Annual General Meeting July 20, 2017

Similar documents
Fourth Quarter & Calendar Year 2016 Earnings Conference Call May 23, 2017

Second Quarter Calendar Year 2018 Financial Results August 9, 2018

2018 J.P. Morgan Healthcare Conference January 9, 2018

August 5 th, Calendar Year Second Quarter Conference Call

Perrigo: Creating Superior Value for Shareholders. April 2015

J.P. Morgan Healthcare Conference

CREDIT SUISSE Phoenix, AZ

Fiscal 2018 Third Quarter Results. 28 June 2018

Perrigo Fiscal Fourth Quarter Conference Call August 18, 2009

Walgreens Boots Alliance 3Q16 Consolidated Financial Results Earnings conference call. 6 July 2016

Fourth Quarter and Fiscal 2018 Results. October 11, 2018

Akorn, Inc. N a s d a q : A K R X

Fourth Quarter and Fiscal 2016 Results. 20 October 2016

Endo International plc

Mylan Q EARNINGS November 5, Q Earnings All Results are Unaudited

JP Morgan Healthcare Conference

Walgreens Boots Alliance Fiscal year end 2015 and 4Q earnings conference call. 28 October 2015

Fiscal 2019 First Quarter Results. December 20, 2018

Q4 and Full Year 2018 Earnings Call

Walgreens Boots Alliance Reports Fourth Quarter and Fiscal 2017 Results

Walgreens Boots Alliance Reports Fiscal 2018 Third Quarter Results

Walgreens Boots Alliance Reports Fiscal 2019 First Quarter Results Delivers Double Digit Percentage Growth in Earnings Per Share (EPS)

Investor Relations Presentation. Delivering solutions, shaping the future

Xerox Investor Handout as of Q Third Quarter 2018 Earnings

Fiscal 2017 First Quarter Results. 5 January 2017

Q Earnings Call

Cardinal Health, Inc. Earnings Investor/Analyst call May 1, 2017

Mylan: Q EARNINGS August 8, Q Earnings All Results are Unaudited

Investor Relations Presentation

BAIRD 2017 GLOBAL INDUSTRIAL CONFERENCE ANDERS GUSTAFSSON CHIEF EXECUTIVE OFFICER ZEBRA TECHNOLOGIES

Walgreens Boots Alliance Reports Fiscal 2018 First Quarter Results

West Pharmaceutical Services, Inc. June 2016

Catalent, Inc. Jefferies Global Healthcare Conference. June 9, DEVELOPMENT DELIVERY SUPPLY more products. better treatments. reliably supplied.

Endo Health Solutions

Quality, Affordable Healthcare Products Since J.P. Morgan Healthcare Conference. January 7th, 2013

NASDAQ 38th Investor Conference

Safe harbor and non-gaap

Walgreens Boots Alliance Reports Fiscal 2018 Second Quarter Results

Fourth Quarter and Full Year 2017 Results. March 1, 2018

Cambrex to Acquire Halo Pharma. July 23, 2018

McKESSON REPORTS FISCAL 2016 SECOND-QUARTER RESULTS

Data. Insights. Results.

Walgreens Boots Alliance Reports Fiscal 2016 Third Quarter Results

Second Quarter 2018 Earnings

Q Conference Call. August 2, 2017

Q3 Fiscal 2018 Investor Overview

Magellan Health. Cantor Fitzgerald Healthcare Conference September 26, 2017

Dave Carlucci Chairman and CEO IMS Health

Cardinal Health, Inc. Earnings Investor/Analyst call February 8, 2018

McKESSON REPORTS FISCAL 2017 FOURTH-QUARTER AND FULL-YEAR RESULTS

Third Quarter Fiscal 2013 Financial Results. June 19, 2013

Walgreens Boots Alliance Reports Fourth Quarter and Fiscal 2016 Results

Safe Harbor Statement

Cardinal Health, Inc. Earnings Investor/Analyst call May 3, 2018

Q Earnings Call

NEW REVENUE ACCOUNTING STANDARD (ASC 606) February 7, 2018

ACTUANT REPORTS THIRD QUARTER RESULTS; UPDATES FISCAL 2018 GUIDANCE

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 8-K

CVS Health Corporation Supplemental Financial Information Preliminary and Unaudited. Fourth Quarter 2014 Earnings Release February 10, 2015

Cardinal Health, Inc. Earnings Investor/Analyst call November 6, 2017

April 22, Second Quarter Fiscal 2015 Earnings

Teva Pharmaceutical Industries Ltd. Q August 2, 2018

34 th Annual J.P. Morgan Healthcare Conference. Steve Collis, President & CEO Tim Guttman, EVP & CFO

Results for Q3 Fiscal 2019

Catalent, Inc. Raymond James Institutional Investors Conference. March 7, 2016

Helping Clients Win with Digital

NET SALES $2,558 $2,487 3% COST OF SALES 1,487 1,453 2% GROSS MARGIN 1,071 1,034 4% % of Net Sales 41.9% 41.6% 0.3 pts

WYNDHAM DESTINATIONS Supplementary Financial Information

31 st Annual J.P. Morgan Healthcare Conference JOHN CHIMINSKI PRESIDENT & CEO

GENERAL MILLS FISCAL 2019 THIRD-QUARTER EARNINGS MARCH 20, 2019

McKesson Corporation Q2 Fiscal 2019 Financial Performance. Financial Results and Company Highlights October 25, 2018

Delivering Solutions. Shaping the Future.

TENNANT COMPANY INVESTOR PRESENTATION REINVENTING HOW THE WORLD CLEANS

Second Quarter 2018 Earnings Non-GAAP Financial Measures. July 26,

Acquisition Offer of RPC Group PLC

Endo Health Solutions

ITW Conference Call First Quarter 2013

FORWARD LOOKING STATEMENTS

Third Quarter and Nine Months October 31, 2017

Investor Mike McGuire Media Carolyn Castel Contact: Senior Vice President Contact: Vice President (401) (401) FOR IMMEDIATE RELEASE

Quad/Graphics, Inc. Call to Review Definitive Agreement to Acquire LSC Communications, Inc. and 3 rd Quarter 2018 Results.

3 RD QUARTER 2013 RESULTS CONFERENCE CALL & WEBCAST

THE WENDY S COMPANY REPORTS PRELIMINARY 2016 RESULTS; ANNOUNCES 2017 OUTLOOK AND UPDATES 2020 GOALS

IMPAX LABORATORIES INC

McKESSON REPORTS FISCAL 2015 THIRD-QUARTER RESULTS

Rent-A-Center today is

VISTEON CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Millions, Except Per Share Data) (Unaudited)

Cardinal Health Reports Second-quarter Results for Fiscal Year 2018

ACETO Corporation NASDAQ: ACET. Investor Presentation February 2018

COVANTA HOLDING CORPORATION REPORTS 2018 THIRD QUARTER RESULTS AND REAFFIRMS 2018 GUIDANCE

Zebra Technologies Third-Quarter 2018 Results. November 6, 2018

Avery Dennison Jefferies Industrials Conference

2013 Oldemark LLC. Third-Quarter 2014 Conference Call November 6, 2014

McKESSON REPORTS FISCAL 2018 THIRD-QUARTER RESULTS

Jacky Lo Chief Finance Officer, Yum China

Fourth Quarter 2018 Earnings Non-GAAP Financial Measures. January 29,

Fourth Quarter 2015 Earnings Call February 11, 2016

Investor Mike McGuire Media Carolyn Castel Contact: Senior Vice President Contact: Vice President (401) (401) FOR IMMEDIATE RELEASE

Valvoline Reports First-Quarter Results; Updates Full-Year Outlook

Fourth Quarter & Full Year 2018 Earnings Monday, March 18, 2019

Transcription:

Annual General Meeting July 20, 2017

Forward Looking Statements Certain statements in this presentation are "forward-looking statements." These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any 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," "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 timing, amount and cost of any share repurchases; future impairment charges; the success of management transition; 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; potential thirdparty claims and litigation, including litigation relating to the Company s restatement of previously-filed financial information; potential impacts of ongoing or future government investigations and regulatory initiatives; general economic conditions; fluctuations in currency exchange rates and interest rates; the consummation of announced acquisitions or dispositions, and the Company s ability to realize the desired benefits thereof; the Company s ability to achieve its guidance; and the Company s ability to execute and achieve the desired benefits of announced cost-reduction efforts and other initiatives. In addition, the Company may identify and be unable to remediate one or more material weaknesses in its internal control over financial reporting. Furthermore, the Company and/or its subsidiaries may incur additional tax liabilities in respect of 2016 and prior years as a result of any restatement or may be found to have breached certain provisions of Irish company legislation in respect of prior financial statements and if so may incur additional expenses and penalties. These and other important factors, including those discussed under "Risk Factors" in the Company's Form 10-K for the year ended December 31, 2016, as well as the Company's 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 presentation are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Measures This presentation contains non-gaap measures. The reconciliation of those measures to the most comparable GAAP measures is included at the end of this presentation. A copy of this presentation, including the reconciliations, is available on the Company s website at www.perrigo.com. 2

About Perrigo Built on a 130-year legacy of operational excellence Founded in 1887 by Luther Perrigo in Allegan, Michigan Based in Dublin, Ireland, since 2013 Develops Quality Affordable Healthcare Products improve the lives of consumers around the world to World's largest manufacturer of OTC healthcare products and supplier of infant formulas for the store brand market World class supply chain and manufacturing capabilities Trusted by partners and families to provide safe and effective products that meet their expanding and evolving healthcare needs Products provided across a wide variety of geographies primarily in North America and Europe as well as other key markets including Israel and China 3

The Perrigo Advantage VISION QUALITY AFFORDABLE HEALTHCARE LEADERSHIP IMPACT Consumers Save >$7B per year That s ~$19 Million of Saving Per Day IMPACT Every Second of Every Day ~2.2K PEOPLE use a Perrigo product 4

Unique Business Model Enables Vision Quality Affordable Healthcare Products Pharmaceutical Quality Affordable Healthcare Products A leading manufacturer and developer of high quality pharmaceutical products in hundreds of dosage forms Pharmaceutical Products are marketed for ease of consumer self selection, providing retailers a full turn key offering Fast Moving Consumer Goods FMCG Supply Chain Supply Chain Vast, highly complex, integrated supply chain which allows for custom packaging, promotion and inventory management 5

Global Presence in 2016 Positioned to Capture Expanding Global Healthcare Needs Presence Operations Global HQ Dublin N.A. Base of Operations - Allegan >$5B >80 >30 >10K >26K >11K 6 In Sales Markets Operating Employees SKUs Formulations Locations

Well Diversified Global Business CHCI CHCA Rx 7

Durable Business Model Approximately 80% of Perrigo is Consumer-Facing in millions ($) Key Competitive Advantages Consumer Focused Assets Global Operating Platform Efficient Supply Chain $6,000 $5,000 $4,000 $3,000 Consumer-Facing Business (1) 22.1% 21.1% 21.0% 78% 77% 73% 25.0% 20.0% 15.0% 130-Year Legacy as a Trusted Partner $2,000 $1,000 10.0% 5.0% Leader in Innovation $0 CY14 CY15 CY16 0.0% Rx + Other Consumer-Facing Businesses Adjusted Net Sales Consolidated Adjusted Operating Margin 8 (1) See attached Appendix for reconciliation of Adjusted (Non-GAAP) to Reported (GAAP) amounts

Consumer Healthcare Americas (CHCA) Primarily focused on the sale of OTC store brand products More than 400 store brand products, >7,300 SKUs and >130 customers CHCA products are comparable in quality and effectiveness to national brands CHC Americas CHC International Generic Rx 9

Consumer Healthcare International (CHCI) Develops, manufactures, markets, and distributes well-known OTC brands, primarily in Europe CHC International Distributes products through an extensive network of pharmacies in 30 countries CHC Americas Many products are top sellers in the markets in which they compete Generic Rx 10

Prescription Pharmaceuticals (Rx) Portfolio of generic and specialty pharmaceutical prescription drugs Predominantly "extended topical" and "specialty" products Includes select controlled substances, injectables, hormones, oral solid dosage forms, and oral liquid formulations CHC Americas CHC International Generic Rx 11

Executing Against Consumer & Rx Strategies New Products as Disclosed on 5/23/17 New Products to Drive Growth Expected 2017 New Products Expect >$200M in new products Expect to launch over 100 new products or ~2 per week New launches include store brand Nexium and further launches of store brand versions of the Mucinex family Committed to R&D Investments for Long-term Growth 12

Uniquely Positioned to Capitalize on Future Rx-to-OTC Switches MORE THAN $19B RX-TO-OTC MARKET OPPORTUNITY All Others 10% All Other 14% All Other 6% 15% GRx Diclofenac 28% 47% 29% GRx Tolterodine 12% 45% All Other 43% 8% GRx Clindomycin 17% GRx Tretinoin 15% 6% 11% 41% 53% Pain (Rx-to-OTC Potential) $900M Overactive Bladder (All Strengths / Forms) $2.5B Acne (< 5% strength) $2.5B Erectile Dysfunction (Oral Dosage Form) $3.5B All Others 28% GRx Sumatriptan 35% 31% GRx Rizatriptan 6% All Others 14% GRx Mometasone 22% 64% 21% All Others 9% 31% 39% All Others 43% 9% 48% 13 Migraine (Triptan Category) $1.2B Nasals $900M Asthma (Inhalants Only) $4.0B Ophthalmic (Drops/Liquid Dosage Forms) $3.7B

Transforming Balance Sheet (B/S) into an Asset Balance Sheet Committed to maintaining investment grade rating Make-whole call on our $600M 2.300% notes due 2018 completed on May 8, 2017; fully repaid ~$200M of outstanding notes issued by Omega subsidiary on May 23, 2017 May 31, 2017, cash tender of $1.4B Mid-year debt pay-down assumption yields $40M lower second half interest than first half Total Cash on B/S as of 4/1/2017 Total Debt on B/S as of 4/1/2017 May 8, 2017; Makewhole May 23, 2017; Omega subsidiary notes May 31, 2017;Tender Total Debt After Pay-downs $3.1B $5.8B ($0.6B) (~$0.2B) ($1.4B) $3.6B 14

Calendar Year 2017 Guidance (1) As Disclosed on 5/23/17 Calendar Year 2017 Guidance Net Sales $4.6B $4.8B Adjusted DSG&A as % of Net Sales (2) ~20% R&D as % of Net Sales (2) ~4% Adjusted Operating Income $930M $990M Calendar Year 2017 CHC Americas Net Sales Guidance ~$2.4B Adjusted Operating Margin Low 20% Interest Expense ~$175M Adjusted Effective Tax Rate ~19.5% Adjusted EPS $4.15 $4.50 Diluted Shares Outstanding ~144M Operating Cash Flow >$575M CHC International Rx Pharma ~$1.4B ~$925M Low to Mid Teens High 30% Expect first half adjusted EPS results weighted towards first quarter; Full-year adjusted EPS results weighted towards second half 15 (1) See attached appendix for reconciliation of adjusted (non-gaap) to reported (GAAP) amounts (2) Percentages are +/- 75 basis points

Foundation for Growth Focused Execution Against 2017 Plan Key Actions to Create Value Pharmaceutical Moved efficiently to drive portfolio strategies Improved corporate governance Implemented cost initiatives across the organization New leadership team focused on driving growth Debt pay-down strategy to enhance financial flexibility Execute against 2017 plan Fast Moving Consumer Goods FMCG Pharmaceutical Supply Chain Quality Affordable Healthcare Products Supply Chain 16

Contact & Appendix Bradley Joseph Vice President, Global Investor Relations and Corporate Communications (269) 686-3373 bradley.joseph@perrigo.com 17

Calendar YTD Consumer-Facing Net Sales excluding held-for-sale businesses Calendar 2014 Calendar 2015 Calendar 2016 Reported CHCA net sales $ 2,503.6 $ 2,554.2 $ 2,507.1 Reported CHCI net sales 348.7 1,360.6 1,652.2 Operating results attributable to held-for-sale businesses* (176.5) (162.6) (112.8) Adjusted consumer-facing net sales $ 2,675.8 $ 3,752.2 $ 4,046.5 Consolidated net sales $ 3,853.8 $ 5,014.7 $ 5,280.6 Operating results attributable to held-for-sale businesses* (176.5) (162.6) (112.8) Adjusted consolidated net sales $ 3,677.3 $ 4,852.1 $ 5,167.8 As a % of total adjusted net sales 73% 77% 78% *Held-for-sale businesses include the U.S. VMS business and a European sports brand. The adjustments to 2014 and 2015 are for comparison purposes only and do not change any other prior year financial information or metrics since these businesses were not held-for-sale in 2014 or 2015. 18

Full Year 2017 EPS Guidance Reported $1.82 - $2.17 Amortization expense related primarily to acquired intangible assets 2.45 Restructuring charges 0.32 Loss on early debt extinguishment 0.12 Impairments 0.08 Operating results attributable to held-for-sale business* 0.01 Acquisition and integration-related expense (income) (0.09) Tysabri royalty stream (0.12) Gain on divestitures (0.15) Tax effect of non-gaap adjustments (1) (0.29) Adjusted $4.15 - $4.50 (1) Includes tax effect of pretax non-gaap adjustments calculated based upon the specific rate of the applicable jurisdiction of the pretax item and certain adjustments for discrete tax items in the first nine months of the year. *Held-for-sale business includes the India API business. 19

Full Year 2017 Guidance Consolidated DSG&A as a % of Net Sales Reported Approx. 22.5% Amortization expense related primarily to acquired intangible assets (2.5)% Adjusted Approx. 20% Consolidated Operating Income Reported Approx. $556 - $616 million Amortization expense related primarily to acquired intangible assets 350 Impairment charges 12 Gain on divestitures (22) Restructuring charges, acquisition-related items, and operating results attributable to held-for-sale businesses 34 Adjusted Approx. $930 - $990 million Effective Tax Rate Tax expense Pre-tax income Effective Tax Rate Reported $ 113 $ 435 Approx. 26% Non-GAAP adjustments 42 365 Adjusted $ 155 $ 800 Approx. 19.5% 20

CHCA Remainder of 2017 Full year 2017 Gross margin Operating margin Reported Approx. 32-33% Approx. 16-20% Amortization expense related to acquired intangible assets 2% 3% Integration and restructuring-related charges 1% Adjusted Approx. 34-35% Approx. 20-24% CHCI Reported Approx. (4) - 0% Amortization expense related primarily to acquired intangible assets 14% Adjusted Approx. 10-14% RX Reported Approx. 27-31% Amortization expense related to acquired intangible assets 10% Restructuring charges and acquisition-related items (1)% Gain on divestitures (2)% Impairment charges 1% Adjusted Approx. 35-39% 21

Twelve Months Ended December 31, 2016 Consolidated Net Sales Gross Profit R&D Expense DSG&A Expense Restructuring and Impairment Charges Operating Income (Loss) Interest, Other, and Change in Fair Value of Tysabri Royalty Stream Pretax Income (Loss) Income tax expense (benefit) Net Income (Loss) Diluted Earnings (Loss) per Share Reported $ 5,280.6 $ 2,051.8 $ 184.0 $ 1,205.5 $ 2,662.0 $ (1,999.7) $ 2,848.6 $ (4,848. 3) $ (835.5) $ (4,012.8) $ (28.01) Adjustments: Impairment charges $ $ $ $ $ (2,631.0) $ 2,631.0 $ (22.4) $ 2,653.4 $ $ 2,653.4 $ 18.48 Tysabri royalty stream - change in fair value (2,608.2) 2,608.2 2,608.2 18.16 Amortization expense related primarily to acquired intangible assets 226.7 (0.9) (136.3) 363.9 363.9 363.9 2.59 Restructuring charges (31.0) 31.0 31.0 31.0 0.22 Acquisition and integration-related charges 4.7 (19.6) 24.3 (1.1) 25.4 25.4 0.18 Unusual litigation (18.4) 18.4 18.4 18.4 0.13 Operating results attributable to held-for-sale businesses* (112.8) (11.4) (1.2) (25.5) 15.3 15.3 15.3 0.11 Losses on equity method investments (4.2) 4.2 4.2 0.03 Gain on divestitures 7.7 (7.7) (7.7) (0.05) Non-GAAP tax adjustments*** 971.3 (971.3) (6.77) Adjusted $ 5,167.8 $ 2,271.8 $ 181.9 $ 1,005.7 $ $ 1,084.2 $ 220.4 $ 863.8 $ 135.8 $ 728.0 $ 5.07 As a % of sales 44.0% 21.0% *Held-for-sale businesses include the U.S. VMS business, European sports brand, and India API business Diluted weighted average shares outstanding **In the period of a net loss, diluted shares outstanding equal basic shares outstanding. Reported 143.3 ***The non-gaap tax adjustment includes the following: (1) $(802.5) million of tax effects of pretax non-gaap adjustments that are Effect of dilution as reported amount was a loss, while calculated based upon the specific rate of the applicable jurisdiction of the pretax item; and (2) Discrete income tax adjustments of: adjusted amount was income** 0.3 $(49.3) million related to jurisdictional tax rate changes in Italy, UK, Germany & France, $102.6 million net impact of valuation allowances on deferred tax assets commensurate with non-gaap pre-tax measures, and $(222.1) million valuation allowance release Adjusted 143.6 due to the sale of Tysabri. The GAAP tax benefit recorded in the current quarter related to these items has been excluded from non- GAAP net income. 22

Consolidated Net Sales Gross Profit R&D Expense DSG&A Expense Twelve Months Ended December 31, 2015 Restructuring and Impairment Charges Operating Income Interest and Other Expense Pretax income Income Tax Expense Net Income (Loss) Diluted Earnings (Loss) per Share Reported $ 5,014.7 $ 2,049.4 $ 186.3 $ 1,162.5 $ 250.2 $ 450.4 $ 391.2 $ 59.2 $ 61.1 $ (1.9) $ (0.01) Adjustments: Losses on acquisition-related foreign currency hedges $ $ $ $ $ $ (268.5) $ 268.5 $ $ 268.5 $ 1.87 Amortization expense related primarily to acquired intangible assets 156.1 (0.4) (95.1) 251.7 251.7 251.7 1.76 Impairment charges (0.4) (222.4) 222.8 (12.5) 235.3 235.3 1.64 Legal and consulting fees related to Mylan defense (100.3) 100.3 100.3 100.3 0.70 Acquisition and integration-related charges (35.2) 35.2 (0.5) 35.7 35.7 0.25 Restructuring charges 0.4 (27.8) 28.2 28.2 28.2 0.20 Loss on debt extinguishment (20.5) 20.5 20.5 0.14 Initial payment made in connection with an R&D arrangement (18.0) 18.0 18.0 18.0 0.13 Losses on equity method investments (10.7) 10.7 10.7 0.07 Unusual litigation (0.3) 0.3 0.3 0.3 Tysabri royalty stream - change in fair value 88.8 (88.8) (88.8) (0.62) Non-GAAP tax adjustments*** 79.6 (79.6) (0.56) Adjusted $ 2,205.9 $ 167.9 $ 931.2 $ $ 1,106.9 $ 167.3 $ 939.6 $ 140.7 $ 798.9 $ 5.57 As a % of sales 44.0% 22.1% 2015 YTD Net Sales excluding the U.S. VMS business and the European sports brand Diluted weighted average shares outstanding Reported $ 5,014.7 Reported 144.6 Operating results attributable to held-for-sale businesses* (162.6) Weighted average effect of 6.8 million shares issued on November 26, 2014 to finance the Omega acquisition, which closed on March 30, 2015. In addition, effect of dilution as reported amount was a loss, while adjusted amount was income**. (1.2) Adjusted $ 4,852.1 Adjusted 143.4 *Held-for-sale businesses include the U.S. VMS business and the European sports brand. **In the period of a net loss, diluted shares outstanding equal basic shares outstanding. *** The non-gaap tax adjustment includes the following: (1) $(135.5) million of tax effects of pretax non-gaap adjustments that are calculated based upon the specific rate of the applicable jurisdiction of the pretax item; (2) a $2.5 million effect on non-gaap income taxes related to the interim tax accounting requirements within ASC 740, Income Taxes; and (3) $53.4 million of discrete income tax adjustments related to debt restructuring for the acquisition of Omega. The GAAP tax benefit recorded in the current quarter related to these items has been excluded from non-gaap net income. 23

Consolidated Net Sales Twelve Months Ended December 27, 2014 Operating Income Reported $ 3,853.8 $ 593.6 As a % of sales 15.4% Adjustments: Amortization expense related primarily to acquired intangible assets $ 132.2 Acquisition and integration-related charges 22.7 Restructuring charges 35.0 Initial payment made in connection with an R&D arrangement 10.0 Unusual litigation 17.8 Adjusted $ 811.3 As a % of sales 21.1% 24