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v3.24.3

Indebtedness | 9 Months Ended
--- | ---
Sep. 28, 2024
Debt Disclosure [Abstract] |
Indebtedness | INDEBTEDNESS Total borrowings are summarized as follows (in millions):
|  |  |  |  | September 28, 2024 |  | December 31, 2023
Term loans |  |  |  |  |
| Term A Loans due April 20, 2027(1) |  |  | $ | 453.1 |  |  | $ | 471.9 |
| Term B Loans due April 20, 2029(1) |  |  | 984.7 |  |  | 1,386.2 |
| Total term loans |  |  | $ | 1,437.8 |  |  | $ | 1,858.1 |
Notes and Bonds |  |  |  |  |
| Coupon | Due |  |  |  |  |
| 3.900% | December 15, 2024 |  |  | $ | 400.0 |  |  | $ | 400.0 |
| 4.375% | March 15, 2026(2) |  |  | 700.0 |  |  | 700.0 |
| 4.900% | June 15, 2030(3) |  |  | 750.0 |  |  | 750.0 |
* | 5.375% | September 30, 2032(4) |  |  | 390.6 |  |  | — |
| 6.125% | September 30, 2032(4) |  |  | 715.0 |  |  | — |
| 5.300% | November 15, 2043 |  |  | 90.5 |  |  | 90.5 |
| 4.900% | December 15, 2044 |  |  | 303.9 |  |  | 303.9 |
| Total notes and bonds |  |  | 3,350.0 |  |  | 2,244.4 |
Other financing | 13.7 |  |  | 14.8 |
Unamortized premium (discount), net | (23.7) |  |  | (17.8) |
Deferred financing fees | (24.5) |  |  | (26.1) |
Total borrowings outstanding | 4,753.3 |  |  | 4,073.4 |
| Current indebtedness | (440.7) |  |  | (440.6) |
Total long-term debt less current portion | $ | 4,312.6 |  |  | $ | 3,632.8 |
(1) Discussed below collectively as the "Senior Secured Credit Facilities". (2) The 4.375% Notes due 2026 were redeemed in full on October 2, 2024. (3) The coupon rate noted above is as of September 28, 2024. This increased from 4.650% to 4.900% on payments starting after June 15, 2024, following a credit rating downgrade by S&P Global in the first quarter of 2024. Future interest rate adjustments are subject to a 2.0% total cap above the original 3.150% interest rate which would result in an interest rate not to exceed 5.150% based on certain rating events as specified in the Note’s Supplemental Indenture No. 3, dated as of June 19, 2020, among Perrigo Finance Unlimited Company, Perrigo Company plc, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee. (4) Discussed below collectively as the "2032 Notes". * Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate. Note Issuances On September 17, 2024, Perrigo Finance Unlimited Company ("Perrigo Finance"), a public unlimited company incorporated under the laws of Ireland and an indirect wholly-owned finance subsidiary of Perrigo whose primary purpose is to finance the business and operations of Perrigo and its affiliates, issued $715.0 million in aggregate principal amount of 6.125% Senior Notes due 2032 (the "USD Notes due 2032") and €350.0 million in aggregate principal amount of 5.375% Senior Notes due 2032 (the "Euro Notes due 2032" and together with the USD Notes due 2032, the "2032 Notes"). The 2032 Notes are fully and unconditionally guaranteed on a senior unsecured basis by Perrigo and its subsidiaries that provide guarantees under Perrigo's Senior Secured Credit Facilities (as defined below). Net proceeds from the 2032 Notes were used to prepay a portion of the Term Loan B Facility (as defined below) on September 19, 2024 and the remaining proceeds were used to fund the redemption of $700.0 million of the 4.375% Notes due 2026 on October 2, 2024. As a result of the redemption, we recognized an extinguishment loss of $5.1 million during the third quarter of 2024 and we anticipate an additional loss of $1.6 million in the fourth quarter of 2024. Credit Agreements On April 20, 2022, we and our indirect wholly owned subsidiary, Perrigo Investments, LLC, (the "Borrower") entered into the senior secured credit facilities, which consisted of (i) a $1.0 billion five-year revolving credit facility (the “Revolver”), (ii) a $500.0 million five-year Term Loan A facility (the “Term Loan A Facility” and the Term A Loans thereunder, the "Term A Loans"), and (iii) a $1.1 billion seven-year Term Loan B facility (the “Term Loan B Facility” and the Term B Loans thereunder borrowed on April 20, 2022, the "2022 Term B Loans” and, together with the Revolver and Term Loan A Facility, the "Senior Secured Credit Facilities"), pursuant to a Term Loan and Revolving Credit Agreement (the "Credit Agreement"). On December 15, 2023, we and the Borrower, entered into Amendment No. 1, an Incremental Assumption Agreement (the "Amendment") to the Credit Agreement. The Amendment provides for a fungible add on to the 2022 Term B Loans in an aggregate principal amount of $300.0 million (the "Incremental Term B Loans" and together with the 2022 Term B Loans, the “Term B Loans”). The terms of the Incremental Term B Loans, including pricing and maturity, are identical to the 2022 Term B Loans. The Term B Loans will mature on April 20, 2029. The net proceeds from the Incremental Term B Loans were used to settle the cash tender offer by Perrigo Finance for $300.0 million in aggregate principal amount of 3.900% Senior Notes due 2024 ("2024 Notes"). The tender offer was settled on December 15, 2023, and Perrigo Finance accepted for purchase $300.0 million of the 2024 Notes and paid approximately $295.1 million in aggregate cash consideration (excluding accrued interest). The Senior Secured Credit Facilities are guaranteed, along with any hedging or cash management obligations entered into with a lender, by us, and certain of our direct and indirect wholly-owned subsidiaries organized in the United States, Ireland, Belgium and England and Wales (subject to certain exceptions) (the “Guarantor Subsidiaries”). Additionally, the Borrower and the Guarantor Subsidiaries provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 5.300% Notes due 2043 issued by the Company, and the Guarantor Subsidiaries, the Company and the Borrower provide full and unconditional guarantees, jointly and severally, on a senior unsecured basis, of the 3.900% Notes due 2024, the 4.375% Notes due 2026, the 4.900% Notes due 2030 and the 4.900% Notes due 2044 issued by Perrigo Finance Unlimited Company, a wholly-owned subsidiary. We are subject to financial covenants in the Senior Secured Credit Facilities. The agreements contain financial covenants that require the Borrower and its restricted subsidiaries to (a) not exceed a maximum first lien secured net leverage ratio of 3.00 to 1.00 at the end of each fiscal quarter and (b) not fall below a minimum interest coverage ratio of 3.00 to 1.00 at the end of each fiscal quarter, provided that such covenants apply only to the Revolver and the Term Loan A Facility. If we consummate certain qualifying acquisitions during the term of the loan, the maximum first lien secured net leverage ratio covenant would increase to 3.25 to 1.00 for such quarter and the three following fiscal quarters thereafter. During the three and nine months ended September 28, 2024, principal repayments of $400.8 million and $420.4 million, respectively, were made on the Term Loan A Facility and Term Loan B Facility. There were no borrowings outstanding under the Revolver as of September 28, 2024 or December 31, 2023. We are in compliance with all the covenants under our debt agreements as of September 28, 2024. 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". Th ere were no material borrowings o utstanding under the overdraft facilities as of September 28, 2024 or December 31, 2023. We have financing leases that are reported in the above table under "Other financing" (refer to Note 8).

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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