December 31, 2020

Eastern European OTC Dermatological Brands Acquisition

On October 30, 2020, we acquired three Eastern European OTC dermatological brands ("Eastern European

Brands"), skincare brands Emolium®, Iwostin®, and hair loss treatment brand Loxon® from Sanofi. The transaction
closed for €53.3 million ($62.3 million). We capitalized $52.5 million as brand-named intangible assets and allocated
the remainder of the purchase price to goodwill, inventory, customer relationships and deferred tax assets.

The addition of these market-leading OTC brands complements our already robust skincare portfolio and

adds scale to our Eastern European business. The acquisition also serves as another step for our CSCI growth plan
and provides new opportunities for self-care revenue synergy in the European markets. The operating results of the
brands are reported within our CSCI segment. The acquisition of the Eastern European Brands was accounted for
as a business combination and has been reported in our Consolidated Statements of Operations as of the
acquisition date.

The goodwill arising from the acquisition consists largely of the assembled workforce, and the cost and

revenue synergies expected from integrating the business into the CSCI segment. The goodwill was allocated to our
CSCI segment, none of which is deductible for income tax purposes. The definite-lived intangible assets acquired
consisted of brands and customer relationships which are being amortized over a weighted average useful life of
approximately 18.8 years. Both the brands and customer relationships were valued using the multi-period excess
earnings method. Significant judgment was applied in estimating the fair value of the intangible assets acquired,
which involved the use of significant estimates and assumptions with respect to the timing and amounts of cash flow
projections, including revenue growth rates, projected profit margins, and discount rates. The opening balance
sheet is final.

Oral Care Assets of High Ridge Brands

On April 1, 2020, we acquired the oral care assets of High Ridge Brands ("Dr. Fresh") for total purchase

consideration of $113.0 million, subject to customary post-closing adjustments, including a working capital
settlement. After post-closing adjustments as of December 31, 2020, total cash consideration paid was
$106.2 million, net of $2.0 million that we allocated as prepayment of contract consideration for transitional services
received related to the transaction.

This acquisition includes the children’s oral care value brand, Firefly®, in addition to the REACH® and Dr.

Fresh® brands, and a licensing portfolio. The U.S. operations, which represent a significant portion of the business,
are reported in our CSCA segment and the remaining non-U.S. operations are reported in our CSCI segment.

During the year ended December 31, 2020, we incurred $4.4 million of general transaction costs (legal,
banking and other professional fees). The amounts were recorded in Administration expenses within the CSCA
segment.

The acquisition of Dr. Fresh was accounted for as a business combination and has been reported in our

Consolidated Statements of Operations as of the acquisition date. From April 1, 2020 through December 31, 2020,
the acquisition generated Net sales of $72.3 million and pre-tax income of $2.1 million, which included $2.0 million
related to inventory costs stepped up to acquisition date fair value.

Perrigo Company plc - Item 8
Note 3

The following table summarizes the consideration paid for Dr

. Fresh and the provisional amounts of the

assets acquired and liabilities assumed (in millions):

Oral Care Assets of High
Ridge Brands (Dr. Fresh)

Purchase price paid

Assets acquired:

Accounts receivable

Inventories

Prepaid expenses and other current assets

Property, plant and equipment, net

Operating lease assets

Goodwill

Distribution and license agreements and supply agreements

f
Developed product technology, formulations, and product rights

Customer relationships and distribution networks

Trademarks, trade names, and brands

Total intangible assets

Total assets

Liabilities assumed:

Accounts payable

Other accrued liabilities

Payroll and related taxes

Accrued customer programs

Other non-current liabilities

Total liabilities

Net assets acquired

106.2

13.1

22.2

0.4

0.7

2.6

17.2

2.2

0.1

20.6

43.2

66.1

122.3

6.1

3.8

0.7

3.0

2.5

16.1

106.2

The goodwill of $17.2 million arising from the acquisition consists largely of the anticipated growth from new

product sales, sales to new customers, the assembled workforce, and the synergies expected from combining the
operations of Dr. Fresh into Perrigo. The goodwill is attributable to our CSCA segment and is tax deductible for
income tax purposes. The definite-lived intangible assets acquired consisted of trademarks and trade names,
license agreements, and customer relationships which are being amortized over a weighted average useful life of
f
approximately 17.8 years. Customer relationships were valued using the multi-period excess earnings method.
Trademarks and trade names and developed technology were valued using the relief from royalty method.
Significant judgment was applied in estimating the fair value of the intangible assets acquired, which involved the
use of significant estimates and assumptions with respect to the timing and amounts of cash flow projections,
including revenue growth rates, projected profit margins, and discount rates. The opening balance sheet is final.

Dexsil®ll

On February 13, 2020, we acquired Dexsil®, a silicon supplement brand, from RXW Group NV, for total cash

consideration paid of approximately $8.0 million. The transaction was accounted for as an asset acquisition, in
which we capitalized the consideration paid as a brand-named intangible asset. We began amortizing the brand
intangible over a 25-year useful life. Operating results attributable to the product are included within our CSCI
segment.

100

Steripod®dd

On January 3, 2020, we acquired Steripod®, a leading toothbrush accessory brand and innovator in the
toothbrush protector market, from Bonfit America Inc. Total consideration paid was $26.0 million. The transaction
was accounted for as an asset acquisition, in which we capitalized $25.1 million as a brand-named intangible asset.
The remainder of the purchase price was allocated to working capital. We began amortizing the brand intangible
over a 25-year useful life. Operating results attributable to the product are included within our CSCA segment.

Perrigo Company plc - Item 8
Note 3

Acquisitions Duringii

the Year Ended December 31, 2019

Prevacid®dd 24HR

On November 29, 2019, we acquired the branded OTC rights to Prevacid®24HR from GlaxoSmithKline for

$61.5 million in cash. We capitalized $61.7 million, inclusive of closing costs, as a brand named intangible asset and
began amortizing it over a 20-year useful life. Operating results attributable to the product are included within our
CSCA segment.

Ranir Global Holdings, LLC

On July 1, 2019, we acquired 100% of the outstanding equity interest in Ranir Global Holdings, LLC

("Ranir"), a privately-held company, for total base consideration of $750.0 million in a debt-free, cash-free
transaction. After po
cash acquired. We funded the transaction with cash on hand and borrowings under the 2018 Revolver (as defined
in Note 13).

st-closing adjustments, total cash consideration paid was $747.7 million, net of $11.5 million

Ranir is headquartered in Grand Rapids, Michigan and is a leading global supplier of private label and

branded oral care products. Ranir's U.S. operations are reported in our CSCA segment and its non-U.S. operations
are reported in our CSCI segment.

The acquisition of Ranir was accounted for as a business combination and has been reported in our
Consolidated Statements of Operations as of the acquisition date. From July 1, 2019 through December 31, 2019,
Ranir generated Net sales of $151.4 million and had $7.6 million of Net income, which is inclusive of a non-recurring
charge of $5.7 million related to inventory costs stepped up to acquisition date fair value.

101

The following table summarizes the consideration paid for Ranir and the amount

s of the assets acquired

and liabilities assumed (in millions):

Perrigo Company plc - Item 8
Note 3

Purchase price paid

Assets acquired:

Cash and cash equivalents

Accounts receivable

Inventories

Prepaid expenses and other current assets

Property, plant and equipment, net

Operating lease assets

Goodwill

Definite-lived intangibles:

ff
Developed product technology, formulations, and product rights

Customer relationships and distribution networks

Trademarks, trade names, and brands

Indefinite-lived intangibles:

In-process research and development

Total intangible assets

Other non-current assets

Total assets

Liabilities assumed:

Accounts payable

Other accrued liabilities

Payroll and related taxes

Accrued customer programs

Deferred income taxes

Other non-current liabilities

Total liabilities

Net assets acquired

Ranir

759.2

11.5

40.6

59.0

4.0

40.8

3.7

292.7

48.6

260.0

41.0

39.7

389.3

2.8

844.4

17.6

7.7

5.5

5.7

45.9

2.8

85.2

759.2

The goodwill of $292.7 million arising from the acquisition consists largely of the anticipated growth from

xpect $252.3 million to be deductible for income tax purposes. The definite-lived

new product sales, sales to new customers, the assembled workforce, and the synergies expected from combining
the operations of Perrigo and Ranir. Goodwill of $212.6 million and $80.1 million was
CSCI segments, respectively
.
CSCI segments, respectively We e
intangible assets acquired consisted of trademarks and trade names, developed product technologies, and
customer relationships. Trademarks and trade names were assigned useful lives that ranged from 20 to 25-years.
Developed product technologies were assigned 10-year useful lives and customer relationships were assigned 24-
year useful lives. Customer relationships were valued using the multi-period excess earnings method. Trademarks
and trade names, developed technology, and in-process research and development ("IPR&D") were valued using
the relief from royalty method. Significant judgment was applied in estimating the fair value of the intangible assets
acquired, which involved the use of significant estimates and assumptions with respect to the timing and amounts of
cash flow projections, including revenue growth rates, projected profit margins, and discount rates. The opening
balance sheet is final.

allocated to our CSCA and

CSC

Generic Product Acquisition

On May 17, 2019, we purchased the ANDA for a generic product used to relieve pain, for $15.7 million in

cash, which we capitalized as a developed product technology intangible asset. We launched the product during the
third quarter of 2019 and began amortizing it over a 20-year useful life. Operating results attributable to the product
are included within our CSCA segment.

102

Perrigo Company plc - Item 8
Note 3

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.

Pro Frr

orFF ma Impact of Business Combinations

The following table presents unaudited pro forma information as if the acquisition of Ranir, Dr. Fresh and the

Eastern European brands occurred on January 1, 2019, and had been combined with the results reported in our
Consolidated Statements of Operations for all periods presented (in millions):

(Unaudited)

Net sales

Income from continuing operations

Year Ended

December 31,
2020

December 31,
2019

4,136.5

58.2

4,144.7

185.0

The unaudited pro forma information is presented for information purposes only and is not indicative of the

results that would have been achieved if the acquisition had taken place at such time. The unaudited pro forma
information presented above includes adjustments primarily for amortization charges for acquired intangible assets,
depreciation of property, plant and equipment that have been revalued, certain acquisition-related charges, and
related tax effects.

Divestitures During the Year Ended December 31, 2021

RX business

Refer to Note 8 - Discontinued Operations for details on the sale of the RX business.

Divestitures During the Year Ended December 31, 2020

Rosemont Pharmaceuticals Business

On June 19, 2020, we completed the sale of our U.K.-based Rosemont Pharmaceuticals business, a

generic prescription pharmaceuticals manufacturer focused on liquid medicines, to a U.K.-headquartered private
equity firm for cash consideration of £155.6 million (approximately $195.0 million). The sale resulted in a pre-tax
loss of $21.1 million recorded in our CSCI segment in Other (income) expense, net on the Consolidated Statements of
Operations. The charge included professional fees and a $46.4 million write-off off
adjustment from Accumulated other comprehensive income.

f foreign currency translation

Divestitures During the Year Ended

December 31, 2019

Animal Health Btt

usiness

On July 8, 2019, we completed the sale of our animal health business to PetIQ for cash consideration of
$182.5 million, which resulted in a pre-tax gain of $71.7 million recorded in our CSCA segment in Other (income)
expense, net on the Consolidated Statements of Operations.

103

NOTE 4 - GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill, by reportable segment, were as follows (in millions):

Perrigo Company plc - Item 8
Note 4

Balance at December 31, 2019

1,899.1

1,203.7

CSCA(1)

CSCI(2)

Total
3,102.8

Business divestitures

Business acquisitions

Currency translation adjustments
Purchase accounting adjustments

Balance at December 31, 2020

Impairments

Purchase accounting adjustments

Currency translation adjustments

—

14.8
1.5

(10.4)
1,905.0

(6.1)
2.4

1.1

Balance at December 31, 2021

1,902.4

(115.6)

7.3
83.3

12.0
1,190.7

(10.0)

(2.4)

(81.3)
1,097.0

22.1
84.8

1.6
3,095.7

(16.1)

—

(80.2)

2,999.4

(1) We had accumulated goodwill impairments of $6.1 as of December 31, 2021.
(2) We had accumulated goodwill impairments of $878.4 as of December 31, 2021 and $868.4 million as of December 31, 2020.

CSCA Reporting Unit Goodwill

On May 18, 2021, we announced a definitive agreement to sell our Mexico and Brazil-based OTC
businesses ("Latin American businesses"), both within our CSCA segment, to Advent International. As a result, we
prepared a goodwill impairment test. We determined the carrying value of this business exceeded the fair value and
recorded an impairment of $6.1 million within our CSCA segment during the three months ended July 3, 2021 (refer
to Note 7 and Note 9).

CSCI Reporting Unit Goodwill

During the three months ended December 31, 2021, we reorganized the reporting structure within our CSCI

segment following the integration of our reporting units into a new operating structure. The goodwill previously
included in the Oral Care International, CSC UK and Australia, and BCS reporting units was combined into a single
CSCI reporting unit. Impairment tests were performed for the legacy reporting units prior to the reorganization and
for the CSCI reporting unit immediately after the reorganization.

During the three months ended June 27, 2020, our Branded Consumer Self-care ("BCS") reporting unit

included in the CSCI segment had an indication of potential impairment which was driven by a decrease in
forecasted cash flows in the second half of 2020 related to impacts from the COVID-19 pandemic. We prepared an
impairment test as of June 27, 2020 and determined that the fair value of the BCS reporting unit exceeded net book
value by less than 10%, consistent with prior annual impairment test as of October 1, 2019. There was no indication
of impairment during the remaining six months of December 31, 2020, nor during the year ended December 31,
2021.

In conjunction with our annual impairment test, during the three months ended December 31, 2021, we

recorded an impairment charge in our Oral Care International reporting unit within our CSCI segment of
$10.0 million. The change in fair value from previous estimates was driven by reduced projections of future cash
flows resulting from increased costs throughout the global supply chain (refer to Note 7).

104

Intangible assets and the related accumulated amortization consisted of the following (in millions):

Perrigo Company plc - Item 8
Note 4

Indefinite-lived intangibles:

Trademarks, trade names, and brands

In-process research and development
Total indefinite-lived intangibles

Definite-lived intangibles:

Distribution and license agreements and

supply agreements

Developed product technology, formulations,

and product rights

Customer relationships and distribution

networks

Trademarks, trade names, and brands

Non-compete agreements

Total definite-lived intangibles

Total intangible assets

Year Ended

December 31, 2021

December 31, 2020

Gross

Accumulated
Amortization

Gross

Accumulated
Amortization

3.5

1.8

5.3

— $

—

— $

4.3

2.7

7.0

—

73.2

56.9

74.8

55.4

300.2

1,820.7

1,482.3

2.1

191.4

887.8

394.2

2.1

303.3

1,920.5

1,581.5

2.9

177.3

823.7

342.2

2.9

3,678.5

3,683.8

1,532.4

3,883.0

3,890.0

1,401.5

Certain intangible assets are denominated in currencies other than U.S. dollar; therefore, their gross and

net carrying values are subject to foreign currency movements.

The remaining weighted-average useful life for our amortizable intangible assets by asset class at

December 31, 2021 was as follows:

Amortizable Intangible Asset Category
Distribution and license agreements and supply agreements

f
Developed product technology, formulations, and product rights

Customer relationships and distribution networks

Trademarks, trade names, and brands

Remaining Weighted-
Average Useful Life
(Years)

We recorded amortization expense of $210.0 million, $212.2 million, and $219.6 million during the years

ended December 31, 2021, December 31, 2020, and December 31, 2019, respectively.

Our estimated future amortization expense is as follows (in millions):

Year

2022

2023

2024

2025

2026

Amount

194.9

183.6

174.7

168.0

160.2

Thereafter

1,264.7

Licensed Pain Relief Products

During the year ended December 31, 2019, following commercial launch delays relating to certain pain

relief products that we licensed from a third party, the licensor determined that it would not extend the license
agreement upon expiration. As a result, we determined the asset was fully impaired and recorded an asset

105

Perrigo Company plc - Item 8
Note 4

impairment of $9.7 million relating to this license, which we had reported as a definite-lived intangible asset in our
CSCI segment (refer to Note 7).

In-process R&D ("IPR&D")

We recorded an impairment charge of $0.9 million and $4.1 million on certain IPR&D assets during the

years ended December 31, 2021 and December 31, 2019, respectively, due to changes in the projected
development and regulatory timelines for various projects.

NOTE 5 - ACCOUNTS RECEIVABLE FACTORING

During the year ended December 31, 2020, we had accounts receivable factoring arrangements
related third-party financial institutions (the “Factors”). Pursuant to the terms of the arrangements, we sell to the
Factors certain of our accounts receivable balances on a non-recourse basis for credit approved accounts. An
administrative fee per invoice is charged on the gross amount of accounts receivables assigned to the Factors, and
interest is calculated at the applicable EUR LIBOR rate plus a spread. At December 31, 2020, the total amount
factored on a non-recourse basis and excluded from accounts receivable was $6.9 million. During the year ended
December 31, 2021, the factoring program was discontinued and there were no amounts factored on
recourse basis and excluded from accounts receivable.

a non-

non-

with

NOTE 6 - INVENTORIES

Major components of inventory were as follows (in millions):

Finished goods
Work in process

Raw materials

Total inventories

Year Ended

December 31,
2021

December 31,
2020

549.2

251.9

219.1

574.1

220.4

264.9

1,020.2

1,059.4

NOTE 7 - FAIR VALUE MEASUREMENTS

On January 1, 2020, we adopted ASU 2018-13: Fair Value Measurement (Topic 820): Disclosure
Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("Topic 820"). The amendments
in this ASU remove disclosure requirements in Topic 820 related to the amount of, and reasons for, transfers
between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the
valuation processes for Level 3 fair value measurements. Additionally, Topic 820 adds disclosure requirements for
the changes in unrealized gains and losses for the period included in other comprehensive income for recurring
s held at the end of the reporting period, and the range and weighted average of
Level 3 fair value measurement
significant unobservable inputs used to develop Level 3 fair value measurements. We have amended certain of our
quantitative Level 3 fair value measurement disclosures to add the range and weighted average of significant
unobservable inputs used.

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date. The following fair value hierarchy is used in
selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable.

Level 1:

Quoted prices for identical instruments in active markets.

Level 2:

Quoted prices for similar instruments in active markets; quoted prices for identical or
similar instruments in markets that are not active; and model-derived valuations in which
all significant inputs are observable in active markets.

Level 3:

Valuations derived from valuation techniques in which one or more significant inputs are
not observable.

106

The table below summarizes the valuation of our financial instruments carried at fair value by the above

pricing categories (in millions):

Perrigo Company plc - Item 8
Note 7

Year Ended

December 31, 2021

December 31, 2020

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

Measured at fair value on a recurring basis:
Assets:

Investment securities
Foreign currency forward contracts
Cross-currency swap
Foreign currency option contracts

Total assets

Liabilities:

Foreign currency forward contracts

Cross-currency swap
Total liabilities

Measured at fair value on a non-recurring basis:
Assets:

Goodwill(1)

Total assets

Liabilities

Liabilities held for sale, net(2)
Total liabilities

0.4
—
—
—
0.4

— $
5.7
—
5.0
10.7

— $
—
— $

2.4
13.8
16.2

— $
—
—
—
— $

— $
—
— $

2.5
—
—
—
2.5

— $
9.8
6.3
—
16.1

— $
—
— $

7.9
—
7.9

— $

71.7

16.8

— $

—
—
—
—
—

—
—
—

—

(1) During the year ended December 31, 2021, goodwill with a carrying value of $81.7 million was written down to a fair value of $71.7 million.
(2) We measured the net assets held for sal

impairment purposes and recorded a total impairment of $162.2 million, resulting in a net

e forff
liability held for sale balance (refer to Note 9).

There were no transfers within Level 3 fair value measurement

s during the years ended December 31, 2021
or December 31, 2020 (refer to Note 10 for information on our investment securities and Note 11 for a discussion of
derivatives).

Foreign Currency Option Contracts

We valued the foreign currency option contract derivatives using an extension of the Black-Scholes Option

Pricing Model ("BSOPM") which uses the strike price and expiry as inputs obtained from the contractual agreement.
Additionally, the model uses risk-free interest rates, forward currency quotes, and option volatility assumptions
obtained from the observable market.

Foreign Currency Forward Contracts

We value the foreign currency forward contracts based on notional amounts, contractual rates, and

observable market inputs, such as currency exchange rates and credit risk.

Cross-currency Swaps

We value the cross-currency swaps using a method which discounts the expected cash flows resulting from

the derivative. We estimate the cash flows using the contractual term of the derivative, including the period to
maturity and we use observable market-based inputs, including interest rate curves, and foreign exchange rate.

107

Perrigo Company plc - Item 8
Note 7

Royalty Pharma Contingent Milestone

During the year ended December 31, 2020, Royalty Pharma payments from Biogen for Tysabri® sales, as
defined in the agreement between the parties, did not exceed the 2020 global net sales threshold. Therefore, we
were not entitled to receive the remaining contingent milestone payment. As of December 31, 2020, there were
no contingent milestone payments outstanding.

The table below summarizes the change in fair value of the Royalty Pharma contingent milestone (in

millions):

Balance at beginning of period

Change in fair value

Balance at end of period

Year Ended

December 31,
2020

95.3

(95.3)

—

During the year ended December 31, 2020, Royalty Pharma payments from Biogen for Tysabri® sales, as

During the year ended December 31, 2019, the fair value of the Royalty Pharma contingent milestone
payment related to 2020 increased by $22.1 million to $95.3 million. These adjustments were driven by higher
projected global net sales of Tysabri and the estimated probability of achieving the earn-out. There was no
contingent milestone based on 2019 sales of Tysabri. The Royalty Pharma payments from Biogen for Tysabri were
$337.5 million in 2018, which triggered the $250.0 million milestone payment received during the year ended
December 31, 2019.

Non-recurring Fair Value Measurements

The non-recurring fair values represent only those assets whose carrying values were adjusted to fair value

during the reporting period.

Goodwill and Intangible Assets

Latin America

During the year ended December 31, 2021, as a result of our definitive agreement to sell our Latin
American businesses, we prepared a goodwill impairment test. We determined the carrying value of this business
exceeded the fair value and recorded an impairment in the CSCA segment (refer to Note 4).

Oral Care Reporting Unit Goodwill

During the year ended December 31, 2021, we prepared a goodwill impairment test utilizing a combination

of comparable company and discounted cash flow techniques. In our comparable company market approach, we
considered observable market information (Level 2 inputs). Our cash flow projections included revenue
assumptions, gross margin and operating expenses based on the reporting unit’s growth plans (Level 3 inputs). In
our discounted cash flow analysis, we used a long-term growth rate of 2.0%. We used a discount rate of 9.75% in
the analysis, which 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 blended jurisdictional tax rates ranging from 16.5% to
29.1%. 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 (refer to Note 4).

108

Perrigo Company plc - Item 8
Note 7

Licensed Pain Relief Products

During the year ended December 31, 2019, we measured the impairment of certain pain relief products that
we license from a third party, a definite-lived intangible asset. We determined the asset was fully impaired because
the agreement with the licensor would not be extended upon expiration (refer to Note 4).

Assets (liabilities) held for sale, net

During the year ended December 31, 2021, as a result of our definitive agreement to sell our Latin
American businesses, we prepared an impairment test on the net assets held for sale related to this business. We
determined the carrying value of the net assets held for sale exceed the fair value less cost to sell and recorded an
impairment in the CSCA segment (refer to Note 9).

Fixed Rate Long-term Debt

Our fixed rate long-term debt consisted of the following (in millions):

Year Ended

December 31,
2021

December 31,
2020

Level 1

Level 2

Level 1

Level 2

Public bonds

Carrying value (excluding discount)

Fair value

$ 2,760.0

$ 2,847.2

— $ 2,760.0

— $ 3,031.1

—

Private placement note

Carrying value (excluding premium)

Fair value

— $

153.5

162.6

— $

164.9

— $

177.5

The fair values of our public bonds for all periods were based on quoted market prices. The fair values of

our private placement note for all periods were based on interest rates offered for borrowings of a similar nature and
remaining maturities.

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

NOTE 8 - DISCONTINUED OPERATIONS

Our discontinued operations primarily consist of our RX segment, which held our prescription

pharmaceuticals business in the U.S. and our pharmaceuticals and diagnostic businesses in Israel (collectively, the
“RX business”).

On March 1, 2021, we announced a definitive agreement to sell our RX business to Altaris. On July 6, 2021,
we completed the sale of the RX business for aggregate consideration of $1.55 billion. The consideration includes a
$53.3 million reimbursement related to an ANDA for a generic topical lotion which Altaris is required to deliver in
cash to Perrigo pursuant to the terms of the Agreement. The sale resulted in a pre-tax gain, net of professional fees,
of $47.5 million recorded in Other (income) expense, net on the Statement of Operations for discontinued
operations. The gain included a $159.3 million increase from the write-off of f
ff
from Accumulated other comprehensive income. The transaction gain was subject to final settlements under the
Agreement, which were finalized in the first quarter of 2022 with no change to the gain reported for the year ended
December 31, 2021.

oreign currency translation adjustment

As of March 1, 2021, we determined that the RX business met the criteria to be classified as a discontinued
operation and, as a result, its historical financial results have been reflected in our consolidated financial statements
as a discontinued operation and its assets and liabilities have been classified as held for sale. We ceased recording

109

Perrigo Company plc - Item 8
Note 8

depreciation and amortization on the RX business assets from March 1, 2021. We have not allocated any general
corporate overhead to the discontinued operation.

Under the terms of the agreement, we will provide transition services for up to 24 months after the close of

the transaction and we entered into a reciprocal supply agreement pursuant to which Perrigo will supply certain
products to the RX business and the RX business will supply certain products to Perrigo. The supply agreements
have a term of four years, extendable up to seven years by the party who is the purchaser of the products under
such agreement. We also extended distribution rights to the RX business for certain OTC products owned and
manufactured by Perrigo that may be fulfilled through pharmacy channels, in return forff

a share of the net profits.

We recognized $7.2 million of income related to the transition services agreement ("TSA") in Other
operating expense (income) and collected $3.6 million during the year ended December 31, 2021. We recognized
$60.6 million of product sales and royalty income in Net sales related to the supply and distribution agreements
with the RX business, of which $28.7 million was collected during the year ended December 31, 2021. We
purchased $18.4 million of inventories related to the supply arrangement with the RX business of which we paid
$12.0 million during the year ended December 31, 2021.

Additionally, under the TSA, we net settle any receipts received or payments made on behalf of the RX

business’ customers or vendors. As of December 31, 2021, we recorded a receivable in the amount of $2.3 million
in Prepaid expenses and other current assets for the reimbursement due to Perrigo.

In the transaction, Perrigo retained certain pre-closing liabilities arising out of antitrust (refer to Note 19 -
Contingencies under the header "Price-Fixing Lawsuits") and opioid matters and the Company’s Albuterol recall,
ff he Company for fifty percent of these liabilities up to an
subject to, in each case, the buyer's obligation to indemnify t
aggregate cap on the buyer's obligation of $50.0 million. We have not requested payments from the buyer related to
the indemnity of these liabilities during the twelve months ended December 31, 2021.

Income from discontinued operations, net of tax was as follows (in millions):

December 31,
2021

Year Ended
December 31,
2020

December 31,
2019

Net sales
Cost of sales

Gross profit

Operating expenses

Distribution
Research and development
Selling
Administration
Impairment charges
Restructuring
Other operating expense (income)

Total operating expenses

Operating income (loss)

Interest expense, net
Other (income) expense, net

Income (loss) from discontinued operations before tax

Gain on disposal of discontinued operations before tax

Income (loss) before income taxes

Income tax expense

Income (loss), net of tax

405.1
258.4
146.7

975.0 $
645.1
329.9

6.1
30.8
16.3
36.4
—
—
(0.4)
89.2

57.5

0.8
(1.6)
58.3
(47.5)
105.8
43.8
62.0

15.2
54.8
30.1
31.8
346.8
0.3
0.7
479.7

(149.8)

3.5
2.0
(155.3)
—
(155.3)
51.5
(
(206.8) $
(

)
)

110

967.5
619.5
348.0

14.1
67.3
25.1
39.1
170.7
0.3
1.3
317.9

30.1

4.3
2.8
23.0
—
23.0
35.6
)
(12.6)
(
)
(

During the year ended December 31, 2021, we incurred $40.8 million of separation costs related to the sale

of the RX business. The costs incurred included selling costs, which were reported in gain on discontinued
operations before tax as part of the gain on sale of the RX business. Separation costs incurred in prior periods were
included in administration expenses.

Select cash flow information related to discontinued operations was as follows (in millions):

Perrigo Company plc - Item 8
Note 8

Cash flows from discontinued operations operating activities:

Depreciation and amortization
Restructuring charges
Impairment charges
Share-based compensation
Gain on sale of business

Cash flows from discontinued operations investing activities:

Asset acquisitions
Additions to property, plant and equipment
Net proceeds from sale of business

December 31,
2021

Year Ended
December 31,
2020

December 31,
2019

15.4
—
—
10.8
(47.5)

97.0 $

0.3
346.8
5.2
—

(69.7) $
(16.1)
1,491.9

(0.9) $

(10.2)
—

99.4
0.3
170.7
5.5
—

(49.1)
(16.3)
—

Asset acquisitions related to discontinued operations consisted of two Abbreviated New Drug Applications

("ANDAs") purchased under a contractual arrangement. On December 31, 2020, we purchased an ANDA for a
generic topical gel for $16.4 million, which was subsequently paid during the three months ended April 3, 2021 and
on March 8, 2021, we purchased an ANDA for a generic topical lotion for $53.3 million. These ANDAs were acquired
by Altaris as part of the RX business sale.

The assets and liabilities classified as held for sale related to discontinued operations were as follows (in

millions):

Cash and cash equivalents
Accounts receivable, net of allowance for credit losses of $1.1
Inventories
Prepaid expenses and other current assets

Current assets held for sale

Property, plant and equipment, net
Operating lease assets
Goodwill and indefinite-lived intangible assets
Definite-lived intangible assets, net
Deferred income taxes
Other non-current assets

Non-current assets held for sale
Total assets held for sale

Accounts payable
Payroll and related taxes
Accrued customer programs
Other accrued liabilities
Current indebtedness

Current liabilities held for sale

Long-term debt, less current portion
Deferred income taxes
Other non-current liabilities

Non-current liabilities held for sale

Total liabilities held forf

sale

111

December 31,
2020

10.0
460.7
140.8
55.4
666.9

131.4
31.3
681.2
492.8
3.6
23.7
1,364.0
2,030.9

92.2
22.3
237.4
67.2
0.5
419.6

0.7
3.1
104.5
108.3
527.9

NOTE 9 - 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.

Perrigo Company plc - Item 8
Note 9

During the three months ended July 3, 2021, management committed to a plan to sell our Latin American
ff

businesses; as a result, such assets were classified as held for sale. Th
reported within our CSCA segment. The sale is expected to close in the first half of 2022. At July 3, 2021, we
determined the carrying value of the net assets held for sale of this business exceeded their fair value less cost to
sell, resulting in an impairment charge of $152.5 million. At December 31, 2021 and October 2, 2021 we recorded
additional impairment charge of $1.0 million and $2.6 million, respectively resulting in a total impairment charge of
$156.1 million. We also recorded a goodwill impairment charge of $6.1 million within our CSCA segment (refer to
Note 4), resulting in a total impairment charge of $162.2 million.

e assets associated with this business were

The assets and liabilities held for sale related to the Latin American businesses were reported within

Current assets held for sale and Current liabilities held for sale on the Consolidated Balance Sheets. Net of
impairment charges, the assets and liabilities of the Latin American businesses reported as held for sale as of
December 31, 2021 totaled $16.1 million and $32.9 million, respectively.

NOTE 10 - INVESTMENTS

The following table summarizes the measurement category, balance sheet location, and balances of our

equity securities (in millions):

Measurement Category

Balance Sheet Location

Fair value method
Fair value method(1)

Prepaid expenses and other current assets

Other non-current assets

Equity method

Other non-current assets

Year Ended

December 31,
2021

December 31,
2020

0.4

1.8

66.4

2.5

1.9

69.8

(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):

Measurement Category Income Statement Location

Fair value method

Other (income) expense, net

Equity method

Other (income) expense, net

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

2.0

1.1

3.0

(3.0) $

4.9

(2.7)

On June 17, 2020, we announced our entrance into the cannabidiol (“CBD”) market through a strategic
investment in and long-term supply agreement with Kazmira LLC ("Kazmira"), a leading supplier of hemp-based
CBD products free of tetrahydrocannabinol (“THC-free”) based in Watkins, Colorado. In addition to the supply
agreement, we acquired an approximate 20% equity stake in Kazmira for $50.0 million with $15.0 million paid at
close of the transaction and the balance due within 18 months thereafter, reported in our CSCA segment (refer to
Note 13). Our minority equity investment initiates the first phase of the partnership in which we will collaborate to
scale-up Kazmira’s facilities and laboratories, in
accordance with current Good Manufacturing Practices, to produce
zero-THC CBD from industrial hemp that meets our standards for reliability and consistency. In the second phase of
the partnership, we will work to launch zero-THC hemp-based CBD products in a number of global markets, while
leveraging our supply agreement with Kazmira, which is exclusive for the U.S. store brand market. We report our
equity method earnings from Kazmira in our Consolidated Financial Statements on a quarterly lag.

112

Perrigo Company plc - Item 8
Note 11

NOTE 11 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Foreign Currency Option Contracts

We enter into foreign currency option contracts, both designated and non-designated, in order to manage

the impact of fluctuations of foreign exchange on expected future purchases and related payables denominated in a
foreign currency and to hedge the impact of fluctuations of foreign exchange on expected future sales and related
receivables denominated in a foreign currency.

In September of 2021, to economically hedge the foreign currency exposure associated with the planned
payment of the euro-denominated purchase price for HRA Pharma, we entered into two non-designated currency
option contracts with a total notional amount of $1.1 billion that will mature in the third quarter of 2022. We recorded
a loss of $20.9 million for the change in fair value of the option contracts during the year ended December 31, 2021
in Other (income) expense, net. Gains or losses on the derivatives due to changes in the EUR/USD exchange rate
prior to the close of the acquisition will be economically offset at closing in the final settlement of the euro-
denominated HRA Pharma purchase price. At the time of settlement, we are obligated to pay contract premiums of
$25.9 million.

Cross Currency Swaps

In a cross-currency swap, interest payments and principal in one currency are exchanged for principal and

interest payments in a different currency. Interest payments are exchanged at fixed intervals during the life of the
agreement. Changes in the fair value of cross-currency swaps designated as net investment hedges are recognized
as a component of OCI as a foreign currency translation adjustment and are recognized in earnings only upon the
sale or substantial liquidation of the hedged net investment. In assessing the effectiveness of these hedges, we use
a method based on changes in spot rates to measure the impact of the foreign currency exchange rate fluctuations
on both our foreign subsidiary net investment and the related swap. Under this method, changes in the fair value of
the hedging instrument, other than those due to changes in the spot rate, are initially recorded in OCI as a
translation adjustment. The excluded component is recognized on a systematic and rational basis by accruing the
swap payments and receipts within Interest expense, net.

On August 15, 2019, we entered into a cross-currency swap designated as a net investment hedge to

hedge the Euro currency exposure of our net investment in European operations. This agreement is a contract to
exchange floating-rate Euro payments for floating-rate U.S. dollar payments through August 15, 2022. We
terminated this cross-currency swap January 28, 2022. The payments are based on a notional basis of
€450.0 million ($498.0 million) and settle quarterly.

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 December 31, 2021 and December 31, 2020.

Foreign Currency Forwards

In a foreign currency forward, a contract is written to exchange currencies at a fixed exchange rate at a
future settlement date. We designate foreign currency forwards primarily as cash flow hedges to protect against
foreign currency fluctuations of probable forecasted purchases and sales. The settlement dates of foreign currency
forwards range from 1 to 60 months.

113

Perrigo Company plc - Item 8
Note 11

Foreign currency forward contracts were as follows (in millions):

Notional Amount

December 31,
2021

December 31,
2020

European Euro (EUR)

232.6

312.6

British Pound (GBP)

Swedish Krona (SEK)

Chinese Yuan (CNH)

Danish Krone (DKK)

Canadian Dollar (CAD)

United States Dollar (USD)

Polish Zloty (PLZ)

Norwegian Krone (NOK)

Turkish Lira (TRY)

Switzerland Franc (CHF)

Australian Dollar (AUD)

Romanian New Leu (RON)

Mexican Peso (MPX)

Israeli Shekel (ILS)

Other

Total

135.8

47.8

37.7

37.5

29.0

22.9

21.0

11.0

3.1

1.9

1.6

1.0

—

3.6

92.3

41.2

49.1

65.2

36.8

101.5

21.8

7.8

4.0

8.2

11.3

3.6

15.6

94.4

2.3

588.1

867.7

Effects of Derivatives on the Financial

Statements

The below tables indicate the effects of all derivative instruments on the 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

Year Ended

Balance Sheet Location

December 31,
2021

December 31,
2020

Designated derivatives

Foreign currency forward contracts

Prepaid expenses and other current assets

Foreign currency forward contracts

Other non-current assets

Cross-currency swap

Other non-current assets

Total designated derivatives

Non-designated derivatives

Foreign currency forward contracts
Foreign currency options

Prepaid expenses and other current assets

Total non-designated derivatives

3.5

1.3

—

4.8

0.9

5.0

5.9

5.0

0.5

6.3

11.8

4.3

—

4.3

114

Perrigo Company plc - Item 8
Note 11

Liability Derivatives

Fair Value

Year Ended

Balance Sheet Location

December 31,
2021

December 31,
2020

Designated derivatives

Foreign currency forward contracts

Cross-currency swap

Total designated derivatives

Non-designated derivatives

Other accrued liabilities

Foreign currency forward contracts

Other accrued liabilities

1.2

13.8

15.0

1.2

5.5

—

5.5

2.4

The following tables summarize the effect of derivative instruments designated as hedging instruments in

Accumulated Other Comprehensive Income ("AOCI") (in millions):

Year Ended

December 31, 2021

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 expense, net

(0.1)

Interest expense, net

— Interest expense, net

(1.8)

Interest expense, net

5.7 Net sales

Cost of sales

5.7

(20.1)

(2.5) Net sales

0.8 Cost of sales

Other (income)
expense, net

)
(3.6)
(
)
(

Interest expense, net

—

0.5

0.7

1.2

(3.9)

Instrument
Cash flow hedges

Treasury locks

Interest rate swap agreements

Foreign currency forward contracts

Net investment hedges

Cross-currency swap

(1) Net loss of $7.5 million is expected to be reclassified out of AOCI into earnings during the next 12 months.

115

Perrigo Company plc - Item 8
Note 11

Year Ended

December 31, 2020

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 expense, net

(0.1)

Interest expense, net

— Interest expense, net

(1.8)

Interest expense, net

5.0 Net sales

Cost of sales

5.0

(20.0)

(11.2)

)
(31.2)
(
)
(

0.2 Net sales

2.0 Cost of sales

Other Income/Expense

0.3

Interest expense, net

—

0.1

0.9

0.5

1.5

6.6

(0.1)

6.5

Year Ended

December 31, 2019

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 expense, net
Other (income)
expense, net

—

(2.4) Net sales

Cost of sales

)
(2.4)
(
)
(

31.2

(0.1)

(1.8)

Interest expense, net
Other (income)
expense, net

2.5 Net sales

(0.9) Cost of sales

)
(0.3)
(
)
(

Interest expense, net

—

(2.1)

(2.6)

)
(4.7)
(
)
(

4.9

Instrument
Cash flow hedges

Treasury locks

Interest rate swap agreements

Foreign currency forward contracts

Net investment hedges

Cross-currency swap

Foreign currency forward contract

Instrument
Cash flow hedges

Treasury locks

Interest rate swap agreements

Foreign currency forward contracts

Net investment hedges

Cross-currency swap

116

Perrigo Company plc - Item 8
Note 11

The amounts of (income)/expense recognized in earnings related to our non-designated derivatives on the

Consolidated Statements of Operations were as follows (in millions):

Non-Designated Derivatives

Income Statement Location

Foreign currency forward contracts

Other (income) expense, net

Interest expense, net

Foreign currency options

Other (income) expense, net

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

(5.1) $

1.3

)
(3.8)
(
)
(

(1.1) $

3.5

2.4

(24.8)

(3.1)

)
(27.9)
(
)
(

20.9

— $

—

The classification and amount of gain/(loss) recognized in earnings on fair value and hedging relationships

were as follows (in millions):

Year Ended

December 31, 2021

Net Sales

Cost of Sales

Interest
Expense, net

Other
(Income)
Expense, net

Total amounts of income and expense line items presented on the
Consolidated Statements of Operations in which the effects of fair
value or cash flow hedges are recorded

4,138.7

2,722.5

125.0

26.7

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

Amount excluded from effectiveness testing recognized using a
systematic and rational amortization approach

Treasury locks

Amount of gain or (loss) reclassified from AOCI into earnings

Interest rate swap agreements

Amount of gain or (loss) reclassified from AOCI into earnings

(2.5) $

— $

0.8

0.5

— $

(0.1) $

— $

(1.8) $

—

0.7

—

Total amounts of income and expense line items presented on the
Consolidated Statements of Operations in which the effects of fair
value or cash flow hedges are recorded

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

Amount excluded from effectiveness testing recognized using a
systematic and rational amortization approach

Treasury locks

Amount of gain or (loss) reclassified from AOCI into earnings

Interest rate swap agreements

Amount of gain or (loss) reclassified from AOCI into earnings

Year Ended

December 31, 2020

Net Sales

Cost of Sales

Interest
Expense, net

Other
(Income)
Expense, net

4,088.2

2,593.3

127.7

16.3

0.2

0.1

2.0

0.9

— $

(0.1) $

— $

(1.8) $

—

0.5

—

117

NOTE 12 - LEASES

The balance sheet locations of our lease assets and liabilities were as follows (in millions):

Perrigo Company plc - Item 8
Note 12

Assets

Operating

Finance

Total

Liabilities

Current

Operating

Finance

Non-Current

Operating

Finance

Total

Balance Sheet Location

Operating lease assets

Other non-current assets

Balance Sheet Location

Other accrued liabilities

Current indebtedness

Other non-current liabilities

Long-term debt, less current portion

December 31,
2021

December 31,
2020

166.9 $

27.9

194.8 $

154.7

29.8

184.5

December 31,
2021

December 31,
2020

26.0 $

4.9

147.3

20.9

199.1 $

28.3

6.7

132.5

20.2

187.7

The below table shows our lease assets and liabilities by reporting segment (in millions):

Assets

Liabilities

Operating

Financing

Operating

Financing

December 31,
2021

December 31,
2020

December 31,
2021

December 31,
2020

December 31,
2021

December 31,
2020

December 31,
2021

December 31,
2020

CSCA

CSCI
Unallocated

Total

98.2 $

75.9 $

15.3 $

16.7 $

99.7 $

75.8 $

16.0 $

30.7
38.0

34.4
44.4

7.9
4.7

5.9
7.2

31.8
41.8

35.2
49.8

5.0
4.8

166.9 $

154.7 $

27.9 $

29.8 $

173.3 $

160.8 $

25.8 $

17.0

2.5
7.4

26.9

Lease expense was as follows (in millions):

Operating leases(1)

Finance leases
Amortization
Interest
Total finance leases

Year Ended

December 31,
2021

December 31,
2020

38.6 $

37.3

5.9 $
0.8
6.7 $

4.4
0.8
5.2

(1) Includes short-term leases and variable lease costs, which are immaterial.

Total operating lease expense for the year ended December 31, 2019 was $37.9 million.

118

The annual future maturities of our leases as of December 31, 2021 are as follows (in millions):

Perrigo Company plc - Item 8
Note 12

2022

2023

2024

2025

2026

After 2026

Total lease payments

Less: Interest

Operating
Leases

Finance
Leases

29.9

22.5

19.4

16.9

15.3

94.9

198.9

25.6

5.6

3.9

2.4

2.2

2.1

13.7

29.9

4.1

Total

35.5

26.4

21.8

19.1

17.4

108.6

228.8

29.7

199.1

Present value of lease liabilities

173.3

25.8

Our weighted average lease terms and discount rates are as follows:

Weighted-average remaining lease term (in years)

Operating leases

Finance leases

Weighted-average discount rate

Operating leases

Finance leases

Our lease cash flow classifications are as follows (in millions):

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows for operating leases

Operating cash flows for finance leases

Financing cash flows for finance leases

Leased assets obtained in exchange for new finance lease liabilities

Leased assets obtained in exchange for new operating lease liabilities

December 31,
2021

December 31,
2020

11.43

9.23

2.63 %

2.79 %

10.63

8.81

3.02 %

3.08 %

Year Ended

December 31,
2021

December 31,
2020

33.5

0.8

5.3

4.6

48.8

34.4

0.8

4.1

7.0

84.5

119

NOTE 13 - INDEBTEDNESS

Total borrowings outstanding are summarized as follows (in millions):

Perrigo Company plc - Item 8
Note 13

Term loan

2019 Term loan due August 15, 2022

600.0

December 31,
2021

December 31,
2020

Notes and bonds

Couponp

Due
5.105% July 28, 2023(3)
4.000% November 15, 2023(2)
3.900% December 15, 2024(1)
4.375% March 15, 2026(4)
3.900% June 15, 2030(5)
5.300% November 15, 2043(2)
4.900% December 15, 2044(1)

Total notes and bonds

Other financing

Unamortized premium (discount), net

Deferred financing fees

Total borrowings outstanding

Current indebtedness

153.5

215.6

700.0

750.0

90.5

303.9

164.9

215.6

700.0

750.0

90.5

303.9

2,913.5

2,924.9

25.8

(4.8)

(14.0)

3,520.5

(603.8)

57.4

(0.3)

(17.1)

3,564.9

(37.3)

Total long-term debt less current portion

2,916.7

3,527.6

(1) Discussed below collectively as the "2014 Notes"
(2) Discussed below collectively as the "2013 Notes"
(3) Debt assumed from Omega
(4) Discussed below collectively as the "2016 Notes"
(5) Discussed below as the "2020 Notes". The coupon rate noted above is that as of December 31, 2021, following a step up in rate from

3.150% to 3.900%, effective December 16, 2021.

Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate.

Revolving Credit Agreements

On March 8, 2018, we entered into a $1.0 billion revolving credit agreement maturing on March 8, 2023 (the

"2018 Revolver"). There were no orrowings outstanding under the 2018 Revolver as
December 31, 2020.

of December 31, 2021 or

Term Lrr

oans

In August 2019, we refinanced a prior term loan with the proceeds of a $600.0 million term loan, maturing

on August 15, 2022 (the "2019 Term Loan"). As a result of the refinancing, during the year ended December 31,
2019, we recorded a loss of $0.2 million, consisting of the write-off of d
extinguishment of debt on the Consolidated Statements of Operations. We had $600.0 million outstanding under the
2019 Term Loan as of December 31, 2021 and December 31, 2020.

eferred financing fees in Loss on

Waiver and Amendment of Debt Covenants

We are subject to financial covenants in the 2018 Revolver and 2019 Term Loan, including a maximum

leverage ratio covenant, which previously required us to maintain a ratio of Consolidated Net Indebtedness to
Consolidated EBITDA (as such terms are defined in such credit agreements) of not more than 3.75 to 1.00 at the
end of each fiscal quarter. During the twelve months ended December 31, 2021, we received a waiver for non-
compliance with such covenants as of July 3, 2021, from the lenders under both such credit facilities and entered

120

Perrigo Company plc - Item 8
Note 13

into amendments to each of the 2018 Revolver and 2019 Term Loan. Due to the waiver and amendment described
above, our leverage ratios at the end of the second and third quarters of 2021 do not prevent us from drawing under
the 2018 Revolver. Additionally, on December 3, 2021, Perrigo Finance Unlimited Company ("Perrigo Finance”),
Perrigo Company PLC (the “Company”), each lender party thereto, and JPMorgan Chase Bank, N.A. as
administrative agent, entered into Amendment No. 2 to the Company’s 2019 Term Loan (the “Term Loan
Amendment”) and Amendment No. 3 to the Company’s 2018 Revolver (the “Revolver Amendment”) with the lenders
under each such facility, pursuant to which the maximum leverage ratio was increased to 5.75 to 1.00 for the fourth
quarter of 2021 and the first quarter of 2022, returning to 3.75 to 1.00 beginning with the second quarter of 2022. If
we consummate certain qualifying acquisitions in the second quarter of 2022 or any subsequent quarter during the
term of the loan, the maximum ratio would increase to 4.00 to 1.00 for such quarter. The amendments also modified
certain provisions related to restricted payments to account for the amended leverage ratio covenant. Finally, the
Revolver Amendment contains amendments related to the replacement of LIBOR with the Sterling Overnight Index
Average (SONIA) as the benchmark for borrowings under the 2018 Revolver in Pounds Sterling. During the twelve
months ended December 31, 2021, we incurred amendment and arrangement fees of $1.4 million, in connection
with these amendments, which were capitalized and will be amortized over the life of the debt. As of December 31,
2021, we are in compliance with all the covenants under our debt agreements.

Notes and Bonds

2020 Notes and 2021 Notes Redemption

On June 19, 2020, Perrigo Finance Unlimited Company issued $750.0 million in aggregate principal amount

of 3.150% Senior Notes due 2030 and received net proceeds of $737.1 million after the underwriting discount and
offering expenses. Interest on the 2020 Notes is payable semi-annually in arrears on June 15 and December 15 of
each year, beginning on December 15, 2020. Due to a credit ratings downgrade by S&P and Moody's in the third
quarter of 2021, the interest of the 2020 Notes has stepped up from 3.150% to 3.900%, starting with the interest
payment due on December 15, 2021. The 2020 Notes will mature on June 15, 2030 and are governed by a base
indenture and a third supplemental indenture (collectively, the "2020 Indenture"). The 2020 Notes are fully and
unconditionally guaranteed on a senior unsecured basis by Perrigo. Perrigo Finance may redeem the 2020 Notes in
whole or in part at any time for cash at the make-whole redemption prices described in the 2020 Indenture.

On July 6, 2020, the proceeds of the 2020 Notes were used to fund the redemption of Perrigo Finance's

$280.4 million of 3.500% Senior Notes due March 15, 2021 and $309.6 million of 3.500% Senior Notes due
December 15, 2021. The balance was used for general corporate purposes. As a result of the early redemption of
the $280.4 million of 3.500% Senior Notes and $309.6 million of 3.500% Senior Notes, during the year ended
December 31, 2020, we recorded a loss of $20 million in Loss on extinguishment of debt on the Consolidated
Statements of Operations, consisting of the premium on debt repayments, the write-off of deferred financing fees,
and the write-off of the remaining bond discounts.

2016 Notes

On March 7, 2016, Perrigo Finance issued $500.0 million in aggregate principal amount of 3.500% senior
notes due 2021 and $700.0 million in aggregate principal amount of 4.375% senior notes due 2026 (together, the
"2016 Notes") and received net proceeds of $1.2 billion after fees and market discount. Interest on the 2016 Notes
is payable semi-annually in arrears in March and September of each year, beginning in September 2016. The 2016
Notes are governed by a base indenture and a second supplemental indenture (collectively, the "2016 Indenture").
The 2016 Notes are fully and unconditionally guaranteed on a senior basis by Perrigo, and no other subsidiary of
Perrigo guarantees the 2016 Notes. The proceeds were used to repay our revolving credit agreement entered into
in December 2014 and amounts borrowed under a $750.0 million revolving credit agreement Perrigo Finance had
entered into in December 2015. There are no restrictions under the 2016 Notes on our ability to obtain funds from
our subsidiaries. Perrigo Finance may redeem the 2016 Notes in whole or in part at any time for cash at the make-
whole redemption prices described in the 2016 Indenture. During the year ended December 31, 2017, we repaid
$219.6 million of the 3.500% senior notes due 2021. On July 6, 2020, we repaid the remaining $280.4 million of
3.500% senior notes due 2021, as discussed above under the heading 2020 Notes and 2021 Notes Redemption.

Notes and Bonds Assumed from Omega

In connection with the Omega acquisition, on March 30, 2015, the remaining assumed debt includes

€135.0 million ($147.0 million) in aggregate principal amount of 5.105% senior notes due 2023 (the "2023 Notes").

121

Perrigo Company plc - Item 8
Note 13

The fair value of the 2023 Notes and Retail Bonds exceeded par value by €93.6 million ($101.9 million) on
the date of the Omega acquisition. As a result, a fair value adjustment was recorded as part of the carrying value of
the underlying debt and will be amortized as a reduction of interest expense over the remaining terms of the
respective debt instruments. The adjustment does not affect cash interest payments.

AAlso in connection with the Omega

e Omega acquisition, we assumed a

5.000% retail bond due in 2019 in the

amount of €120.0 million

€€120.0 million (($$130.7 million), which was repaid in full

), which was repaid in full on

yMay 23, 2019.

2014 Notes

On December 2, 2014, Perrigo Finance issued $500.0 million in aggregate principal amount of 3.500%

senior notes due 2021 (the "2021 Notes”), $700.0 million in aggregate principal amount of 3.900% senior notes due
2024 (the “2024 Notes”), and $400.0 million in aggregate principal amount of 4.900% senior notes due 2044 (the
“2044 Notes” and, together with the 2021 Notes and the 2024 Notes, the “2014 Notes”) and received net proceeds
of $1.6 billion after fees and market discount. Interest on the 2014 Notes is payable semi-annually in arrears in June
and December of each year, beginning in June 2015. The 2014 Notes are governed by a base indenture and a first
supplemental indenture (collectively, the "2014 Indenture"). The 2014 Notes are fully and unconditionally
guaranteed on a senior unsecured basis by Perrigo, and no other subsidiary of Perrigo guarantees the 2014 Notes.
There are no restrictions under the 2014 Notes on our ability to obtain funds from our subsidiaries. Perrigo Finance
may redeem the 2014 Notes in whole or in part at any time for cash at the make-whole redemption prices described
in the 2014 Indenture. During the year ended December 31, 2017, we repaid $96.1 million of the 4.900% senior
notes due 2044 and $190.4 million of the 3.500% senior notes due 2021. On July 6, 2020, we repaid the remaining
$309.6 million of the 3.500% notes due 2021, as discussed above under the heading 2020 Notes and Notes
Redemption.

2013 Notes

On November 8, 2013, Perrigo Company issued $500.0 million aggregate principal amount of its 1.300%
senior notes due 2016 (the "1.300% 2016 Notes"), $600.0 million aggregate principal amount of its 2.300% senior
notes due 2018 (the "2018 Notes"), $800.0 million aggregate principal amount of its 4.000% senior notes due 2023
(the "4.000% 2023 Notes") and $400.0 million aggregate principal amount of its 5.300% senior notes due 2043 (the
"2043 Notes" and, together with the 1.300% 2016 Notes, the 2018 Notes and the 4.000% 2023 Notes, the "2013
Notes") in a private placement with registration rights. We received net proceeds of $2.3 billion from the issuance of
the 2013 Notes after fees and market discount. On September 29, 2016, we repaid all $500.0 million of the 1.300%
2016 Notes outstanding. During the year ended December 31, 2017, we made the following debt repayments: all
$600.0 million of the 2018 Notes, $584.4 million of the 4.000% 2023 Notes, and $309.5 million of the 2043 Notes.

Interest on the 2013 Notes is payable semi-annually in arrears in May and November of each year,

beginning in May 2014. The 2013 Notes are governed by a base indenture and a first supplemental indenture
(collectively, the "2013 Indenture"). The 2013 Notes are our unsecured and unsubordinated obligations, ranking
equally in right of payment to all of our existing and future unsecured and unsubordinated indebtedness. The 2013
Notes are not entitled to mandatory redemption or sinking fund payments. We may redeem the 2013 Notes in whole
or in part at any time for cash at the make-whole redemption prices described in the 2013 Indenture. The 2013
Notes were guaranteed on an unsubordinated, unsecured basis by the same entities that guaranteed our then-
outstanding credit agreement until November 21, 2014, at which time the 2013 Indenture was amended to remove
all guarantors.

On September 2, 2014, we offered to exchange our private placement senior notes for public bonds (the
"Exchange Offer"). The Exchange Offer expired on October 1, 2014, at which time substantially all of the private
placement notes had been exchanged for bonds registered with the Securities and Exchange Commission. As a
result of the changes in the guarantor structure noted above, we are no longer required to present guarantor
financial statements.

Other Financing

We have overdraft facilities available that we use to support our cash management operations. We report

any balances outstanding in the above table under "Other financing". There were no borrowings outstanding under
the facilities as of December 31, 2021 and December 31, 2020.

122

Perrigo Company plc - Item 8
Note 13

On June 17, 2020, we incurred debt of $34.3 million related to our equity method investment in Kazmira

pursuant to two promissory notes, with $3.7 million, $5.8 million and $24.8 million to be settled in November 2020,
May 2021 and November 2021, respectively (refer to Note 10). On December 8, 2020, we repaid the $3.7 million
balance due on the November 2020 portion of the Promissory Notes. During the year ended December 31, 2021,
we repaid the $5.8 million balance due on the May 2021 portion of the Promissory Notes and the $24.8 million
balance due on the November 2021 portion, settling the debt in full.

We have financing leases that are reported in the above table under "Other financing" (refer to Note 12).

Future Maturities

The annual future maturities of our short-term and long-term debt, including capitalized leases, are as

follows (in millions):

Payment Due
2022

2023

2024

2025

2026

Amount

604.9

373.3

704.2

4.2

704.2

Thereafter

1,148.5

NOTE 14 - EARNINGS PER SHARE AND SHAREHOLDERS' EQUITY

Earnings per Share

A reconciliation of the numerators and denominators used in our basic and diluted earnings per share

("EPS") calculation is as follows (in millions):

Numerator:

Net income (loss)

Denominator:

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

(68.9) $

(162.6) $

146.1

Weighted average shares outstanding for basic EPS

Dilutive effect of share-based awards*

Weighted average shares outstanding for diluted EPS

133.6

—

133.6

136.1

137.2

136.0

0.5

136.5

Anti-dilutive share-based awards excluded from
computation of diluted EPS*

—

1.5

* In the period of a loss from continuing operations, diluted shares equal basic shares.

Shareholders' Equity

Our common stock consists of ordinary shares of Perrigo Company plc, a public limited company

incorporated under the laws of Ireland.

We trade our ordinary shares on the New York Stock Exchange under the symbol PRGO. On November 22,

2021, we initiated steps to voluntarily delist our ordinary shares from trading on the TASE. The delisting of our
ordinary shares took effect on February 23, 2022, three months following the date of our request to the TASETT
pursuant to Israeli law. All ordinary shares that were traded on TASE were transferred to the NYSE where they
continue to be traded.

123

Perrigo Company plc - Item 8
Note 14

Dividends

We paid dividends as follows:

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

Dividends paid (in millions)

Dividends paid (per share)

129.6

0.96

123.9

0.90

112.4

0.82

The declaration and payment of dividends and the amount paid, if any, are subject to the discretion of the

Board of Directors and depend on our earnings, financial condition, availability of distributable reserves, capital and
surplus requirements and other factors the Board of Directors may consider relevant.

Share Repurchases

In October 2015, the Board of Directors approved a three-year share repurchase plan of up to $2.0 billion

(the "2015 Authorization"). Following the expiration of the 2015 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 (the "2018 Authorization"). We did not purchase any shares during the year ended December
31, 2021. During the year ended December 31, 2020, we repurchased 3.4 million ordinary shares at an average
purchase price of $48.28 per share for a total of $164.2 million under the 2018 Authorization. We did not repurchase
any shares during the year ended December 31, 2019.

NOTE 15 - SHARE-BASED COMPENSATION PLANS

All share-based compensation for employees and directors is granted under the 2019 Long-Term Incentive

Plan, as amended (the "Plan"). The Plan has been approved by our shareholders and provides for the granting of
awards to our employees and directors. The purpose of the Plan is to attract and retain individuals of exceptional
talent and encourage these individuals to acquire a vested interest in our success and prosperity. The awards that
may be granted under this program include non-qualified stock options, restricted stock, restricted share units, and
performance share units based on relative total shareholder return ("RTSR"). Restricted shares are generally
service-based, requiring a certain length of service before vesting occurs, while restricted share units can be either
service-based or performance-based. Performance-based restricted share units require a certain length of service
until vesting; however, they contain an additional performance feature, which can vary the amount of shares
ultimately paid out based on certain performance criteria specified in the Plan. RTSR performance share units are
subject to a market condition. Awards granted under the Plan vest and may be exercised and/or sold from one year
to ten years after the date of grant based on a vesting schedule. As of December 31, 2021, there were 2.9 million
shares available to be granted.

Share-based compensation expense was as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

57.0

53.3

46.7

As of December 31, 2021, unrecognized share-based compensation expense was $46.8 million, and the

weighted-average period over which the expense is expected to be recognized was approximately 1.3 years.
Proceeds from the exercise of stock options are credited to ordinary shares.

124

Stock Options

A summary of activity related to stock options is presented below (options in thousands):

Perrigo Company plc - Item 8
Note 15

Options outstanding at December 31, 2019

Forfeited or expired

Options outstanding at December 31, 2020

Forfeited or expired

Options outstanding December 31, 2021

Options exercisable

Options expected to vest

Weighted-
Average
Exercise
Price Per
Share

Weighted-
Average
Remaining
Term in
Years

Aggregate
Intrinsic
Value

Number of
Options

1,464

(120) $

1,344

(96) $

1,248

— $

92.33

78.21

93.61

91.10

93.80

—

5.2 $

4.4 $

0.0 $

—

The aggregate intrinsic value for options exercised was zero for the years ended December 31, 2021 and

December 31, 2020, and $0.5 for the year ended December 31, 2019.

The weighted-average fair value per share at the grant date for options granted was zero for

the years

ended December 31, 2021, December 31, 2020, and December 31, 2019.

Non-Vested Service-Based Restricted Share Units

A summary of activity related to non-vested service-based restricted share units is presented below (units in

thousands):

Number of
Non-vested
Service-
Based
Share Units

Weighted-
Average
Grant Date
Fair Value Per
Share

Weighted-
Average
Remaining
Term in
Years

Aggregate
Intrinsic
Value

Non-vested service-based share units
outstanding at December 31, 2019

Granted

Vested

Forfeited

Non-vested service-based share units
outstanding at December 31, 2020

Granted

Vested

Forfeited

1,211

823

(372) $

(42) $

1,620

1,197

(782) $

(101) $

60.96

54.68

69.64

59.82

55.82

41.36

60.43

46.32

1 $

72.5

Non-vested service-based share units
outstanding at December 31, 2021

1,934

45.52

0.8 $

75.2

The weighted-average fair value per share at the date of grant for service-based restricted share units

granted was as follows:

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

41.36

54.68

47.48

125

Perrigo Company plc - Item 8
Note 15

The total fair value of service-based restricted share units that vested was as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

47.2

25.9

25.6

Non-Vested Performance-Based Restricted Share Units

A summary of activity related to non-vested performance-based restricted share units is presented below

(units in thousands):

Non-vested performance-based share units

outstanding at December 31, 2019

Granted

Vested

Forfeited

Non-vested performance-based share units

outstanding at December 31, 2020

Granted

Vested

Forfeited

Non-vested performance-based share units

outstanding at December 31, 2021

Number of
Non-vested
Performance-
Based
Share Units

Weighted-
Average
Grant
Date Fair
Value Per Share

Weighted-
Average
Remaining
Term in
Years

Aggregate
Intrinsic
Value

653

291

(184) $

(9) $

751

381

(188) $

(26) $

918

61.44

55.08

68.89

70.60

57.13

41.04

75.58

47.74

47.10

1.4 $

33.6

1.2 $

35.7

The weighted-average fair value of performance-based restricted share units can fluctuate depending upon
e weighted-average fair

the success or failure of the achievement of performance criteria as set forth in the Plan. Th
value per share at the date of grant for performance-based restricted share units granted was as follows:

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

41.04

55.08

47.54

The total fair value of performance-based restricted share units that vested was as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

14.2

12.7

8.0

Non-vested Relative Total Shareholder Return Performance Share Units

The fair value of the RTSR performance share units is determined using the Monte Carlo pricing model as

the number of shares to be awarded is subject to a market condition. The valuation model considers a range of
possible outcomes, and compensation cost is recognized regardless of whether the market condition is actually
satisfied.

126

The assumptions used in estimating the fair value of the RTSR performance share units granted during

each year were as follows:

Perrigo Company plc - Item 8
Note 15

Dividend yield

Volatility, as a percent

Risk-free interest rate

Expected life in years

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

2.3

44.0 %

0.3

2.8

.6 %

40.4 %

.6 %

2.8

1.6 %

40.2 %

1.9 %

2.4

A summary of activity related to non-vested RTSR performance share units is presented below (units in

thousands):

Number of
Non-vested
RTSR
Performance
Share Units

Weighted-
Average
Grant
Date Fair
Value Per Share

Weighted-
Average
Remaining
Term in
Years*

Aggregate
Intrinsic
Value

142

(24) $

176

(9) $

236

63.02

67.72

62.73

65.04

41.20

52.52

53.85

1.5 $

7.9

1.2 $

9.2

Non-vested RTSR performance share units

outstanding at December 31, 2019

Granted

Vested

Non-vested RTSR performance share units

outstanding at December 31, 2020

Granted

Vested

Non-vested RTSR performance share units

outstanding at December 31, 2021

* Midpoint used in calculation.

The weighted-average fair value per share at the date of grant for RTSR performanc
ff
was as follows:

e share units granted

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

41.20

67.72

55.61

The total fair value of RTSR performance share units that vested was as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

0.5 $

1.5 $

—

127

NOTE 16 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in our Accumulated Other Comprehensive Income (loss) ("AOCI") balances, net of tax, were as

follows (in millions):

Perrigo Company plc - Item 8
Note 16

Fair Value of
Derivative
Financial
Instruments,
net of tax

Balance at December 31, 2019

OCI before reclassifications

Amounts reclassified from AOCI

Other comprehensive income (loss)

Balance at December 31, 2020

OCI before reclassifications

Amounts reclassified from AOCI

Other comprehensive income (loss)

12.7

(12.2)

(1.2)

(13.4)

(0.7)

(24.9)

3.6

(21.3)

Foreign
Currency
Translation
Adjustments (1)
132.9
$

228.0

46.4

274.4

407.3

(339.9)

—

(339.9)

Post-
Retirement
and Pension
Liability
Adjustments,
net of tax

Total AOCI

(6.2) $

1.8

(7.2)

(5.4)

(11.6)

7.4

(5.7)

1.7

139.4

217.6

38.0

255.6

395.0

(357.4)

(2.1)

(359.5)

35.5

Balance at December 31, 2021

)
(22.0) $
(
)
(

67.4

)
(9.9) $
(
)
(

(1) Refer to the description in Note 3 of the Rosemont Pharmaceuticals business divestiture for information regarding amounts reclassified from
AOCI.

NOTE 17 - INCOME TAXES

Pre-tax income (loss) and the (benefit) provision for income taxes from continuing operations are

summarized as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

Pre-tax income (loss):

Ireland

United States

Other foreign

Total pre-tax income (loss)

Current provision (benefit) for income taxes:

Ireland

United States

Other foreign

Subtotal

Deferred provision (benefit) for income taxes:

Ireland

United States

Other foreign

Subtotal

341.9

(179.9) $

(35.3)

(47.9)

258.7

303.6

14.9

81.3

399.8

0.4

3.3

(13.9)

(10.2)

91.5

94.3

5.9

0.1

4.5

34.9

39.5

(0.1)

(64.2)

(13.5)

(77.8)

Total provision for income taxes

389.6

)
(38.3) $
(
)
(

(204.0)

(368.4)

720.4

148.0

(0.5)

24.8

8.3

32.6

—

(24.1)

(19.2)

(43.3)

)
(10.7)
(
)
(

128

A reconciliation of the provision based on the Irish statutory income tax rate to our effective income tax rate

is as follows:

Perrigo Company plc - Item 8
Note 17

Provision at statutory rate

Foreign rate differential

State income taxes, net of federal benefit

Provision to return

Tax credits

Change in tax law

Change in valuation allowance

Change in unrecognized taxes

Permanent differences

Legal entity restructuring

Taxes on unremitted earnings

Other

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

12.5 %

1.5

0.2

0.4

(19.6)

1.5

17.1

116.5

1.6

18.6

0.2

0.1

(952.9)

139.7

144.3

(229.3)

46.5

(1,331.7)

437.3

1,624.8

(561.9)

(0.1)

15.0

6.9

1.5

1.0

(3.9)

(1.2)

(29.2)

(8.5)

16.5

—

0.3

(3.1)

)
(7.2)%
(
)
(

Effective income tax rate

150.6 %

(
(655.8)%
(

)
)

As a result of the divestiture of the RX business and internal restructuring of the U.S. group, our deferred
tax liability with respect to undistributed earnings of certain foreign subsidiaries has decreased by $42.5 million in
2021 to a balance of $0.5 million as of December 31, 2021. In addition, we have recorded a deferred tax asset of
$20.1 million with respect to the outside basis differences in our Latin American businesses held for sale, with a fully
offsetting valuation allowance.

As of December 31, 2021, the Company considered approximately $9.2 million of unremitted earnings of

our foreign subsidiaries as indefinitely reinvested. The unrecognized deferred tax liability related to these earnings
is estimated at approximately $1.2 million. However, this estimate could change based on the manner in which the
outside basis differences associated with these earnings reverse.

The U.S. Tax Cuts and Jobs Act subject

s a U.S. shareholder to tax on global intangible low-taxed income

("GILTI") earned by certain foreign subsidiaries. The FASB Staf
f Qff &A, Topic 740, No. 5, Accounting for Global
Intangible Low-Taxed Income states that an entity can make an accounting policy election to either recognize
deferred taxes forff
temporary basis differences expected to reverse as GILTI in future years or provide for the
expense related to GILTI in the year the tax is incurred. We have elected an accounting policy to provide for the tax
expense related to GILTI in the year the tax is incurred ("period cost method").

tax

129

Deferred income taxes arise from temporary differences between the financial reporting and the tax
reporting basis of assets and liabilities and operating loss and tax credit carryforwards for tax purposes. The
components of our net deferred income tax asset (liability) are presented on a total company basis as follows (in
millions):

Perrigo Company plc - Item 8
Note 17

Deferred income tax asset (liability):

Depreciation and amortization
Right of use assets
Unremitted earnings
Inventory basis differences
Accrued liabilities
Lease obligations
Share-based compensation
Federal benefit of unrecognized tax positions
Loss and credit carryforwards
R&D credit carryforwards
Interest carryforwards
Other, net

Subtotal

Valuation allowance (1)

Net deferred income tax liability

Year Ended

December 31,
2021

December 31,
2020

(320.5) $
(42.5)
19.6
29.4
38.3
43.2
27.5
21.7
341.7
39.4
6.9
13.2
217.9
(450.7)
)
(
)
(
(232.8) $

(393.7)
(44.3)
(42.0)
27.7
81.4
45.3
24.5
23.5
390.1
48.4
17.9
0.9
179.7
(414.8)
)
(
)
(
(235.1)

(1) The movement in the valuation allowance balance differs from the amount in the effective tax rate reconciliation due to adjustments affecting

balance sheet only items and forff eign currency.

The above amounts are classified on the Consolidated Balance Sheets as follows (in millions):

Assets
Liabilities

Net deferred income tax liability

Year Ended

December 31,
2021

December 31,
2020

6.5
(239.3)
)
(
)
(
(232.8) $

44.2
(279.3)
)
(
)
(
(235.1)

For the year ended December 31, 2020, the above balances include $3.6 million of non-current assets and

$3.1 million of non-current liabilities held for sale.

The change in valuation allowance reducing deferred taxes was (in millions):

Balance at beginning of period
Change in assessment (1)
Current year operations, foreign currency and other

Balance at end of period

December 31,
2021

Year Ended
December 31,
2020

December 31,
2019

414.8
39.1
(3.2)
450.7

501.3
(50.3)
(36.2)
414.8

557.9
(8.3)
(48.3)
501.3

(1) Includes additions of $40.0 million related primarily to our Latin American businesses in 2021, and release of $51.5 million of valuation

allowance against U.S. deferred tax assets in 2020.

We have U.S. state credit carryforwards and U.S. R&D credit carryforwards of $43.6 million as well as U.S.
federal and state net operating loss carryforwards and non-U.S. net operating loss carryforwards of $367.2 million,
which will expire at various times through 2041. The remaining U.S. and non-US credit carryforwards of $9.0 million,
U.S. federal and non-US loss carryforwards of $1.2 billion, and U.S. interest carryforwards of $28.1 million have no
expiration.

130

Perrigo Company plc - Item 8
Note 17

For the year ended December 31, 2021 we recorded a net increase in valuation allowances of $35.9 million,

comprised primarily of an increase of valuation allowance for deferred tax assets related to our Latin American
businesses included as held for sale. Valuation allowances are determined based on management's assessment of
its deferred tax assets that are more likely than not to be realized.

We recorded a valuation allowance against all U.S. deferred tax assets as of December 31, 2016 and
continued to maintain this valuation allowance through December 31, 2019. For the year ended December 31,
2020, based on current and anticipated future earnings, we released a portion of the valuation allowance against
our U.S. deferred tax assets. The release resulted in the recognition of $51.5 million of U.S. deferred tax assets.

The Company operates in multiple jurisdictions with complex tax policy and regulatory environments and

establishes reserves for uncertain tax positions in accordance with the accounting guidance governing uncertainty
in income taxes. Uncertainty in a tax position may arise because tax laws are subject to interpretation. The following
table is presented on a total company basis and summarizes the activity related to the liability recorded for uncertain
tax positions, excluding interest and penalties (in millions):

Balance at December 31, 2019
Additions:

Positions related to the current year
Positions related to prior years

Reductions:

Lapse of statutes of limitation
Decrease in prior year positions
Cumulative translation adjustment
Balance at December 31, 2020

Additions:

Positions related to the current year
Positions related to prior years

Reductions:

Settlements with taxing authorities
Lapse of statutes of limitation
Decrease in prior year positions
Cumulative translation adjustment
Balance at December 31, 2021

Tax Benefits
350.5

18.2
28.9

(2.2)
(1.0)
1.6
396.0

11.4
339.0

(344.1)
(11.9)
(41.9)
(1.3)
347.2

We recognize interest and penalties related to uncertain tax positions as a component of income tax

expense. The total amount accrued for interest and penalties in the liability for uncertain tax positions was
$105.1 million, $108.9 million, and $98.1 million as of December 31, 2021, December 31, 2020, and December 31,
2019, respectively.

If recognized, of the total liability for uncertain tax positions, $240.1 million, $250.2 million, and

$204.6 million as of December 31, 2021, December 31, 2020, and December 31, 2019, respectively, would impact
the effective tax rate in future periods.

Our major income tax jurisdictions are Ireland, the U.S., Israel, Belgium, France, and the United Kingdom.

We are routinely audited by the tax authorities in our major jurisdictions. We have substantially concluded all Ireland
income tax matters through the year ended December 31, 2013, all U.S. federal income tax matters through the
year ended June 28, 2008, all Israel income tax matters through the year ended June 28, 2019. All significant
matters in our remaining major tax jurisdictions have been concluded for tax years through 2018.

Internal Revenue Service Audits ott

f Perrigo Company, a U.S. Subsidiary

Perrigo Company, our U.S. subsidiary ("Perrigo U.S.") is engaged in a series of tax disputes in the U.S.

relating primarily to transfer pricing adjustments including income in connection with the purchase, distribution, and
sale of store-brand OTC pharmaceutical products in the United States, including the heartburn medication
omeprazole. On August 27, 2014, we received a statutory notice of deficiency from the IRS relating to our fiscal tax
years ended June 27, 2009, and June 26, 2010 (the “2009 tax year” and “2010 tax year”, respectively). On April 20,
2017, we received a statutory notice of deficiency from the IRS for the years ended June 25, 2011 and June 30,

131

Perrigo Company plc - Item 8
Note 17

2012 (the “2011 tax year” and “2012 tax year”, respectively). Specifically, both statutory notices proposed
adjustments related to the offshore reporting of profits on sales of omeprazole in the United States resulting from
the assignment of an omeprazole distribution contract to an affiliate. In addition to the transfer pricing adjustments,
which applied to all four tax years, the statutory notice of deficiency for the 2011 and 2012 tax years included
adjustments for the capitalization and amortization of certain expenses that were deducted when paid or incurred in
defending against certain patent infringement lawsuits related to Abbreviated New Drug Applications (“ANDAs”).

We do not agree with the audit adjustments proposed by the IRS in either of the notices of deficiency. We

paid the assessed amounts of tax, interest, and penalties set forth in the statutory notices and timely filed claims for
refund on June 11, 2015 for the 2009 and 2010 tax years, and on June 7, 2017, for the 2011 and 2012 tax years. On
August 15, 2017, following disallowance of such refund claims, we timely filed a complaint in the United States
District Court for the Western District of Michigan seeking refunds of tax, interest, and penalties of $27.5 million for
the 2009 tax year, $41.8 million for the 2010 tax year, $40.1 million for the 2011 tax year, and $24.7 million for the
2012 tax year, for a total of $134.1 million, plus statutory interest thereon from the dates of payment. The amounts
sought in the complaint for the 2009 and 2010 tax years were recorded as deferred charges in Other non-current
assets on our balance sheet during the three months ended March 28, 2015, and the amounts sought in the
complaint for the 2011 and 2012 tax years were recorded as deferred charges in Other non-current assets on our
balance sheet during the three months ended July 1, 2017.

The trial was held during the period May 25, 2021 to June 7, 2021 for the refund case in the United States

District Court for the Western District of Michigan. The total amount of cumulative deferred charge that we are
seeking to receive in this litigation is approximately $111.6 million, which reflects the impact of conceding that
Perrigo U.S. should have received a 5.24% royalty on all omeprazole sales. That concession was previously paid
and is the subject of the above refund claims. The issues outlined in the statutory notices of deficiency described
above are continuing in nature, and the IRS will likely carry forward the adjustments set forth therein as long as the
drug is sold, in the case of the omeprazole issue, and for all post-2012 Paragraph IV filings that trigger patent
infringement suits, in the case of the ANDA issue. On April 30, 2021, we filed a Notice of New Authority in our refund
case in the Western District of Michigan alerting the court to a Tax Court decision in Mylan v. Comm'r that ruled in
favor of the taxpayer on nearly identical ANDA issues as we have before the court. Post-trial briefings were
completed on September 24, 2021 and the case is now fully submitted for the court’s decision. On January 28,
2022, the IRS filed a Notice of Appeal with the United States Court of Appeals of the Third Circuit, to appeal the
United States Tax Court's decision in Mylan v. Comm'r.

On January 13, 2021, the IRS issued a 30-day letter with respect to its audit of our fiscal tax years ended
June 29, 2013, June 28, 2014, and June 27, 2015. The IRS letter proposed, among other modifications, transfer
pricing adjustments regarding our profits from the distribution of omeprazole in the aggregate amount of
$141.6 million and ANDA adjustments in the aggregate amount of $21.9 million. The 30-day letter also set forth
adjustments described in the next two paragraphs. We timely filed a protest to the 30-day letter for those additional
adjustments, but noting that due to the pending litigation described above, IRS Appeals will not consider the merits
of the omeprazole or ANDA matters. We believe that we should prevail on the merits on both carryforward issues
and have reserved for taxes and interest payable on the 5.24% deemed royalty on omeprazole through the tax year
ended December 31, 2018. Beginning with the tax year ended December 31, 2019, we began reporting income
commensurate with the 5.24% deemed royalty. We have not reserved for the ANDA-related issue described above.
While we believe we should prevail on the merits of this case, the outcome remains uncertain. If our litigation
position on the omeprazole issue is not sustained, the outcome for the 2009–2012 tax years could range from a
reduction in the refund amount to denial of any refund. In addition, we expect that the outcome of the refund
litigation could effectively bind future tax years. In that event, an adverse ruling on the omeprazole issue could have
a material impact on subsequent periods, with additional tax liability in the range of $24.0 million to $112.0 million,
not including interest and any applicable penalties.

The 30-day letter for the 2013-2015 tax years also proposed to reduce Perrigo U.S.'s deductible interest

expense for the 2014 tax year and the 2015 tax year on $7.5 billion in debts owed by it to Perrigo Company plc. The
debts were incurred in connection with the Elan merger transaction in 2013. On May 7, 2020, the IRS issued a
NOPAPP capping the interest rate on the debts for U.S. federal tax purposes at 130.0% of the Applicable Federal Rate
("AFR") (a blended rate reduction of approximately 4.0% per annum), on the stated ground that the loans were not
negotiated on an arms’-length basis. The NOPAPP proposes a reduction in gross interest expense of approximately
$414.7 million for tax years 2014 and 2015. On January 13, 2021, we received a Revenue Agent Report ("RAR"),
together with the 30-day letter, requiring our filing of a written Protest to request IRS Appeals consideration. The
Protest was timely filed with the IRS on February 26, 2021. On January 20, 2022, the IRS responded to our Protest
with its Rebuttal, and revised its position on this interest rate issue by reasserting that implicit parental support
considerations are necessary to determine the arm's length interest rates and proposed revised interest rates that

132

Perrigo Company plc - Item 8
Note 17

are higher than the interest rates proposed under its 130.0% of AFR assertion. The blended interest rate proposed
by the IRS Rebuttal is 4.36%, an increase from the blended interest rate in the RAR of 2.57%, and lower than the
stated blended interest rate of the loans of 6.8%. We will pursue all available administrative and judicial remedies
necessary to defend the deductibility of the interest expense on this indebtedness. If the IRS were to prevail in its
revised proposed adjustment, we estimate an increase in tax expense of approximately $72.9 million, excluding
interest and penalties, for fiscal years ended June 28, 2014 through June 27, 2015. In addition, we expect the IRS
to seek similar adjustments for the fiscal years ended December 31, 2015 through December 31, 2018 with
potential section 163(j) carryover impacts beyond December 2018. If those further adjustments were sustained,
based on preliminary calculations and subject to further analysis, our current best estimate is that the additional tax
expense will not exceed $58.5 million, excluding interest and penalties. No further adjustments beyond this period
are expected. We strongly disagree with the IRS position and we will pursue all available administrative and judicial
remedies necessary. At this stage, we are unable to estimate any additional liability, if any, associated with this
matter.

In addition, the 30-day letter for the 2013-2015 tax years expanded on a NOPA issued on December 11,

2019 and proposed to disallow adjustments to gross sales income on the sale of prescription products to
wholesalers for accrued wholesale customer pipeline chargebacks where the prescription products were not re-sold
by such wholesalers to covered retailers by the end of the tax year for the 2013-2015 tax years. The IRS' NOPA
asserts that the reduction of gross sales income of such chargebacks is an impermissible method of accounting.
The IRS proposed a change in accounting method that would defer the reduction in gross sales income until the
year the prescription products were re-sold to covered retailers. The NOPAPP proposes an increase in sales revenue
of approximately $99.5 million for the 2013-2015 tax years. We filed a protest on February 26, 2021 to request IRS
Appeals consideration. On January 20, 2022, the IRS responded to our Protest with its Rebuttal and reiterated its
position in the NOPAPP that the accrued chargebacks are not currently deductible in the tax year accrued because all
events have not occurred to establish the fact of the liability in the year deducted. If the IRS were to prevail in its
proposed adjustment, we estimate a payment of approximately $18.0 million, excluding interest and penalties for
the 2013-2015 tax years. In addition, we expect the IRS to seek similar adjustments for future years. If those future
adjustments were to be sustained, based on preliminary calculations and subject to further analysis, we estimate
this would result in a payment not to exceed $7.0 million through tax year ended December 31, 2021, excluding
interest and penalties. We have fully reserved for this issue. We strongly disagree with the IRS’s proposed
adjustment and will pursue all available administrative and judicial remedies necessary.

On December 2, 2021, the IRS commenced an audit of our federal income tax returns for the tax years

ended December 31, 2015, through December 31, 2019.

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

On April 26, 2019, we received a revised NOPAPP from the IRS regarding transfer pricing positions related to

the IRS audit of Athena Neurosciences, LLC ("Athena") for the years ended December 31, 2011, December 31,
2012, and December 31, 2013. The NOPAPP carries forward the IRS's theory from its 2017 draft NOPAPP that when Elan
took over the future funding of Athena's in-process research and development after acquiring Athena in 1996, Elan
should have paid a substantially higher royalty rate for the right to exploit Athena’s early stage intellectual property
in various developmental products, including the Multiple Sclerosis drug Tysabri, rather than rates based on transfer
pricing documentation prepared by Elan's external tax advisors. The NOPAPP proposes a payment of $843.0 million,
which represents additional tax based on imputing royalty income to Athena using a 24.7% royalty rate derived by
the IRS and a 40.0% accuracy-related penalty. This amount excludes consideration of offsetting ta
x attributes and
any potential interest that may be imposed. We strongly disagree with the IRS position. On December 22, 2016, we
also received a NOPAPP for these years denying the deductibility of settlement costs related to illegal marketing of
Zonegran in the United States raised in a Qui Tam action under the U.S. False Claims Act. We strongly disagree
with the IRS' position on this issue as well. Because we believe that any concession on these issues in Appeals
would be contrary to our evaluation of the issues, we pursued our remedies under the U.S. - Ireland Income Tax
Treaty to alleviate double taxation. On April 21 and 23, 2020, we filed requests for Competent Authority Assistance
with the IRS and Irish Revenue on the Tysabri royalty issue, and those applications were accepted. On October 20,
2020, we amended our requests for Competent Authority Assistance to include the Zonegran issue and these
supplemental requests were also accepted. On May 6, 2021, we had our opening conference with the IRS. A follow-
up conference was held with the IRS on December 13, 2021 and we discussed our submission, which continues to
be reviewed by the IRS. Our opening conference with Irish Revenue was held on July 23, 2021 and we discussed
our submission, which continues to be reviewed by Irish Revenue. The U.S. and Irish Competent Authorities will
seek to achieve a resolution that avoids double taxation on both the Tysabri royalty and Zonegran issues.

133

Perrigo Company plc - Item 8
Note 17

No payment of the additional amounts is required until these two matters are resolved with finality under the

treaty, or any additional administrative or judicial process if treaty negotiations are unsuccessful.

Irish Revenue Audit of Fiscal Years Ended December 31, 2012 and December 31, 2013

On October 30, 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 related assets to
Biogen Idec by Elan Pharma. The consideration paid by Biogen to Elan Pharma took the form of an upfront
payment and future contingent royalty payments. Elan Pharma recognized such receipts as trading income in its tax
returns filed with Irish Revenue, consistent with Elan Pharma's historical practice relating to its active management
of intellectual property rights.

In its audit findings letter, Irish Revenue proposed to charge Elan Pharma tax on the net chargeable gain

realized by Elan Pharma on the Tysabri transaction in 2013 at a rate of 33%, rather than the 12.5% tax rate applied
to trading income. On November 29, 2018, Irish Revenue issued a Notice of Amended Assessment (“NoA”) for the
tax year ended December 31, 2013, in the amount of €1,643 million, and claiming tax payable in the amount of
€1,636 million, not including interest or any applicable penalties.

Accordingly, we filed an appeal of the NoA on December 27, 2018 with the Irish Tax Appeals Commission

("TAC") which is the statutory body charged with considering whether the NoA was properly founded as a matter of
Irish tax law. Separately, we were also granted leave by the Irish High Court on February 25, 2019 to seek judicial
review of the issuance of the NoA by Irish Revenue.

On November 4, 2020, the High Court ruled that the Irish Revenue's decision to issue the NoA did not

violate Elan Pharma's constitutional rights and legitimate expectations as a taxpayer. The Irish High Court did not
rule on the merits of the NoA under Irish tax law.

We strongly believe that Elan Pharma’s tax position was correct and ultimately would have been confirmed

through judicial process. However, in light of the risks and delays inherent in any litigation, on April 26, 2021,
Perrigo, through its tax adviser, made a without prejudice written offer of settlement to Irish Revenue detailing a
possible framework to resolve the dispute, which applied an alternative basis of taxation than the respective
positions taken by Irish Revenue in the NoA and by Elan Pharma in its tax returns. On May 31, 2021, Irish Revenue
issued a formal response to Perrigo's tax adviser indicating that the written settlement offer would not be accepted
as presented. However, Irish Revenue did indicate that they would remain available for further discussion without
prejudice and the Company's representatives continued to meet and correspond with Irish Revenue throughout the
summer.

On July 9, 2021, Irish Revenue issued a letter acknowledging that not all relevant facts were known to them
when they issued the NoA in 2018 and, accordingly, they would not object if the Appeal Commissioner were to make
certain adjustments reducing Irish Revenue’s original assessment. Such adjustments would reflect contingent
royalty payments that were never received by Elan Pharma, deductions for acquisition and development costs
incurred, and allowable losses and reliefs, and would, if allowed, result in an aggregate reduction of more than
€660.0 million from the income taxes claimed in the NoA as issued.

On September 29, 2021, Elan Pharma reached an agreement with Irish Revenue providing for full and final

settlement of the NoA. Elan Pharma and Irish Revenue agreed to a full and final settlement of the NoA on the
following terms: (i) on a 'without prejudice basis' and, for purposes of the settlement, an alternative basis of taxation
was applied, (ii) Irish Revenue to take no further action in relation to the NoA or any Tysabri related income or
transactions, (iii) no interest or penalties applied, (iv) a total tax of €297.0 million charged as full and final settlement
of all liabilities arising from the sale of the Tysabri patents for the fiscal years 2013 to 2021, and (v) after Irish
Revenue credited taxes already paid and certain unused R&D credits against the €297.0 million charged settlement
amount, the total cash payment of €266.1 million ($307.5 million) was made on October 5, 2021. We recorded the
payment as a component of income tax expense on the Consolidated Statements of Operations.

Israel Tax Authority Audit of Fiscal Year Ended June 27, 2015 and Calendar Years Ended December 31, 2015
through December 31, 2017

The Israel Tax Authority ("ITA") audited our income tax returns for the 2015 tax year, and calendar years
ended December 31, 2015, December 31, 2016 and December 31, 2017. On December 29, 2020, we received a

134

Stage A assessment from the Israeli Tax Authority for the tax years ended December 31, 2015 through December
31, 2017 in the amount of $63.8 million relating to attribution of intangible income to Israel, income qualifying for a
lower preferential rate of tax, exemption from capital gains tax, and deduction of certain settlement payments. Our
protest was timely filed on March 11, 2021 to move the matter to Stage B of the assessment process.

Through negotiations with the ITA, we resolved the audit for the tax year ended June 27, 2015 through tax

Perrigo Company plc - Item 8
Note 17

year ended December 31, 2019, by agreeing to add tax year ended December 31, 2018 and tax year ended
December 31, 2019 to the audit to reach an agreeable resolution to provide certainty for these additional periods.
The agreement with the ITATT required us to pay $19.0 million, after offset
taxable years. In addition, we paid $12.5 million to resolve a tax liability indemnity for the tax year ended December
31, 2017 relating to Perrigo API Ltd, which we disposed of in December 2017.

of refunds of $17.2 million, for the five

As a result of the settlement with the ITA,TT we reduced our liability recorded for uncertain tax positions by

$38.3 million including interest.

Based on the final resolution of tax examinations, judicial or administrative proceedings, changes in facts or

law, expirations of statute of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions -
one or more of which may occur within the next twelve months - it is reasonably possible that unrecognized tax
benefits for certain tax positions taken on previously filed tax returns may change materially from those recorded as
of December 31, 2021. However, we are not able to estimate a reasonably possible range of how these events
may impact our unrecognized tax benefits in the next twelve months.

Recent Tax Law Changes

On March 27, 2020, the U.S. enacted the CARES Act. The CARES Act allowed for an increased interest

expense limitation and depreciation deductions resulting in a reduction of income tax expense of approximately
$36.6 million for tax years 2019 and 2020. Additionally, Treasury and the IRS issued Proposed and Final
Regulations in 2020 regarding interest expense limitations under Section 163(j). These regulations adjust the
definition of interest expense and items allowable in adjusted taxable income to calculate the annual interest
deduction limitation. Perrigo has applied the updated regulations resulting in a reduction of income tax expense of
approximately $8.9 million during 2020.

On December 28, 2021, the U.S. Treasury and the IRS released final foreign tax credit regulations

addressing various aspects of the foreign tax credit (“FTC”) regime. These regulations finalize, among other
guidance, provisions relating to the disallowance of a credit or deduction for foreign income taxes with respect to
dividends eligible for a dividends-received deduction; the allocation and apportionment of interest expense, foreign
income tax expense; the definition of a foreign income tax and a tax in lieu of an income tax; transition rules relating
to the impact on loss accounts of net operating loss carrybacks; the definition of foreign branch category income;
and the time at which foreign taxes accrue and can be claimed as a credit. The regulations also contain clarifying
rules relating to foreign-derived intangible income (FDII). These regulations are generally effective on March 7,
2022, with some provisions having retroactive effect. For the year ended December 31, 2021, we evaluated whether
these final FTC regulations would have any effect on our income tax reporting for the year ended December 31,
2021, and applicable prior periods, and concluded that these final FTC regulations do not result in any material
changes to our income tax reporting for the year ended December 31, 2021 or for any prior periods. We will
continue to evaluate the effects of these final FTC regulations on future accounting periods.

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740) - Simplifying the
Accounting for Income Taxes." It removes certain exceptions to the general principles in ASC Topic 740 and
improves consistent application of and simplifies GAAP for other areas of ASC Topic 740 by clarifying and amending
existing guidance. This guidance was effective for interim and annual reporting periods beginning after December
15, 2020. We adopted this guidance as of January 1, 2021, and the impact on our Consolidated Financial
Statements was immaterial.

135

Perrigo Company plc - Item 8
Note 18

NOTE 18 - POST-EMPLOYMENT PLANS

On December 31, 2020, we adopted ASU 2018-14: Compensation – Retirement Benefits – Defined Benefit
Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined
Benefit Plans. The amendments in this ASU remove the disclosure of amounts in accumulated other comprehensive
income expected to be recognized as components of net periodic benefit cost over the next fiscal year. Additionally,
Subtopic 715-20 adds disclosure requirements to explain the reasons for significant gains and losses related to
changes in the benefit obligation for the period.

Defined Contribution Plans

We have a qualified profit-sharing and investment plan under Section 401(k) of the IRS, which covers
substantially all U.S. employees. Our contributions to the plan include an annual nondiscretionary contribution of 3%
of an employee's eligible compensation and a discretionary contribution at the option of the Board of Directors.
Additionally, we match a portion of employees' contributions.

We also have a defined contribution plan that covers our Ireland employees. We contribute up to 18% of

each participating employee’s annual eligible salary on a monthly basis.

We assumed a number of defined contribution plans associated with the Omega acquisition and we pay

contributions to the pension insurance plans.

Our contributions to all of the plans were as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

28.0

27.3

26.6

Pension and Post-Retirement Healthcare Benefit Plans

We have a number of defined benefit plans forff

employees based primarily in Ireland, the Netherlands,

Belgium, Germany, Switzerland, Greece and France.

Our defined benefit pension plans are managed externally and the related pension costs and liabilities are

assessed at least annually in accordance with the advice of a qualified professional actuary. We used a
December 31, 2021 measurement date and all plan assets and liabilities are reported as of that date.

We provide certain healthcare benefits to eligible U.S. employees and their dependents who meet certain

age and service requirements when they retire. Generally, benefits are provided to eligible retirees after age 65 and
to their dependents. Increases in our contribution for benefits are limited to increases in the Consumer Price Index.
Additional healthcare cost increases are paid through participant contributions. We accrue the expected costs of
such benefits during a portion of the employees’ years of service. The plan is not funded. Under current plan
provisions, the plan is not eligible for any U.S. federal subsidy related to the Medicare Modernization Act of 2003
Part D Subsidy.

136

The change in the projected benefit obligation and plan assets consisted of the following (in millions):

Perrigo Company plc - Item 8
Note 18

Pension Benefits
Year Ended

Other Benefits
Year Ended

December 31,
2021

December 31,
2020

December 31,
2021

December 31,
2020

Projected benefit obligation at beginning of period

214.3

186.9

3.5

Service costs

Interest cost

Actuarial loss (gain)

Contributions paid

Benefits paid
Settlements
Foreign currency translation

3.9

2.6

6.1

0.3

(2.0)
(7.9)
(14.7)

2.7

2.8

7.0

0.2

(2.3)
—
17.0

—

0.1

(0.5)

—

(0.1)
—
—

Projected benefit obligation at end of period

202.6

214.3

3.0

Fair value of plan assets at beginning of period

Actual return on plan assets

Benefits paid
Settlements

Employer contributions

Contributions paid

Foreign currency translation

Fair value of plan assets at end of period

Unfunded status

Presented as:

Other non-current assets

Current assets held for sale

Other non-current liabilities

Current liabilities held for sale

189.1

12.6

(2.0)
(7.9)

2.7

0.3

(13.1)

181.7

)
(20.9) $
(
)
(

21.2

0.4

(39.1) $

(3.4) $

165.4

8.3

(2.3)
—

2.3

0.2

15.2

—

(0.1)
—

0.1

—

189.1

)
(25.2) $
(
)
(

— $

)
(3.0) $
(
)
(

17.9

— $

(43.1) $

— $

3.7

—

0.1

(0.2)

—

(0.1)
—
—

3.5

—

(0.1)
—

0.1

—

)
(3.5)
(
)
(

—

The total accumulated benefit obligation for the defined benefit pension plans was $194.9 million and

$207.5 million at December 31, 2021 and December 31, 2020 respectively.

The following information relates to pension plans with an accumulated benefit obligation in excess of plan

assets (in millions):

Accumulated benefit obligation

Fair value of plan assets

Year Ended

December 31,
2021

December 31,
2020

104.7

70.0

107.4

71.1

137

The following

information relates to pension plans with a projected benefit obligation in excess of plan

assets (in millions):

Perrigo Company plc - Item 8
Note 18

Projected benefit obligation

Fair value of plan assets

Year Ended

December 31,
2021

December 31,
2020

112.5

70.0

114.2

71.1

The following unrecognized actual gain for the other benefits liability was included in OCI, net of tax (in

millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

0.6

0.2

2.6

The unamortized net actuarial loss (gain) in AOCI net of tax for defined benefit pension and other benefits

was as follows (in millions):

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

9.9

11.6

6.2

There is no estimated credit amount to be recognized from AOCI into net periodic cost during the next year.

At December 31, 2021, the total estimated future benefit payments to be paid by the plans for the next five
years is approximately $14.1 million for pension benefits and $0.9 million for other benefits as follows (in millions):

Payment Due

Pension
Benefits

Other
Benefits

2022

2023

2024

2025

2026

Thereafter

2.3

2.2

2.9

3.1

3.6

28.5

0.1

0.2

1.0

The expected benefits to be paid are based on the same assumptions used to measure our benefit
obligation at December 31, 2021, including the expected future employee service. We expect to contribute
$3.2 million to the defined benefit plans within the next year.

138

Perrigo Company plc - Item 8
Note 18

Net periodic pension cost consisted of the following (in millions):

Pension Benefits
Year Ended
December 31,
2020

December 31,
2021

December 31,
2019

December 31,
2021

Other Benefits
Year Ended
December 31,
2020

December 31,
2019

Service cost
Interest cost
Expected return on assets
Settlement
Curtailment
Net actuarial loss/(gain)
Net periodic pension cost/
(gain)

3.9
2.6
(5.5)
1.1
—
0.1

2.7
2.8
(4.9)
—
—
0.9

2.5
3.8
(4.9)
0.9
(2.5)
0.8

— $
0.1
—
—
—
(1.4)

— $
0.1
—
—
—
(3.2)

2.2

1.5

0.6

)
(1.3) $
(
)
(

)
(3.1) $
(
)
(

0.6
0.2
—
—
—
(0.3)

0.5

The components of the net periodic pension cost, other than the service cost component, are included in

the line item Other (income) expense, net in the Consolidated Statement of Operations.

The increase in the discount rate from 0.95% to 1.18% has decreased the liability. This increase of 0.23%
versus the discount rate used at December 31, 2020 is primarily attributable to the increase in bond yields across
the Euro zone.

The weighted-average assumptions used to determine net periodic pension cost and benefit obligation

were:

Pension Benefits
Year Ended

December 31,
2020
0
.95 %
1.33 %
1.76 %
0.59 %

December 31,
2021

1.18
%
2.10 %
1.55 %
0.34 %

December 31,
2019

1.06
%
1.18 %
2.54 %
0.83 %

Discount rate
Inflation
Expected return on assets
Interest crediting rates

Other Benefits
Year Ended

December 31,
2021
2

.14 %

December 31,
2020

December 31,
2019

3.14 %

4.25 %

The discount rate is based on market yields at the valuation date and chosen with reference to the yields

available on high quality corporate bonds, with regards to the duration of the plan's liabilities.

As of December 31, 2021, the expected weighted-average long-term rate of return on assets of 1.6% was

calculated based on the assumptions of the following returns for each asset class:

Equities

Bonds

Absolute return fund

Insurance contracts

Other

5.0 %

1.5 %

4.0 %

1.4 %

0.9 %

The investment mix of the pension plans' assets is a blended asset allocation, with a diversified portfolio of

shares listed and traded on recognized exchanges.

Certain of our plans have target asset allocation ranges. As of December 31, 2021, these ranges were as

follows:

Equities

Bonds

Absolute return

20%-30%

40%-50%

10%-20%

139

Perrigo Company plc - Item 8
Note 18

Other plans do not have target asset allocation ranges, for such plans, the strategy is to invest mainly in

Insurance Contracts.

The purpose of the pension funds is to provide a flow of income for members in retirement. A flow of income

delivered through fixed interest bonds provides a costly but close match to this objective. Equities are held within
the portfolio as a means of reducing this cost, but holding equities creates a strategic risk because they give a very
ff he portfolio. Investment risk is measured
different pattern of return. Property investments are held to help diversify t
and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and
investment portfolio reviews.

The following table sets forth the fair value of the pension plan assets (in millions):

December 31, 2021

December 31, 2020

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

Year Ended

Equities

Bonds

Insurance contracts

Absolute return fund

Other

Total

0.1

1.0

—

41.2

— $

41.3

— $

42.8

— $

42.5

—

23.7

9.9 —

—

63.3

—

43.5

63.3

23.7

9.9

1.2

—

43.0

—

30.8

7.1

—

64.2

—

42.8

44.2

64.2

30.8

7.1

1.1

117.3

63.3

181.7

1.2

123.7

64.2

189.1

The following table sets forth a summary of the changes in the fair value of the Level 3 pension plan assets,

which were measured at fair value on a recurring basis (in millions):

Assets at beginning of year

Actual return on plan assets

Purchases, sales and settlements, net

Foreign exchange

Assets at end of year

Year Ended

December 31,
2021

December 31,
2020

64.2

1.9

1.1

(3.9)

63.3

56.1

1.9

1.2

5.0

64.2

The fair value of the insurance contracts is an estimate of the amount that would be received in an orderly

sale to a market participant at the measurement date. The amount the plan would receive from the contract holder if
the contracts were terminated is the primary input and is unobservable. The insurance contracts are therefore
classified as Level 3 investments.

Deferred Compensation Plans

We have non-qualified plans related to deferred compensation and executive retention that allow certain

employees and directors to defer compensation subject to specific requirements. Although the plans are not formally
funded, we own insurance policies that had a cash surrender value of $38.4 million and $37.3 million at
December 31, 2021 and December 31, 2020, respectively, that are intended as a long-term funding source for these
plans. The assets, which are recorded in Other non-current assets, are not a committed funding source and may,
under certain circumstances, be subject to claims from creditors. The deferred compensation liability of $31.6 million
and $34.2 million at December 31, 2021 and December 31, 2020, respectively, was recorded in Other non-current
liabilities.

NOTE 19 - COMMITMENTS AND CONTINGENCIES

We lease certain assets, principally warehouse facilities and computer equipment, under agreements that
expire at various dates through the year ended December 31, 2040. Certain leases contain provisions for renewal
and purchase options and require us to pay various related expenses. The annual future maturities of our leases as
of December 31, 2021 was $199.1 million (refer to Note 12).

140

Perrigo Company plc - Item 8
Note 19

Rent expense under all leases was $44.5 million, $41.7 million, and $41.0 million for the years ended

December 31, 2021, December 31, 2020, and December 31, 2019, respectively.

At December 31, 2021, we had non-cancelable purchase obligations totaling $865.6 million consisting of

contractual commitments to purchase materials and services to support operations. The majority of the obligations
are expected to be paid within one year.

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 December 31, 2021, 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

Perrigo is a defendant in several cases in the generic pricing multidistrict litigation MDL No. 2724 (United

States District Court for Eastern District of Pennsylvania). This multidistrict litigation, which has many cases that do
not include Perrigo, includes class action and opt-out cases for federal and state antitrust claims, as well as
complaints filed by certain states alleging violations of state antitrust laws.

On July 14, 2020, the court issued an order designating the following cases to proceed on a more expedited

basis (as a bellwether) than the other cases in MDL No. 2724: (a) the May 2019 state case alleging an overarching
conspiracy involving more than 120 products (which does not name Perrigo a defendant) and (b) class actions
alleging “single drug” conspiracies involving Clomipramine, Pravastatin, and Clobetasol. Perrigo is a defendant in
the Clobetasol cases but not the others. On February 9, 2021, the Court entered an order provisionally deciding to
remove the May 2019 state case and the pravastatin class cases from the bellwether proceedings. On May 7, 2021,
the Court ruled that the clobetasol end payer and direct purchaser class cases will remain part of the bellwether.
The Court also ruled that the June 10, 2020 state complaint against Perrigo and approximately 35 other
manufacturers will move forward as a bellwether case. The bellwether cases are proceeding in discovery, which
must be completed by January 17, 2023 under the schedule set by the Court. No trial dates have been set for any
of the bellwether cases, or any of the other cases in the MDL.

Class Action Complaints

(a) Single Drug Conspiracy Class Actions

We have been named as a co-defendant with certain other generic pharmaceutical manufacturers in a

number of class actions alleging single-product conspiracies to fix or raise the prices of certain drugs and/or allocate
customers for those products 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 court denied motions to dismiss each of the complaints
alleging “single drug” conspiracies involving Perrigo, and the cases are proceeding in discovery. As noted above,
the Clobetasol cases have been designated to proceed on a more expedited schedule than the other cases. That
schedule culminates with summary judgment motions due to be filed no later than November 16, 2023. No trial
dates have been set for the Clobetasol cases, and no schedules have been set for the other “single drug”
conspiracy cases.

(b) “Overarching Conspiracy” Class Actions

The same three putative classes, including (a) direct purchasers, (b) end payors, and (c) indirect resellers,
have filed two sets of class action complaints alleging that Perrigo and other manufacturers (and some individuals)
entered into an “overarching conspiracy” that involved allocating customers, rigging bids and raising, maintaining,
and fixing prices for various products. Each class brings claims for violations of Sections 1 and 3 of the Sherman

141

Perrigo Company plc - Item 8
Note 19

Antitrust Act as well as several state antitrust and consumer protection statutes.

Filed in June 2018, and later amended in December 2018 (with respect to direct purchasers) and April 2019

(with respect to end payors and indirect resellers), the first set of “overarching conspiracy” class actions include
allegations against Perrigo and approximately 27 other manufacturers involving 135 drugs with allegations dating
back to March 2011. The allegations against Perrigo concern only two formulations (cream and ointment) of one of
the products at issue, Nystatin. The court denied motions to dismiss the first set of “overarching conspiracy” class
actions, and they are proceeding in discovery. None of these cases are included in the group of cases on a more
expedited schedule pursuant to the court’s May 17, 2021 order.

In December 2019, both the end payor and indirect reseller class plaintiffs filed a second set of "overarching

conspiracy” class actions against Perrigo, dozens of other manufacturers of generic prescription pharmaceuticals,
and certain individuals dating back to July 2009 (end payors) or January 2010 (indirect resellers). The direct
purchaser plaintiffs filed their second round overarching conspiracy complaint in February 2020 with claims dating
back to July 2009. On March 11, 2020, the indirect reseller plaintiffs filed a motion to amend their second round
December 2019 complaint, and that motion was granted. On September 4, 2020, and December 15, 2020, the end
payor plaintiffs amended their second round complaint. On October 21, 2020, the direct purchaser plaintiffs
amended their second round complaint. On December 15, 2020, the indirect reseller plaintiffs filed another
complaint adding allegations for additional drugs that mirror the other class plaintiffs’ claims.

This second set of overarching complaints allege conspiracies relating to the sale of various products that

are not at issue in the earlier-filed overarching conspiracy class actions, the majority of which Perrigo neither makes
nor sells. The amended indirect reseller complaint alleges that Perrigo conspired in connection with its sales of
Betamethasone Dipropionate lotion, Imiquimod cream, Desonide cream and ointment, and Hydrocortisone Valerate
cream. The December 2020 indirect reseller complaint alleges that Perrigo conspired in connection with its sales of
Adapalene, Ammonium Lactate, Bromocriptine Mesylate, Calcipotriene, Calcipotriene Betamethasone Dipropionate,
Ciclopirox, Clindamycin Phosphate, Erythromycin, Fluticasone Propionate, Halobetasol Propionate, Hydrocortisone
Acetate, Methazolamide, Mometasone Furoate, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus, and
Triamcinolone Acetonide. The amended end payor complaint alleges that Perrigo conspired in connection with its
sale of the following drugs: Adapalene, Ammonium Lactate, Betamethasone Dipropionate, Bromocriptine Mesylate,
Calcipotriene Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate, Erythromycin, Fenofibrate,
Fluocinonide, Fluticasone Propionate, Halobetasol Propionate, Hydrocortisone Acetate, Hydrocortisone Valerate,
Imiquimod, Methazolamide, Mometasone Furoate, Permethrin, Prochlorperazine Maleate, Promethazine HCL,
Tacrolimus, and Triamcinolone Acetonide. The amended direct purchaser complaint alleges that Perrigo conspired
in connection with its sale of the following drugs: Adapalene, Ammonium Lactate, Betamethasone Dipropionate,
Bromocriptine Mesylate, Ciclopirox, Clindamycin Phosphate, Fenofibrate, Fluocinonide, Halobetasol Propionate,
Hydrocortisone Valerate, Methazolamide, Permethrin, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus,
and Triamcinolone Acetonide.

Perrigo has not yet responded to the second set of overarching conspiracy complaints, and responses are

currently stayed.

Opt-Out Complaints

On January 22, 2018, Perrigo was 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. On December 21, 2018, an amended complaint was filed that adds
additional products and allegations against a total of 39 manufacturers for 33 products. The only allegations specific
to Perrigo relate to Clobetasol, Desonide, Econazole, Nystatin cream, and Nystatin ointment. Perrigo moved to
dismiss this complaint on February 21, 2019. The motion was denied on August 15, 2019. The case is proceeding in
discovery. On February 3, 2020, the plaintiffs requested leave to file a second amended complaint. The proposed
amended complaint adds dozens of additional products and allegations to the original complaint. Perrigo is
discussed in connection with allegations concerning an additional drug, Fenofibrate. Defendants opposed the
motion for leave to file a second amended complaint and the court has yet to rule on the issue.

On August 3, 2018, a large managed care organization filed a complaint alleging price-fixing and customer
allocation concerning 17 different products among 27 manufacturers including Perrigo. The only allegations specific
to Perrigo concern Clobetasol. Perrigo moved to dismiss this complaint on February 21, 2019. Plaintiff filed a
second amended complaint in April 2019 that adds additional products and allegations. The amended allegations

142

Perrigo Company plc - Item 8
Note 19

that concern Perrigo include: Clobetasol, Desonide, Econazole, and Nystatin. The motion to dismiss was denied on
August 15, 2019. The case is proceeding in discovery.

The same organization amended a different complaint that it had filed in October 2019, which did not name

Perrigo, on December 15, 2020, adding Perrigo as a defendant and asserting new allegations of alleged antitrust
violations involving Perrigo and dozens of other generic pharmaceutical manufacturers. The allegations relating to
Perrigo concern: Adapalene, Betamethasone Dipropionate, Bromocriptine Mesylate, Ciclopirox, Clindamycin
Phosphate, Fenofibrate, Fluocinonide, Halobetasol Propionate, Hydrocortisone Valerate, Imiquimod, Permethrin,
Prochlorperazine Maleate, and Triamcinolone Acetonide.

The same organization filed a third complaint on December 15, 2020, naming Perrigo and dozens of other

manufacturers alleging antitrust violations concerning generic pharmaceutical drugs. The allegations relating to
Perrigo concern: Ammonium Lactate, Calcipotriene Betamethasone Dipropionate, Erythromycin, Fluticasone
Propionate, Hydrocortisone Acetate, Methazolamide, Promethazine HCL, and Tacrolimus.

On January 16, 2019, a health insurance carrier filed a complaint 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
Perrigo concerned Clobetasol gel, Desonide, Econazole, Nystatin cream, and Nystatin ointment. Perrigo has not yet
responded to the complaint, and responses are currently stayed. On December 15, 2020, the complaint was
amended to add additional defendants and claims. The new allegations that concern Perrigo relate to Fluocinonide.

The same health insurance carrier filed a new complaint on December 15, 2020, naming Perrigo and

dozens of other manufacturers alleging antitrust violations concerning generic pharmaceutical drugs. The
allegations relating to Perrigo concern: Adapalene, Ammonium Lactate, Betamethasone Dipropionate,
Bromocriptine Mesylate, Calcipotriene Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate,
Erythromycin, Fluticasone Propionate, Halobetasol Propionate, Hydrocortisone Acetate, Hydrocortisone Valerate,
Imiquimod, Methazolamide, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus, and Triamcinolone
Acetonide.

On July 18, 2019, 87 health plans filed a Praecipe to Issue Writ of Summons in Pennsylvania state court to

commence an action against 53 generic pharmaceutical manufacturers and 17 individuals, alleging antitrust
violations concerning generic pharmaceutical drugs. While Perrigo was named as a defendant, no complaint has
been filed and the precise allegations and products at issue have not been identified. Proceedings in the case,
including the filing of a complaint, have been stayed at the request of the plaintiffs.

On December 11, 2019, a health care service company filed a complaint against Perrigo and 38 other

pharmaceutical companies alleging an overarching conspiracy to fix, raise or stabilize prices of dozens of products,
most of which Perrigo neither makes nor sells. The product conspiracies allegedly involving Perrigo focus on the
same products as those involved in other multi-district litigation ("MDL") complaints naming Perrigo: Clobetasol,
Desonide, Econazole, and Nystatin cream/ointment. Perrigo has not yet responded to the complaint, and responses
are currently stayed. On December 15, 2020, the complaint was amended to add additional defendants and claims.
The new allegations relating to Perrigo concern: Adapalene, Ammonium Lactate, Betamethasone Dipropionate,
Bromocriptine Mesylate, Calcipotriene Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate,
Erythromycin, Fenofibrate, Fluocinonide, Fluticasone Propionate, Halobetasol Propionate, Hydrocortisone Acetate,
Hydrocortisone Valerate, Imiquimod, Methazolamide, Permethrin, Prochlorperazine Maleate, Promethazine HCL,
Tacrolimus, and Triamcinolone Acetonide.

On December 16, 2019, a Medicare Advantage claims recovery company filed a complaint against Perrigo

and 39 other pharmaceutical companies alleging an overarching conspiracy to fix, raise or stabilize prices of dozens
of products, most of which Perrigo neither makes nor sells. The product conspiracies allegedly involving Perrigo
focus on the same products as those involved in other MDL complaints naming Perrigo: Clobetasol, Desonide, and
Econazole. The complaint was originally filed in the District of Connecticut but has been consolidated into the MDL.
Perrigo has not yet had the opportunity to respond to the complaint, and responses are currently stayed. On
December 15, 2020, the complaint was amended to add additional defendants and claims. The new allegations
relating to Perrigo concern: Adapalene, Ammonium Lactate, Betamethasone Dipropionate, Bromocriptine Mesylate,
Calcipotriene Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate, Desoximetasone, Erythromycin,
Fenofibrate, Fluocinonide, Fluticasone Propionate, Halobetasol Propionate, Hydrocortisone Acetate, Hydrocortisone
Valerate, Imiquimod, Methazolamide, Permethrin, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus, and
Triamcinolone Acetonide.

143

Perrigo Company plc - Item 8
Note 19

On December 23, 2019, several counties in New York filed an amended complaint against Perrigo and 28

other pharmaceutical companies alleging an overarching conspiracy to fix, raise or stabilize prices of dozens
products, most of which Perrigo neither makes nor sells. The product conspiracies allegedly involving Perrigo focus
on the same products as those involved in other MDL complaints naming Perrigo: Clobetasol, Desonide, Econazole,
and Nystatin. The complaint was originally filed in New York State court but was removed to federal court and has
been consolidated into the MDL. Perrigo has not yet responded to the complaint, and responses are currently
stayed. On December 15, 2020, the complaint was amended to add additional defendants and claims. The new
allegations relating to Perrigo concern: Adapalene, Betamethasone Dipropionate, Bromocriptine Mesylate,
Calcipotriene Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate, Erythromycin, Fluticasone
Propionate, Halobetasol Propionate, Hydrocortisone Acetate, Hydrocortisone Valerate, Imiquimod, Methazolamide,
Mometasone Furoate, Nystatin, Permethrin, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus, and
Triamcinolone Acetonide. On June 30, 2021, the counties filed a proposed revised second amended complaint.
Perrigo has not yet responded to the complaint, and responses are currently stayed.

On December 27, 2019, a healthcare management organization filed a complaint against Perrigo and 25

other pharmaceutical companies alleging an overarching conspiracy to fix, raise or stabilize prices of dozens of
products, most of which Perrigo neither makes nor sells. The product conspiracies allegedly involving Perrigo focus
on the same products as those involved in other MDL complaints naming Perrigo: Clobetasol, Desonide, Econazole,
and Nystatin. The complaint was filed originally in the Northern District of California but has been consolidated into
the MDL. Perrigo has not yet responded to the complaint, and responses are currently stayed. On December 15,
2020, the complaint was amended to add additional defendants and claims. The new allegations relating to Perrigo
concern: Adapalene, Ammonium Lactate, Betamethasone Dipropionate, Bromocriptine Mesylate, Calcipotriene
Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate, Erythromycin, Fenofibrate, Fluticasone
Propionate, Halobetasol Propionate, Hydrocortisone Acetate, Hydrocortisone Valerate, Imiquimod, Methazolamide,
Permethrin, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus, and Triamcinolone Acetonide.

On March 1, 2020, Harris County of Texas filed a complaint against Perrigo and 29 other pharmaceutical
companies alleging an overarching conspiracy to fix, raise or stabilize prices of dozens of products, most of which
Perrigo neither makes nor sells. The products at issue that plaintiffs claim Perrigo manufacturers or sells include:
Adapalene, Betamethasone Dipropionate, Ciclopirox, Clindamycin, Clobetasol, Desonide, Econazole, Ethinyl
Estradiol/Levonorgestrel, Fenofibrate, Fluocinolone, Fluocinonide, Gentamicin, Glimepiride, Griseofulvin,
Halobetasol Propionate, Hydrocortisone Valerate, Ketoconazole, Mupirocin, Nystatin, Olopatadine, Permethrin,
Prednisone, Promethazine, Scopolamine, and Triamcinolone Acetonide. The complaint was originally filed in the
Southern District of Texas but has been transferred to the MDL. Harris County amended its complaint in May 2020.
Perrigo has not yet responded to the complaint, and responses are currently stayed.

In May 2020, seven health plans filed a writ of summons in the Pennsylvania Court of Common Pleas in

Philadelphia concerning an as-yet unfiled complaint against Perrigo, three dozen other manufacturers, and
seventeen individuals, concerning alleged antitrust violations in connection with the pricing and sale of generic
prescription pharmaceutical products. No complaint has yet been filed, so the precise allegations and products at
issue are not yet clear. Proceedings in the case have been stayed.

On June 9, 2020, a health insurance carrier filed a complaint against Perrigo and 25 other manufacturers
alleging an overarching conspiracy to allocate customers and/or fix, raise or stabilize prices of dozens of products,
most of which Perrigo neither makes nor sells. The product conspiracies allegedly involving Perrigo focus on the
same products as those involved in other MDL complaints naming Perrigo: Clobetasol, Desonide, Econazole, and
Nystatin. The complaint was filed in the Eastern District of Pennsylvania and has been transferred into the MDL.
Perrigo has not yet responded to the complaint, and responses are currently stayed. On December 15, 2020, the
complaint was amended to add additional defendants and claims. The new allegations relating to Perrigo concern:
Adapalene, Ammonium Lactate, Betamethasone Dipropionate, Bromocriptine Mesylate, Calcipotriene
Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate, Erythromycin, Fluocinonide, Fluticasone
Propionate, Halobetasol Propionate, Hydrocortisone Acetate, Hydrocortisone Valerate, Imiquimod, Methazolamide,
Permethrin, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus, and Triamcinolone Acetonide.

On July 9, 2020, a drugstore chain filed a complaint against Perrigo and 39 other pharmaceutical
companies alleging an overarching conspiracy to fix, raise or stabilize prices of dozens of products, most of which
Perrigo neither makes nor sells. The product conspiracies allegedly involving Perrigo focus on the same products as
those involved in other MDL complaints naming Perrigo: Clobetasol, Desonide, Econazole, and Nystatin. Perrigo is

144

Perrigo Company plc - Item 8
Note 19

also listed in connection with Fenofibrate. The complaint was filed in the Eastern District of Pennsylvania and will be
transferred into the MDL. Perrigo has not yet responded to the complaint, and responses are currently stayed. On
December 15, 2020, the complaint was amended to add additional defendants and claims. The new allegations
relating to Perrigo concern: Adapalene, Ammonium Lactate, Betamethasone Dipropionate, Bromocriptine Mesylate,
Calcipotriene Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate, Erythromycin, Fenofibrate,
Fluticasone Propionate, Halobetasol Propionate, Hydrocortisone Acetate, Hydrocortisone Valerate, Imiquimod,
Methazolamide, Permethrin, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus, and Triamcinolone
Acetonide.

On August 27, 2020, Suffolk County of New

York filed a complaint against Perrigo and 35 other

manufacturers alleging an overarching conspiracy to allocate customers and/or fix, raise or stabilize prices of
dozens of products, most of which Perrigo neither makes nor sells. The product conspiracies allegedly involving
Perrigo focus on the same products as those involved in other MDL complaints naming Perrigo: Clobetasol,
Desonide, Econazole, and Nystatin cream and ointment. The other products at issue that plaintiffs claim Perrigo
manufacturers or sells include: Adapalene gel, Albuterol, Benazepril HCTZ, Clotrimazole, Diclofenac Sodium,
Fenofibrate, Fluocinonide, Glimepiride, Ketoconazole, Meprobamate, Imiquimod, Triamcinolone Acetonide,
Erythromycin/Ethyl Solution, Betamethasone Valerate, Ciclopirox Olamine, Terconazole, Hydrocortisone Valerate,
Fluticasone Propionate, Desoximetasone, Clindamycin Phosphate, Halobetasol Propionate, Hydrocortisone
Acetate, Promethazine HCL, Mometasone Furoate, and Amiloride HCTZ. The complaint was filed in the Eastern
District of New York and has been transferred into the MDL. Perrigo has not yet responded to the complaint, and
responses are currently stayed.

On September 4, 2020, a drug wholesaler and distributor filed a complaint against Perrigo and 39 other

manufacturers alleging an overarching conspiracy to allocate customers and/or fix, raise or stabilize prices of
dozens of products, most of which Perrigo neither makes nor sells. The product conspiracies allegedly involving
Perrigo focus on Adapalene, Ammonium Lactate, Betamethasone Dipropionate, Bromocriptine Mesylate,
Calcipotriene Betamethasone Dipropionate, Ciclopirox, Clindamycin, Clobetasol, Desonide, Econazole,
Erythromycin, Fenofibrate, Fluticasone, Halobetasol, Hydrocortisone Acetate, Hydrocortisone Valerate, Imiquimod,
Methazolamide, Mometasone furoate, Nystatin, Prochlorperazine, Promethazine HCL, Tacrolimus, and
Triamcinolone Acetonide. The complaint was filed in the Eastern District of Pennsylvania and has been transferred
into the MDL. Perrigo has not yet responded to the complaint, and responses are currently stayed.

On December 11, 2020, a drugstore chain filed a complaint against Perrigo and 45 other manufacturers

alleging an overarching conspiracy to allocate customers and/or fix, raise or stabilize prices of dozens of products,
most of which Perrigo neither makes nor sells. The product conspiracies allegedly involving Perrigo focus on
Adapalene, Ammonium Lactate, Betamethasone Dipropionate, Bromocriptine Mesylate, Calcipotriene
Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate, Clobetasol, Desonide, Econazole, Erythromycin,
Fenofibrate, Fluticasone Propionate, Halobetasol, Hydrocortisone Acetate, Hydrocortisone Valerate, Imiquimod,
Methazolamide, Nystatin, Permethrin, Prochlorperazine, Promethazine HCL, Tacrolimus, and Triamcinolone. The
complaint was filed in the Eastern District of Pennsylvania and has been transferred into the MDL.

On December 14, 2020, a supermarket chain filed a complaint against Perrigo and 45 other manufacturers
(as well as certain individuals) alleging an overarching conspiracy to allocate customers and/or fix, raise or stabilize
prices of dozens of products, most of which Perrigo neither makes nor sells. The product conspiracies allegedly
involving Perrigo focus on Betamethasone Dipropionate, Bromocriptine Mesylate, Ciclopirox, Clindamycin
Phosphate, Clobetasol, Desonide, Econazole, Fenofibrate, Halobetasol, Hydrocortisone Valerate, Nystatin,
Permethrin, and Triamcinolone Acetonide. The complaint was filed in the Eastern District of Pennsylvania and has
been transferred into the MDL.

On December 15, 2020, a drugstore chain filed a complaint against Perrigo and 45 other manufacturers

alleging an overarching conspiracy to allocate customers and/or fix, raise or stabilize prices of dozens of products,
most of which Perrigo neither makes nor sells. The complaint lists 63 drugs that the chain purchased from Perrigo,
but the product conspiracies allegedly involving Perrigo focus on Adapalene, Betamethasone Dipropionate,
Bromocriptine Mesylate, Calcipotriene Betamethasone Dipropionate, Ciclopirox, Clindamycin Phosphate, Desonide,
Econazole, Erythromycin, Fluocinonide, Fluticasone Propionate, Halobetasol, Hydrocortisone Acetate,
Hydrocortisone Valerate, Imiquimod, Methazolamide, Nystatin, Prochlorperazine, Promethazine HCL, Tacrolimus,
and Triamcinolone. The complaint was filed in the Eastern District of Pennsylvania and has been transferred into the
MDL.

145

Perrigo Company plc - Item 8
Note 19

On December 15, 2020, several counties in New York filed a complaint against Perrigo and 45 other

pharmaceutical companies alleging an overarching conspiracy to fix, raise or stabilize prices of dozens products,
most of which Perrigo neither makes nor sells. The allegations that concern Perrigo include: Adapalene,
Betamethasone Dipropionate, Bromocriptine Mesylate, Calcipotriene Betamethasone Dipropionate, Ciclopirox,
Clindamycin Phosphate, Erythromycin, Fluticasone Propionate, Halobetasol Propionate, Hydrocortisone Acetate,
Hydrocortisone Valerate, Imiquimod, Methazolamide, Mometasone Furoate, Nystatin, Permethrin, Prochlorperazine
Maleate, Promethazine HCL, Tacrolimus, and Triamcinolone Acetonide. The complaint was originally filed in New
York State court but has been removed to federal court and consolidated into the MDL. The counties filed an
amended complaint on June 30, 2021.

On August 30, 2021, the county of Westchester, NY filed a complaint in New York State court against
Perrigo and 45 other pharmaceutical companies alleging an overarching conspiracy to fix, raise or stabilize prices of
dozens products, most of which Perrigo neither makes nor sells. The allegations that concern Perrigo include:
Adapalene, Betamethasone Dipropionate, Bromocriptine Mesylate, Calcipotriene Betamethasone Dipropionate,
Ciclopirox, Clindamycin Phosphate, Clobetasol, Desonide, Econazole, Erythromycin, Fluticasone Propionate,
Halobetasol Propionate, Hydrocortisone Acetate, Hydrocortisone Valerate, Imiquimod, Methazolamide,
Mometasone Furoate, Nystatin, Permethrin, Prochlorperazine Maleate, Promethazine HCL, Tacrolimus, and
Triamcinolone Acetonide. The case has been removed to federal court and consolidated into the MDL.

On October 8, 2021, approximately 20 health plans filed a Praecipe to Issue Writ of Summons in

Pennsylvania state court to commence an action against 46 generic pharmaceutical manufacturers and 24
individuals, alleging antitrust violations concerning generic pharmaceutical drugs. While Perrigo was named as a
defendant, no complaint has been filed and the precise allegations and products at issue have not been identified.
Proceedings in the case, including the filing of a complaint, have not yet occurred.

State Attorney General Complaint

On June 10, 2020, the Connecticut Attorney General’s office filed a lawsuit on behalf of Connecticut and 50
other states and territories against Perrigo, 35 other generic pharmaceutical manufacturers, and certain individuals
(including one former and one current Perrigo employee), alleging an overarching conspiracy to allocate customers
and/or fix, raise or stabilize prices of eighty products. The allegations against Perrigo focus on the following drugs:
Adapalene Cream, Ammonium Lactate cream and lotion, Betamethasone dipropionate lotion, Bromocriptine tablets,
Calcipotriene Betamethasone Dipropionate Ointment, Ciclopirox cream and solution, Clindamycin solution,
Desonide cream and ointment, Econazole cream, Erythromycin base alcohol solution, Fluticasone cream and lotion,
Halobetasol cream and ointment, Hydrocortisone Acetate suppositories, Hydrocortisone Valerate cream, Imiquimod
cream, Methazolamide tablets, Nystatin ointment, Prochlorperazine suppositories, Promethazine HCL suppositories,
Tacrolimus ointment, and Triamcinolone cream and ointment. The Complaint was filed in the District of Connecticut,
but has been transferred into the MDL. On May 7, 2021, the Court ruled that this case will move forward as a
bellwether case. On September 9, 2021, the States filed an amended complaint, although the substantive
allegations against Perrigo did not change. Perrigo moved to dismiss the Complaint on November 12, 2021. That
motion is pending. The case is included among the “bellwether cases” designated to move on a more expedited
schedule than the other cases in the MDL, and, as such, it will be subject to the January 17, 2023 discovery
deadline and November 16, 2023 summary judgment deadline if the Complaint survives the pending motions to
dismiss. Like the other cases in the MDL, no trial date has been set for this case.

Canadian Class Action Complaint

In June 2020, an end payor filed a class action in Ontario, Canada against Perrigo and 29 other

At this stage, we cannot reasonably estimate the outcome of the liability if any, associated with the claims

listed above.

146

Perrigo Company plc - Item 8
Note 19

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 10b5) 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: (i) shareholders who purchased shares during the period
from April 21, 2015 through May 3, 2017 on the U.S. exchanges; (ii) shareholders who purchased shares during the
same period on the Tel Aviv exchange; and (iii) 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, the defense against the Mylan tender offer, and the alleged price fixing activities with respect to six
generic prescription pharmaceuticals. The defendants who remain in the case (the Company, Mr. Papa, and Ms.
Brown) have filed answers denying liability, and the discovery stage of litigation began in late 2018. Discovery in the
class action ended on January 31, 2021. In early April 2021, the defendants filed various post-discovery motions,
including summary judgment motions; the briefing of which was completed in early July 2021. The motions are now
before the court. The court will hold oral argument in April 2022. We intend to defend the lawsuit vigorously.

On November 14, 2019, the court granted the lead plaintiffs’ motion and certified three classes for the case:

(i) all those who purchased shares between April 21, 2015 through May 2, 2017 inclusive on a U.S. exchange and
were damaged thereby; (ii) all those who purchased shares between April 21, 2015 through May 2, 2017 inclusive
on the Tel Aviv exchange and were damaged thereby; and (iii) all those who owned shares as of November 12,
2015 and held such stock through at least 8:00 a.m. on November 13, 2015 (whether or not a person tendered
shares in response to the Mylan tender offer) (the "tender offer class"). Defendants filed a petition for leave to
appeal in the Third Circuit challenging the certification of the tender offer class. On April 30, 2020, the Third Circuit
denied leave to appeal. The District Court has approved the issuance of a notice of the pendency of the class
action, and the notice has been sent to shareholders who are eligible to participate in the classes.

147

In early July 2021, the Court assigned the securities class action case (Roofer’s case) to a new judge within

Perrigo Company plc - Item 8
Note 19

the U.S. District Court for the District of New Jersey. Unless otherwise noted, each of the lawsuits discussed in the
following sections is pending in the U.S. District Court for the District of New Jersey and remains with the originally
assigned judge. The allegations in the complaints relate to events during certain portions of the 2015 through 2017
calendar years, including the period of the Mylan tender offer. All but one of these lawsuits allege violations of
federal securities laws, but none are class actions. One lawsuit (Highfields
in all these cases, except Starborr
listed below pending in federal court in New Jersey are suspended pending the ruling on the summary judgment
motions in the class action case (Roofers case). We intend to defend all these lawsuits vigorously.

) alleges only state law claims. Discovery
fields, ended in November, 2021. As of January 2022, the cases

ard Value and Highi

ii
Carmignac, First Manhattan
generally make the same factual assertions but, at times, differ as to which securities laws violations they allege:

and Similar Cases. The following seven cases were filed by the same law firm and

Case
Carmignac Gestion, S.A. v. Perrigo Company plc, et al.
First Manhattan Co

. v. Perrigo Company plc, et al.

Nationwide Mutual Funds, et al. v. Perrigo Company plc, et al.
Schwab Capital Trust, et al. v. Perrigo Company plc, et al.

Aberdeen Canada Funds -- Global Equity Ft
Principal Funds, Inc., et al. v. Perrigo Company plc, et al.

und, et al. v. Perrigo Company plc, et al.

Kuwait Investment Authority, et al. v. Perrigo Company plc, et al.

Date Filed

11/1/2017
2/16/2018; amended
4/20/2018

10/29/2018
1/31/2019

2/22/2019
3/5/2020

3/31/2020

The original complaints in the Carmignac case and the First Manhattan

case named Perrigo, Mr. Papa, Ms.
Brown, and Mr. Coucke as defendants. Mr. Coucke was dismissed as a defendant after the plaintiffs agreed to apply
the July 2018 ruling in the Roofers'rr Pension Fund case to these two cases. The complaints in each of the other
cases name only Perrigo, Mr. Papa, and Ms. Brown as defendants.

Each complaint asserts claims under Sections 10(b) (and Rule 10b-5 thereunder) and all cases except

Aberdeen assert claims under Section 14(e) of the Securities Exchange Act against all defendants, as well as
control person liability under Section 20(a) of the Securities Exchange Act against the individual defendants. The
control person claims against the individual defendants are limited to the period from April 2015 through April 2016
in the Carmignac case. The complaints in the Carmignac and First Manhattan cases also assert claims under
Section 18 of the Exchange Act.

Each complaint alleges inadequate disclosures concerning the valuation and integration of Omega, the

financial guidance we provided, 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, and, in each of the
cases other than Carmignac, alleged price fixing activities with respect to six generic prescription pharmaceuticals.
The First Manhattan
Carmignac, each of these cases relates to events during the period from April 2015 through May 2017. Many of the
allegations in these cases overlap with the allegations of the June 2017 amended complaint in the Roofers’rr Pension
Fund case, though the Nationwide Mutual, Schwab Capital, Aberdeen, Principal Funds
not include the factual allegations that the court dismissed in the July 2018 ruling in the Roofers'rr Pension Fund
case.

complaint also alleges improper accounting for the Tysabri

® asset. With the exception of

and Kuwait complaints do

After the court issued its July 2018 opinion in the Roofers’ Pension Fund case, the parties in Carmignac and

First Manhattan conferred and agreed that the ruling in the Roofers’rr Pension Fund case would apply equally to the
common allegations in their cases. The later filed cases adopted a similar posture. The defendants in the
Carmignac and other cases listed above filed motions to dismiss addressing the additional allegations in such
cases. On July 31, 2019, the court granted such motions to dismiss in part and denied them in part. That ruling
applies to each of the above cases. The defendants have filed answers in each case denying liability. Discovery in
these cases has ended.

148

Mason Capitalp
generally make the same factual allegations:

,, Pentwater and Similar Cases. The following eight cases were filed by the same law firm and

Perrigo Company plc - Item 8
Note 19

Case
Mason Capital L.P., et al. v. Perrigo Company plc, et al.

O
Pentwater Equity Ot
WCM Alternatives: Event-Drive Fund, et al. v.

pportunities Maste

Perrigo Co., plc, et al.

r Fund Ltd., et al. v. Pvv

errigo Company plc, et al.

Hudson Bay Master Fund Ltd., et al. v. Perrigo Co., plc, et al.

Discovery Global Citizens Maste
York Capital Management, L.P., et al. v. Perrigo Co. plc, et al.

r Fund, Ltd., et al. v. Perrigo Co. plc, et al.

Burlington Loan Management DACDD
Universities Superannuation Scheme Limited v. Perrigo Co. plc, et al.

v. Perrigo Co. plc, et al.

Date Filed
1/26/2018

1/26/2018
11/15/2018

11/15/2018

12/18/2019
12/20/2019

2/12/2020
3/2/2020

The complaints in the Mason Capital case and the Pentwater case originally named Perrigo and 11 current

or former directors and officers of Perrigo as defendants. In the July 2018 Roofers’ Pension Fund ruling, the court
dismissed without prejudice each of the defendants other than Perrigo, Mr. Papa and Ms. Brown from that case;
these plaintiffs later agreed that this ruling would apply to their cases as well. The complaints in each of the other
cases in the above table name only Perrigo, Mr. Papa, and Ms. Brown as defendants.

Each complaint asserts claims under Section 14(e) of the Securities Exchange Act against all defendants,

as well as control person liability under Section 20(a) of the Securities Exchange Act against the individual
defendants. The complaints in the WCM case and the Universities Superannuation Scheme case also assert claims
under Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

Each complaint alleges inadequate disclosure during the tender offer period in 2015 and at various times
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. The WCM complaint also makes these allegations for the period through May 2017 and the
Universities Superannuation Scheme complaint also concerns certain times during 2016. Many of the factual
allegations in these cases overlap with the allegations of the June 2017 amended complaint in the Roofers’ Pension
Fund case, and the Mason Capital and Pentwater cases include factual allegations similar to those in the
Carmignac case described above.

After the court issued its July 2018 opinion in the Roofers’ Pension Fund case, the parties in each of the
above cases conferred and agreed that the ruling in the Roofers’rr Pension Fund case would apply equally to the
common allegations in their cases. The defendants in each of these cases have filed answers denying liability, and
the discovery phase in each of these cases has ended.

Harel Insurance and TIAA-CREF Cases. The following two cases were filed by the same law firm and generally
make the same factual allegations relating to the period from February 2014 through May 2017 (in the Harel case)
and from August 2014 through May 2017 (in the TIAA-CREF case):

Case
Harel Insurance Company, Ltd., et al. v. Perrigo Company plc, et al.

TIAA-CREF Investment Management, LLC., et al. v. Perrigo Company plc, et al.

Date Filed
2/13/2018

4/20/2018

The complaints in the Harel and TIAA-CREF cases originally named Perrigo and 13 current or former

directors and officers of
Perrigo as defendants (adding two more individual defendants not sued in the other cases
described in this section). In the July 2018 Roofers’ Pension Fund ruling, the court dismissed without prejudice 8 of
the 11 defendants other than Perrigo, Mr. Papa and Ms. Brown from that case. These plaintiffs later agreed that that
ruling would apply to these cases as well and also dismissed their claims against the two additional individuals that
only these plaintiffs had named as defendants.

Each complaint asserts claims under Sections 10(b) and 14(e) of the Securities Exchange Act and Rule
10b-5 thereunder against all defendants, as well as control person liability under Section 20(a) of the Securities

149

Perrigo Company plc - Item 8
Note 19

Exchange Act against the individual defendants. The complaint in the Harel case also asserts claims based on
Israeli securities laws.

Each of the complaints alleges inadequate disclosure around the tender offer events in 2015 and at various
times during the relevant periods 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.

After the court issued its July 2018 opinion in the Roofers’ Pension Fund case, the parties in the Harel and

TIAA-CREF cases conferred and agreed that such ruling would apply equally to the common allegations in their
cases. The defendants in each of these cases have filed answers denying liability, and the discovery phase in each
of these cases has ended.

Other Cases Related to Events in 2015-2017. Certain allegations in the following three cases also overlap with the
allegations of the June 2017 amended complaint in the Roofers'rr Pension Fund case and with allegations in one or
more of the other individual cases described in the sections above:

Case
Sculptor Master Fund (f/k/a OZ Master Fund, Ltd.), et al. v. Perrigo Company plc, et al.
Highfields Capital I LP, et al. v. Perrigo Company plc, et al.

BlackRock Global Allocation Fund, Inc., et al. v. Perrigo Co. plc, et al.

Starboard Value and Opportunity C L

P, et al. v. Perrigo Company plc, et al.

Date Filed

2/6/2019
6/4/2020

4/21/2020

2/25/2021

Each of the above complaints names Perrigo, Mr. Papa, and Ms. Brown as defendants.

The Sculptor Master Fund (formerly OZ) complaint asserts claims under Sections 10(b) and 14(e) of the

Securities Exchange Act and Rule 10b-5 thereunder against all defendants, as well as control person liability under
Section 20(a) of the Securities Exchange Act against the individual defendants. The parties have agreed that the
court's rulings in July 2018 in the Roofers'rr Pension Fund case and in July 2019 in the Carmignac and related cases
will apply to this case as well. The defendants have filed answers denying liability. The plaintiffs participated in the
discovery proceedings in the Roofers'
Pension Fund case and the various individual cases described above. The
discovery phase in this case has ended.

The BlackRock Global complaint also asserts claims under Securities Exchange Act section 10(b) (and

Rule 10b-5) and section 14(e) against all defendants and section 20(a) control person claims against the individual
defendants largely based on the same 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, alleged lower performance in the generic prescription drug business during 2015 and alleged
improper accounting for the Tysabri
TT
participated in the discovery proceedings in the Roofers'
described above. The discovery phase in this case has ended.

® asset. The defendants have filed answers denying liability. The plaintiffs
Pension Fund case and the various individual cases

The Starboard Value and Opportunity C LP

complaint also asserts claims under Securities Exchange Act

section 10(b) (and Rule 10b-5) against all defendants and section 20(a) control person claims against the individual
defendants based on events related to alleged price fixing activities with respect to generic prescription drugs during
periods that overlap to some extent with the period alleged in the various other cases described above. Plaintiffs
contend that the defendants provided inadequate disclosure during 2016 about generic prescription drug business
and those alleged matters. The lawsuit was filed on February 25, 2021; but by agreement the case was
administratively terminated by the court in June 2021 pending a decision on the same defendants’ motions currently
pending before the court in the Roofers'rr Pension Fund case described above.

The Highfields federal case complaint asserted claims under Sections 14(e) and 18 of the Securities
Exchange Act against all defendants, as well as control person liability under Section 20(a) of the Securities
Exchange Act against the individual defendants. As originally filed in the U.S. District Court for the District of
Massachusetts, the Highfields complaint also alleged claims under the Massachusetts Unfair Business Methods
Law (chapter 93A) and Massachusetts common law claims of tortious interference with prospective economic

150

Perrigo Company plc - Item 8
Note 19

advantage, common law fraud, negligent misrepresentation, and unjust enrichment. The factual allegations
generally were similar to the factual allegations in the Amended Complaint in the Roofers' Pension Fund case
described above, except that the Highfields plaintiffs did not include allegations about alleged collusive pricing of
generic prescription drugs. In March 2020, the District of Massachusetts court granted defendants’ motion and
transferred the case to the U.S. District Court for the District of New Jersey so that the activities in the case could
proceed in tandem with the other cases in the District of New Jersey described above. After the tran
sfer, in June
ff
Highfields plaintiffs the same
2020, the Highfields plaintiffs voluntarily dismissed their federal lawsuit. The same
then filed a new lawsuit in Massachusetts State Court asserting the same factual allegations as in their federal
lawsuit and alleging only Massachusetts state law claims under the Massachusetts Unfair Business Methods Law
(chapter 93A) and Massachusetts common law claims of tortious interference with prospective economic
advantage, common law fraud, negligent misrepresentation, and unjust enrichment. Defendants’ motion to dismiss
was fully briefed as of late November 2020, argument occurred in early May 2021. In December 2021, the
Massachusetts State Court granted Defendants’ motion to dismiss in part and denied it in part. Defendants’ filed
their answers in January 2022 denying liability. The discovery phase in this case has begun (including discovery
related to some factual allegations that were not part of the discovery in the actions in New Jersey federal court).

day

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

Because our shares are traded on the Tel Aviv exchange under a dual trading arrangement, we are
potentially subject to securities litigation in Israel. Three cases were filed; one was voluntarily dismissed in each of
2017 and 2018 and one was stayed in 2018. We are consulting with Israeli counsel about our response to these
allegations and we intend to defend this case vigorously.

On June 28, 2017, a plaintiff filed a complaint in Tel Aviv District Court styled Israel Elec. Corp. Employees’

Educ. Fund v. Perrigo Company plc, et al. The lead plaintiff seeks to represent a class of shareholders who
purchased Perrigo stock on the Tel Aviv exchange during the period from April 24, 2015 through May 3, 2017 and
also a claim for those that owned shares on the final day of the Mylan tender offer (November 13, 2015). The
amended complaint names as defendants the Company, Ernst & Young LLP (the Company’s auditor), 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 complaint alleges violations under U.S. securities laws 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 or, in
the alternative, under Israeli securities laws. In general, the allegations concern the actions taken by us and our
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 concerning purported integration problems related to
the Omega acquisition, alleges incorrect reporting of organic growth at the Company, alleges price fixing activities
with respect to six generic prescription pharmaceuticals, and alleges improper accounting for the Tysabri® royalty
stream. The plaintiff indicates an initial, preliminary class damages estimate of 2.7 billion NIS (approximately
$760.0 million at 1 NIS = 0.28 cents). After the other two cases filed in Israel were voluntarily dismissed, the plaintiff
in this case agreed to stay this case pending the outcome of the Roofers’ Pension Fund case in the U.S. (described
above). The Israeli court approved the stay, and this case is now stayed. We intend to defend the lawsuit vigorously.

In the United States (cases related to Irish Tax events)

On January 3, 2019, a shareholder filed a complaint against the Company, our CEO Murray Kessler, and

our former CFO Ronald Winowiecki in the U.S. District Court for the Southern District of New York (Masih v. Perrigo
Company, et al.). Plaintiff purported to represent a class of shareholders for the period November 8, 2018 through
December 20, 2018, inclusive. The complaint alleged violations of Securities Exchange Act section 10(b) (and Rule
10b‑5) against all defendants and section 20(a) control person liability against the individual defendants. In general
the allegations contended that the Company, in its Form 10-Q filed November 8, 2018, disclosed information about
an October 31, 2018 audit finding letter received from Irish tax authorities but failed to disclose enough material
information about that letter until December 20, 2018, when we filed a current report on Form 8‑K about Irish tax
matters. The plaintiff did not provide an estimate of class damages. The court selected lead plaintiffs and changed
the name of the case to In re Perrigo Company plc Sec. Litig. The lead plaintiffs filed an amended complaint on April
12, 2019, which named the same defendants, asserted the same class period, and invoked the same Exchange Act
sections. The amended complaint generally repeated the allegations of the original complaint with a few additional
details and adds that the defendants also failed to timely disclose the Irish tax authorities’ Notice of Amended
Assessment received on November 29, 2018. Defendants filed a motion to dismiss on May 3, 2019. On May 31,
2019, the plaintiffs filed a second amended complaint, which asserted a longer class period (March 1, 2018 through
December 20, 2018) and added one additional individual defendant, former CEO Uwe Roehrhoff. In general, the
second amended complaint contended that Perrigo’s disclosures about the Irish tax audit were inadequate

151

Perrigo Company plc - Item 8
Note 19

beginning with Perrigo’s 10-K filed on March 1, 2018 through December 20, 2018 and repeated many of the
allegations of the April 2019 amended complaint. The second amended complaint alleged violations of Securities
Exchange Act section 10(b) (and Rule 10b-5) against all defendants and section 20(a) control person liability
against the three individual defendants. All defendants filed a joint motion to dismiss, and the motion was fully
briefed. On January 23, 2020, the court granted the motion to dismiss in part and denied it in part, dismissing Mr.
Roehrhoff as a defendant and dismissing allegations of inadequate disclosures related to the audit by Irish Revenue
during the period March 2018 through October 30, 2018. The court permitted the plaintiffs to pursue their claims
against us, Mr. Kessler, and Mr. Winowiecki related to disclosures after Perrigo received the October 30, 2018 audit
findings letter and later events through December 20, 2018. The defendants filed answers on February 13, 2020
denying liability, and the court issued a scheduling order on March 3, 2020 that was subsequently modified.
Discovery on the remaining issues ended in early March 2021. Plaintiffs filed a motion for class certification, which
was granted in September 2020. In January 2021, class plaintiffs filed a motion for leave to file a third amended
complaint in an effort to revive their claim that the disclosure of the audit during the period from March 1, 2018 to
October 30, 2018 was also inadequate. The court denied the motion in February 2021. Defendants filed motions for
summary judgement and other post discovery motions on March 31, 2021 and plaintiffs filed cross-motions of the
same type on the same day. All motions were fully briefed by late May 2021. During the week of July 11, 2021, the
Court issued various opinions and orders denying some of the motions by both parties, and granting in part certain
motions by plaintiffs. Defendants filed a motion for reconsideration for some of the rulings in late July, which the
court granted in part in August. The court also indicated that the parties should prepare for trial in mid-October 2021
(subject to COVID-19 developments), without setting an exact trial date.

The court simultaneously ordered mediation, which led to a settlement that the parties first publicly

announced in a court filing on September 8, 2021. Trial was cancelled when a settlement was reached. Motion
papers seeking approval of the class action settlement were filed on October 4, 2021. The court issued a
preliminary approval order on October 29, 2021, which lead to the issuance of notices to class members. Class
plaintiffs filed papers in January 2022 seeking final approval of the settlement. The Court held a hearing on
February 16, 2022 about the settlement and issued the Final Approval Order and Judgment. As a result, the
settlement has been approved and the case has now ended. The settlement has been funded by insurance.

In Israel (case related to Irish Tax events)

On December 31, 2018, a shareholder filed an action against the Company, our CEO Murray Kessler, and
our former CFO Ronald Winowiecki in Tel Aviv District Court (Baton v. Perrigo Company plc, et. al.). The case is a
securities class action brought in Israel making similar factual allegations for the same period as those asserted in
the In re Perrigo Company plc Sec. Litig case in New York federal court. This case alleges that persons who
invested through the Tel Aviv stock exchange can assert claims under Israeli securities law that will follow the
liability principles of Sections 10(b) and 20(a) of the U.S. Securities Exchange Act. The plaintiff does not provide an
estimate of class damages. In 2019, the court granted two requests by Perrigo to stay the proceedings pending the
resolution of proceedings in the United States. Perrigo filed a further request for a stay in February 2020, and the
court granted the stay indefinitely. The plaintiff filed a motion to lift the stay then later agreed that the case should
remain stayed through February 2021. The stay continued in place during 2021. After the settlement of the U.S.
case described above (In re Perrigo Company plc Sec. Litig.), Perrigo’s counsel informed the Israeli Court of the
final approval of the settlement of the U.S. case. The Court has ordered the plaintiff to file papers in response no
later than March 6, 2022. We intend to defend the lawsuit vigorously.

Claim Arising from the Omega Acquisition

On December 16, 2016, we and Perrigo Ireland 2 brought an arbitral claim ("Claim") against Alychlo NV

("Alychlo") and Holdco I BE NV (together the "Sellers") in accordance with clause 26.2 of the Share Purchase
Agreement dated November 6, 2014 ("SPA") and the rules of the Belgian Centre for Arbitration and Mediation
("CEPANI"). Our Claim related to the accuracy and completeness of information about Omega provided by the
Sellers as part of the sale process, the withholding of information by the Sellers during that process and breaches of
Sellers’ warranties. We sought monetary damages from the Sellers. The Sellers served their respective responses
to the Claim on February 20, 2017. In its response, Alychlo asserted a counterclaim for monetary damages
contending that we breached a warranty in the SPAPP and breached the duty of good faith in performing the SPA.
Alychlo subsequently filed papers seeking permission to introduce an additional counterclaim theory of recovery
related to the Irish tax issues disclosed by the Company such that if the position of the Irish tax authorities prevails,
Alychlo would have further basis for its counterclaim against Perrigo. In June 2019, the Tribunal denied permission
for Alychlo to introduce the additional counterclaim and dismissed certain aspects of the original Alychlo
counterclaim.

152

On August 27, 2021 the Tribunal issued its ruling. The panel found fraud by the Sellers of Omega and

awarded Perrigo approximately €355.0 million ($417.6 million at the time of cash receipt) including fees and costs.
The panel also ruled against the Sellers and in favor of Perrigo on all counterclaims. The Sellers have paid all
amounts owed under the award, and the arbitral proceedings have now ended. The arbitration proceedings remain
confidential as required by the SPAPP and the rules of CEPANI. We recorded the cash receipt as a reduction to
Operating Expenses on the Consolidated Statements of Operations.

Perrigo Company plc - Item 8
Note 19

Other Matters

Talcum Powder

The Company has been named, together with other manufacturers, in product liability lawsuits in state
courts in California, Florida, Missouri, New Jersey, Louisiana, Oregon and Illinois alleging that the use of body
powder products containing talcum powder causes mesothelioma and lung cancer due to the presence of asbestos.
All but one of these cases involve legacy talcum powder products that have not been manufactured by the
Company since 1999. One of the pending actions involves a current prescription product that contains talc as an
excipient. As of December 31, 2021, the Company is currently named in 54 individual lawsuits seeking
compensatory and punitive damages and has accepted a tender for a portion of the defense costs and liability from
a retailer for one additional matter. The Company has several defenses and intends to aggressively defend these
lawsuits. Trials for these lawsuits are currently scheduled throughout 2022, 2023 and 2024, with the earliest trial
date in March 2022.

Ranitidine

After regulatory bodies announced worldwide that ranitidine may potentially contain N-nitrosodimethylamine

("NDMA"), a known environmental contaminant, the Company promptly began testing its externally-sourced
ranitidine API and ranitidine-based products. On October 8, 2019, the Company halted shipments of the product
based upon preliminary results and on October 23, 2019, the Company made the decision to conduct a voluntary
retail market withdrawal.

In February 2020, the resulting actions involving Zantac® and other ranitidine products were transferred for

coordinated pretrial proceedings to a Multi-District Litigation (In re Zantac®/Ranitidine Products Liability Litigation
MDL No. 2924) in the U.S. District Court for the Southern District of Florida. After the Compan
to dismiss the first set of Master Complaints in the MDL, it now includes three: 1) an Amended Master Personal
Injury Complaint; 2) a Consolidated Amended Consumer Economic Loss Class Action Complaint; and 3) a
Consolidated Medical Monitoring Class Action Complaint. All three name the Company. Plaintiffs appealed one of
the original Master Complaints, the Third-Party Payor Complaint, and two individual plaintiffs appealed their
individual personal injury claims on limited grounds. The Company is not named in the appeals.

y successfully moved

On June 30, 2021, the Court dismissed all claims against the retail and distributor defendants with
prejudice, thereby reducing the Company’s potential for exposure and liability related to possible indemnification.
On July 8, 2021, the Court dismissed all claims against the Company with prejudice. Appeals of these dismissal
orders to the U.S. Court of Appeals for the 11th Circuit have been filed, as well several state level claims related to
the theories advanced in the MDL litigation. The Company will continue to vigorously defend each of these lawsuits.

As of December 31, 2021, the Company has been named in three hundred and five (305) personal injury

lawsuits, most in the MDL tied to various federal courts alleging that plaintiffs developed various types of cancers or
are placed at higher risk of developing cancer as a result of ingesting products containing ranitidine. The Company
has also been named in a handful of similar lawsuits in the state courts of Illinois and Pennsylvania. The Company
is named in these lawsuits with manufacturers of the national brand Zantac® and other manufacturers of ranitidine
products, as well as distributors, repackagers, and/or retailers. Plaintiffs seek compensatory and punitive damages,
and in some instances seek applicable remedies under state consumer protection laws.

The Company has also been named in a Complaint brought by the New Mexico Attorney General based on

the following theories: violation of a New Mexico public nuisance statute, NMSA 30-8-1 to -14; common law
nuisance; and negligence and gross negligence. The Company is named in this lawsuit with manufacturers of the
national brand Zantac® and other manufacturers of ranitidine products and/or retailers. Brand name manufactures
named in the lawsuit also face claims under the state’s Unfair Practices & False Advertising acts. Likewise, the
Company has also been named in a Complaint brought by the Mayor and City Council of Baltimore, along with
manufacturers of the national brand Zantac® and other manufacturers of ranitidine products and/or retailers. This

153

Perrigo Company plc - Item 8
Note 19

action brings claims under the Maryland Consumer Protection Act against the brand name defendants only, as well
as public nuisance and negligence for the remaining defendants. The Company was originally able to consolidate
the New Mexico and Baltimore Actions to the MDL, however both actions were recently remanded to state court.
The Company filed motions to dismiss in both actions. The New Mexico District Court denied the Company’s Motion
to Dismiss and litigation continues. The Maryland Circuit Court has not issued a ruling on the Company’s Motion.
The Company will continue to vigorously defend each of these lawsuits.

Some of the Company’s retailer customers are seeking indemnity from the Company for a portion of their

defense costs and liability relating to these cases.

Acetaminophen

The Company has received requests for indemnification and defense of several consumer fraud claims
involving its store brand infants’ and children’s acetaminophen products. In September 2020, the Company was
directly named as a defendant in one suit filed in the Central District of California. The Company was recently
named in a cross complaint by a retailer for contractual indemnity in California Superior Court, Alameda County. The
Company has also received 16 different claims for indemnification or defense from 10 different retailers for lawsuits
filed in California, Illinois, Florida, Minnesota and Pennsylvania, with nationwide class action allegations.

The Plaintiffs generally allege that the children’s and infants’ acetaminophen products have identical drug
concentration amounts, yet the infants’ product costs more than the children’s product and consumers have been
misled into purchasing the more expensive product. At this juncture, most of these lawsuits have been dismissed or
settled for nominal amounts, including suits in which it was directly named. The Company will continue to assess
whether, or to what extent, the Company may contribute in the lawsuits filed against its retail customers.

Guarantee Liability Related to the Is
Guarantee Liability Related to the

rael API Sale

During the year ended December 31, 2017, we completed the sale of our Israel API business to SK Capital,
resulting in a guarantee liability of $13.8 million, classified as a Level 3 liability within the fair value hierarchy. Per the
agreement, we will be reimbursed for tax receivables for tax years prior to closing and will need to reimburse SK
Capital for the settlement of any uncertain tax liability positions for tax years prior to closing. In addition, after closing
and going forward, the Israel API business will be assessed by and liable to the Israel Tax Authority ("ITA") for any
audit findings. During the year ended December 31, 2021, we paid $12.5 million to resolve the tax liability indemnity
for the tax year ended December 31, 2017 (refer to Note 17) and $0.7 million upon the sale of the RX business.
There is no remaining guarantee liability at December 31, 2021.

Contingencies Accruals

As a result of the matters discussed in this Note, the Company has established a loss accrual for litigation

contingencies where we believe a loss to be probable and for which an amount of loss can be reasonably
estimated. However, we cannot determine a reasonable estimate of the maximum possible loss or range of loss for
these matters given that they are at various stages of the litigation process and each case is subject to inherent
uncertainties of litigation. At December 31, 2021, the loss accrual for litigation contingencies reflected on the
balance sheet in Other accrued liabilities was approximately $96.9 million. The Company also recorded an
insurance recovery receivable reflected on the balance sheet in Prepaid expenses and other current assets of
approximately $79.0 million related to these litigation contingencies because it believes such amount is recoverable
based on communications with its insurers to date; however, the Company may erode this insurance receivable as it
incurs defense costs associated with defending the matters. The Company’s management believes these accruals
for contingencies are reasonable and sufficient based upon information currently available to management;
however, there can be no assurance that final costs related to these contingencies will not exceed current estimates
or that all of the final costs related to these contingencies will be covered by insurance. (See "Insurance Coverage
Litigation," below.) In addition, we have other litigation matters pending for which we have not recorded any accruals
because our potential liability for those matters is not probable or cannot be reasonably estimated based on
currently available information. For those matters where we have not recorded an accrual but a loss is reasonably
possible, we cannot determine a reasonable estimate of the maximum possible loss or range of loss for these
matters given that they are at various stages of the litigation process and each case is subject to the inherent
uncertainties of litigation.

154

Insurance Coverage Litigation

In May 2021 insurers on multiple policies of D&O insurance filed an action in the High Court in Dublin

Perrigo Company plc - Item 8
Note 19

the Company seeking declaratory

against the Company and multiple current and former directors and officers of
judgments on certain coverage issues. Those coverage issues include claims that policies for periods beginning in
December 2015 and December 2016, respectively, do not have to provide coverage for the securities actions
described above pending in the District of New Jersey or in Massachusetts state court concerning the events of
2015-2017. The policy for the period beginning December 2014 is currently providing coverage for those matters,
and the litigation would not affect that existing coverage. However, if the plaintiffs are successful, the total amount of
insurance coverage available to defend such lawsuits and to satisfy aff
would be limited to one policy period. The insurers’ lawsuit also challenges coverage for Krueger derivatively on
behalf of nominal defendant Perrigo Company plc v. Alford et al., a prior derivative action filed in the District of New
Jersey that was dismissed in August 2020, and forff
the counterclaims brought in the Omega arbitration proceedings.
Perrigo responded on November 1, 2021; Perrigo’s response includes its position that the policies for the periods
beginning December 2015 and December 2016 provide coverage for the underlying litigation matters and seeks a
ruling to that effect. Discovery activity commenced in February 2022. We intend to defend the lawsuit vigorously.

ny judgment or settlement costs thereunder

NOTE 20 - RESTRUCTURING CHARGES

We periodically take action to reduce redundant expenses and improve operating efficiencies. Restructuring

activity includes severance, lease exit costs, and related consulting fees. The following reflects our restructuring
activity (in millions):

Balance at December 31, 2018

Additional charges

Payments

Non-cash adjustments

Balance at December 31, 2019

Additional charges

Payments

Non-cash adjustments

Balance at December 31, 2020

Additional charges

Payments

Non-cash adjustments

Balance at December 31, 2021

23.7

25.0

(28.9)

(0.3)

19.5

3.2

(14.2)

0.6

9.1

16.9

(19.0)

(0.1)

6.9

The charges incurred during the year ended December 31, 2021, were primarily associated with actions
taken to streamline the organization. The charges incurred during the year ended December 31, 2020, were also
primarily associated with actions taken to streamline the organization. The charges incurred during the year ended
December 31, 2019 were primarily associated with our strategic transformation initiative and the reorganization of
our executive management team.

Of the amount recorded during the year ended December 31, 2021, $6.1 million was related to our CSCI

segment, due primarily to various integration initiatives and $7.9 million was related to our CSCA segment, due
primarily to actions taken to streamline the organization. Of the amount recorded during the year ended
December 31, 2020, $1.4 million was related to our CSCI segment, also due primarily to various integration
initiatives, and $1.0 million was not allocated to a segment and was associated with actions taken to streamline the
organization. Of the amount recorded during the year ended December 31, 2019, $12.2 million related to our CSCI
segment due primarily to the sales force reorganization in France, and $10.1 million was not allocated to a segment
and was primarily related to our strategic transformation initiative and the reorganization of our executive
management team. There were no other material restructuring programs in any of the periods presented.

All charges are recorded in Restructuring expense on the Consolidated Financial Statements. The remaining

$6.9 million liability for employee severance benefits is expected to be paid within the next year.

155

Perrigo Company plc - Item 8
Note 22

NOTE 21 - SEGMENT AND GEOGRAPHIC INFORMATION

Our segment reporting structure is consistent with the way our management makes operating decisions,

allocates resources and manages the growth and profitability of the business (refer to Note 1).

Below is a summary of our results by reporting segment (in millions):

Year Ended December 31, 2021

Net sales
Operating income
Operating income %
Total assets
Capital expenditures
Property, plant and equipment, net
Depreciation/amortization

Year Ended December 31, 2020

Net sales
Operating income (loss)
Operating income %
Total assets
Capital expenditures
Property, plant and equipment, net
Depreciation/amortization
Change in financial assets

Year Ended December 31, 2019

Net sales
Operating income (loss)
Operating income %
Total assets
Capital expenditures
Property, plant and equipment, net
Depreciation/amortization
Change in financial assets

CSCA

CSCI

Held for Sale

Unallocated

Total

$
$

$
$
$
$

$
$

$
$
$
$
$

$
$

$
$
$
$
$

2,693.1
206.5

7.7 %

5,983.8
112.0
706.9
117.0

2,693.0
465.0

17.3 %

4,585.1
131.4
701.1
109.9
—

2,487.7
406.7

16.3 %

4,087.7
102.6
624.3
102.8
—

$
$

$
$
$
$

$
$

$
$
$
$
$

$
$

$
$
$
$
$

1,445.6
36.1

2.5 %

4,425.8
24.0
157.2
179.8

1,395.2
32.3

2.3 %

4,872.4
28.8
163.5
177.8
—

1,382.2
19.6

1.4 %

4,682.7
18.8
149.9
194.3
—

$
$

$
$
$
$

$
$

$
$
$
$
$

$
$

$
$
$
$
$

—
—
— %

16.1
—
—
—

—
—
— %

2,030.9
—
—
—
—

—
—
— %

2,531.0
—
—
—
—

$
$

$
$
$
$

$
$

$
$
$
$
$

$
$

$
$
$
$
$

—
167.8

— %
—
—
—
—

—
(232.1)

— %
—
—
—
—
95.3

—
(251.6)

— %
—
—
—
—
(22.1)

$
$

$
$
$
$

$
$

$
$
$
$
$

$
$

$
$
$
$
$

4,138.7
410.4

9.9 %

10,425.7
136.0
864.1
296.8

4,088.2
265.2

6.5 %

11,488.4
160.2
864.6
287.7
95.3

3,869.9
174.7

4.5 %

11,301.4
121.4
774.2
297.1
(22.1)

The net book value of Property, plant and equipment, net by location was as follows (in millions):

U.S.
Europe(1)

All other countries

Year Ended

December 31,
2021

December 31,
2020

674.9

174.4

14.8

864.1

636.3

169.7

58.6

864.6

(1)

Includes Ireland Property, plant and equipment, net of $0.1 million and $20.3 million, forff
December 31, 2020, respectively.

the years ended December 31, 2021 and

Sales to Walmart as a percentage of Consolidated Net sales (reported primarily in our CSCA segment) were

as follows:

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

14.0%

15.2%

15.5%

156

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.

CONTROLS AND PROCEDURES

(a)

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Offiff cer, has

evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in
Rule 13a-15(e) or 15d-15(e) of the Exchange Act) as of December 31, 2021. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Offiff cer have concluded that our disclosure controls and procedures were
effective as of December 31, 2021. Management concluded that the consolidated financial statements included in
this Annual Report present fairly, in all material respects, the financial position of the Company at December 31,
2021 in conformity with GAAP and our external auditors have issued an unqualified opinion on our consolidated
financial statements as of and for the year ended December 31, 2021.

(b)

Management’s Annual Report on Internal Control Over Financial Reporting

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Perrigo Company plc is responsible for establishing and maintaining adequate internal

control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) or 15d-15(f)
promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our
principal executive and principal financial officers and effected by our Board of Directors, management and other
personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with U.S. generally accepted accounting principles and
includes those policies and procedures that:

•

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with U.S. generally accepted accounting principles and that our receipts
and expenditures are being made only in accordance with authorizations of our management and directors;
and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on the financial statements.

All systems of internal control, no matter how well designed, have inherent limitations. Therefore, even

those systems deemed to be effective can provide only reasonable assurance with respect to financial statement
preparation and presentation. Because of inherent limitations, our internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effeff ctiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of
December 31, 2021. The framework used in carrying out our evaluation was the 2013 Internal Control - Integrated
Framework published by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission. In
evaluating our information technology controls, we also used components of the framework contained in the Control
Objectives for Information and Related Technology, which was developed by the Information Systems Audit and
Control Association’s IT Governance Institute, as a complement to the COSO internal control framework.
Management has concluded that our internal control over financial reporting was effective as of December 31, 2021.
The results of management’s assessment have been reviewed with our Audit Committee.

Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements

included in this Annual Report on Form 10-K, also audited the effectiveness of our internal control over financial
reporting, as stated in their report that is included herein.

157

ITEM 9B.

OTHER INFORMATION

Not applicable.

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS.

Not applicable.

158

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Perrigo Company plc

Opinion on Internal Control Over Financial Reporting

We have audited Perrigo Company plc’s internal control over financial reporting as of December 31, 2021, based on
criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Perrigo Company plc (the
Company) maintained, in all material respects, effective internal control over financial reporting as of December 31,
2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related
consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each
of the three years in the period ended December 31, 2021, and the related notes and the financial statement
schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”) and our
report dated March 1, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

the effectiveness of

The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of
internal control over financial reporting included in the accompanying
Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S.
the Securities and Exchange
Commission and the PCAOB.

federal securities laws and the applicable rules and regulations of

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

/s/ Ernst & Young LLP

Grand Rapids, Michigan
March 1, 2022

159

Perrigo Company plc - Item 10

PART III.

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

(a)

Directors of Perrigo Company plc.

This information is incorporated by reference to our Proxy Statement for the Annual Meeting of
Shareholders to be held on May 6, 2022 under the heading "Election of Directors" or will be
included in an amendment to this annual report on Form 10-K.

(b)

Executive Offiff cers of Perrigo Company plc.

See Part I, Additional Item of this Form 10-K under the heading "Information About our Executive
Officers."

(c)

Audit Committee Financial Expert.

This information is incorporated by reference to our Proxy Statement for the Annual Meeting of
Shareholders to be held on May 6, 2022 under the heading "Audit Committee" or will be included in
an amendment to this annual report on Form 10-K.

(d)

Identification and Composition of the Audit Committee.

(e)

Compliance with Section 16(a) of the Exchange Act.

This information is incorporated by reference to our Proxy Statement for the Annual Meeting of
Shareholders to be held on May 6, 2022 under the heading "Delinquent Section 16(a) Reports" or
will be included in an amendment to this annual report on Form 10-K.

(f)

Code of Ethics.

This information is incorporated by reference to our Proxy Statement for the Annual Meeting of
Shareholders to be held on May 6, 2022 under the heading "Corporate Governance" or will be
included in an amendment to this annual report on Form 10-K.

ITEM 11.

EXECUTIVE COMPENSATION

This information is incorporated by reference to our Proxy Statement for the Annual Meeting of

Shareholders to be held on May 6, 2022 under the headings "Executive Compensation", "Remuneration Committee
Report", "Potential Payments Upon Termination or Change in Control" and "Director Compensation" or will be
included in an amendment to this annual report on Form 10-K.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS

This information is incorporated by reference to our Proxy Statement for the Annual Meeting of
Shareholders to be held on May 6, 2022 under the heading "Ownership of Perrigo Ordinary Shares" or will be
included in an amendment to this annual report on Form 10-K. Information concerning equity compensation plans is
incorporated by reference to our Proxy Statement for the Annual Meeting of Shareholders to be held on May 6,
2022 under the heading "Equity Compensation Plan Information" or will be included in an amendment to this annual
report on Form 10-K.

160

Perrigo Company plc - Item 13

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

This information is incorporated by reference to our Proxy Statement for the Annual Meeting of

Shareholders to be held on May 6, 2022 under the heading "Certain Relationships and Related-Party Transactions"
and "Corporate Governance" or will be included in an amendment to this annual report on Form 10-K.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

This information is incorporated by reference to our Proxy Statement for the Annual Meeting of
Shareholders to be held on May 6, 2022 under the heading "Ratification, in a Non-Binding Advisory Vote, of the
Appointment of Ernst & Young LLP as Independent Auditor of the Company and Authorization, in a Binding Vote, of
the Board of Directors, Acting Through the Audit Committee, to Fix the Remuneration of the Auditor" or will be
included in an amendment to this annual report on Form 10-K.

161

Perrigo Company plc Item 15
Exhibits

PART IV.

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed or incorporated by reference as part of this Form 10-K:

1. All financial statements. See Index to Consolidated Financial Statements.

2. Financial Schedules.

Schedule II – Valuation and Qualifying Accounts.

Schedules other than the one listed are omitted because the required information is included in the footnotes,
immaterial or not applicable.

3. Exhibits:

2.1

2.4

2.5+

2.7

2.8

2.9

3.1

3.2

4.1

Transaction Agreement, dated as of July 28, 2013, among Perrigo Company, Elan Corporation, plc,
Perrigo Company plc, Habsont Limited and Leopard Company (incorporated by reference from Annex A
to the joint proxy statement/prospectus included in the Company's Registration Statement on Form S-4/
A filed on October 8, 2013) (File No. 333-190859).

Put Option Agreement, dated as of September 8, 2021, by and among Perrigo Company plc, Habsont
Unlimited Company and certain other parties set forth therein (incorporated by reference from Exhibit
2.1 to the Company’s Current Report on Form 8-K filed on September 9, 2021) (File No. 001-36353).

Habsont Unlimited Company and certain other parties set forth therein (incorporated by reference from
Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on October 21, 2021 (File No.
001-36353).

Part A of Appendix I to Rule 2.5 Announcement (Conditions to the Implementation of the Scheme and
the Acquisition) (incorporated by reference from Annex B to the joint proxy statement/prospectus
included in the Company's Registration Statement on Form S-4/A filed on October 8, 2013) (File No.
333-190859).

Asset Purchase Agreement, dated as of February 5, 2013, by and among Elan Pharma International
Limited, Elan Pharmaceuticals, Inc. and Biogen Idec International Holding Ltd (incorporated by
reference from Exhibit 4(c) (31) of Elan Corporation, plc’s Annual Report on Form 20-F for the year
ended December 31, 2012) (File No. 001-13896).

Agreement for the Sale and Purchase of 685,348,257 Shares Of Omega Pharma Invest N.V., dated as
of November 6, 2014, by and among the Company, Alychlo N.V. and Holdco I BE N.V. (incorporated by
reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 12, 2014)
(File No. 001-36353).

Amendment Agreement dated March 27, 2015 to the Agreement for the Sale and Purchase of
685,348,257 Shares Of Omega Pharma Invest N.V., dated as of November 6, 2014, by and among the
Company, Alychlo N.V. and Holdco I BE N.V. (incorporated by reference from Exhibit 2.3 to the
Company’s Quarterly Report on Form 10-Q filed on April 29, 2015) (File No. 001-36353).

Assignment Letter dated March 17, 2015 regarding the Agreement for the Sale and Purchase of
685,348,257 Shares Of Omega Pharma Invest N.V., dated as of November 6, 2014, by and among the
Company, Alychlo N.V. and Holdco I BE N.V. (incorporated by reference from Exhibit 2.1 to the
Company’s Quarterly Report on Form 10-Q filed on April 29, 2015) (File No. 001-36353).

Closing Letter dated March 17, 2015 regarding the Agreement for the Sale and Purchase of
685,348,257 Shares Of Omega Pharma Invest N.V., dated as of November 6, 2014, by and among the
Company, Alychlo N.V. and Holdco I BE N.V. (incorporated by reference from Exhibit 2.2 to the
Company’s Quarterly Report on Form 10-Q filed on April 29, 2015) (File No. 001-36353).

Certificate of Incorporation of Perrigo Company plc (formerly known as Perrigo Company Limited)
(incorporated by reference from Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed
December 19, 2013) (File No. 333-192946).

Memorandum and Articles of Association of Perrigo Company plc, as amended and restated
(incorporated by reference from Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed on
August 10, 2017) (File No. 001-36353).

Indenture dated as of November 8, 2013, among the Company, the guarantors named therein and
Wells Fargo Bank, N.A., as Trustee (incorporated by reference from Exhibit 4.1 to the Company's
Current Report on Form 8-K filed on November 12, 2013) (File No. 333-190859).

162

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.11

10.1

10.2

10.3

10.4

10.5

Perrigo Company plc - Item 15
Exhibits

First Supplemental Indenture, dated December 18, 2013 to the Indenture dated as of November 8,
2013, among the Company, the guarantors named therein and Wells Fargo Bank, N.A., as Trustee
(incorporated by reference from Exhibit 4.1 to the Company's Current Report on Form 8-K filed on
December 19, 2013) (File No. 333-190859).

Base Indenture dated as of December 2, 2014, between Perrigo Finance Unlimited Company, formerly
known as Perrigo Finance plc, the Company and Wells Fargo Bank, National Association, as trustee
(incorporated by reference from Exhibit 4.1 to the Company's Current Report on Form 8-K filed on
December 2, 2014) (File No. 001-36353).

First Supplemental Indenture dated as of December 2, 2014, between Perrigo Finance Unlimited
Company, formerly known as Perrigo Finance plc, the Company and Wells Fargo Bank, National
Association, as trustee (incorporated by reference from Exhibit 4.2 to the Company's Current Report on
Form 8-K filed on December 2, 2014) (File No. 001-36353).

Supplemental Indenture No. 2, dated as of March 10, 2016, among Perrigo Finance Unlimited
Company, the Company and Wells Fargo Bank, National Association, as trustee (incorporated by
reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 10, 2016) (File
No. 001-36353).

Third Supplemental Indenture, dated as of June 19, 2020, among Perrigo Finance Unlimited Company,
Perrigo Company plc, and Wells Fargo Bank, National Association, as trustee (incorporated by
reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 19, 2020) (File
No. 001-36353).

Form of 3.900% Senior Notes due 2024 (included as Exhibit A-2 to the First Supplemental Indenture
dated as of December 2, 2014, between Perrigo Finance Unlimited Company, formerly known as
Perrigo Finance plc, the Company and Wells Fargo Bank, National Association, as trustee)
(incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on
December 2, 2014) (File No. 001-36353).

Form of 4.900% Senior Notes due 2044 (included as Exhibit A-3 to the First Supplemental Indenture
dated as of December 2, 2014, between Perrigo Finance Unlimited Company, formerly known as
Perrigo Finance plc, the Company and Wells Fargo Bank, National Association, as trustee)
(incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on
December 2, 2014) (File No. 001-36353).

Form of 3.150% Note due 2030 (included in the Third Supplemental Indenture dated as of June 19,
2020) (incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form 8-K filed
on June 19, 2020) (File No. 001-36353).

Form of Global Note representing the 2026 Notes (included in Exhibit 4.5).

Description of the Company’s Securities (incorporated by reference to Exhibit 4.12 to the Company’s
Annual Report on Form 10-K filed on February 27, 2020) (File No. 001-36353).

Revolving Credit Agreement by and among Perrigo Finance Unlimited Company, Perrigo Company plc,
JPMorgan Chase Bank, N.A., and the other lenders party thereto, dated as of March 8, 2018
(incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on
March 9, 2018) (File No. 001-36353).

Amendment No. 1, by and among Perrigo Finance Unlimited Company, Perrigo Company plc,
JPMorgan Chase Bank, N.A., and the other lenders party thereto, dated as of August 15, 2019
(incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on
August 16, 2019) (File No. 001-36353).

Amendment No. 2 and Waiver to 2018 Revolver, dated as of August 10, 2021, by and among Perrigo
Finance Unlimited Company, Perrigo Company plc, JPMorgan Chase Bank, N.A., and the other lenders
party thereto, dated as of August 15, 2019 (incorporated by reference from Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q filed August 11, 2021) (File No. 001-36353).

Amendment No. 3 to that certain Revolving Credit Agreement, dated as of December 3, 2021 and
entered into by and among Perrigo Finance, the Company, each lender party thereto and JPMorgan
Chase Bank, N.A., as administrative agent (incorporated by reference from Exhibit 10.2 to the
Company’s Current Report on Form 8-K filed on December 9, 2021) (File No. 001-36353).

Term Loan Credit Agreement by and among Perrigo Finance Unlimited Company, Perrigo Company
plc, JPMorgan Chase Bank, N.A., and the other lenders party thereto, dated as of August 15, 2019
(incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on
August 16, 2019) (File No. 001-36353).

163

10.6

10.7

10.8

10.9

10.10*

10.11*

10.12*

10.13*

10.14*

10.15*

10.17*

10.18*

10.19*

10.20*

10.21*

10.22*

Perrigo Company plc Item 15
Exhibits

Amendment No. 1 and Waiver to 2019 Term Loan, dated as of August 10, 2021, by and among Perrigo
Finance Unlimited Company, Perrigo Company plc, JPMorgan Chase Bank, N.A., and the other lenders
party thereto, dated as of August 15, 2019 (incorporated by reference from Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q filed on August 11, 2021) (File No. 001-36353).

Amendment No. 2 to that certain Term Loan Credit Agreement, dated as of December 3, 2021 and
entered into by and among Perrigo Finance, the Company, each lender party thereto and JPMorgan
Chase Bank, N.A., as administrative agent (incorporated by reference from Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed on December 9, 2021) (File No. 001-36353).

Purchase and Sale Agreement by and among Perrigo Pharma International Designated Activity
Company, Perrigo Company plc and RPI Finance Trust, dated February 27, 2017 (incorporated by
reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 28, 2017)
(File No. 001-36353).

Stock Purchase Agreement and Agreement and Plan of Merger by and among Perrigo Oral Health
Care Holdings, Inc., Perrigo Ireland 6 DAC, Big Mouth Merger Sub, LLC, Ranir Global Holdings, LLC,
Camden Partners III SPV, L.P., RGH SELLER REP, LLC and Perrigo Company plc, effective as of May
8, 2019 (incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q
filed on August 8, 2019) (File No. 001-36353).

Perrigo Annual Incentive Plan, as amended and restated effective February 13, 2019 (incorporated by
reference from Exhibit 10.5 to the Company’s Annual Report on Form 10-K filed on February 27, 2019)
(File No. 001-36353).

2008 Long-Term Incentive Plan, adopted November 4, 2008 (incorporated by reference from Exhibit
10(b) to Perrigo Company's Quarterly Report on Form 10-Q filed on February 3, 2009) (File No.
000-19725).

2013 Long-Term Incentive Plan (incorporated by reference from Annex J to the Company’s Registration
Statement on Form S-4/A filed on October 8, 2013) (File No. 333-190859).

Amendment No. 1 to the 2013 Long-Term Incentive Plan, dated as of January 29, 2014 (incorporated
by reference from Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q filed on February 6,
2014) (File No. 333-190859).

Amendment No. 2 to the 2013 Long-Term Incentive Plan, effective as of July 9, 2015 (incorporated by
reference from Exhibit 10.17 to the Company's Annual Report on Form 10-K, filed on August 13, 2015)
(File No. 001-36353).

Amendment No. 3 to the 2013 Long-Term Incentive Plan, effective as of November 3, 2017
(incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on
November 9, 2017) (File No. 001-36353).

Amendment No. 4 to the 2013 Long-Term Incentive Plan, effective as of February 13, 2019
(incorporated by reference from Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on
February 27, 2019) (File No. 001-36353).

Perrigo Company plc 2019 Long-Term Incentive Plan (incorporated by reference from Exhibit 10.1 to
the Company’s Current Report on Form 8-K filed on April 30, 2019) (File No. 001-36353).

Nonqualified Deferred Compensation Plan, as amended as of October 10, 2007 and effective January
1, 2007 (incorporated by reference from Exhibit 10.1 to Perrigo Company’s Current Report on Form 8-K
filed on October 11, 2007) (File No. 000-19725).

Amendment One to the Nonqualified Deferred Compensation Plan, dated December 3, 2009
(incorporated by reference from Exhibit 10.14 to the Company's Annual Report on Form 10-K filed on
August 14, 2014) (File No. 001-36353).

Amendment Two to the Nonqualified Deferred Compensation Plan, dated as of October 10, 2012,
(incorporated by reference from Exhibit 10.1 to Perrigo Company’s Quarterly Report on Form 10-Q filed
on February 1, 2013) (File No. 000-19725).

Amendment Three to the Nonqualified Deferred Compensation Plan, dated as of November 13, 2013
(incorporated by reference from Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed on
February 6, 2014) (File No. 333-190859).

Amendment Four to the Nonqualified Deferred Compensation Plan, dated as of January 31, 2014
(incorporated by reference from Exhibit 10.13 to the Company’s Quarterly Report on Form 10-Q filed
on February 6, 2014) (File No. 333-190859).

164

10.23*

10.24*

10.25*

10.26*

10.27*

10.28*

10.29*

10.30*

10.31*

10.32*

10.33*

10.35*

10.36*

10.37*

10.38*

Perrigo Company plc - Item 15
Exhibits

Amendment Five to the Nonqualified Deferred Compensation Plan, dated as of August 17, 2015
(incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on
November 2, 2015) (File No. 001-36353).

Amendment Six to the Perrigo Company Nonqualified Deferred Compensation Plan, dated as of July
23, 2018 (incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report on Form 10-
Q filed on August 9, 2018) (File No. 001-36353).

Perrigo Company plc Executive Committee Severance Policy, as amended and restated effective
February 13, 2019 (incorporated by reference from Exhibit 10.20 to the Company’s Annual Report on
Form 10-K filed on February 27, 2019) (File No. 001-36353).

Perrigo Company plc Change in Control Severance Policy for U.S. Employees, as amended and
restated effective February 13, 2019 (incorporated by reference from Exhibit 10.21 to the Company’s
Annual Report on Form 10-K filed on February 27, 2019) (File No. 001-36353).

Perrigo Company plc U.S. Severance Policy, as amended and restated effective February 13, 2019
(incorporated by reference from Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed on
February 27, 2019) (File No. 001-36353).

Perrigo Company Employee Severance Programme - Ireland, effective April 9, 2020 (incorporated by
reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2020)
(File No. 001-36353).

Forms of Grant Agreement under the Company's 2013 Long-Term Incentive Plan (incorporated by
reference from Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q filed on February 6,
2014) (File No. 333-190859).

Forms of Amendment to Nonqualified Stock Option Agreements under Perrigo Company plc's 2013
Long-Term Incentive Plan (incorporated by reference from Exhibit 10.8 to the Company’s Quarterly
Report on Form 10-Q filed on August 10, 2017) (File No. 001-36353).

Forms of Service-Based Restricted Stock Unit Award Agreements under the Company's 2013 Long-
Term Incentive Plan (incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report
on Form 10-Q filed on November 9, 2017) (File No. 001-36353).

Forms of Nonqualified Stock Option Agreements under the Company's 2013 Long-Term Incentive Plan
(incorporated by reference from Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed on
November 9, 2017) (File No. 001-36353).

Forms of Service-Based Restricted Stock Unit Award Agreements under the Company’s Long-Term
Incentive Plan (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form
8-K filed on January 8, 2018) (File No. 001-36353).

Forms of Service-Based Restricted Stock Unit Award Agreement under Perrigo Company plc’s 2013
Long-Term Incentive Plan (incorporated by reference from exhibit 10.61 to the Company’s Annual
Report on Form 10-K filed on March 1, 2018) (File No. 001-36353).

Form of Nonqualified Stock Option Agreement under Perrigo Company plc’s 2013 Long-Term Incentive
Plan (incorporated by reference from exhibit 10.63 to the Company’s Annual Report on Form 10-K filed
on March 1, 2018) (File No. 001-36353).

Form of Nonqualified Stock Option Agreement under Perrigo Company plc’s 2013 Long-Term Incentive
Plan (incorporated by reference from Exhibit 10.49 to the Company’s Annual Report on Form 10-K filed
on February 27, 2019) (File No. 001-36353).

Form of Service-based Restricted Stock Unit Award Agreement under Perrigo Company plc’s 2013
Long-Term Incentive Plan (incorporated by reference from Exhibit 10.50 to the Company’s Annual
Report on Form 10-K filed on February 27, 2019) (File No. 001-36353).

Forms of Performance-based Restricted Stock Unit Award Agreements under Perrigo Company plc’s
2013 Long-Term Incentive Plan (incorporated by reference from Exhibit 10.51 to the Company’s Annual
Report on Form 10-K filed on February 27, 2019) (File No. 001-36353).

Form of Perrigo Company plc Director Indemnity Agreement (incorporated by reference from Exhibit
10.1 to the Company’s Current Report on Form 8-K filed on December 19, 2013) (File No.
333-190859).

10.40*

Form of Perrigo Company plc Officer Indemnity Agreement (incorporated by reference from Exhibit 10.2
to the Company’s Current Report on Form 8-K filed on December 19, 2013) (File No. 333-190859).

165

Perrigo Company plc - Item 15
Exhibits

10.41*

10.42*

10.43*

Form of Perrigo Company Indemnity Agreement (incorporated by reference from Exhibit 10.3 to the
Company’s Current Report on Form 8-K filed on December 19, 2013) (File No. 333-190859).

Form of Nonqualified Stock Option Agreement under Perrigo Company plc’s 2019 Long-Term Incentive
Plan (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed
on April 30, 2019) (File No. 001-36353).

Form of Service-based Restricted Stock Unit Award Agreement under Perrigo Company plc’s 2019
Long-Term Incentive Plan (incorporated by reference from Exhibit 10.3 to the Company’s Current
Report on Form 8-K filed on April 30, 2019) (File No. 001-36353).

Forms of Performance-based Restricted Stock Unit Award Agreement under Perrigo Company plc’s
2019 Long-Term Incentive Plan (incorporated by reference from Exhibit 10.4 to the Company’s Current
Report on Form 8-K filed on April 30, 2019) (File No. 001-36353).

Form of Nonqualified Stock Option Agreement under Perrigo Company plc's 2019 Long-Term Incentive
Plan (incorporated by reference from Exhibit 10.61 to the Company's Annual Report on Form 10-K filed
on February 27, 2020) (File No. 001-36353).

10.46*

Forms of Performance-based Restricted Stock Unit Award Agreement under Perrigo Company plc's
2019 Long-Term Incentive Plan (incorporated by reference from Exhibit 10.62 to the Company's Annual
Report on Form 10-K filed on February 27, 2020) (File No. 001-36353).

Form of Service-based Restricted Stock Unit Award Agreement under Perrigo Company plc's 2019
Long-Term Incentive Plan (incorporated by reference from Exhibit 10.63 to the Company's Annual
Report on Form 10-K filed on February 27, 2020) (File No. 001-36353).

Employment Agreement, effective as of October 8, 2018, by and between Perrigo Management
Company and Murray S. Kessler (incorporated by reference from Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed on October 9, 2018) (File No. 001-36353).

Amendment No. 1 to Employment Agreement, effective as of February 13, 2019, by and between
Perrigo Management Company and Murray S. Kessler (incorporated by reference from Exhibit 10.63 to
the Company’s Annual Report on Form 10-K filed on February 27, 2019) (File No. 001-36353).

Amended and Restated Employment Agreement, effective as of March 1, 2021, by and between
Perrigo Management Company and Murray S. Kessler (incorporated by reference from Exhibit 10.57 to
the Company’s Annual Report on Form 10-K filed on March 1, 2021 ) (File No. 001-36353).

Form of Nonqualified Stock Option Agreement under Perrigo Company plc’s 2013 Long-Term Incentive
Plan (incorporated by reference from Exhibit 10.64 to the Company’s Annual Report on Form 10-K filed
on February 27, 2019) (File No. 001-36353).

Form of Service-based Restricted Stock Unit Award Agreement under Perrigo Company plc’s 2013
Long-Term Incentive Plan (incorporated by reference from Exhibit 10.65 to the Company’s Annual
Report on Form 10-K filed on February 27, 2019) (File No. 001-36353).

Forms of Performance-based Restricted Stock Unit Award Agreements under Perrigo Company plc’s
2013 Long-Term Incentive Plan incorporated by reference from Exhibit 10.66 to the Company’s Annual
Report on Form 10-K filed on February 27, 2019) (File No. 001-36353).

Letter Agreement between the Company and Raymond Silcock, dated March 17, 2019 (incorporated by
reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 20, 2019)
(File No. 001-36353).

Management Agreement, effective as of January 1, 2020 by and between Perrigo Holding NV and
Svend Andersen (incorporated by reference from Exhibit 10.80 to the Company’s Annual Report on
Form 10-K filed on February 27, 2020) (File No. 001-36353).

Employment Agreement between Perrigo Pharma International D.A.C. and James Dillard, dated
January 25, 2019 (incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on May 5, 2020) (File No. 001-36353).

Stock and Asset Purchase Agreement, by and between the Company and Vestas Pharma LLC, dated
as of March 1, 2021 (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed on March 2, 2021) (File No. 001-36353).

Amendment to Stock and Asset Purchase Agreement, by and between Perrigo Company plc and
Padagis LLC, dated as of July 6, 2021 (incorporated by reference from Exhibit 10.2 to the Company’s
Current Report on Form 8-K filed on July 12, 2021).

10.48*

10.49*

10.50*

10.51*

10.52*

10.53*

10.54*

10.55*

10.56*

10.57

10.58

166

10.59*

Supplement to Letter Agreement, dated as of August 11, 2021, by and between the Company and
Raymond Silcock (incorporated by reference from Exhibit 10.4 to the Company’s Quarterly Report on
Form 10-Q filed on November 12, 2021) (FIle No. 001-36353).

Perrigo Company plc - Item 15
Exhibits

Subsidiaries of the Registrant.

Consent of Ernst & Young LLP.

Power of Attorney (see signature page).

Rule 13a-14(a) Certifications.

Section 1350 Certifications.

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File, formatted in Inline XBRL (contained in Exhibit 101.INS).

*
**

Confidential treatment has been requested for portions of this agreement. A completed copy of the agreement, including the redacted
portions, has been filed separately with the SEC.
Denotes management contract or compensatory plan or arrangement.
The Company has omitted schedules and other similar attachments to such agreement pursuant to Item 601(b) of Regulation S-K. The
Company will furnish a copy of such omitted document to the SEC upon request.

(b) Exhibits.

The response to this portion of Item 15 is submitted as a separate section of this Report. See Item 15(a)(3)
above.

The response to this portion of Item 15 is submitted as a separate section of this Report. See Item 15(a)(2)
above.

167

Perrigo Company plc - Item 15
Exhibits

SCHEDULE II – VALVV UATION AND QUALIFYING ACCOUNTS

PERRIGO COMPANY PLC
(in millions)

Year Ended

December 31,
2021

December 31,
2020

December 31,
2019

Allowance for doubtful accounts

Balance at beginning of period
Net bad debt expenses(1)
Additions/(deductions)(2)

Balance at end of period

6.5

4.0

(3.3)

6.0

2.3

(1.8)

7.2

6.5

5.8

2.2

(2.0)

6.0

Includes effects of changes in foref

(1)
(2) Uncollectible accounts written off, net of recoveries. Also includes effects of changes in foreign exchange rates and transfers to held for

ign exchange rates.

sale.

168

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this Annual Report on Form 10-K for the year ended December 31, 2021 to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Dublin, Ireland on March 1, 2022.

SIGNATURES

PERRIGO COMPANY PLC

By:

/s/ Murray S. Kessler

Murray S. Kessler
Chief Executive Officer and President

(Principal Executive Officer)

POWER OF ATTORNEY

Each person whose signature appears below hereby appoints Murray S. Kessler, Raymond P. Silcock, and Todd W.
Kingma and each of them severally, acting alone and without the other, his true and lawful attorney-in-fact with
authority to execute in the name of each such person, and to file with the Securities and Exchange Commission,
together with any exhibits thereto and other documents therewith, any and all amendments to this Annual Report on
Form 10-K for the year ended December 31, 2021 necessary or advisable to enable Perrigo Company plc to comply
the Securities and
with the Securities Exchange Act of 1934, or any rules, regulations and requirements of
Exchange Commission in respect thereof, which amendments may make such other changes in the report as the
aforesaid attorney-in-fact executing the same deems appropriate.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K for the year
ended December 31, 2021 has been signed below by the following persons on behalf of the Registrant and in the
capacities indicated on March 1, 2022.

169

Signature

/s/ Murray S. Kessler
Murray S. Kessler

/s/ Raymond P. Silcock
Raymond P. Silcock

/s/ Rolf A. Classon
Rolf A. Classon

/s/ Bradley A. Alford
Bradley A. Alford

/s/ Orlando D. Ashford
Orlando D. Ashford

/s/ Katherine Doyle
Katherine Doyle

/s/ Adriana Karaboutis
Adriana Karaboutis

/s/ Jeffrey B. Kindler
Jeffrey B. Kindler

/s/ Erica L. Mann
Erica L. Mann

/s/ Donal O'Connor
Donal O'Connor

/s/ Geoffrey M. Parker
Geoffrey M. Parker

/s/ Theodore R. Samuels
Theodore R. Samuels

Title

President and Chief Executive Officer and Director
(Principal Executive Officer)

Chief Financial Officer
(Principal Accounting and Financial Officer)

Chairman of the Board

Director

170