PERRIGO Co plc
For the period ended Sep 26, 2026. Filed Nov 4, 2026.
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Sep 26, 2026 · Filed Nov 4, 2026
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Derivative Instruments and Hedging Activities
NOTE 10 -DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Interest Rate Swaps
We have $712.5 million notional amount of variable-to-fixed interest rate swaps effective through April 2029 used to economically hedge interest rate risk on a substantial portion of our Senior Secured Credit Facilities (as defined in Note 11). The interest rate swaps were designated as cash flow hedges to fix the variable interest rate. As a designated cash flow hedge, changes in fair value will be deferred in AOCI and recognized within Interest expense, net when interest is paid on the Senior Secured Credit Facilities.
As of September 26, 2026, the undesignated economically offsetting interest rate swaps totaling$600.0 million are effective through April 2029.
Cross-currency Swaps
We have $2.3 billion notional amount fixed-for-fixed cross-currency interest rate swaps designated as net investment hedges to hedge the European Euro (“EUR”) currency exposure of our investment in European operations. As designated net investment hedges, gains and losses related to the EUR spot exchange rate will be deferred within the Cumulative Translation Adjustment, a component of AOCI, and recognized in the Condensed Consolidated Statements of Operations when the hedged EUR net investment is substantially liquidated. Gains and losses on excluded components (e.g., interest differentials) will be recorded in Interest expense, net on a systematic and rational basis.
As of September 26, 2026, of the total $2.3 billion notional amount, $1.0 billion, $300.0 million, $450.0 million, $380.0 million, and $200.0 million notional amounts are effective through April 2027, September 2028, November 2030, December 2030, and March 2033, respectively.
Note 10
Between October 2, 2026 and October 7, 2026, we entered into a series of transactions to extend the effective date of our$1.0 billion notional amount of cross-currency swaps effective through April 2027. The following are the terms and notional amounts of the restructured swaps:
$312.5 million of notional amount effective from October 2, 2026 through October 2, 2031
$202.5 million of notional amount effective from October 5, 2026 through October 5, 2031
$135 million of notional amount effective from October 5, 2026 through October 5, 2029
$200 million of notional amount effective from October 6, 2026 through October 8, 2029
$150 million of notional amount effective from October 7, 2026 through April 20, 2030
Other Hedging Instruments
The €350.0 million 2032 Notes (as defined in Note 11) are designated as a net investment hedge on our investment in European operations.
As a designated net investment hedge, gains and losses related to the EUR spot exchange rate will be deferred within the Cumulative Translation Adjustment, a component of AOCI, and recognized in the Condensed Consolidated Statements of Operations when the hedged EUR net investment is substantially liquidated.
Foreign Currency Forwards
Notional amounts of foreign currency forward contracts were as follows (in millions):
| September 26, 2026 | December 31, 2025 | |
|---|---|---|
| European Euro (EUR) | $406.8 | $50.1 |
| United States Dollar (USD) | 123.7 | 160.6 |
| British Pound (GBP) | 148.3 | 148.1 |
| Polish Zloty (PLZ) | 64.7 | 43.3 |
| Danish Krone (DKK) | 97.1 | 56.8 |
| Canadian Dollar (CAD) | 21.0 | 21.2 |
| Chinese Yuan (CNH) | 16.8 | 16.3 |
| Swedish Krona (SEK) | 15.7 | 48.6 |
| Switzerland Franc (CHF) | 13.0 | 5.6 |
| Hungarian Forint (HUF) | 10.5 | 11.0 |
| Norwegian Krone (NOK) | — | 4.6 |
| Other(1) | 5.1 | 12.5 |
| Total | $922.6 | $578.7 |
(1) Number consists of notional amounts of various currencies, none of which individually exceed $10.0 million in either year presented.
The maximum term of our forward currency exchange contracts is 60 months.
On August 1, 2025, we entered into a deal-contingent EUR/USD forward contract of €300 million to hedge foreign exchange risk related to the proceeds expected for the planned divestiture of our Dermacosmetics Business (refer to Note 3 for additional details). The contract was contingent on the successful closing of the transaction, which occurred on April 30, 2026. Gains or losses on the derivatives due to changes in the EUR/USD exchange rate prior to the close of the divestiture were economically offset at closing in the final settlement of the euro-denominated Dermacosmetics Business purchase price. The total settlement loss was $5.6 million of which we recorded a gain of $3.2 million during the nine months ended September 26, 2026, and a loss of $8.8 million during the twelve months ended December 31, 2025 in Other (income) expense, net on the Condensed Consolidated Statements of Operations.
Note 10
Effects of Derivatives on the Financial Statements
The below tables indicate the effects of all derivative instruments on the Condensed Consolidated Financial Statements. All amounts exclude income tax effects.
The balance sheet location and gross fair value of our derivative instruments were as follows (in millions):
| Balance Sheet Location · September 26, 2026 · December 31, 2025 | |||||
|---|---|---|---|---|---|
| Designated derivative assets: | |||||
| Foreign currency forward contracts | Prepaid expenses and other current assets | $1.0 | $0.3 | ||
| Interest rate swap agreements | Other non-current assets | 5.3 | 1.1 | ||
| Total designated derivative assets | $6.4 | $1.4 | |||
| Non-designated derivative assets: | |||||
| Foreign currency forward contracts | Prepaid expenses and other current assets | $1.6 | $2.1 | ||
| Interest rate swap agreements | Other non-current assets | 2.2 | — | ||
| Total non-designated derivatives | $3.8 | $2.1 | |||
| Designated derivative liabilities: | |||||
| Foreign currency forward contracts | Accrued derivative liabilities | $1.4 | $1.1 | ||
| Cross-currency swaps | Accrued derivative liabilities | 70.5 | — | ||
| Cross-currency swaps | Other non-current liabilities | 123.9 | 265.6 | ||
| Interest rate swap agreements | Other non-current liabilities | — | 22.0 | ||
| Total designated derivative liabilities | $195.8 | $288.7 | |||
| Non-designated derivative liabilities: | |||||
| Foreign currency forward contracts | Accrued derivative liabilities | $1.9 | $13.4 | ||
| Interest rate swap agreements | Other non-current liabilities | 10.5 | 10.8 | ||
| Total non-designated derivative liabilities | $12.4 | $24.2 | |||
The amounts of (income)/expense recognized in earnings related to our non-designated derivatives on the Condensed Consolidated Statements of Operations were as follows (in millions):
| Three Months Ended · Nine Months Ended | |||||
|---|---|---|---|---|---|
| Non-Designated Derivatives | Income Statement Location | September 26, 2026 | September 27, 2025 | September 26, 2026 | September 27, 2025 |
| Foreign currency forward contracts | Other (income) expense, net | $2.5 | $9.8 | $24.0 | $9.0 |
| Interest rate swap agreements | Interest expense, net | $3.7 | $0.3 | $4.1 | $0.8 |
The following tables summarize the effect of derivative instruments designated as hedging instruments in AOCI (in millions):
Note 10
| Gain or (Loss) Reclassified from AOCI into Earnings | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Related to Amounts Included in Effectiveness Testing · Related to Amounts Excluded from Effectiveness Testing | ||||||||||
| Amount of Gain or (Loss) Recognized in OCI(1) · Location of Gain or (Loss) · Amount Reclassified(2) · Location of Gain or (Loss) · Amount Reclassified(2) | ||||||||||
| Cash flow hedges | ||||||||||
| Interest rate swap agreements | $12.8 | Interest expense, net | $1.7 | Interest expense, net | $— | |||||
| Foreign currency forward contracts | 0.6 | Net sales | — | Net sales | — | |||||
| Cost of sales | (0.2) | Cost of sales | — | |||||||
| Other (income) expense, net | — | |||||||||
| Total Cash flow hedges | $13.4 | $1.6 | $— | |||||||
| Net investment hedges | ||||||||||
| Cross-currency swaps | $(1.0) | Interest expense, net | $8.6 | |||||||
| Euro Notes Due 2032 | (0.3) | |||||||||
| Total Net investment hedges | $(1.2) | $8.6 | ||||||||
| Cash flow hedges | ||||||||||
| Interest rate swap agreements | $24.3 | Interest expense, net | $2.3 | Interest expense, net | $— | |||||
| Foreign currency forward contracts | (0.7) | Net sales | 0.2 | Net sales | 0.1 | |||||
| Cost of sales | (1.2) | Cost of sales | 0.1 | |||||||
| Other (income) expense, net | — | |||||||||
| Total Cash flow hedges | $23.7 | $1.3 | $0.2 | |||||||
| Net investment hedges | ||||||||||
| Cross-currency swaps | $73.3 | Interest expense, net | $25.3 | |||||||
| Euro Notes Due 2032 | 12.3 | |||||||||
| Total Net investment hedges | $85.6 | $25.3 | ||||||||
| Cash flow hedges | ||||||||||
| Interest rate swap agreements | $(0.2) | Interest expense, net | $3.9 | Interest expense, net | $— | |||||
| Foreign currency forward contracts | 0.7 | Net sales | 0.3 | Net sales | (0.1) | |||||
| Cost of sales | (0.5) | Cost of sales | (0.1) | |||||||
| Other (income) expense, net | (0.1) | |||||||||
| Total Cash flow hedges | $0.5 | $3.7 | $(0.3) | |||||||
| Net investment hedges | ||||||||||
| Cross-currency swaps | $17.6 | Interest expense, net | $9.5 | |||||||
| Euro Notes Due 2032 | 0.6 | |||||||||
| Total Net investment hedges | $18.2 | $9.5 | ||||||||
| Cash flow hedges | ||||||||||
| Interest rate swap agreements | $(16.3) | Interest expense, net | $13.0 | Interest expense, net | $— | |||||
| Foreign currency forward contracts | 4.0 | Net sales | 0.4 | Net sales | (0.2) | |||||
| Cost of sales | (0.1) | Cost of sales | — | |||||||
| Other (income) expense, net | (0.2) | |||||||||
| Total Cash flow hedges | $(12.3) | $13.3 | $(0.4) | |||||||
| Net investment hedges | ||||||||||
| Cross-currency swaps | $(211.3) | Interest expense, net | $28.4 | |||||||
| Euro Notes Due 2032 | (46.8) | |||||||||
| Total Net investment hedges | $(258.1) | $28.4 | ||||||||
(1) Net income of $35.9 million is expected to be reclassified out of AOCI into earnings during the next 12 months.
(2) For additional details about the effect of the amounts reclassified from AOCI refer to Note 13.
Note 10
The classification and amount of gain/(loss) recognized in earnings related to fair value and hedging relationships on the Condensed Consolidated Statement of Operations were as follows (in millions):
| Net Sales | Cost of Sales | Interest Expense, net | Other (Income) Expense, net | |
|---|---|---|---|---|
| Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded | $988.6 | $667.8 | $37.9 | $3.4 |
| Gain (loss) on cash flow hedging relationships | ||||
| Foreign currency forward contracts | ||||
| Amount of gain reclassified from AOCI into earnings | $— | $(0.2) | $— | $— |
| Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | $— | $— | $— | $— |
| Interest rate swap agreements | ||||
| Amount of gain reclassified from AOCI into earnings | $— | $— | $1.7 | $— |
| Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded | $2,980.6 | $2,020.4 | $117.1 | $(123.1) |
| Gain (loss) on cash flow hedging relationships | ||||
| Foreign currency forward contracts | ||||
| Amount of gain reclassified from AOCI into earnings | $0.2 | $(1.2) | $— | $— |
| Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | $0.1 | $0.1 | $— | $— |
| Interest rate swap agreements | ||||
| Amount of gain reclassified from AOCI into earnings | $— | $— | $2.3 | $— |
| Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded | $1,043.3 | $666.2 | $40.6 | $9.6 |
| Gain (loss) on cash flow hedging relationships | ||||
| Foreign currency forward contracts | ||||
| Amount of gain reclassified from AOCI into earnings | $0.3 | $(0.5) | $— | $— |
| Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | $(0.1) | $(0.1) | $— | $(0.1) |
| Interest rate swap agreements | ||||
| Amount of gain reclassified from AOCI into earnings | $— | $— | $3.9 | $— |
| Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded | $3,143.5 | $2,011.2 | $119.2 | $11.9 |
| Gain (loss) on cash flow hedging relationships | ||||
| Foreign currency forward contracts | ||||
| Amount of gain (loss) reclassified from AOCI into earnings | $0.4 | $(0.1) | $— | $— |
| Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach | $(0.2) | $— | $— | $(0.2) |
| Interest rate swap agreements | ||||
| Amount of gain reclassified from AOCI into earnings | $— | $— | $13.0 | $— |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.