PERRIGO Co plc

The Company provides non-GAAP financial measures as additional information that it believes is useful to investors and analysts in evaluating the performance of the Company’s ongoing operating trends, facilitating comparability between periods and companies in similar industries and assessing the Company’s prospects for future performance. These non-GAAP financial measures exclude items, such as impairment charges, restructuring charges, and acquisition and integration-related charges, that by their nature affect comparability of operational performance or that we believe obscure underlying business operational trends. The non-GAAP measures the Company provides are consistent with how management analyzes and assesses the operating performance of the Company and disclosing them provides investor insight into management’s view of the business. Management uses these adjusted financial measures for planning and forecasting in future periods and evaluating segment and overall operating performance. In addition, management uses certain of the profit measures as factors in determining compensation.

TABLE I

(1)

Individual pre-tax line item adjustments have not been tax effected, as tax expense on these items are aggregated in the “Non-GAAP tax adjustments” line item.

(2)

Non-GAAP tax adjustments for the twelve months ended December 31, 2024 are primarily due to $62.6 million of tax expense on pre-tax non-GAAP adjustments, plus the removal of (1) $65.9 million of tax impact related to an inter-company sale of intellectual property, (2) $3.5 million of tax benefit related to a partial valuation allowance release in Belgium and (3) $1.0 million of tax expense related to audit adjustments.

(3)

During the twelve months ended December 31, 2024, we determined the carrying value of the Rare Diseases reporting unit net assets exceeded their fair value less costs to sell, resulting in a total impairment charge of $34.1 million, inclusive of a goodwill impairment charge of $22.1 million, we also determined the carrying value of the Hospital & Specialty Business net assets exceeded their fair value less costs to sell, resulting in a total impairment charge of 16.2 million, inclusive of a goodwill impairment charge of $5.4 million and we determined the carrying value of our Prevacid® branded product was impaired by $38.6 million and recorded the charge within our CSCA segment.

(4)

Adjustments primarily to remove the impact of currency fluctuations and acquisitions,divestitures, and exited products not included in Perrigo’s original compensation plans for 2024.

(5)

Other pre-tax adjustments for the twelve months ended December 31, 2024, included expenses of $14.4 million related to de-designation of interest rate swap agreements, amounts related to professional consulting fees for divestiture activity and amounts related to a foreign jurisdiction transfer tax payment.

(6)

In the period of a net loss, reported diluted shares outstanding equal basic shares outstanding.

TABLE I (CONTINUED)

(1)

Individual pre-tax line item adjustments have not been tax effected, as tax expense on these items are aggregated in the “Non-GAAP tax adjustments” line item.

(2)

During the twelve months ended December, 31, 2023, we determined goodwill related to our Rare Diseases reporting unit was impaired by $90.0 million and recorded the charge within our CSCI segment.

(3)

Non-GAAP tax adjustments for the twelve months ended December 31, 2023 are primarily due to $61.6 million of tax expense related to pre-tax non-GAAP adjustments, plus the removal of (1) $11.4 million of tax expense related to audit settlements (2) $2.1 million of tax expense related to valuation allowance and (3) $7.2 million of tax benefit related to tax law changes.

(4)

In the period of a net loss, diluted shares outstanding equal basic shares outstanding.

TABLE II

(in millions)

(1) Adjustments include $1.5M related to paying bonuses lower than planned and $8.8M resulting from legal settlements related to prior years.

(1) Other, net includes expenses due primarily to professional consulting fees for divestiture activity, amortization adjustments from equity method investments and expenses associated with debt refinancing activities during the year.

TABLE III