What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2020-12-11 compared with 2019-12-20 · 504 added, 383 removed, 878 unchanged (50% of the section changed)

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 31, 2020 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for Leases as of November 1, 2019 due to the adoption of Financial Accounting Standards Board Accounting Standards Codification Topic 842, Leases .

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting appearing under item 9A.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

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Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

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Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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We believe that our audits provide a reasonable basis for our opinions.

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Definition and Limitations of Internal Control Over Financial Reporting

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The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate s to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment.

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of Gross Unrecognized Tax Benefits

As discussed in Notes 1 and 5 to the consolidated financial statements, the Company has recorded a liability for gross unrecognized tax benefits, excluding associated interest and penalties, of $49.7 million as of October 31, 2019.

Unrecognized tax benefits are recorded when there is a greater than 50% likelihood that a position taken on the Company’s tax returns would not be sustained upon examination by the relevant taxing authority, based solely on the technical merits of the tax position.

We identified the assessment of gross unrecognized tax benefits as a critical audit matter.

Unrecognized tax benefits

As discussed in Notes 1 and 6 to the consolidated financial statements, the Company has recorded a liability for unrecognized tax b enefits, excluding associated interest and penalties, of $58.5 million as of October 31, 2020.

A reserve for unrecognized tax benefits is recorded when there is a greater than 50% likelihood that a position taken on the Company’s tax returns would not be sustained upon examination by the relevant taxing authority, based solely on the technical merits of the tax position.

We identified the assessment of unrecognized tax benefits as a critical audit matter.

Evaluating the Company’s interpretation of tax law and its identification and estimate of uncertain tax positions, including transfer pricing related to its international operations, required complex auditor judgment.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s gross unrecognized tax benefit process, including controls related to the interpretation of tax law, identification of unrecognized tax benefits, and measurement of related liabilities.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s

THE COOPER COMPANIES, INC.

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unrecognized tax benefit process, including controls related to the interpretation of tax law, identification of uncertain tax positions, and measurement of related liabilities.

We involved tax and valuation professionals with specialized skills and knowledge, who assisted in:

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inspecting correspondence and settlements from taxing authorities, and analyzing the expiration of statutes of limitations.

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We have served as the Company’s auditor since 1982.

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Net income attributable to Cooper stockholders

Earnings per share - basic (Note 6)

Earnings per share - diluted (Note 6)

Earnings per share (Note 7)

Number of shares used to compute earnings per share:

See accompanying notes to consolidated financial statements.

The accompanying notes are an integral part of these Consolidated Financial Statements.

THE COOPER COMPANIES, INC.

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(In millions)

Other comprehensive income (loss):

Foreign currency translation adjustment

Other comprehensive loss:

Cash flow hedges, net of tax (benefit) of $(4.1) in fiscal 2020

Change in minimum pension liability, net of tax (benefit) provision of $(4.0), $(8.0) and $3.1, respectively

Other comprehensive (loss) income

Foreign currency translation adjustment

Other comprehensive loss

Comprehensive income

Comprehensive income attributable to Cooper stockholders

See accompanying notes to consolidated financial statements.

The accompanying notes are an integral part of these Consolidated Financial Statements.

THE COOPER COMPANIES, INC.

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Trade accounts receivable, net of allowance for doubtful accounts of $10.2 at October 31, 2020 and $16.4 at October 31, 2019

Inventories (Note 1)

Prepaid expense and other current assets

Total current assets

Property, plant and equipment, at cost

Property, plant and equipment, at cost (Note 1)

accumulated depreciation and amortization

Operating lease right-of-use assets (Note 2)

Goodwill (Note 4)

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Employee compensation and benefits

Operating lease liabilities (Note 2)

Other current liabilities

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Long-term tax payable

Operating lease liabilities (Note 2)

Accrued pension liability and other

Total liabilities

Commitments and contingencies (see Note 11)

Contingencies (see Note 12)

Stockholders’ equity:

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Accumulated other comprehensive loss

(In millions)

Retained earnings

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Stockholders’ equity (Note 8)

See accompanying notes to consolidated financial statements.

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of these Consolidated Financial Statements.

THE COOPER COMPANIES, INC.

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Other comprehensive income, net of tax

Issuance of common stock for stock plans

Treasury stock repurchase

Issuance of common stock for stock plans, net

Dividends on common stock

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ASU2018-02 adoption

Noncontrolling interests

Balance at October 31, 2018

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Other comprehensive loss, net of tax

Issuance of common stock for stock plans

Issuance of common stock for stock plans, net

Treasury stock repurchase

Dividends on common stock

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ASU2016-16 adoption

Noncontrolling interests

Balance at October 31, 2019

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Other comprehensive loss, net of tax

Issuance of common stock for stock plans

Issuance of common stock for stock plans, net

Issuance of common stock for employee stock purchase plan

Treasury stock repurchase

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Share-based compensation expense

ASU2016-16 adoption

Balance at October 31, 2020

See accompanying notes to consolidated financial statements.

The accompanying notes are an integral part of these Consolidated Financial Statements.

THE COOPER COMPANIES, INC.

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Inventory step-up release

Loss on disposal of property, plant and equipment

Non-cash operating lease expense

Impairment and loss on disposal of property, plant and equipment

Deferred income taxes

Provision for doubtful accounts

CCA cost amortization

Interest income on convertible note

Change in assets and liabilities:

Accounts receivable

Operating lease right-of-use assets and liabilities, net

Accounts payable

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Repayments of long-term debt

Net proceeds from (repayments of) short-term debt

Net (repayments of) proceeds from short-term debt

Repurchase of common stock

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Dividends on common stock

Issuance of common stock for employee stock purchase plan

Debt acquisition costs

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Proceeds from construction allowance

Years Ended October 31,

(In millions)

Net cash (used in) provided by financing activities

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Total cash, cash equivalents, and restricted cash

See accompanying notes to consolidated financial statements.

The accompanying notes are an integral part of these Consolidated Financial Statements.

THE COOPER COMPANIES, INC.

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CooperSurgical primarily develops, manufactures, markets medical devices and procedures solutions, and provides services to improve health care delivery to women, babies and families.

The World Health Organization categorized the Coronavirus disease 2019 (COVID-19) as a pandemic.

The COVID-19 pandemic has caused a severe global health crisis, along with economic and societal disruptions and uncertainties, which have negatively impacted business and healthcare activity globally.

As a result of healthcare systems responding to the demands of managing the pandemic, governments around the world imposing measures designed to reduce the transmission of the COVID-19 virus, and individuals responding to the concerns of contracting the COVID-19 virus, many optical practitioners & retailers, hospitals, medical offices and fertility clinics closed their facilities, restricted access, or delayed or canceled patient visits, exams and elective medical procedures, and many customers that have reopened are experiencing reduced patient visits.

This has had, and we believe will continue to have, an adverse effect on our sales, operating results and cash flows.

The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of net sales and expenses during the reporting period.

Actual results could differ from those estimates particularly as it relates to estimates reliant on forecasts and other assumptions reasonably available to the Company and the uncertain future impacts of the COVID-19 pandemic and related economic disruptions.

The extent to which the COVID-19 pandemic and related economic disruptions impact our business and financial results will depend on future developments including, but not limited to, the continued spread, duration and severity of the COVID-19 pandemic;

the occurrence, spread, duration and severity of any subsequent wave or waves of outbreaks;

the actions taken by the U.S.

and foreign governments to contain the COVID-19 pandemic, address its impact or respond to the reduction in global and local economic activity;

the occurrence, duration and severity of a global, regional or national recession, depression or other sustained adverse market event;

the impact of the developments described above on our customers and suppliers;

and how quickly and to what extent normal economic and operating conditions can resume.

The accounting matters assessed included, but were not limited to:

allowance for doubtful accounts and credit losses

carrying value of inventory

the carrying value of goodwill and other long-lived assets.

There was not a material impact to the above estimates in the Company’s Consolidated Financial Statements for fiscal 2020.

The Company continually monitors and evaluates the estimates used as additional information becomes available.

Adjustments will be made to these provisions periodically to reflect new facts and circumstances that may indicate that historical experience may not be indicative of current and/or future results.

The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material changes to the estimates and material impacts to the Company’s Consolidated Financial Statements in future reporting periods.

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

Significant Accounting Policies

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Business Segment Information, for disaggregation of revenue.

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Notes to Consolidated Financial Statements

Reserves for Variable Consideration

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Variable consideration is estimated based on the most likely amount or expected value approach, depending on which method the Company expects to better predict the amount of consideration to which it will be entitled.

Once the Company elects one of the methods to estimate variable consideration for a particular type of performance obligation, the Company applies that method consistently.

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Notes to Consolidated Financial Statements

Company elects one of the methods to estimate variable consideration for a particular type of performance obligation, the Company applies that method consistently.

Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.

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However, we have significant experience in estimating the amount of refunds, based primarily on historical data.

Our refund liability for product returns was $ 11.6 million at October 31, 2019 which is included in Accrued Liabilities on our Consolidated Balance Sheets and represents the expected value of the aggregate refunds that will be due to our customers.

Our refund liability for product returns was $ 10.0 million and $ 11.6 million at October 31, 2020 and 2019, respectively, which is included in Accrued Liabilities on our Consolidated Balance Sheets and represents the expected value of the aggregate refunds that will be due to our customers.

Rebates and Chargebacks

Rebates are estimated based on contractual terms, historical experience, customer mix, trend analysis and projected market conditions in the various markets served.

Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list

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Notes to Consolidated Financial Statements

wholesale prices charged to the Company’s direct customers.

For certain office and surgical products in CooperSurgical, customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers.

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The Company does not have material contract assets or liabilities.

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Notes to Consolidated Financial Statements

Leases - We consider an arrangement a lease if the arrangement transfers the right to control the use of an identified asset in exchange for consideration.

We have operating leases, but do not have material financing leases.

Lease right-of-use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make payments arising from the lease agreement.

These assets and liabilities are recognized at the commencement of the lease based upon the present value of the future minimum lease payments over the lease term.

The lease term reflects the noncancelable period of the lease together with periods covered by an option to extend or terminate the lease when management is reasonably certain that it will exercise such option.

Changes in the lease term assumption could impact the right-of-use assets and lease liabilities recognized on the balance sheet.

As our leases typically do not contain a readily determinable implicit rate, we determine the present value of the lease liability using our incremental borrowing rate at the lease commencement date based on the lease term on a collateralized basis.

Net realizable value of inventory - In assessing the value of inventories, we make estimates and judgments regarding aging of inventories and other relevant issues potentially affecting the saleable condition of products and estimated prices at which those products will sell.

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While estimates are involved, historically, obsolescence has not been a significant factor due to long product dating and lengthy product life cycles.

Valuation of goodwill - Effective April 30, 2019, there was a change in the reporting units as a result of realignment in the internal reporting structure of the business around markets and customers at CooperSurgical.

As such, Cooper Surgical has evolved into two reporting units, namely, Office/Surgical and Fertility, which reflects management oversight of operations.

The change in reporting units did not result in a change in operating segments.

We allocated CooperSurgical's goodwill based on relative fair values utilizing the discounted cash flow method and guideline public company method as our allocation base.

The key assumptions and estimates for the market and income approaches used to determine fair value of the reporting units included market data and market multiples, discount rates and terminal growth rates, as well as future levels of revenue growth, and operating margins, which were based upon the Company’s strategic plan.

The allocated fair values exceeded the carrying values for each of the three reporting units as of April 30, 2019.

Our reporting units are CooperVision, Office/Surgical and Fertility reflecting the current way we manage our business.

We evaluate goodwill for impairment annually during the fiscal third quarter and when an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

Valuation of goodwill - We evaluate goodwill for impairment annually during the fiscal third quarter and when an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

We account for goodwill and evaluate our goodwill balances and test them for impairment in accordance with related accounting standards.

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We perform a qualitative assessment to test each reporting unit's goodwill for impairment.

Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

affecting each reporting unit.

Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit.

Based on our qualitative assessment, if we determine that the fair value of a reporting unit is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value of the reporting unit.

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Key assumptions routinely utilized in allocation of purchase price to intangible assets include projected financial information such as revenue projections for companies acquired.

As of the acquisition date, goodwill is measured as the excess of consideration given, over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed.

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Notes to Consolidated Financial Statements

acquisition date, goodwill is measured as the excess of consideration given, over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed.

Direct acquisition costs are expensed as incurred.

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We file income tax returns in all jurisdictions in which we operate.

We record a liability for uncertain tax positions taken or expected to be taken in income tax returns.

We record a liability for uncertain tax positions taken or expected to be taken in income tax returns that we have determined are not more-likely-than-not realizable.

Our financial statements reflect expected future tax consequences of such positions presuming the taxing authorities' full knowledge of the position and all relevant facts.

We record a liability for the portion of unrecognized tax benefits claimed that we have determined are not more-likely-than-not realizable.

These tax reserves have been established based on management's assessment as to the potential exposure attributable to our uncertain tax positions as well as interest and penalties attributable to these uncertain tax positions.

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Share-Based Compensation - We grant various share-based compensation awards, including stock options, performance unit shares, restricted stock and restricted stock units.

Under fair value recognition provisions, share-based compensation expense is measured at the grant date based on the

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

fair value of the award and is recognized as expense over the vesting period.

Under fair value recognition provisions, share-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the vesting period.

Determining the fair value of share-based awards at the grant date requires judgment, including estimating Cooper's stock price volatility, employee exercise behaviors and related employee forfeiture rates.

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The dividend yield is based on the projected annual dividend payment per share, divided by the stock price at the date of grant.

As share-based compensation expense recognized in our Consolidated Statements of Income is based on awards ultimately expected to vest, the amount of expense has been reduced for estimated forfeitures.

Forfeitures are estimated at the time of grant, based on historical experience, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

If factors change and we employ different assumptions in the application of the fair value recognition provisions, the compensation expense that we record in future periods may differ significantly from what we have recorded in the current period.

Accounting Pronouncements Recently Adopted

In July 2019, the FASB issued ASU 2019-07, Codification Updates to SEC Sections and in July 2018, the FASB issued ASU 2018-09, Codification Improvements .

The ASU clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations, thereby eliminating redundancies and making the codification easier to apply.

The Company adopted this guidance during fiscal 2019, and it did not have a material impact on the Company’s reported consolidated financial results.

In August 2018, the FASB issued ASU 2018-15, Intangibles (Topic 350):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

This new standard also requires customers to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement.

The Company adopted the standard, prospectively, in the fourth quarter of fiscal 2019, resulting in the capitalization of $ 4.1 million in implementation costs related to the Company's cloud computing arrangements that are service contracts.

In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-07, Compensation - Retirement Benefits (Topic 715):

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost .

The ASU requires an entity to disaggregate the service cost component from the other components of net benefit cost.

The service cost component is now presented in the same income statement line as other compensation costs arising from services rendered by the pertinent employees during the period and the other components of net benefit costs are presented separately as other income/expense below operating income.

The Company adopted this guidance on November 1, 2018, and it did not have a material impact on the Company’s reported consolidated financial results.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740):

Intra-Entity Transfers of Assets Other Than Inventory , which requires entities to recognize the income tax consequences on an intra-entity transfer of an asset other than inventory when the transfer occurs.

The ASU changes the timing of the

As share-based compensation expense recognized in our Consolidated Statements of Income is based on awards ultimately expected to vest, the amount of expense has been reduced for estimated

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

recognition of the income tax consequences of non-inventory transfers which under previous guidance deferred the income tax consequences until the asset was sold to an outside party or otherwise recognized.

The guidance for the amendments of ASU 2016-16 requires companies to apply a modified retrospective approach with a cumulative catch-up adjustment to opening retained earnings in the period of adoption.

The Company adopted ASU 2016-16 in the first quarter of fiscal 2019 on a modified retrospective basis.

The Company recorded the cumulative effect of the change as a decrease to retained earnings of approximately $ 13.3 million .

The cumulative effect adjustment represents the recognition of unrecognized income tax effects from intra-entity transfers of assets other than inventory that occurred prior to the date of adoption.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606).

The ASU requires revenue recognition to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The amendments in the ASU can be applied either retrospectively to each prior reporting period presented or alternatively, the modified retrospective transition method whereby the company recognizes the cumulative effect of initially applying the guidance as an opening balance sheet adjustment to equity in the period of initial application.

This alternative approach must be supplemented by additional disclosures.

We adopted ASU 2014-09 on November 1, 2018, using the modified retrospective transition method.

We did not recognize any cumulative effect of initially applying the new revenue standard as an adjustment to our opening balance of retained earnings due to its immaterial impact.

The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

There was no material impact of ASU 2014-09 to our financial statements during fiscal 2019.

We do not expect the adoption of the new revenue standard to have a material impact to our net income on an ongoing basis.

The Company applies the provisions of Accounting Standards Codification (ASC) 606-10 or ASU 2014-09, Revenue from Contracts with Customers , and all related appropriate guidance.

The Company recognizes revenue under the core principle to depict the transfer of control to the Company’s customers in an amount reflecting the consideration to which the Company expects to be entitled.

In order to achieve that core principle, the Company applies the following five step approach:

(1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.

Forfeitures are estimated at the time of grant, based on historical experience, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Accounting Pronouncements Recently Adopted

In May 2020, the SEC adopted the final rule under SEC release No.

33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses , amending Rule 1-02(w)(2) which includes amendments to certain of its rules and forms related to the disclosure of financial information regarding acquired or disposed businesses.

Among other changes, the amendments impact SEC rules relating to (1) the definition of “significant” subsidiaries, (2) requirements to provide financial statements for “significant” acquisitions, and (3) revisions to the formulation and usage of pro forma financial information.

The final rule is effective on January 1, 2021;

however, voluntary early adoption is permitted.

The Company early adopted the provisions of the final rule in the third quarter of fiscal 2020.

The guidance did not have a material impact on the Company’s consolidated financial statements and disclosures.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) .

ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases.

A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use (ROU) asset representing its right to use the underlying asset for the lease term.

For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases Topic 842 Target improvements, which provides an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings.

In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements , which further clarifies the determination of fair value of the underlying asset by lessors that are not manufacturers or dealers and modifies transition disclosure requirements for changes in accounting principles and other technical updates.

We adopted this standard using the optional transition method and recorded an adjustment to the Consolidated Balance Sheet on November 1, 2019.

We have implemented changes to certain business processes, systems and internal controls to support adoption of the new standard and the related disclosure requirements, including the implementation of a third-party leasing software solution.

We elected the package of transition expedients, which allows us to keep our existing lease classifications and not reassess whether any existing contracts as of the date of adoption are leases or contain leases and not reassess initial direct costs.

In addition, we elected the practical expedients to combine lease and non-lease components for our leases, and for leases with an initial term of 12 months or less to recognize the associated lease payments in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.

As of October 31, 2020, the aggregate balances of lease right-of-use assets and lease liabilities were $ 260.2 million and $ 270.1 million , respectively.

The standard did not affect our Consolidated Statements of Income and Comprehensive Income.

We will continue to disclose comparative reporting periods prior to November 1, 2019 under the previous accounting guidance, ASC 840 Leases.

Accounting Pronouncements Issued Not Yet Adopted

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Measurement of Credit Losses on Financial Instruments ” and subsequent amendments to the initial guidance:

ASU 2018-19 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses” , ASU 2019-04 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” , ASU 2019-05 “ Financial Instruments-Credit Losses” and ASU 2019-11 “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” ( collectively , “Topic 326”).

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Notes to Consolidated Financial Statements

Hedging, and Topic 825, Financial Instruments” , ASU 2019-05 “ Financial Instruments-Credit Losses ”, ASU 2019-11 “ Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (collectively, Topic 326), ASU 2020-02 Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842) and ASU 2020-03 Codification Improvements to Financial Instruments.

Topic 326 requires measurement and recognition of expected credit losses for financial assets held.

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Early adoption is permitted.

We are currently evaluating the impact of Topic 326 on our consolidated financial statements.

The Company believes that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses.

We continue to monitor the economic implications of the COVID-19 pandemic, however based on current market conditions and as credit losses from the Company's trade receivables have not historically been significant, the Company anticipates that the adoption of the ASU will not have a material impact on the consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808), Clarifying the Interaction between Topic 808 and Topic 606.

This guidance amended Topic 808 and Topic 606 to clarify that transactions in a collaborative arrangement should be accounted for under Topic 606 when the counterparty is a customer for a distinct good or service (i.e., unit of account).

The amendments preclude an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with

The amendments preclude an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, which means it will be effective for our fiscal year beginning November 1, 2020.

Early adoption is permitted.

The adoption of this guidance will not have a material impact on our Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

This guidance removes certain exceptions to the general principles in Topic 740 and enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law.

This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020.

Early adoption is permitted.

We are currently evaluating the impact of ASU 2019-12 on our Consolidated Financial Statements, which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2021.

In January 2020, the FASB issued ASU 2020-01 Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.

This guidance addresses accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities.

This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020.

Early adoption is permitted.

We are currently evaluating the impact of ASU 2020-01 on our Consolidated Financial Statements, which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2021.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform ( Topic 848 ):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The guidance generally can be applied from March 12, 2020 through December 31, 2022.

We are currently assessing the impacts of the practical expedients provided in ASU 2020-04 and which, if any, we will adopt.

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

customers if the counterparty is not a customer for that transaction.

We are currently evaluating the impact of ASU 2018-18 which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2020.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) .

ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases.

For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases Topic 842 Target improvements , which provides an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings.

This standard is effective for the Company in our fiscal year and interim periods beginning on November 1, 2019.

The Company adopted this standard using the optional transition method and will record a cumulative-effect adjustment to the Company's Consolidated Balance Sheet as of November 1, 2019.

The Company has implemented changes to certain business processes, systems and internal controls to support adoption of the new standard and the related disclosure requirements, including the implementation of a third-party leasing software solution.

We will elect the package of transition expedients, which allows the Company to keep our existing lease classifications and not reassess whether any existing contracts as of the date of adoption are, or contain leases, and not reassess initial direct cost.

In addition, we will elect to the practical expedients to combine lease and non-lease components for our real estate leases and to allow for leases with an initial term of 12 months or less to recognize the associated lease payments in the Consolidated Statements of Income on a straight-line basis over the lease term.

Based on the Company’s evaluation of this standard, the Company expects the adoption to result in recognition of right-of-use assets of approximately $ 263.1 million and lease liabilities of approximately $ 271.9 million on the Consolidated Balance Sheets with an immaterial impact to its Consolidated Statements of Income and Cash Flows.

The Company will continue to disclose comparative reporting periods prior to November 1, 2019 under the previous accounting guidance, ASC 840.

In August 2020, the FASB issued ASU 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) .

This update amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related EPS guidance for both Subtopics.

This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2021, which means it will be effective for our fiscal year beginning November 1, 2022.

Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

We are currently evaluating the impact of ASU 2020-06 on our Consolidated Financial Statements.

No other recently issued accounting pronouncements had or are expected to have a material impact on our Consolidated Financial Statements.

Consolidation

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We recorded in other expense and income a net foreign exchange loss of $ 1.2 million for fiscal 2020, $ 2.2 million for fiscal 2019 and $ 3.4 million for fiscal 2018.

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Notes to Consolidated Financial Statements

We are subject to various legal proceedings, claims, litigation, investigations and contingencies arising out of the ordinary course of business.

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We also expense the cost for lenses provided to practitioners as replenishment for fitting sets in the period shipped to selling, general and administrative expense on our Consolidated Statements of Income.

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Notes to Consolidated Financial Statements

Cash and Cash Equivalents

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Cost is computed using standard cost that approximates actual cost, on a first-in, first-out basis.

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Notes to Consolidated Financial Statements

Property, Plant and Equipment

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At October 31, 2020 and 2019 , the number of shares in treasury was approximately 4.3 million and 4.1 million , respectively.

The Company purchased 537 thousand shares during the year ended October 31, 2019 and no shares during the year ended October 31, 2018.

The Company purchased 161 thousand shares during the year ended

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Notes to Consolidated Financial Statements

October 31, 2020 and 537 thousand shares during the year ended October 31, 2019.

Stockholders' Equity for additional information on the share repurchase program.

The Company primarily has operating leases for office, manufacturing and warehouse space, vehicles, and office equipment.

The Company's leases expire on various dates between 2020 and 2045, some of which could include options to extend the lease.

Lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

As these leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease's commencement date in determining the present value of lease payments.

The Company considers information including, but not limited to, the lease term, its credit rating and interest rates of similar debt instruments with comparable credit ratings and security interests.

The lease right-of-use assets are increased by any lease prepayments made and reduced by any lease incentives such as tenant improvement allowances.

Options to extend the lease term are included in the lease term when it is reasonably certain that the Company will exercise the extension option.

The Company’s operating leases typically include non-lease components such as common-area maintenance costs.

The Company has elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed.

Non-lease components that are not fixed are expensed as incurred as variable lease payments.

Leases with a term of one year or less are not recognized on the Consolidated Balance Sheet, while the associated lease payments are recorded in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.

Commitments under finance lease arrangements of $ 2.4 million as of October 31, 2020 are not significant and are not included in the disclosure tables below.

The following table presents information about leases on the Consolidated Balance Sheet:

(In millions)

October 31, 2020

Operating Leases

Operating lease right-of-use assets

Operating lease liabilities, current

Operating lease liabilities, non-current

Total operating lease liabilities

Weighted average remaining lease term (in years)

Weighted average discount rate

The following table presents information about lease expense, which is included in selling, general and administrative expenses in the Consolidated Statement of Income and Comprehensive Income:

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

(In millions)

Operating lease expense

Short-term lease expense

Variable lease expense

ASC 840 Comparative Disclosures

Prior to fiscal 2020, we accounted for our leases in accordance with ASC 840, Leases .

Under ASC 840, rental expense for operating leases was $ 45.3 million and $ 38.8 million for fiscal 2019 and 2018, respectively.

Supplemental Cash Flow Information

The following table presents supplemental cash flow information about the Company’s leases:

(In millions)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Operating lease right-of-use assets obtained in exchange for lease obligations

Maturity of Lease Liabilities

The minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of October 31, 2020 are:

(In millions)

Total lease payments

Present value of lease liabilities

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Notes to Consolidated Financial Statements

The following is a summary of the allocation of the total purchase consideration for business and asset acquisitions that the Company completed during fiscal 2020, 2019, and 2018:

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Total identifiable intangible assets

Net tangible assets (liabilities)

Net tangible (liabilities) assets

Total purchase price

All the acquisitions were funded by cash generated from operations or facility borrowings.

For business acquisitions, we recorded the tangible and intangible assets acquired and liabilities assumed at their fair values as of the applicable date of acquisition.

For asset acquisitions, we recorded the tangible and intangible assets acquired and liabilities assumed at their estimated and relative fair values as of the applicable date of acquisition.

We believe these acquisitions strengthen CooperSurgical's and CooperVision's businesses through the addition of new or complementary products and services.

All acquisitions were funded by cash generated from operations or facility borrowings.

For business acquisitions, the Company recorded tangible and intangible assets acquired and liabilities assumed at their fair values as of the applicable date of acquisition.

For asset acquisitions, the Company recorded tangible and intangible assets acquired and liabilities assumed at their estimated and relative fair values as of the applicable date of acquisition.

The Company believes these acquisitions strengthen CooperSurgical's and CooperVision's businesses through the addition of new distributors or complementary products and services.

Fiscal Year 2020

On August 7, 2020, CooperVision completed the acquisition of a privately-held U.S contact lens manufacturer focusing on ortho-k lenses.

This acquisition expands CooperVision’s specialty eye care portfolio and its leadership in addressing the increasing severity and prevalence of myopia.

The purchase price allocation is preliminary and the Company is in the process of finalizing information and the corresponding impact on goodwill.

On December 13, 2019, CooperSurgical completed the acquisition of a privately-held distributor of in vitro fertilization (IVF) medical devices and systems.

The pro forma results of operations have not been presented because the effect of the business combinations described above were not material to our consolidated results of operations.

Fiscal Year 2019

Purchase price allocation for the acquisitions in fiscal year 2019 are completed.

On December 31, 2018, CooperSurgical completed the acquisition of Incisive Surgical Inc., a privately-held U.S.

On December 31, 2018, CooperSurgical completed the acquisition of a privately-held U.S.

medical device company that develops mechanical surgical solutions for skin closure.

On December 28, 2018, CooperVision completed the acquisition of Blanchard Contact Lenses.

Blanchard is a privately-held scleral lens company, which expands CooperVision's specialty and scleral lens portfolio.

The pro forma results of operations of these acquisitions have not been presented because the effects of the business combinations described above, individually and in the aggregate, were not material to our reported consolidated financial results.

On December 28, 2018, CooperVision completed the acquisition of a privately-held scleral lens company, which expands CooperVision's specialty and scleral lens portfolio.

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Notes to Consolidated Financial Statements

Fiscal Year 2018

On November 1, 2017, CooperSurgical acquired the assets of the PARAGARD Intrauterine System (IUS) business (PARAGARD) from Teva Pharmaceuticals Industries Limited for $ 1.1 billion .

On November 1, 2017, CooperSurgical acquired the assets of the PARAGARD Intrauterine Device (IUD) business (PARAGARD) from Teva Pharmaceuticals Industries Limited for $ 1.1 billion .

This asset acquisition broadened and strengthened CooperSurgical's product portfolio.

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2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business , whereby the Company recognized assets acquired based on their

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

estimated relative fair values on the acquisition date.

Clarifying the Definition of a Business , whereby the Company recognized assets acquired based on their estimated relative fair values on the acquisition date.

Due to the required screening test, the acquisition does not meet the definition of a business as substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset.

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Clarifying the Definition of a Business , the Company has not included proforma financial information which is applicable for a business acquisition.

Other Acquisitions

On April 3, 2018, CooperSurgical completed the acquisition of The LifeGlobal Group (LifeGlobal).

LifeGlobal was a privately held company that specializes primarily in in-vitro fertilization (IVF) media.

LifeGlobal’s product categories include media products as well as IVF laboratory air filtration products and dishware.

On January 4, 2018, CooperVision acquired Blueyes Ltd, a long-standing distribution partner, with a leading position in the distribution of contact lenses to the Optical and Pharmacy sector in Israel.

On December 1, 2017, CooperVision acquired Paragon Vision Sciences, a leading provider of orthokeratology (ortho-k) specialty contact lenses and oxygen permeable rigid contact lens materials.

Ortho-k contact lenses are overnight lenses which enable corneal topography correction for myopia (nearsightedness) patients.

Fiscal Year 2017

On August 3, 2017, CooperVision completed the acquisition of Procornea Holding B.V.

Procornea is a Netherlands based manufacturer and distributor of specialty contact lenses, mainly ortho-k

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

which expands CooperVision's access to myopia (nearsightedness) management markets with new products.

On June 30, 2017, CooperVision completed the acquisition of Grand Vista LLC, a long-standing distribution partner in Russia.

Grand Vista LLC is engaged in contact lens and contact lens solutions and lens care product distribution business in Russia.

On November 4, 2016, CooperSurgical completed the acquisition of Wallace, the IVF segment of Smiths Medical International, Ltd., a division of Smiths Group plc.

Wallace manufactures a range of IVF and OB/GYN products.

Other Acquisitions

On April 3, 2018, CooperSurgical completed the acquisition of a privately held company that specializes primarily in in-vitro fertilization (IVF) media.

This acquisition product categories include media products as well as IVF laboratory air filtration products and dishware.

On January 4, 2018, CooperVision acquired a long-standing distribution partner, with a leading position in the distribution of contact lenses to the Optical and Pharmacy sector in Israel.

On December 1, 2017, CooperVision acquired a leading provider of orthokeratology (ortho-k) specialty contact lenses and oxygen permeable rigid contact lens materials.

ortho-k contact lenses are overnight lenses which enable corneal topography correction for myopia (nearsightedness) patients.

Intangible Assets

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Balance at October 31, 2018

Net additions during the year ended October 31, 2018

Net additions

Foreign currency translation adjustment

Balance at October 31, 2019

Net additions during the year ended October 31, 2019

Net additions

Foreign currency translation adjustment

Balance at October 31, 2020

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Of the October 31, 2019 goodwill balance, $ 146.8 million for CooperSurgical and $ 29.2 million for CooperVision was expected to be deductible for tax purposes.

The Company evaluates goodwill annually during the fiscal third quarter and whenever an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

The Company accounts for goodwill, evaluates and tests goodwill balances for impairment in accordance with related accounting standards.

The Company performed its annual impairment assessment in the third quarter of each of fiscal 2020 and 2019, which indicated that there was no impairment of goodwill in reporting units at either time.

Qualitative factors considered in the assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit.

A reporting unit is the level of reporting at which goodwill is tested for impairment.

Our reporting units are CooperVision, Office/Surgical and Fertility, which reflects the current way we manage our business.

Goodwill impairment analysis and measurement is a process that requires significant judgment.

If our common stock price trades below book value per share, there are changes in market conditions or a future downturn in our business, or a future goodwill impairment test indicates an impairment of our goodwill, we may have to recognize a non-cash impairment of goodwill that could be material and could adversely affect our results of operations in the period recognized and also adversely affect our total assets and stockholders' equity.

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Notes to Consolidated Financial Statements

Other Intangible Assets

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(In millions)

& Translation

& Translation (1)

Weighted Average Amortization Period (in years)

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accumulated amortization and translation

Intangible assets with definitive lives, net

Intangible assets with definite lives, net

Intangible assets with indefinite lives, net (1)

Total other intangible assets, net

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Notes to Consolidated Financial Statements

(1) In the second quarter of fiscal 2018, CooperSurgical recognized an impairment charge of $ 24.4 million upon the intangible assets on the exit of the carrier screening and non-invasive prenatal testing (NIPT) product lines acquired from Recombine Inc.

in fiscal 2016.

The intangible assets impaired consisted of Technology, Trademark and Customer relationships.

(1) Intangible assets with indefinite lives include technology and trademarks.

Balances include foreign currency translation adjustments.

In the second quarter of fiscal 2019, CooperSurgical sold an exclusive distribution right to distribute Filshie Clip System in the U.S.

for $ 21.0 million and recognized a gain of $ 19.0 million .

In the third quarter of fiscal 2019, CooperVision removed $ 37.3 million of fully amortized non-compete agreements.

(3) Intangible assets with indefinite lives include trademark and technology intangible assets.

Balances include foreign currency translation adjustments.

As of October 31, 2020, the estimation of amortization expenses for intangible assets with definite lives is as follows:

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The inputs used in the fair value analysis fall within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value.

The Company performs impairment tests using an income approach, more specifically a relief from royalty method.

The Company performs impairment tests using an

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

income approach, more specifically a relief from royalty method.

In the development of the forecasted cash flows, the Company applies significant management judgment to determine key assumptions, including revenue growth and operating margin growth, royalty rates and discount rates assumptions.

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Other assumptions are consistent with those applied to goodwill impairment testing.

The Company did not recognize any material definite-lived or indefinite-lived intangible asset impairment charges during fiscal 2019.

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Notes to Consolidated Financial Statements

Given the general deterioration in economic and market conditions surrounding the COVID-19 pandemic, the Company considered the impact that the COVID-19 pandemic may have on its near and long-term forecasts and determined that it was not more likely than not that the fair value of reporting units or relevant asset groups was below carrying amounts, and therefore the Company determined that there was no impairment to either its goodwill, definite-lived or indefinite-lived intangible assets during fiscal 2020.

(In millions)

Overdraft and other credit facilities

unamortized debt issuance cost

Short-term debt

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(In millions )

$ 400 million Term Loan on November 1, 2018 and $ 500 million Term Loan on September 27, 2019

On November 1, 2018, the Company entered into a 364 -day, $ 400.0 million , senior unsecured term loan agreement (the 2018 Term Loan Agreement) by and among the Company, the lenders party thereto and PNC Bank, National Association, as administrative agent which was scheduled to mature on October 31, 2019.

The Company used the funds to partially repay outstanding borrowings under the 2016 Revolving Credit Facility (as defined below).

On September 27, 2019 , the Company amended the 2018 Term Loan Agreement to establish a new 364 -day senior unsecured term loan (the 2019 Term Loan Agreement) with the same parties as the 2018 Term Loan Agreement.

The 2019 Term Loan Agreement modifies certain provisions of the 2018 Term Loan Agreement which, among other things, extends the maturity date to September 25, 2020 and increases the aggregate principal amount of the term loan facility from an original amount of $ 400 million to $ 500 million .

The Company used the additional funds to partially repay outstanding borrowings under the 2017 Term Loan Agreement.

At October 31, 2019 , the Company had $ 500.0 million outstanding under the 2019 Term Loan Agreement.

Amounts outstanding under the 2019 Term Loan Agreement will bear interest, at the Company's option, at either the base rate, or the adjusted LIBOR (each as defined in the 2019 Term Loan Agreement), plus, in each case, an applicable rate of 0.00 % in respect of base rate loans and 0.60 % in respect of adjusted LIBOR loans.

The weighted average interest rate for the fiscal year ended October 31, 2019 was 2.95 % .

The 2019 Term Loan Agreement contains customary restrictive covenants, as well as financial covenants that require the Company to maintain a certain Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2019 Term Loan Agreement) consistent with the 2016 Credit Agreement discussed below.

Term Loan Agreement on October 16, 2020

On October 16, 2020, the Company entered into a 364 -day, $ 350.0 million , term loan agreement by and among the Company, the lenders party thereto and The Bank of Nova Scotia, as administrative agent which matures on October 15, 2021.

The funds were used to partially repay outstanding borrowings under the 2020 Revolving Credit Facility (as defined below).

At October 31, 2020, the Company had $ 350.0 million outstanding under this agreement.

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

$ 1.425 billion Term Loan on November 1, 2017

On November 1, 2017 , in connection with the PARAGARD acquisition, the Company entered into a five -year, $ 1.425 billion , senior unsecured term loan agreement (the 2017 Term Loan Agreement) by and among the Company, the lenders party thereto and DNB Bank ASA, New York Branch, as administrative agent which matures on November 1, 2022 .

The Company used part of the facility to fund the PARAGARD acquisition and used the remainder of the funds to partially repay outstanding borrowings under our revolving credit agreement.

Amounts outstanding under the 2017 Term Loan Agreement will bear interest, at our option, at either the base rate, or the adjusted LIBOR (each as defined in the 2017 Term Loan Agreement), plus, in each case, an applicable rate of, between 0.00 % and 0.75 % in respect of base rate loans and between 1.00 % and 1.75 % in respect of adjusted LIBOR loans, in each case in accordance with a pricing grid tied to the Total Leverage Ratio as defined in the 2017 Term Loan Agreement.

The 2017 Term Loan Agreement contains customary restrictive covenants, as well as financial covenants that require the Company to maintain a certain Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2017 Term Loan Agreement) consistent with the 2016 Credit Agreement discussed below.

At October 31, 2019 , the Company had $ 1.0 billion outstanding under the 2017 Term Loan Agreement.

The interest rate on the 2017 Term Loan was 3.16 % at October 31, 2019.

Revolving Credit and Term Loan Agreement on March 1, 2016

On March 1, 2016 , the Company entered into a Revolving Credit and Term Loan Agreement (the 2016 Credit Agreement), among the Company, CooperVision International Holding Company, LP, the lenders party thereto and KeyBank National Association, as administrative agent.

The 2016 Credit Agreement provides for a multicurrency revolving credit facility in an aggregate principal amount of $ 1.0 billion (the 2016 Revolving Credit Facility) and a term loan facility in an aggregate principal amount of $ 830.0 million (the 2016 Term Loan Facility), each of which, unless terminated earlier, mature on March 1, 2021 .

In addition, the Company has the ability from time to time to request an increase to the size of the 2016 Revolving Credit Facility or establish one or more new term loans under the 2016 Term Loan Facility in an aggregate amount up to $ 750.0 million , subject to the discretionary participation of the lenders.

Amounts outstanding under the 2016 Credit Agreement will bear interest, at our option, at either the base rate, or the adjusted LIBOR or adjusted foreign currency rate (each as defined in the 2016 Credit Agreement), plus, in each case, an applicable rate of between 0.00 % and 0.75 % , in respect of base rate loans and between 1.00 % and 1.75 % in respect of adjusted LIBOR or adjusted foreign currency rate loans, in each case in accordance with a pricing grid tied to the Total Leverage Ratio, as defined in the 2016 Credit Agreement.

The Company pays an annual commitment fee that ranges from 0.125 % to 0.25 % of the unused portion of the 2016 Revolving Credit Facility depending on certain financial ratios.

In addition to the annual commitment fee described above, the Company is also required to pay certain letter of credit and related fronting fees and other administrative fees pursuant to the terms of the 2016 Credit Agreement.

At October 31, 2019 , the Company had no outstanding balance under the 2016 Term Loan Facility and $ 264.0 million outstanding under the 2016 Revolving Credit Facility.

$ 734.8 million was available under the 2016 Revolving Credit Facility.

The 2016 Credit Agreement contains customary restrictive covenants, as well as financial covenants that require us to maintain a certain Total Leverage Ratio and Interest Coverage Ratio, each as defined in the 2016 Credit Agreement:

Amounts outstanding under this agreement will bear interest, at the Company's option, at either the base rate, or the adjusted LIBO rate, plus, in each case, an applicable rate of 0.00 % in respect of base rate loans and 0.80 % in respect of adjusted LIBO rate loans.

The interest rate was 0.93 % at October 31, 2020.

This agreement contains customary restrictive covenants, as well as financial covenants that require the Company to maintain a certain Total Leverage Ratio and Interest Coverage Ratio consistent with the 2020 Credit Agreement discussed below.

Revolving Credit and Term Loan Agreement on April 1, 2020

On April 1, 2020, the Company entered into a Revolving Credit and Term Loan Agreement (the 2020 Credit Agreement), among the Company, CooperVision International Holding Company, LP, CooperSurgical Netherlands B.V., CooperVision Holding Kft.

the lenders from time to time party thereto, and KeyBank National Association, as administrative agent.

The 2020 Credit Agreement provides for (a) a multicurrency revolving credit facility (the 2020 Revolving Credit Facility) in an aggregate principal amount of $ 1.29 billion and (b) a term loan facility (the 2020 Term Loan Facility) in an aggregate principal amount of $ 850.0 million , each of which, unless terminated earlier, mature on April 1, 2025.

In addition, the Company has the ability from time to time to request an increase to the size of the revolving credit facility or establish one or more new term loans under the term loan facility in an aggregate amount up to $ 1.605 billion , subject to the discretionary participation of the lenders.

Amounts outstanding under the 2020 Credit Agreement will bear interest, at the Company’s option, at either the base rate, or the adjusted LIBO rate or adjusted foreign currency rate, plus, in each case, an applicable rate of between 0.00 % and 0.50 % in respect of base rate loans, and between 0.75 % and 1.50 % in respect of adjusted LIBO rate or adjusted foreign currency rate loans, in each case in accordance with a pricing grid tied to the Total Leverage Ratio, as defined in the 2020 Credit Agreement.

During the term of the 2020 Revolving Credit Facility, the Borrowers may borrow, repay and re-borrow amounts available under the Revolving Credit Facility, subject to voluntary reduction of the revolving commitment.

The Company pays an annual commitment fee that ranges from 0.10 % to 0.20 % of the unused portion of the 2020 Revolving Credit Facility based upon the Company’s Total Leverage Ratio, as defined in the 2020 Credit Agreement.

In addition to the annual commitment fee, the Company is also required to pay certain letter of credit and related fronting fees and other administrative fees pursuant to the terms of the 2020 Credit Agreement.

On April 1, 2020, the Company borrowed $ 850.0 million under the 2020 Term Loan Facility and $ 445.0 million under the 2020 Revolving Credit Facility and used the proceeds to fully repay all borrowings outstanding under a previously existing term loan agreement and transfer all letters of credit and borrowings outstanding under a previously existing credit agreement to the 2020 Credit Agreement, as further described below.

On October 30, 2020, the Company entered into Amendment No.

1 to the 2020 Credit Agreement (the First Amendment to the 2020 Credit Agreement).

The First Amendment to the 2020 Credit Agreement modifies the 2020 Credit Agreement by, among other things, adding CooperVision International Limited as a revolving borrower and releasing certain borrowers in the 2020 Credit Agreement.

At October 31, 2020, the Company had $ 850.0 million outstanding under the 2020 Term Loan Facility and $ 534.0 million outstanding under the 2020 Revolving Credit Facility.

The interest rate on the 2020 Term Loan Facility was 1.15 % at October 31, 2020.

The interest rate on the 2020 Revolving Credit Facility was 1.15 % at October 31, 2020.

In fiscal 2020, the Company expensed $ 1.8 million , related to the debt issuance costs of the 2020 Term Loan Facility.

The 2020 Credit Agreement contains customary restrictive covenants, as well as financial covenants that require the Company to maintain a certain Total Leverage Ratio and Interest Coverage Ratio, each as defined in the 2020 Credit Agreement:

Interest Coverage Ratio, as defined, to be at least 3.00 to 1.00 at all times.

Total Leverage Ratio, as defined, to be no higher than 3.75 to 1.00 .

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

At October 31, 2019 , the Company was in compliance with the Interest Coverage Ratio at 13.82 to 1.00 and the Total Leverage Ratio at 1.85 to 1.00 for 2019 Term Loan Agreement, 2017 Term Loan Agreement, and 2016 Credit Agreement.

Total Leverage Ratio, as defined, to be no higher than 3.75 to 1.00.

At October 31, 2020, the Company was in compliance with the Interest Coverage Ratio at 21.19 to 1.00 and the Total Leverage Ratio at 2.15 to 1.00 for 2020 Credit Agreement.

The Company, after considering the potential impacts of the COVID-19 pandemic, expects to remain in compliance with its financial maintenance covenant and meet its debt service obligations for at least the twelve months following the date of issuance of these financial statements.

$ 500 million Term Loan on September 27, 2019, amended on April 1, 2020

On November 1, 2018, the Company entered into a 364 -day senior unsecured term loan agreement (the 2018 Term Loan Agreement) by and among the Company, the lenders party thereto and PNC Bank, National Association, as administrative agent which was scheduled to mature on October 31, 2019.

On September 27, 2019, the Company amended the 2018 Term Loan Agreement to establish a new 364 -day senior unsecured term loan (the 2019 Term Loan Agreement) with the same parties as the 2018 Term Loan Agreement.

The 2019 Term Loan Agreement modifies certain provisions of the 2018 Term Loan Agreement which, among other things, extended the maturity date to September 25, 2020 and increased the aggregate principal amount of the term loan facility from an original amount of $ 400 million to $ 500 million .

The Company used the additional funds to partially repay outstanding borrowings.

On April 1, 2020, the Company entered into Amendment No.

2 to the 2018 Term Loan Agreement (the Second Amendment to the 2018 Term Loan Agreement).

The Second Amendment to the 2018 Term Loan Agreement further modifies the 2018 Term Loan Agreement by, among other things, conforming certain provisions therein to those contained in the 2020 Credit Agreement discussed above.

At maturity, on September 25, 2020, outstanding amounts under the 2019 Term Loan Agreement (including the Second Amendment to the 2018 Term Loan Agreement) were fully repaid using borrowings under the 2020 Revolving Credit Facility.

The following is a summary of the maximum commitments and the net amounts available to the Company under the credit facilities discussed above as of October 31, 2020:

(In millions)

Facility Limit

Outstanding Borrowings

Outstanding Letters of Credit

Total Amount Available

Maturity Date

2020 Revolving Credit Facility

April 1, 2025

2020 Term Loan Facility

April 1, 2025

2020 Term Loan

October 15, 2021

European Credit Facilities

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The weighted average interest rate on the outstanding balances was 1.59 % .

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Notes to Consolidated Financial Statements

Asian Pacific Credit Facilities

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Interest expense is calculated on all outstanding balances based on an applicable base rate for each country plus a fixed spread across all subsidiaries covered under each guaranty.

At October 31, 2019 ,

$ 1.2 million of the facilities were utilized.

At October 31, 2020 , $ 0.4 million of the facilities were utilized.

The weighted average interest rate on the outstanding balances was 2.41 % .

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Recent Tax Legislation

The 2017 Act was enacted into law on December 22, 2017, and significantly changes existing U.S.

The 2017 Act adopts a territorial tax system, imposes a mandatory one-time transition tax on earnings of foreign subsidiaries that were previously indefinitely reinvested, and reduces the U.S.

federal statutory tax rate from 35% to 21% .

For fiscal 2019 the Company utilized the enacted U.S.

federal statutory tax rate of 21% .

The 2017 Act includes several provisions that are effective for our fiscal 2019:

(i) tax on global intangible low-taxed income (GILTI) of foreign subsidiaries, (ii) tax on certain payments between a U.S.

corporation and its foreign subsidiaries referred to as the base erosion and anti-abuse tax (BEAT), (iii) limitation on the tax deduction for interest payments, and (iv) expanded limitation on the tax deduction for compensation paid to certain executives.

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

The 2017 Act was effective in the first quarter of fiscal 2018.

As of January 31, 2019, we completed our accounting for the tax effects of the enactment of the 2017 Act and did not recognize any material adjustments to the provisional tax expense previously recorded.

The 2017 Act imposes a new tax on foreign earnings and profits in excess of a deemed return on tangible assets of foreign subsidiaries referred to as GILTI which is effective in fiscal 2019.

In accordance with FASB Staff Q&A, Topic 740, No.

5, Accounting for Global Intangible Low-Taxed Income, the Company is making an accounting policy election to recognize the tax expense related to GILTI in the year the tax is incurred.

The Company is no longer asserting that earnings from our foreign subsidiaries are indefinitely reinvested.

The 2017 Act limits the future deductions relating to interest expense and certain executive compensation.

These provisions are generally effective for the Company in 2019.

Pursuant to transition rules provided in the 2017 Act, companies will be allowed tax deductions for performance-based plans in existence on or before November 2, 2017, if not materially modified after that date.

We have completed our analysis of the executive compensation relating to plans in existence on or before November 2, 2017 and concluded that substantially all of those plans will meet the grandfather provisions and be fully deductible.

Diverted Profits Tax (DPT)

The United Kingdom enacted a Diverted Profits Tax (DPT) as of April 1, 2015 on profits of multinationals that they deemed artificially diverted from the United Kingdom.

The tax rate is 25%.

DPT is intended to apply in two situations:

(a) where a foreign company has artificially avoided having a taxable presence in the United Kingdom;

and (b) where a group adopts a structure which lacks economic substance in order to divert profits from the United Kingdom.

On December 20, 2017, the U.K.

Tax Authorities issued a DPT charging notice of approximately GBP 31.0 million with respect to the transfer out of the United Kingdom of certain intellectual property rights in connection with the 2014 acquisition of Sauflon Pharmaceutical Ltd.

Although taxes were paid on the transfer, the U.K.

Tax Authorities challenged the value assigned to such property.

We subsequently settled on an additional value of US $ 116.0 million as a transfer pricing adjustment and on January 17, 2019, the U.K.

Tax Authorities issued an amending notice to bring the DPT charge down to zero.

On January 29, 2019, we received a termination letter closing the DPT review.

On February 26, 2019, the Company received a refund of approximately GBP 22.1 million (USD 29.0 million ) from the GBP 31.0 million (USD 42.0 million ) payment made on January 19, 2018 to the U.K.

Tax Authorities.

Coronavirus Aid, Relief and Economic Security Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was enacted and signed into law in response to the market volatility and instability resulting from the COVID-19 pandemic.

It includes a significant number of tax provisions and lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (the 2017 Act).

The changes are mainly related to:

(1) the business interest expense disallowance rules for 2019 and 2020;

(2) net operating loss rules;

(3) charitable contribution limitations;

(4) employee retention credit;

and (5) the realization of corporate alternative minimum tax credits.

The Company continues to assess the impact and future implications of these provisions;

however, it does not anticipate any amounts that could give rise to a material impact to the overall Consolidated Financial Statements.

Effective Tax Rate

The Company’s effective tax rate (ETR) was 2.3 % , 57.9 % and 5.3 % for fiscal 2019, 2018 and 2017, respectively.

The ETR in fiscal 2019 decreased in comparison to fiscal 2018 primarily due to the net charge related to the enactment of the 2017 Act which was recorded in fiscal 2018, tax benefits from audit settlements in fiscal 2019, and additional taxes in the United States from the inclusion of earnings from our foreign subsidiaries pursuant to the GILTI provisions that became effective in fiscal 2019.

The ETR in fiscal 2018 increased in comparison to fiscal 2017 primarily due to the net charge related to the enactment of the 2017 Act which was partially offset by a shift in the geographic mix of income.

The ETR for 2019 was less than the U.S.

federal statutory tax rate primarily due to a majority of our taxable income being earned in foreign jurisdictions with lower tax rates, discrete tax benefits from settling income tax audits, excess tax benefits from share-based compensation, and additional taxes in the United States from the inclusion of earnings from our foreign subsidiaries pursuant to the GILTI provisions.

The ETR for 2018 was greater than the U.S.

federal statutory tax rate primarily due to the tax expense related to the enactment of the 2017 Act.

The ETR for 2017 was less than the U.S.

The Company’s effective tax rate (ETR) was 10.6 % and 2.3 % for fiscal 2020 and fiscal 2019, respectively.

The ETR in fiscal 2020 increased in comparison to fiscal 2019 primarily due to foreign earnings subject to US tax, partially offset by a shift in the geographic mix of income.

The ETR for both fiscal 2020 and fiscal 2019 was less than the US federal statutory tax rate primarily due to foreign earnings in jurisdictions with lower tax rates, a step-up of the US tax-deductible basis of intellectual property rights from intra-entity sales and excess tax benefits from share-based compensation.

This was partially offset by foreign earnings subject to US tax.

The jurisdictions with lower tax rates with the most significant tax impact include Barbados, Puerto Rico and the United Kingdom.

The ETR for fiscal 2018 was greater than the US federal statutory tax rate primarily due to enactment of the 2017 Tax Act.

This was partially offset by foreign earnings in jurisdictions with lower tax rates and

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

statutory tax rate because a majority of our taxable income was earned in foreign jurisdictions with lower tax rates and excess tax benefits from share-based compensation.

The ratio of domestic income to worldwide income significantly impacted our overall tax rate due to the fact that the tax rates in some of the foreign jurisdictions where we operate are significantly lower than the statutory rate in the United States.

The foreign jurisdictions with lower tax rates compared to the U.S.

federal statutory tax rate that had the most significant impact on our provision for foreign income taxes in the fiscal years presented include the United Kingdom, Barbados and Puerto Rico.

excess tax benefits from share-based compensation.

The jurisdictions with lower tax rates with the most significant tax impact include Barbados, Puerto Rico and the United Kingdom.

The components of income before income taxes and the income tax provision related to income from all operations in our Consolidated Statements of Income consist of:

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Notes to Consolidated Financial Statements

We reconcile the provision for income taxes attributable to income from operations and the amount computed by applying the statutory federal income tax rate of 21 % for 2019, 23.34 % for 2018, and 35 % for 2017 to income before income taxes as follows:

We reconcile the provision for income taxes attributable to income from operations and the amount computed by applying the statutory federal income tax rate of 21 % for fiscal 2020 and 2019, and 23 % for fiscal 2018, to income before income taxes as follows:

Years Ended October 31,

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Foreign source income subject to United States tax

Research and development credit

Incentive stock option compensation and non-deductible employee compensation

Deferred tax asset step-up

US provision-to-return

Tax accrual adjustment

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Total gross deferred tax assets

Less valuation allowance

valuation allowance

Deferred tax assets

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Notes to Consolidated Financial Statements

In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowance at October 31, 2019.

The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

A valuation allowance of $ 41.5 million and $ 39.1 million was recorded against our gross deferred tax asset balance as of October 31, 2019, and October 31, 2018, respectively.

The increase relates to state net operating losses and tax credits in our foreign operations.

At October 31, 2019, we had federal net operating loss carryforwards of $ 23.1 million , state net operating loss carryforwards of $ 37.5 million .

Additionally, we had $ 1.7 million of California research credits.

Federal net operating losses of $ 18.6 million expire on various dates between 2022 and 2037 and $ 4.5 million carry forward indefinitely.

The state net operating loss carryforwards expire on various dates between 2020 through 2038, and the California research credits carry forward indefinitely.

The aggregated changes in the balance of unrecognized tax benefits (UTB) were as follows:

In assessing the realizability of deferred tax assets, the Company analyzes whether some or all deferred tax assets will not be realized.

This analysis considers historical taxable income, the projected reversal of deferred tax liabilities, projected taxable income and tax planning strategies.

Based upon this analysis, it is more likely than not the deferred tax assets, net of valuation allowance, will be realized.

The valuation allowance is $ 45.3 million and $ 41.5 million for fiscal 2020 and fiscal 2019, respectively.

The increase is primarily due to state net operating loss carryforwards and foreign tax credits.

At October 31, 2020, we had federal net operating loss carryforwards of $ 20.3 million , state net operating loss carryforwards of $ 16.3 million , and $ 1.9 million of California research credit carryforwards.

Federal net operating loss carryforwards of $ 15.8 million expire on various dates between 2024 and 2037 and $ 4.5 million does not expire.

The state net operating loss carryforwards expire on various dates between 2021 through 2040, and the California research credit carryforwards do not expire.

The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position.

The tax benefits recognized from such positions are estimated based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

The changes in the balance of unrecognized tax benefits (UTB) were as follows:

(In millions)

Balance at October 31, 2018

Increase from prior year's UTB's

Decrease from prior year's UTB's

Increase from current year's UTB's

UTB (decrease) from tax authorities' settlements

UTB (decrease) from expiration of statute of limitations

Balance at October 31, 2019

Decrease from prior year's UTB's

Increase from prior year's UTB's

Increase from current year's UTB's

UTB (decrease) from tax authorities' settlements

UTB (decrease) from expiration of statute of limitations

Balance at October 31, 2020

As of October 31, 2019, 2018, and 2017 we had unrecognized tax benefits of $ 49.7 million , $ 68.9 million , and $ 59.9 million , respectively.

As of October 31, 2020, 2019 and 2018 there were unrecognized tax benefits of $ 58.5 million , $ 49.7 million and $ 68.9 million , respectively.

If recognized, these tax benefits would affect our effective tax rates for 2020, 2019 and 2018, by $ 46.0 million , $ 41.7 million and $ 46.6 million , respectively.

It is our policy to recognize interest and penalties directly related to incomes tax as additional income tax expense.

As of October 31, 2019, 2018, and 2017, we had accrued gross interest and penalties related to uncertain tax positions of $ 3.9 million , $ 4.4 million , and $ 3.6 million , respectively.

It is the Company's policy to recognize interest and penalties related to income tax as income tax expense.

As of October 31, 2020, 2019 and 2018, we had accrued gross interest and penalties related to unrecognized tax benefits of $ 7.3 million , $ 3.9 million and $ 4.4 million , respectively.

Included in the balance of unrecognized tax benefits at October 31, 2020, is $ 7.2 million related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months.

We are required to file income tax returns in the U.S.

federal jurisdiction, various state and local jurisdictions, and many foreign jurisdictions.

As of October 31, 2019, the tax years for which we remain subject to U.S.

federal income tax assessment upon examination are 2015 through 2019, as well as other major tax jurisdictions including the United Kingdom, Japan and France.

We remain subject to income tax

Filed tax returns are subject to examination by tax authorities in major tax jurisdictions after fiscal 2014.

Intellectual property rights

In November 2020, the Company completed an intra-group transfer of certain intellectual property and related operating assets and liabilities to its UK subsidiary as part of a group restructuring to establish headquarters operation in the UK.

Under US GAAP, any profit resulting from this transfer will be eliminated upon consolidation.

However, the transfer resulted in a step-up of the UK tax-deductible basis

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

examinations in Australia for the tax years 2014 through 2019.

The Company is currently under audit in the U.S.

for 2015 and 2016 and the U.K.

for 2015 through 2018.

in the transferred assets, including goodwill, and created a temporary difference between the book basis and the tax basis of these assets.

As a result, the Company expects to recognize a deferred tax asset of up to $ 2.4 billion , with a corresponding income tax benefit.

The valuation of the transferred assets, and the calculation of the amount of the deferred tax asset, will be finalized during the first quarter of fiscal 2021.

Earnings Per Share

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Balance at October 31, 2017

Gross change in value for the period

Tax effect for the period

Balance at October 31, 2017

Gross change in value for the period

Tax effect for the period

Gross change in value

ASU 2018-02 adoption (1)

Balance at October 31, 2018

Gross change in value for the period

Tax effect for the period

Gross change in value

Balance at October 31, 2019

Represents reclassification to retained earnings from adoption of ASU 2018-02.

Gross change in value

Balance at October 31, 2020

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

Represents reclassification to retained earnings from adoption of ASU 2018-02.

Share Repurchases

In December 2011, our Board of Directors authorized the 2012 Share Repurchase Program and through subsequent amendments, the most recent in March 2017, the total repurchase authorization was increased from $ 500.0 million to $ 1.0 billion of the Company's common stock.

In December 2011, the Company's Board of Directors authorized the 2012 Share Repurchase Program and through subsequent amendments, the most recent in March 2017, the total repurchase authorization was increased from $ 500.0 million to $ 1.0 billion of the Company's common stock.

The program has no expiration date and may be discontinued at any time.

Purchases under the 2012 Share Repurchase Program are subject to a review of the circumstances in place at the time and may be made from time to time as permitted by securities laws and other legal requirements.

In the fourth quarter of fiscal 2019, we repurchased 512 thousand shares of the Company's common stock for $ 150.0 million , at an average purchase price of $ 292.7 per share.

During fiscal year ended October 31, 2019 , we repurchased 537 thousand shares of our common stock for $ 156.1 million under the 2012 Share Repurchase Program.

During the fiscal year ended October 31, 2018 , we did no t repurchase any shares.

For the years ended October 31, 2020 and 2019, the Company share repurchases were as follow:

Periods Ended October 31,

Number of shares

Average repurchase price per share

Total costs of shares repurchased (in millions)

At October 31, 2020 , $ 359.7 million remained authorized for repurchase under the program.

In fiscal 2019 and 2018, we paid a semiannual dividend of 3 cents per share:

In fiscal 2020 and 2019, the Company paid a semiannual dividend of 3 cents per share:

$ 1.5 million or 3 cents per share on February 10, 2020 to stockholders of record on January 23, 2020;

$ 1.5 million or 3 cents per share on August 7, 2019 to stockholders of record on July 23, 2019 ;

$ 1.5 million or 3 cents on August 7, 2020 to stockholders of record on July 23, 2020;

$ 1.5 million or 3 cents per share on February 8, 2019 to stockholders of record on January 22, 2019 ;

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In March 2020, we received stockholder approval of the 2020 Directors Plan.

The 2006 Directors Plan was subsequently amended and restated, and approved by stockholders, in March 2009 and again in March 2011.

The Board of Directors further amended the Second Amended and Restated 2006 Directors Plan in October 2011, October 2012, October 2013, October 2016 and March 2018.

The Second Amended and Restated 2006 Directors Plan expired by its terms in March 2019.

The Second Amended and Restated 2006 Directors Plan authorized either Cooper's Board of Directors or a designated committee thereof composed of two or more Non-Employee Directors to grant to Non-Employee Directors during the period ending March 21, 2019 , equity awards for up to 950,000 shares of common stock, subject to adjustment for future stock splits, stock dividends, expirations, forfeitures and similar events.

The Second Amended and Restated 2006 Directors Plan provided for annual equity award grants to Non-Employee Directors on November 15 of each fiscal year which subsequently vested on the first anniversary of the date of grant.

Grants could be awarded in the form of stock options, restricted stock, restricted stock units (RSUs), or a combination of award types.

Awards were made with a total grant value of $ 270,000 , or $ 285,500 in the case of the Lead Director and $ 297,000 in the case of the Chairman of the Board.

Under the 2006 Directors Plan, grants of stock options had an exercise price equal to 100 % of fair market value on the date of grant and would expire no more than 10 years after the grant date.

Awards of restricted stock provided the right to purchase shares for $ 0.10 per share, subject to restrictions on sale or transfer which lapse on the first anniversary of the date of grant .

Restricted shares retained dividend and voting rights.

RSUs entitled the recipient to receive shares of common stock, without any payment in cash or property.

The 2020 Directors Plan authorizes either the Company's Board of Directors or a designated committee thereof composed of two or more Non-Employee Directors to grant to Non-Employee Directors equity awards for up to 50,000 shares of common stock, subject to adjustment for future stock splits, stock dividends, expirations, forfeitures and similar events.

The 2020 Directors Plan provides for annual equity award grants to Non-Employee Directors on April 1 st of each fiscal year which subsequently vest on the first anniversary of the date of grant.

Grants can be awarded in the form of stock options, restricted stock, restricted stock units (RSUs), or a combination of award types.

Awards are made with a total target grant date value of $ 270,000 , or $ 283,500 in the case of the Lead Director and $ 297,000 in the case of the Chairman of the Board.

Under the 2020 Directors Plan, awards are made in the form of RSUs unless otherwise approved by the Board of Directors.

RSUs entitle the recipient to receive shares of common stock, without any payment in cash or property.

Legal ownership of the shares is not transferred until the unit vests and issued RSUs have no dividend or voting rights prior to vesting.

Awards may also be made in the form of stock options or restricted stock.

In the event of such awards, grants of stock options will have an exercise price equal to 100 % of fair market value on the date of grant and expire no more than 10 years after the grant date.

Awards of restricted stock provide the right to receive shares, subject to such purchase price requirements,

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

As of October 31, 2019, the plan had expired and no shares remain available under the Second Amended and Restated 2006 Directors' Plan for future grants.

2007 Long-Term Incentive Plan (2007 LTIP)

In March 2007, we received stockholder approval of the 2007 LTIP.

The 2007 LTIP was subsequently amended and restated, and granted stockholder approval in March 2009, March 2011, and March 2016.

The Third Amended and Restated 2007 LTIP is designed to increase our stockholder value by attracting, retaining and motivating key employees and consultants who directly influence our profitability.

The Third Amended and Restated 2007 LTIP authorizes either our Board of Directors, or a designated committee thereof composed of two or more Non-Employee Directors, to grant to eligible individuals during the period ending December 31, 2026, up to 6,930,000 shares in the form of specified equity awards including stock option, restricted stock unit and performance share awards, subject to adjustment for future stock splits, stock dividends, expirations, forfeitures and similar events.

During fiscal 2019, we granted stock options, restricted stock units (RSUs) and performance share awards to employees under the Third Amended and Restated 2007 LTIP.

restrictions on sale or transfer, or other conditions as approved by the Board of Directors.

Restricted shares retain dividend and voting rights.

As of October 31, 2020, 42,929 shares remain available under the 2020 Directors' Plan for future grants.

2007 Long-Term Incentive Plan (2007 Plan)

In March 2007, we received stockholder approval of the 2007 Plan.

The 2007 Plan was subsequently amended and restated, and granted stockholder approval in March 2009, March 2011, and March 2016.

The Third Amended and Restated 2007 Plan is designed to increase our stockholder value by attracting, retaining and motivating key employees and consultants who directly influence our profitability.

The Third Amended and Restated 2007 Plan authorizes either our Board of Directors, or a designated committee thereof composed of two or more Non-Employee Directors, to grant to eligible individuals during the period ending December 31, 2026, up to 6,930,000 shares in the form of specified equity awards including stock option, restricted stock unit and performance share awards, subject to adjustment for future stock splits, stock dividends, expirations, forfeitures and similar events.

During fiscal 2020, we granted stock options and restricted stock units (RSUs) to employees under the Third Amended and Restated 2007 Plan.

Prior to fiscal 2020 we also granted performance share awards to employees.

All stock options are granted at 100 % of fair market value on the date of grant and expire no more than 10 years after the grant date.

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Legal ownership of the shares is not transferred to the recipient until the award vests, and the number of shares distributed is dependent upon the achievement of certain performance targets over a specified period of time.

As of October 31, 2019 , 1,280,407 shares remained available under the Third Amended and Restated 2007 LTIP for future grants.

As of October 31, 2020 , 1,088,901 shares remained available under the Third Amended and Restated 2007 Plan for future grants.

The amount of available shares includes shares which may be distributed under performance share awards.

Share-Based Compensation

The compensation cost and related tax benefit recognized in our consolidated financial statements for share-based awards were as follows:

Compensation expense and the related tax benefit recognized in our consolidated financial statements for share-based awards, including the Employee Stock Purchase Plan, were as follows:

(In millions)

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Vested and exercisable at October 31, 2020

The weighted-average fair value of each option granted during fiscal 2019, estimated as of the grant date using the Black-Scholes option pricing model, for the 2007 LTIP was $ 60.71 .

The weighted-average fair value of each option granted during fiscal 2020, estimated as of the grant date using the Black-Scholes option pricing model, for the 2007 Plan was $ 70.45 .

No options were granted under the 2020 Directors Plan in fiscal 2020.

The total intrinsic value of options exercised during the fiscal year ended October 31, 2020 was $ 22.6 million .

The weighted-average fair value of each option granted during fiscal 2018, estimated as of the grant date using the Black-Scholes option pricing model, for the 2007 LTIP was $ 57.86 .

No options were granted under the 2006 Directors Plan in fiscal 2018.

The weighted-average fair value of each option granted during fiscal 2019, estimated as of the grant date using the Black-Scholes option pricing model, for the 2007 Plan was $ 60.71 .

Stock awards outstanding under our current plans have been granted at prices which are either equal to or above the market value of the common stock on the date of grant.

Options granted under the 2007 LTIP generally vest over a range of three to five years based on service conditions and expire no later than ten years after the grant date.

Options granted under the 2007 Plan generally vest over a range of three to five years based on service conditions and expire no later than ten years after the grant date.

Options granted under the 2020 Directors Plan generally vested in one year and expire no later than ten years after the grant date.

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Restricted Stock Units

RSUs granted under the 2007 LTIP generally vest over three to five years .

RSUs granted under the 2006 Directors Plan generally vested in one year .

The fair value of restricted stock units is estimated on the date of grant based on the market price of our common stock.

RSUs granted under the 2007 Plan generally vest over three to five years .

RSUs granted under the 2020 Directors Plan vest in one year .

The fair value of RSUs is estimated on the date of grant based on the market price of our common stock.

We recognize compensation expense ratably over the vesting period.

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We recognize compensation expense ratably over the vesting period.

As of October 31, 2019 , there was $ 0.4 million of total unrecognized compensation cost related to non-vested performance units, which is expected to be recognized over a remaining weighted-average vesting period of 1.0 year .

Performance units granted on January 29, 2016 completed their performance period on October 31, 2018 and met 100 % of the target.

As of October 31, 2020 , there was no unrecognized compensation cost related to non-vested performance units.

Employee Stock Purchase Plan

On March 18, 2019, the Company received stockholder approval for the Employee Stock Purchase Plan (ESPP).

The first offering period is for U.S.

employees and is expected to begin on November 4, 2019.

The first offering period began on November 4, 2019 and offerings are generally made on a quarterly basis.

The purpose of the ESPP is to provide eligible employees of the Company with the opportunity to acquire shares of common stock at 85 % of the market price on the last business day of each offering period by means of accumulated payroll deductions.

Payroll deductions will be limited to maximum of 15 % of the employee’s eligible compensation, not to exceed $ 21.3 thousand in any one calendar year.

The ESPP would initially authorize the issuance of 1,000,000 shares of common stock.

The ESPP initially authorized the issuance of 1,000,000 shares of common stock.

These shares will be made available from shares of common stock reacquired by the Company as Treasury Stock.

At October 31, 2019, there were approximately 4.1 million shares of Treasury Stock available.

During fiscal year ended October 31, 2020, we issued 11,641 shares to our employees under the ESPP.

At October 31, 2020, the number of shares remaining available for future issuance under the ESPP was 988,359 shares.

Total ESPP share-based compensation recognized during the fiscal year ended October 31, 2020 was $ 0.7 million .

THE COOPER COMPANIES, INC.

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Virtually all of the assets of the Plan are comprised of equities and participation in equity and fixed income funds.

We use individual spot rates along the yield curve that correspond with the timing of each benefit payment to determine the service and interest costs of components of our net periodic benefit cost utilizing the correlation of projected cash outflows and corresponding spot rates on the yield curve.

The Company uses individual spot rates along the yield curve that correspond with the timing of each benefit payment to determine the service and interest costs of components of its net periodic benefit cost utilizing the correlation of projected cash outflows and corresponding spot rates on the yield curve.

The following table sets forth the Plan's benefit obligations and fair value of the Plan assets at October 31, 2020 , 2019 and 2018 and the funded status of the Plan and net periodic pension costs for each of the years in the three-year periods ended October 31, 2020 .

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A change in the discount rate will cause the present value of benefit obligations to change in the opposite direction.

If a discount rate of 4.42 % , which is 0.67 % more than prior fiscal year, had been used, the projected benefit obligation would have been $ 158.5 million , and the accumulated benefit obligation would have been $ 143.7 million .

If a discount rate of 3.13 % , which is 1.29 % lower than prior fiscal year, had been used, the projected benefit obligation would have been $ 207.8 million , and the accumulated benefit obligation would have been $ 186.3 million .

The expected rate of return on plan assets was determined based on a review of historical returns, both for this plan and for medium- to large-sized defined benefit pension funds with similar asset allocations.

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The projected benefit obligation experienced a net loss of approximately $ 20.0 million during the year.

This loss is the result of assumption changes resulting in a loss of approximately $ 33.8 million , plus losses of approximately $ 2.6 million due to demographic experience.

The key assumption changes were the decrease in the discount rate (loss of $ 43.5 million ), and a change to the mortality table (gain of $ 0.4 million ), changes to termination rates (gain of $ 3.9 million ), changes to salary increase rates (gain of $ 1.7 million ), addition of assumptions to reflect expected lump sum payments (loss of $ 0.3 million ), and a change in the discount rate methodology (gain of $ 4.0 million ).

This loss is primarily due to losses from assumption changes of approximately $ 18.1 million , and losses of approximately $ 1.9 million due to demographic experience.

The key assumption changes were the decrease in the discount rate (loss of $ 11.0 million ), changes in assumptions for lump sum determination (loss of $ 8.4 million ), and a change to the mortality table (gain of $ 1.3 million ).

The primary reasons for demographic losses were salary increases higher than expected, an increase in the number of participants, and the net impact of other demographic changes.

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Fair value is based upon quoted market prices, as Level 1 inputs, where available.

For our investments in equity and bond mutual funds, and real estate funds, fair value is based on observable, Level 1 inputs, as price quotes are available and the fair values of these funds were not impacted by liquidity restrictions or the fund status.

For investments in equity and bond mutual funds, and real estate funds, fair value is based on observable, Level 1 inputs, as price quotes are available and the fair values of these funds were not impacted by liquidity restrictions or the fund status.

Level 2 assets are those where price quotes are not readily available and the fair value would be determined based on other observable inputs.

Level 3 assets are those where price quotes are not readily available and the fair value would be determined based on unobservable inputs.

While we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

THE COOPER COMPANIES, INC.

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Contributions

The Company contributions to the Plan were $ 13.1 million for fiscal 2019 and, $ 10.0 million for each of fiscal 2018 and 2017.

We closely monitor the funded status of the Plan with respect to legislative and accounting rules.

We expect to make contributions of about $ 10.0 million during fiscal 2020.

The Company contributions to the Plan were $ 23.4 million for fiscal 2020, $ 13.1 million for fiscal 2019 and, $ 10.0 million for fiscal 2018.

The Company closely monitors the funded status of the Plan with respect to legislative and accounting rules.

The Company expects to make contributions of approximately $ 10.0 million during fiscal 2021.

Estimated Future Benefit Payments

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Existing employees already covered by the Plan, continue to accrue their benefits.

There was no material impact on the Company's results of operations, financial position and cash flows for fiscal 2019.

There was no material impact on the Company's results of operations, financial position and cash flows for fiscal 2020 or fiscal 2019.

Cooper's 401(k) Savings Plan

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International Pension Plans

For our employees outside the United States, we also participate in country-specific defined contribution plans and government-sponsored retirement plans.

The defined contribution plans are administered by third-party trustees and we are not directly responsible for providing benefits to participants of government-sponsored plans.

For its employees outside the United States, the Company also participates in country-specific defined contribution plans and government-sponsored retirement plans.

The defined contribution plans are administered by third-party trustees and the Company is not directly responsible for providing benefits to participants of government-sponsored plans.

The Company’s contributions to such plans are not significant individually or in the aggregate.

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At October 31, 2020 and October 31, 2019 , the carrying value of cash and cash equivalents, accounts receivable, prepaid expense and other current assets, lines of credit, accounts payable and other current liabilities approximate fair value due to the short-term nature of such instruments and the ability to obtain financing on similar terms.

The carrying value of our revolving credit facility and term loans approximates fair value estimated based on current market rates (Level 2).

As of both October 31, 2019 and October 31, 2018, the Company did no t have any derivative assets or liabilities, including no interest rate swaps, cross currency swaps or foreign currency forward contracts.

The carrying value of the Company's revolving credit facility and term loans approximates fair value based on current market rates (Level 2).

On April 6, 2020 the Company entered into six interest rate swap contracts which are used to hedge its exposure to changes in cash flows associated with its variable rate term loans and are designated as derivatives in a cash flow hedge.

The payment streams are based on a total notional amount of $ 1.5 billion at the inception of the contracts.

The interest rate swap contracts have maturities of seven years or less.

On October 1, 2020, one of the six interest rate swap contracts matured.

The outstanding contracts as of October 31, 2020 have a total notional amount of $ 1.4 billion .

The gain or loss on the derivatives is recorded as a component of accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

The fair value of the interest rate swap contracts is measured on a recurring basis by netting the discounted future fixed cash payments and the discounted expected variable cash receipts.

The variable cash receipts are based on the expectation of future interest rates (forward curves) derived from observable market interest rate curves.

The interest rate swap contracts were categorized as Level 2 in the fair value hierarchy, as the inputs to the derivative pricing model are generally observable and do not contain a high level of subjectivity.

Refer to Note 14.

Financial Derivatives and Hedging for further information.

The Company did not have any cross-currency swaps or foreign currency forward contracts as of October 31, 2020.

Nonrecurring fair value measurements

On a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment.

Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges.

In fiscal 2018, we recorded $ 24.4 million of impairment charge during the second fiscal quarter related to the intangible assets acquired from Recombine Inc.

as the cash flows expected to be generated by this asset group over its estimated remaining life were not sufficient to recover its carrying value.

Our valuation included unobservable Level 3 inputs and was based on expected sales proceeds and discounted cash flows.

The fair value of these intangible assets determined at the end of the second fiscal quarter of fiscal 2018 was $ 0 .

There were no material impairment charges in fiscal 2019.

In addition, the Company uses fair value measures when determining assets and liabilities acquired in an acquisition as described in Note 2.

The Company uses fair value measures when determining assets and liabilities acquired in an acquisition as described in Note 3.

Acquisitions which are considered a Level 3 measurement.

The Company also used fair value measures to allocate goodwill upon the split of our reporting units as discussed in Note 3.

Intangible Assets which was considered a Level 3 measurement.

Commitments and Contingencies

Lease Commitments

Total minimum annual rental obligations under noncancelable operating and finance leases (substantially all real property or equipment) in force at October 31, 2019 , were payable as follows:

(In millions)

2025 and thereafter

Aggregate rental expense for both cancelable and noncancelable contracts amounted to $ 45.3 million , $ 38.8 million and $ 32.2 million in 2019, 2018 and 2017, respectively.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Contingencies

Legal Proceedings

Since March 2015, over 50 putative class action complaints were filed by contact lens consumers alleging that contact lens manufacturers, in conjunction with their respective Unilateral Pricing Policy (UPP), conspired to reach agreements between each other and certain distributors and retailers regarding the prices at which certain contact lenses could be sold to consumers.

The plaintiffs are seeking damages against CooperVision, Inc., other contact lens manufacturers, distributors and retailers, in various courts around the United States.

In June 2015, all of the class action cases were consolidated and transferred to the United States District Court for the Middle District of Florida.

In August 2017, CooperVision entered into a settlement agreement with the plaintiffs, without any admission of liability, to settle all claims against CooperVision.

In July 2018, the Court approved the plaintiffs’ motion for preliminary approval of the settlement, and the Company paid the $ 3.0 million settlement amount into an escrow account.

The settlement remains subject to final Court approval at a future hearing currently scheduled for February 25, 2020.

The Company is involved in various lawsuits, claims and other legal matters from time to time that arise in the ordinary course of conducting business, including matters involving our products, intellectual property, supplier relationships, distributors, competitor relationships, employees and other matters.

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Business Segment Information

The Company discloses information about its operating segments, which were established based on the way that management organizes segments within the Company for making operating decisions and assessing financial performance.

The Company's two operating segments are described below.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

CooperVision.

Competes in the worldwide contact lens market by developing, manufacturing and marketing a broad range of products for contact lens wearers, featuring advanced materials and optics.

CooperVision designs its products to solve vision challenges such as astigmatism, presbyopia, myopia, ocular dryness and eye fatigues, with a broad collection of spherical, toric and multifocal contact lenses.

CooperSurgical.

Competes in the general health care market with a focus on advancing the health of women, babies and families through a diversified portfolio of products and services focusing on women's health and fertility.

Cooper uses operating income, as presented in our financial reports, as the primary measure of segment profitability.

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No customers accounted for 10% or more of our consolidated net revenue in the fiscal 2020, 2019 and 2018.

One customer, a CooperVision contact lens distributor, accounted for approximately 10 % of our consolidated net revenue in the fiscal 2017.

Identifiable assets are those used in continuing operations except cash and cash equivalents, which we include as corporate assets.

Long-lived assets are net property, plant and equipment.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents a summary of our business segment net sales:

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Single-use sphere lens

Non single-use sphere and other

Non single-use sphere, other

Total CooperVision net sales

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Total net sales

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Information by business segment for each of the years in the three-year period ended October 31, 2020 , follows:

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Sales between geographic areas

Operating income

Property, plant and equipment, net

Operating income (loss)

Long-lived assets

Sales to unaffiliated customers

Sales between geographic areas

Operating (loss) income

Property, plant and equipment, net

Operating income (loss)

Long-lived assets

Sales to unaffiliated customers

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Operating income

Property, plant and equipment, net

Long-lived assets

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

Financial Derivatives and Hedging

As part of the Company’s overall risk management practices the Company enters into financial derivatives, interest rate swaps designated as cash flow hedges, to hedge the floating interest rate on its debt.

The Company records all derivatives on its consolidated balance sheets at fair value.

The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.

All of the Company's derivatives have satisfied the criteria necessary to apply hedge accounting.

The gain or loss on derivative instruments designated and qualifying for cash flow hedge accounting is deferred in other comprehensive income.

The changes in fair value for all trades that are not designated for hedge accounting are recognized in current period earnings.

Deferred gains or losses from designated cash flow hedges are reclassified into earnings in the period that the hedged interest expense affects earnings.

The effectiveness of cash flow hedges is assessed at inception and quarterly thereafter.

The Company does not offset fair value amounts recognized for derivative instruments in its consolidated balance sheet for presentation purposes.

Credit risk related to derivative transactions reflects the risk that a party to the transaction could fail to meet its obligation under the derivative contracts.

Therefore, the Company’s exposure to the counterparty’s credit risk is generally limited to the amounts, if any, by which the counterparty’s obligations to the Company exceed the Company’s obligations to the counterparty.

The Company’s policy is to enter into contracts only with financial institutions which meet certain minimum credit ratings to help mitigate counterparty credit risk.

As of October 31, 2020, the Company had the following outstanding derivatives designated as hedging instruments:

(In millions, except for number of instruments)

Number of Instruments

Notional Value

Interest Rate Swap Contracts

These contracts have maturities of seven years or less.

The pre-tax impact of loss on derivatives designated for hedge accounting recognized in other comprehensive income (loss) was $ 17.1 million ( $ 13.0 million , net of tax) as of October 31, 2020.

The Company did not have any derivatives designated as hedging instruments for the period ended October 31, 2019.

The following table summarizes the fair values of derivative instruments as of the periods indicated and the line items in the accompanying consolidated balance sheets where the instruments are recorded:

Derivative Liabilities

(In millions)

October 31, 2020

Derivatives designated as cash flow hedges

Balance sheet location

Interest rate swap contracts

Other current liabilities

Interest rate swap contracts

Other non-current liabilities

The following table summarizes the amounts recognized with respect to our derivative instruments within the accompanying consolidated statements of income:

Periods Ended October 31,

(In millions)

Derivatives designated as cash flow hedges

Location of Loss Recognized on Derivatives

Interest rate swap contracts

Interest expense

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The Company expects that $ 6.8 million recorded as a component of accumulated other comprehensive income (loss) will be realized in the statements of earnings over the next twelve months and the amount will vary depending on prevailing interest rates.

The following table details the changes in accumulated other comprehensive income:

(In millions)

Beginning balance gain / (loss) as of October 31, 2019

Amount recognized in other comprehensive income on interest rate swap contracts (net of tax of $5.0 million)

Amount reclassified from other comprehensive income into earnings, gross (net of tax of $0.9 million)

Ending balance loss as of October 31, 2020

Selected Quarterly Financial Data (Unaudited)

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Income before income taxes

Net (loss) income attributable to Cooper stockholders

Earnings (loss) per share attributable to Cooper stockholders - basic

Earnings (loss) per share attributable to Cooper stockholders - diluted

Net income attributable to Cooper stockholders

Earnings per share attributable to Cooper stockholders - basic

Earnings per share attributable to Cooper stockholders - diluted

THE COOPER COMPANIES, INC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data