Con Dividere

Main Menu

  • Normal Value
  • Quota By Country
  • Statement of Financial Accounting
  • York Antwerp Rules
  • Commerce

Con Dividere

Header Banner

Con Dividere

  • Normal Value
  • Quota By Country
  • Statement of Financial Accounting
  • York Antwerp Rules
  • Commerce
Statement of Financial Accounting
Home›Statement of Financial Accounting›COOPER COMPANIES, INC. Discussion and analysis by management of the financial situation and operating results. (form 10-K)

COOPER COMPANIES, INC. Discussion and analysis by management of the financial situation and operating results. (form 10-K)

By Thomas Heikkinen
December 10, 2021
0
0

Note numbers refer to “Notes to Consolidated Financial Statements” in Item 8. Financial Statements and Supplementary Data.

RESULTS OF OPERATIONS

In this section, we discuss the results of our operations for fiscal 2021
compared with fiscal 2020. We discuss our cash flows and current financial
condition under "Capital Resources and Liquidity." For a discussion related to
fiscal 2020 compared with fiscal 2019, please refer to Item 7 of Part II,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our Annual Report on Form 10-K for the Year Ended October 31,
2020, which was filed with the United States Securities and Exchange Commission
(SEC) on December 11, 2020, and is available on the SEC's website at www.sec.gov
and our Investor Relations website at investor.coopercos.com.

In the tables shown, percentages are calculated based on the underlying whole dollar amounts and, therefore, may not be exactly recalculated from the rounded numbers used for disclosure purposes.

Non-GAAP financial measures

The succeeding sections of Management's Discussion and Analysis (MD&A) may
include certain financial measures that are not defined by accounting principles
generally accepted in the United States (GAAP). These measures, which are
referred to as non-GAAP measures, are listed below:
•Free Cash Flow - Free cash flow is calculated as net cash provided by operating
activities less capital expenditures.
•Constant currency - Constant currency is defined as excluding the effect of
foreign currency fluctuations.
For a discussion of these measures and the reasons management believes they are
useful to investors, refer to "Summary of Non-GAAP Financial Measures" below. To
the extent applicable, this MD&A includes reconciliations of these non-GAAP
measures to the most directly comparable financial measures calculated and
presented in accordance with GAAP.

The presentation of these non-GAAP financial measures is not intended to be a
substitute for, or superior to, the financial information prepared and presented
in accordance with GAAP and may be different from non-GAAP financial measures
used by other companies, and therefore, may not be comparable among companies.

COVID-19 Considerations

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 and 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. These factors have had, and in the future may have, an
adverse effect on our sales, operating results and cash flows.
                                       66
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



We have taken an active role in addressing the ongoing pandemic's impact on our
employees, suppliers, distribution channels, operations and customers, including
taking precautionary measures, such as implementing contingency plans, and
making operational adjustments as necessary. We have taken measures to help
ensure the safety of our personnel in all our facilities, and we have endeavored
and continue to follow recommended actions of government and health authorities
to protect our employees worldwide.

As of the date of this filing, we have not experienced any significant
disruption at our manufacturing facilities. We have had no significant
disruption in our access to necessary raw materials and other supplies or with
our distribution network; however, we have experienced higher unabsorbed fixed
overhead costs, labor inefficiencies, higher cost of production and higher
freight charges as a result of the COVID-19 pandemic. Our manufacturing and
distribution operations have responded to the impacts related to the COVID-19
pandemic, and we have been able to continue to supply our products around the
world without interruption. In the future, we may decide or need to implement
additional precautionary measures or operational adjustments as we deem prudent
to meet consumer demand or to help further ensure employee safety. We believe
that the actions we are taking have enabled us to keep our employees safe and
our supply chain intact and will help us emerge from this global pandemic
operationally sound and well positioned for long-term growth.

The extent to which the global COVID-19 pandemic and related economic
disruptions impact our business, results of operations, cash flow and financial
condition will depend on future developments. At this time, future developments
are highly uncertain, difficult to predict and largely outside of our control.
These include, but are not limited to, the spread, duration and severity of the
pandemic outbreak and any subsequent waves of additional outbreaks, including
the emergence and spread of variants of the COVID-19 virus, actions taken by
governments to contain the pandemic, address its impact or respond to the
reduction in global and local economic activity, and how quickly and to what
extent normal economic and operating conditions can resume. We will continue to
closely monitor the developments relating to the COVID-19 pandemic and the
responses from governments and private sector participants and their respective
impact on our Company and on our customers, suppliers, vendors and business
partners.

For more information on the risks associated with the COVID-19 pandemic, refer
to Part I, Item 1A, "Risk Factors" herein.
Outlook
Overall, we remain optimistic about the long-term prospects for the worldwide
contact lens and general health care markets. However, the impact, risks and
uncertainty relating to the global COVID-19 pandemic and related economic
disruptions, as further described in the "COVID-19 Considerations" section above
and in the "Risk Factors" section in Part I, Item 1A of this filing, have
adversely affected our sales, cash flow and current performance and are likely
to further adversely affect our future sales, cash flow and performance.
Additionally, other events affecting the economy as a whole, including but not
limited to the uncertainty and instability of global markets driven by foreign
currency volatility, inflation, changes in tax legislation, debt concerns, the
uncertainty following the United Kingdom (UK)'s withdrawal from the EU, changes
to existing and new regulations, global trade barriers including additional
tariffs and the trend of consolidations within the health care industry could
impact our current performance and continue to represent a risk to our future
performance.
CooperVision - We compete in the worldwide contact lens market with our
spherical, toric, multifocal, toric multifocal and myopia management contact
lenses offered in a variety of materials including using silicone hydrogel
Aquaform® technology, PC Technology™ and ActivControl® technology. We believe
that there will be lower contact lens wearer dropout rates as technology
improves and enhances the wearing experience through a combination of improved
designs and materials and the growth of preferred
                                       67
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



modalities such as single-use and monthly wearing options. CooperVision also
competes in the myopia management and specialty eye care markets with products
such as orthokeratology (ortho-k) and scleral lenses. In November 2019,
CooperVision received United States Food and Drug Administration (FDA) approval
for its MiSight® 1 day lens, which is the first and only FDA-approved product
indicated to slow the progression of myopia in children with treatment initiated
between the ages of 8-12 and became available in the United States during fiscal
2020. In August 2021, CooperVision received Chinese National Medical Products
Administration (NMPA) approval for its MiSight® 1 day lens for use in China.
CooperVision is focused on greater worldwide market penetration using recently
introduced products, and we continue to expand our presence in existing and
emerging markets, including through acquisitions.
CooperVision acquired the following entities during fiscal 2021:
•A privately-held UK contact lens manufacturer on April 26, 2021
•A privately-held medical device company on January 19, 2021
CooperVision acquired the following entity during fiscal 2020:
•A privately-held US contact lens manufacturer focusing on ortho-k lenses on
August 7, 2020
Our ability to compete successfully with a full range of silicone hydrogel
products is an important factor to achieving our desired future levels of sales
growth and profitability. CooperVision manufactures and markets a wide variety
of silicone hydrogel contact lenses. Our single-use silicone hydrogel product
franchises, clariti® and MyDay®, remain a focus as we expect increasing demand
for these products as well as future single-use products as the global contact
lens market continues to shift to this modality. Outside of single-use, the
Biofinity® and Avaira Vitality® product families comprise our focus in the FRP,
or frequent replacement product, market which encompasses the 2-week and monthly
modalities. Included in this segment are unique products such as Biofinity
Energys®, which helps individuals with digital eye fatigue.
CooperSurgical - Our CooperSurgical business competes in the general health care
market with a commitment to advancing the health of women, babies and families
through its diversified portfolio of products and services focusing on women's
health and fertility. CooperSurgical has established its market presence and
distribution system by developing products and acquiring companies, products and
services that complement its business model.
CooperSurgical acquired the following entities during fiscal 2021:
•A privately-held medical device company that develops single-use illuminating
medical devices on May 3, 2021
•A privately-held medical device company on March 1, 2021
•A privately-held medical device company on February 1, 2021
•A privately-held in vitro fertilization (IVF) cryo-storage software solutions
company on December 31, 2020
CooperSurgical acquired the following entity during fiscal 2020:
•A privately-held distributor of IVF medical devices and systems on December 13,
2019
On November 6, 2021, subsequent to the fiscal year ended October 31, 2021,
CooperSurgical entered into an Agreement and Plan of Merger (the "Merger
Agreement") to acquire Generate Life Sciences, a privately held leading provider
of donor egg and sperm for fertility treatments, fertility cryopreservation
services and newborn stem cell (cord blood and cord tissue) storage. The
aggregate consideration is
                                       68
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



$1.605 billion in cash, subject to adjustment as set forth in the Merger
Agreement. The transaction is anticipated to close in the first quarter of
fiscal 2022 and is subject to customary closing conditions, including regulatory
approval. See Note 15. Subsequent Events of the Consolidated Financial
Statements for additional information.
Capital Resources - At October 31, 2021, we had $95.9 million in unrestricted
cash, primarily held outside the United States, and $742.6 million available
under our 2020 Revolving Credit Facility. Debt outstanding at October 31, 2021
primarily consisted of:
•$850.0 million term loan entered into on April 1, 2020
•$546.1 million drawn under our 2020 Revolving Credit Facility entered into on
April 1, 2020

See note 5. Debt from the consolidated financial statements for more information.

On November 2, 2021, subsequent to the fiscal year ended October 31, 2021, we
entered into a 364-day, $840.0 million, term loan agreement by and among us, the
lenders party thereto and The Bank of Nova Scotia, as administrative agent,
which matures on November 1, 2022. We used part of the funds to partially repay
outstanding borrowings under the 2020 Revolving Credit Facility and for general
corporate purposes. See Note 15. Subsequent Events of the Consolidated Financial
Statements for additional information.

Assets held for sale

On February 2, 2021, CooperVision entered into a stock purchase agreement to
sell 50% of the equity interest in a wholly-owned subsidiary that was acquired
by CooperVision on January 19, 2021. The closing of this transaction is subject
to certain closing conditions including required regulatory approvals. We intend
to operate the previously wholly-owned subsidiary as a joint venture with the
purchaser of the 50% interest once the transaction is closed. We concluded the
substantive terms of the joint venture during the third quarter of fiscal 2021,
and as of July 31, 2021, the assets and liabilities of this disposal group were
reclassified as held for sale. On August 1, 2021, CooperVision entered into a
stockholders agreement, which outlines the terms regarding the operation and
management of the joint venture. As of October 31, 2021, we were in the process
of finalizing the joint venture related ancillary agreements, and the disposal
group continues to be classified as held for sale. We did not record any
impairment in fiscal 2021, and this disposal did not qualify as a discontinued
operation.

See note 3. Acquisitions and assets held for sale to the consolidated financial statements for more information.

LIBOR transition

The UK's Financial Conduct Authority (FCA), which regulates the London Interbank
Offered Rate (LIBOR), announced in July 2017 that it will no longer persuade or
require banks to submit rates for LIBOR after 2021. In March 2021, the FCA
confirmed its intention to stop requiring banks to submit rates required to
calculate LIBOR after 2021. However, for U.S. dollar-denominated (USD) LIBOR,
only one-week and two-month USD LIBOR will cease to be published after 2021, and
all remaining USD LIBOR tenors will continue being published until June 2023.
Further, in March 2020, the Financial Accounting Standards Board (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. We have material contracts that are indexed to LIBOR and are continuing to
monitor this activity and evaluate the related risk. We are
                                       69
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



continuing to evaluate the scope of impacted contracts and the potential impact.
We are also monitoring the developments regarding alternative rates and may
amend certain contracts to accommodate those rates if the contract does not
already specify a replacement rate. While the notional value of agreements
potentially indexed to LIBOR is material, we do not expect a material impact on
our financial statements related to this transition.

We believe that current cash, cash equivalents and future cash flow from
operating activities will be sufficient to meet our anticipated cash needs,
including working capital needs, capital expenditures and contractual
obligations for at least 12 months from the issuance date of the financial
statements included in this annual report. To the extent additional funds are
necessary to meet our liquidity needs such as that for acquisitions, share
repurchases, cash dividends or other activities as we execute our business
strategy, we anticipate that additional funds will be obtained through the
incurrence of additional indebtedness, additional equity financings or a
combination of these potential sources of funds; however, such financing may not
be available on favorable terms, or at all.
                                       70
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



2021 Compared to 2020

                     [[Image Removed: coo-20211031_g5.jpg]]

Highlights: 2021 vs 2020

•Gross margin increased to 67% of net sales compared with 63% in fiscal 2020
•Operating income increased by 62% to $505.8 million from $311.8 million
•Interest expense decreased to $23.1 million from $36.8 million due to lower
average debt balances and lower interest rates
•Diluted earnings per share increased by 1,131% to $59.16 from $4.81
•Operating cash flow increased by 52% to $738.6 million from $486.6 million.

Selected statistical information – Percentage of Net sales

                                                                                                       2021 vs. 2020
                                                                                                        % Change in
Years Ended October 31,                                            2021                 2020          Absolute Values
Net sales                                                             100  %               100  %                20  %
Cost of sales                                                          33  %                37  %                 8  %
Gross profit                                                           67  %                63  %                27  %
Selling, general and administrative expense                            41  %                41  %                22  %
Research and development expense                                        3  %                 4  %                (1) %
Amortization of intangibles                                             5  %                 6  %                 6  %
Operating income                                                       17  %                13  %                62  %


CooperVision Net Sales
The contact lens market has two major product categories:
•Spherical lenses including lenses that correct near- and farsightedness
uncomplicated by more complex visual defects; and
•Toric and multifocal lenses including lenses that, in addition to correcting
near- and farsightedness, address more complex visual defects such as
astigmatism and presbyopia by adding optical properties of cylinder and axis,
which correct for irregularities in the shape of the cornea.
                                       71
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



CooperVision Net Sales by Category

  [[Image Removed: coo-20211031_g6.jpg]][[Image Removed: coo-20211031_g7.jpg]]
     ($ in millions)                     2021                 2020               2021 vs. 2020 % Change
     Toric                            $   697.5            $   598.2                               17  %
     Multifocal                           238.6                197.0                               21  %
     Single-use spheres                   616.3                529.0                               16  %
     Non single-use sphere, other         599.6                518.8                               16  %
                                      $ 2,152.0            $ 1,843.0                               17  %



In the fiscal year ended October 31, 2021:
•Toric and multifocal lenses grew primarily through the success of Biofinity
toric and multifocal and MyDay toric.
•Single-use sphere lenses growth was primarily driven by MyDay, clariti and
MiSight lenses.
•Non single-use sphere lenses growth was primarily driven by Biofinity and
ortho-k lenses.
•"Other" products primarily include lens care which represented approximately 2%
of net sales in fiscal 2021 and 2020.
•Total silicone hydrogel products increased by 21%, representing 76% of net
sales in fiscal 2021 compared to 74% in fiscal 2020.
•Foreign exchange rates positively impacted sales by approximately $58.9 million
and had a negative impact of $2.4 million in fiscal 2020. In fiscal 2021, net
sales increased by 14% in constant currency over the prior year.
•Sales growth was primarily driven by an increase in the volume of lenses sold
across our core portfolio due to a recovery in demand from the impact of the
COVID-19 pandemic. Average realized prices by product did not materially
influence sales growth.
•We expect to continue seeing downward pressure and volatility in certain
markets related to net sales if the COVID-19 pandemic continues, as optical
retailers and healthcare centers continue to restrict access, and social
distancing measures continue.
                                       72
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



CooperVision Net Sales by Geography
CooperVision competes in the worldwide soft contact lens market and services in
three primary regions: the Americas, EMEA (Europe, Middle East and Africa) and
Asia Pacific.
($ in millions)         2021           2020         2021 vs. 2020 % Change
Americas             $   832.1      $   720.3                         16  %
EMEA                     819.5          690.1                         19  %
Asia Pacific             500.4          432.6                         16  %
                     $ 2,152.0      $ 1,843.0                         17  %


CooperVision's growth in net sales across all regions was primarily attributable
to market gains of silicone hydrogel contact lenses and favorable foreign
currency impacts. Refer to CooperVision Net Sales by Category above for further
discussion.
CooperSurgical Net Sales by Category
CooperSurgical supplies the family health care market with a diversified
portfolio of products and services. Our office and surgical offerings include
products that facilitate surgical and non-surgical procedures that are commonly
performed primarily by Obstetricians/Gynecologists (OB/GYN) in hospitals,
surgical centers, fertility clinics and medical offices. Fertility offerings
include highly specialized products and services that target the IVF process,
including diagnostics testing with a goal to make fertility treatment safer,
more efficient and convenient.
The chart below shows the percentage of net sales of office and surgical
products and fertility.
  [[Image Removed: coo-20211031_g8.jpg]][[Image Removed: coo-20211031_g9.jpg]]
($ in millions)                       2021         2020           2021 vs. 2020 % Change
Office and surgical products        $ 451.3      $ 358.8                            26  %
Fertility                             319.2        229.1                            39  %
                                    $ 770.5      $ 587.9                            31  %




                                       73
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



In the fiscal year ended October 31, 2021:
•Office and surgical products increased compared to the prior year due to an
increase in PARAGARD® sales compared to the prior year. Further, there was an
increase from other office and surgical products such as Uterine Manipulators,
Retractors, Closure products, Point-of-Care products and sales from our recent
acquisitions, Illuminate and Fetal Pillow®.
•Fertility net sales increased compared to the prior year mainly due to an
increase in revenue from fertility consumables, equipment sales, preimplantation
genetic testing and sales from our recent acquisition, Embryo Options.
•Foreign exchange rates positively impacted sales by approximately $6.2 million
and had a negative impact of $2.1 million in the prior year. In fiscal 2021, net
sales increased by 30% in constant currency over the prior year.
•Sales growth was primarily driven by stronger demand for our products and
services as a result of our customers continuing to reopen their health care
facilities and medical offices.
•We expect to continue seeing downward pressure and volatility in certain
markets related to net sales if the COVID-19 pandemic continues, as hospitals
and healthcare centers continue to restrict access, and social distancing
measures continue.
Gross Margin
Consolidated Gross Margin increased in fiscal 2021 to 67% compared to 63% of
fiscal 2020 primarily driven by favorable product mix and increased sales due to
a recovery in demand from the impact of the COVID-19 pandemic. Fiscal 2021
included $29.4 million of costs primarily related to integration and other
manufacturing related costs. Fiscal 2020 included $90.1 million of costs
primarily related to the COVID-19 pandemic and other manufacturing related
costs.

Selling, general and administrative expenses (SGA)

                                  % Net                   % Net      2021 vs. 2020
($ in millions)      2021         Sales       2020        Sales        % Change
CooperVision      $   843.9        39  %    $ 682.3        37  %              24  %
CooperSurgical        320.0        42  %      261.0        44  %              23  %
Corporate              47.3         -          49.2         -                 (4) %
                  $ 1,211.2        41  %    $ 992.5        41  %              22  %



CooperVision's SGA increased in fiscal 2021 compared to fiscal 2020 primarily
due to increases in distribution costs, general and administrative costs and
advertising and marketing activities primarily related to myopia management.
CooperVision's SGA in fiscal 2021 included $63.9 million of costs primarily
related to the increase in fair value of the contingent consideration of $56.8
million as described in Note 3. Acquisitions and Assets Held for Sale of the
Consolidated Financial Statements. CooperVision's SGA in fiscal 2020 included
$6.5 million of costs primarily related to acquisition and integration
activities.
CooperSurgical's SGA increased in fiscal 2021 compared to fiscal 2020 primarily
due to increases in selling expenses and advertising and marketing activities.
CooperSurgical's SGA in fiscal 2021 included $19.3 million of costs primarily
related to the increase in fair value of the contingent consideration of $9.3
million as described in Note 3. Acquisitions and Assets Held for Sale of the
Consolidated Financial Statements and acquisition and integration expenses.
CooperSurgical's SGA in fiscal 2020 included $19.8 million of costs primarily
related to integration expenses and Medical Devices Regulation (MDR) costs.
Corporate SGA decreased in fiscal 2021 compared to fiscal 2020 primarily due to
savings from lower professional fees and travel expenses as a result of the
COVID-19 pandemic.
                                       74
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



Research and development (R&D) costs

                               % Net                  % Net      2021 vs. 2020
($ in millions)     2021       Sales       2020       Sales        % Change
CooperVision      $ 61.6         3  %    $ 54.1         3  %              14  %
CooperSurgical      31.1         4  %      39.2         7  %             (21) %
                  $ 92.7         3  %    $ 93.3         4  %              (1) %

CooperVision’s R&D expenses increased in FY2021 compared to FY2020, primarily due to myopia management programs and the timing of R&D projects. As a percentage of sales, CooperVision’s R&D spending has remained relatively stable. CooperVision’s R&D activities are primarily focused on contact lens development, manufacturing technology and process improvement.

CooperSurgical's R&D expense decreased in fiscal 2021 compared to fiscal 2020
primarily due to timing of R&D projects and changes in headcount. CooperSurgical
has not paused research programs during the COVID-19 pandemic and has maintained
its spend on innovations and increased its spend on key regulatory investment
areas to support our long-term objectives. As a percentage of sales,
CooperSurgical's R&D expense decreased primarily due to an increase in net
sales. CooperSurgical's R&D activities are focused on upgrading existing and
developing new products ranging from diagnostics, surgical devices to fertility
instruments and solutions.
Amortization Expense
                                % Net                   % Net      2021 vs. 2020
($ in millions)     2021        Sales       2020        Sales        % Change
CooperVision      $  35.7         2  %    $  32.4         2  %              10  %
CooperSurgical      110.4        14  %      104.8        18  %               5  %
                  $ 146.1         5  %    $ 137.2         6  %               6  %


CooperVision's and CooperSurgical's amortization expense increased in absolute
dollars in fiscal 2021 compared to fiscal 2020, primarily due to the
amortization of intangible assets newly acquired through acquisitions. As a
percentage of sales, CooperSurgical's amortization expense decreased, primarily
due to an increase in net sales.
Operating Income
                                % Net                   % Net      2021 vs. 2020
($ in millions)     2021        Sales       2020        Sales        % Change
CooperVision      $ 481.3        22  %    $ 375.7        20  %              28  %
CooperSurgical       71.8         9  %      (14.7)       (3) %             588  %
Corporate           (47.3)        -         (49.2)        -                  4  %
                  $ 505.8        17  %    $ 311.8        13  %              62  %



CooperVision's operating income increased as a percentage of net sales and in
absolute dollars in fiscal 2021 compared to fiscal 2020, primarily due to an
increase in net sales partially offset by a $56.8 million expense related to the
increase in fair value of the contingent consideration as described in Note 3.
Acquisitions and Assets Held for Sale of the Consolidated Financial Statements.

CooperSurgical's operating income increased as a percentage of net sales and in
absolute dollars in fiscal 2021 compared to fiscal 2020, primarily due to an
increase in net sales and a decrease in R&D expenses.
                                       75
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



The company’s operating loss decreased in fiscal 2021 compared to fiscal 2020, primarily due to savings from lower professional fees and travel costs due to the pandemic of COVID-19.

On a consolidated basis, operating income increased as a percentage of net sales
and in absolute dollars in fiscal 2021 compared to fiscal 2020, primarily due to
the increase in consolidated net sales.

Interest Expense
                                % Net                  % Net      2021 vs. 2020
($ in millions)      2021       Sales       2020       Sales        % Change
Interest expense   $ 23.1         1  %    $ 36.8         2  %             (37) %


Interest expense decreased as a percentage of net sales and in absolute dollars
during fiscal 2021 compared to the prior year, primarily due to lower average
debt balances and lower interest rates.
Other (Income) Expense, Net
($ in millions)                 2021        2020
Investment gain               $ (11.6)     $   -
Foreign exchange loss             5.5        1.2
Other (income) expense, net      (2.7)       7.3
                              $  (8.8)     $ 8.5


On January 19, 2021, CooperVision acquired all of the remaining equity interests
of a privately-held medical device company that develops spectacle lenses for
myopia management. The fair value remeasurement of our previous equity
investment immediately before the acquisition resulted in a gain of $11.5
million recognized in the first quarter of fiscal 2021.
Foreign exchange loss primarily resulted from the revaluation and settlement of
foreign currency-denominated balances.
Other income increased in fiscal 2021, primarily due to an increase in defined
benefit plan related income and a decrease in losses on minority investments
during the year.
Provision for Income Taxes
The effective tax rates for fiscal 2021 and 2020 were (499.1)% and 10.6%,
respectively. The decrease was primarily due to an intra-group transfer of
intellectual property, as discussed below, and remeasurement of the related
deferred tax assets caused by the UK enactment of a 25% corporate tax rate. The
effective tax rate otherwise increased due to changes in the geographical
composition of pre-tax earnings, partially offset by changes in foreign earnings
subject to US tax.

The effective tax rate for fiscal 2021 was lower than the US federal statutory
tax rate primarily due to the intra-group transfer, the remeasurement of
deferred tax assets, and earnings in foreign jurisdictions with lower tax rates
partially offset by foreign earnings subject to US tax. The effective tax rate
for fiscal 2020 was lower than the US federal statutory rate primarily due to
foreign earnings in jurisdictions with lower tax rates partially offset by
foreign earnings subject to US tax.

In November 2020, we completed an intra-group transfer of certain intellectual
property and related assets of the CooperVision business to a UK subsidiary as
part of a group restructuring to establish headquarters operations in the UK.
Determining fair value involved significant judgment related to future revenue
growth, operating margins and discount rates. Income before income taxes
resulting from this transfer is eliminated upon consolidation. The transfer
resulted in a step-up of the UK tax-deductible basis in the
                                       76
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



intellectual property and goodwill, creating a temporary difference between the
book basis and the tax basis of these assets. As a result, we recognized a
deferred tax asset of $1,987.9 million, with a corresponding income tax benefit,
during the three months ended January 31, 2021.

See note 6. Income taxes to the consolidated financial statements for more information.

Share-based compensation plans

We grant various share-based compensation awards, including stock options,
performance shares and restricted stock units. The share-based compensation and
related income tax benefit recognized in the Consolidated Financial Statements
in fiscal 2021 was $44.7 million and $5.6 million, respectively, compared to
$38.6 million and $4.8 million, respectively, in fiscal 2020. As of October 31,
2021, there was $94.3 million of total unrecognized share-based compensation
cost related to non-vested awards. See Note 9. Stock Plans of the Consolidated
Financial Statements for additional information.

We estimate the fair value of each stock option award on the date of grant using
the Black-Scholes valuation model, which requires management to make estimates
regarding expected option life, stock price volatility and other assumptions.
The use of different assumptions could lead to a different estimate of fair
value. The expected life of the stock option is based on the observed and
expected time to post-vesting forfeiture and/or exercise. Groups of employees
that have similar historical exercise behavior are considered separately for
valuation purposes. If our assumption for the expected life increased by one
year, the fair value of an individual option granted in fiscal 2021 would have
increased by approximately $9.60. To determine the stock price volatility,
management considers implied volatility from publicly-traded options on the
Company's stock at the date of grant, historical volatility and other factors.
If our assumption for stock price volatility increased by one percentage point,
the fair value of an individual option granted in fiscal 2021 would have
increased by approximately $2.62.

Employee share purchase plan

On March 18, 2019, the Company received stockholder approval for the Employee
Stock Purchase Plan (ESPP). 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 15% of the employee's eligible compensation, not
to exceed $21.3 thousand in any one calendar year. 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. During fiscal 2021 and 2020, we issued 17,575 and 11,641 shares to our
employees under the ESPP, respectively. At October 31, 2021, the number of
shares remaining available for future issuance under the ESPP is 970,784 shares.
Total ESPP Share-based compensation recognized during fiscal 2021 and 2020 was
$1.0 million and $0.7 million.
                                       77
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



CAPITAL RESOURCES AND LIQUIDITY
2021 Highlights
•Operating cash flow of $738.6 million compared to $486.6 million in fiscal 2020
•Expenditures for purchases of property, plant and equipment of $214.4 million
compared to $310.4 million in fiscal 2020
•Cash payments for acquisitions and others of $235.9 million compared to $54.1
million in fiscal 2020
•Total debt, net of debt issuance cost, at $1.5 billion at the end of fiscal
2021 compared to $1.8 billion at the end of fiscal 2020
•Cash provided by operations of $738.6 million offset by capital expenditures of
$214.4 million resulted in positive free cash flow of $524.2 million, up 198%
compared to the prior year
Comparative Statistics
Years Ended October 31,
($ in millions)                                     2021          2020
Cash and cash equivalents                             $95.9        $115.9
Total assets                                       $9,606.2      $6,737.5
Working capital                                      $733.2        $269.8
Total debt                                         $1,479.0      $1,793.2
Stockholders' equity                               $6,942.0      $3,824.8
Ratio of debt to equity                              0.21:1        0.47:1

Debt as a percentage of total capitalization 18% 32%


Working Capital
The increase in working capital at October 31, 2021 from the end of fiscal 2020
was primarily due to:
•decrease in short-term debt of $326.4 million primarily due to repayment of the
outstanding balance of the 2020 Term Loan at maturity;
•increase in assets held-for-sale of $89.2 million. Refer to Note 3.
Acquisitions and Assets Held for Sale for additional information;
•increase in trade accounts receivable of $79.9 million primarily due to higher
sales and timing of collections;
•increase in prepaid expense and other current assets of $26.8 million,
•increase in inventories of $15.2 million due to higher sales;
•decrease in accounts payable of $14.6 million due to timing of payments,
partially offset by:
•increase in other current liabilities of $34.9 million;
•increase in employee compensation and benefits of $29.7 million; and
•decrease in cash and cash equivalents of $20.0 million.
At October 31, 2021, our inventory months on hand were 6.8 compared to 6.6 at
October 31, 2020. The $15.2 million increase in inventories was primarily due to
higher sales, and the buildup of inventory for future product launches.
                                       78
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



Our days sales outstanding (DSO) was 64 days at October 31, 2021 compared to 60
days at October 31, 2020. The increase in DSO from October 31, 2020 to October
31, 2021 was primarily due to timing of collections.

Operating cash flow

Cash provided by operating activities increased by $252.0 million from $486.6
million in fiscal 2020 to $738.6 million in fiscal 2021. This increase in cash
flow provided by operating activities primarily consists of:
•increase in net income of $2,706.3 million from a net income of $238.4 million
in fiscal 2020 to $2,944.7 million in fiscal 2021;
•$68.4 million increase in the net changes in accrued liabilities partially due
to impact from adoption of ASC 842, Leases in prior year period and higher
customer rebate accruals in current period as a result of higher sales;
•$66.1 million increase in the net changes in the fair value of contingent
consideration. Refer to Note 3. Acquisitions and Assets Held for Sale for
further information;
•$53.1 million increase in the net changes in inventories primarily due to
higher sales;
•$22.4 million increase in the net changes in income tax payable;
•$22.2 million increase in net changes in depreciation and amortization, from
$287.1 million in fiscal 2020 to $309.3 million in fiscal 2021, partially offset
by;
•$2501.3 million decrease in the net changes in deferred income taxes. Refer to
Note 6. Income Taxes for additional information;
•$84.0 million decrease in the net changes in trade receivables primarily due to
timing of collections;
•$39.2 million decrease in the net changes in accounts payable primarily due to
timing of payments;
•$28.0 million decrease in the net changes in prepayments and other assets
primarily due to the capitalized cloud computing costs and increase in prepaid
inventory; and
•$27.5 million decrease in impairment and loss on disposal of property, plant
and equipment, and other.

Investing Cash Flow

Cash used in investing activities increased by $85.8 million to $450.3 million
in fiscal 2021 from $364.5 million in fiscal 2020, primarily due to:
•increase of $181.8 million in payments made for acquisitions in fiscal 2021
compared to the prior year period, partially offset by;
•decrease of $96.0 million in capital expenditures.

Cash flow financing

Cash used in financing activities increased by $ 215.9 million at $ 311.4 million
during the 2021 financial year of $ 95.5 million during fiscal year 2020, mainly due to:

                                       79
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



•$1,777.9 million decrease in proceeds from long-term debt, primarily due to
funds received from the 2020 Credit Agreement (as defined below);
•$314.7 million increase in net repayments of short-term debt, primarily due to
the repayments of the 2020 Term Loan Agreement (as defined below), partially
offset by;
•$1,819.9 million decrease in repayments of long-term debt, primarily related to
repayments of funds from the 2020 Credit Agreement (as defined below) in fiscal
2021, and termination of the 2020 Term Loan Agreement (as defined below), the
2017 Term Loan Agreement and the 2016 Credit Agreement in fiscal 2020.
On April 1, 2020, the Company entered into a Revolving Credit and Term Loan
Agreement (the 2020 Credit Agreement), among the Company 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.

On October 16, 2020, the Company entered into a 364-day, $350.0 million, term
loan agreement (the 2020 Term Loan Agreement) by and among the Company, the
lenders party thereto and The Bank of Nova Scotia, as administrative agent,
which matured on October 15, 2021. At maturity, outstanding amounts under this
agreement were fully repaid using borrowings under the 2020 Revolving Credit
Facility.

On November 2, 2021, subsequent to the fiscal year ended October 31, 2021, the
Company entered into a 364-day, $840.0 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 November 1, 2022. The Company used part
of the funds to partially repay outstanding borrowings under the 2020 Revolving
Credit Facility and for general corporate purposes. See Note 15. Subsequent
Events of the Consolidated Financial Statements for additional information.

The following is a summary of the maximum commitments and net amounts available to us under various credit facilities as of the October 31, 2021:

                                     Facility Limit           Outstanding             Outstanding            Total Amount               Maturity Date
(In millions)                                                  Borrowings          Letters of Credit           Available
2020 Revolving Credit
Facility                           $       1,290.0          $       546.1          $           1.3          $      742.6                      April 1, 2025
2020 Term Loan Facility                      850.0                  850.0                         n/a                  -                      April 1, 2025
Total                              $       2,140.0          $     1,396.1          $           1.3          $      742.6



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. As defined, in the 2020 Credit
Agreement, we are required to maintain an Interest Coverage Ratio of at least
3.00 to 1.00, and a Total Leverage Ratio of no higher than 3.75 to 1.00. At
October 31, 2021, we were in compliance with the Interest Coverage Ratio at
43.29 to 1.00 and the Total Leverage Ratio at 1.38 to 1.00. 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.

See note 5. Debt from the consolidated financial statements for more information.

                                       80
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



Considering recent market conditions and the ongoing COVID-19 pandemic crisis,
we have re-evaluated our operating cash flows and cash requirements and continue
to believe that current cash, cash equivalents, future cash flow from operating
activities and cash available under our 2020 Credit Agreement will be sufficient
to meet our anticipated cash needs, including working capital needs, capital
expenditures and contractual obligations for at least 12 months from the
issuance date of the Consolidated Financial Statements included in this
quarterly report. To the extent additional funds are necessary to meet our
liquidity needs such as that for acquisitions, share repurchases, cash dividends
or other activities as we execute our business strategy, we anticipate that
additional funds will be obtained through the incurrence of additional
indebtedness, additional equity financings or a combination of these potential
sources of funds; however, such financing may not be available on favorable
terms, or at all.

Share Repurchases
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.
The Company's share repurchases during the fiscal years ended October 31, 2021
and 2020 are as follows:
        Years Ended October 31,                              2021          

2020

        Number of shares                                    69,622      

160,850

        Average repurchase price per share                 $ 356.6      $  296.9
        Total costs of shares repurchased (in millions)    $  24.8      $   47.8



At October 31, 2021, $334.8 million remained authorized for repurchase under the
program.
Dividends
In fiscal 2021 and 2020, the Company paid a semiannual dividend of 3 cents per
share: $1.5 million or 3 cents per share on February 9, 2021 to stockholders of
record on January 22, 2021; $1.5 million or 3 cents per share on August 11, 2021
to stockholders of record on July 27, 2021; $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, 2020 to stockholders of record on July 23, 2020.
                                       81
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

From October 31, 2021, we had the following contractual obligations and commercial commitments: Payments due by financial year

                                                   2023              2025              2027
(In millions)                             Total              2022            & 2024            & 2026           & Beyond
Contractual obligations:
Long-term debt                         $ 1,396.3          $     -          $     -          $ 1,396.3          $      -
Interest payments                           87.2             21.9             43.7               19.0               2.6
Operating leases                           317.6             42.5             69.2               59.6             146.3

Transition tax on unremitted foreign
earnings and profits (1)                   112.2             11.8             34.0               66.4                 -
Purchase obligations (2)                   196.0             86.5             58.0               50.2               1.3
Defined benefit plan (3)                   142.8             10.7             24.4               28.1              79.6
Total contractual obligations            2,252.1            173.4            229.3            1,619.6             229.8
Commercial commitments:
Stand-by letters of credit                   4.9              4.9                -                  -                 -
Total                                  $ 2,257.0          $ 178.3          $ 229.3          $ 1,619.6          $  229.8



(1) As of October 31, 2021, we had $112.2 million of income tax liabilities
related to the one-time transition tax that resulted from the enactment of the
2017 US Tax Act, which is payable in annual installments through fiscal 2026.
The installment for fiscal 2021 is classified as a current income tax payable on
our consolidated balance sheet.

We are unable to reliably estimate the timing of future payments related to uncertain tax positions and have excluded $ 39.2 million long-term tax payable according to the table above. See note 6. Income taxes to the consolidated financial statements for more information.

(2) Purchase obligations consist of agreements to purchase goods and services
that are enforceable and legally binding and includes obligations for inventory,
capital expenditures and other operating expense commitments.

(3) The expected future benefit payments for our Retirement Income Plan through
2031 are disclosed in Note 10. Employee Benefits of the Consolidated Financial
Statements.

Summary of Non-GAAP Financial Measures

The non-GAAP financial measures that may be included in this MD&A and the
reasons management believes they are useful to investors are described below.
These measures should be considered supplemental in nature and are not intended
to be a substitute for the related financial information prepared in accordance
with GAAP. In addition, these measures may not be the same as similarly named
measures presented by other companies.

Free cash flow is defined as cash provided by operating activities less capital
expenditures. Management believes free cash flow is useful for investors as an
additional measure of liquidity because it represents cash that is available to
grow the business, make strategic acquisitions, repay debt, buyback common stock
or fund the dividend. We use free cash flow internally to understand, manage,
make operating decisions and evaluate our business. In addition, we use free
cash flow to help plan and forecast future periods.

                                       82
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



Constant currency is defined as excluding the effect of foreign currency rate
fluctuations. In order to assist with the assessment of how our underlying
businesses performed, we compare the percentage change in net sales from one
period to another, excluding the effect of foreign currency fluctuations. To
present this information, current period revenue for entities reporting in
currencies other than the United States dollar are converted into United States
dollars at the average foreign exchange rates for the corresponding period in
the prior year.

Accounting positions Information concerning new accounting positions is included in note 1. Accounting methods of the consolidated financial statements.

Critical accounting policies and estimates

Management estimates and judgments are an integral part of financial statements
prepared in accordance with GAAP. We believe that the critical accounting
policies described in this section address the more significant estimates
required of management when preparing the Consolidated Financial Statements in
accordance with GAAP. We consider an accounting estimate critical if changes in
the estimate may have a material impact on our financial condition or results of
operations. We believe that the accounting estimates employed are appropriate
and resulting balances are reasonable; however, actual results could differ from
the original estimates, requiring adjustment to these balances in future
periods.

The World Health Organization categorized the 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 and 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. These factors have had,
and in the future may 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, including the emergence and spread
of variants of the COVID-19 virus; 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 bad debts • the carrying amount of inventories

                                       83
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



• the carrying amount of goodwill and other long-term assets

There was not a material impact to the above estimates in our Consolidated
Financial Statements for fiscal 2021 as a result of the COVID-19 pandemic. We
continually monitor and evaluate 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. Our future assessment of
the magnitude and duration of the COVID-19 pandemic, as well as other factors,
could result in material changes to the estimates and material impacts to our
Consolidated Financial Statements in future reporting periods.

Our critical accounting policies include:
•Revenue recognition - We recognize revenue from product sales when obligations
under the terms of a contract with the customer are satisfied; generally, this
occurs with the transfer of control of the goods to customers and/or when
services are rendered. Our payment terms are typically between 30 to 120 days.
Provisions for certain rebates, sales incentives, volume discounts, contractual
pricing allowances and product returns are accounted for as variable
consideration and recorded as a reduction in sales.
Product discounts, including certain rebates, sales incentives, and volume
discounts are granted based on terms of the arrangement with direct distribution
customers and at times the indirect end consumer. We evaluate contractual terms,
historical experience, and perform internal analysis to estimate total product
discounts at the time revenue is recognized. Our PARAGARD program is subject to
Medicaid rebates, which are estimated at the time of sale based upon the
difference between current retail pricing and contractual Medicaid pricing and
an estimate of the number of units that will be sold to Medicaid patients, which
is informed by historical trends of claim history.
Sales returns are estimated and recorded based on historical sales return data.
Promotional programs, such as cooperative advertising arrangements, are recorded
in the same period as related sales. Reasonably likely changes to assumptions
used to calculate the accruals for rebates, sales incentives, volume discounts,
contractual pricing allowances and product returns are not anticipated to have a
material effect on the financial statements. We currently disclose the impact of
changes to assumptions in the quarterly or annual filing in which there is a
material financial statement impact.
•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,
evaluate and test goodwill balances for impairment in accordance with related
accounting standards. We test goodwill impairment in accordance with ASU
2017-04, Intangibles - Goodwill and other (Topic 350): Simplifying the Test for
Goodwill Impairment. 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 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. A reporting unit is the level of
reporting at which goodwill is tested for impairment.
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
                                       84
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



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.
•Business combinations - We routinely consummate business combinations. Results
of operations for acquired companies are included in our consolidated results of
operations from the date of acquisition. We recognize separately from goodwill,
the identifiable assets acquired, including acquired in-process research and
development, the liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date fair values as defined by accounting standards
related to fair value measurements. 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. Direct acquisition costs are expensed as
incurred.
•Income taxes - We account for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases, and for tax losses and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized.

As part of the process of preparing our Consolidated Financial Statements, we
must estimate our income tax expense for each of the jurisdictions in which we
operate. This process requires significant management judgments and involves
estimating our current tax exposures in each jurisdiction including the impact,
if any, of additional taxes resulting from tax examinations as well as judging
the recoverability of deferred tax assets. To the extent recovery of deferred
tax assets is not likely based on our estimation of future taxable income in
each jurisdiction, a valuation allowance is established. Tax exposures can
involve complex issues and may require an extended period to resolve. Frequent
changes in tax laws in each jurisdiction complicate future estimates. To
determine the tax rate, we use the full-year income and the related income tax
expense in each jurisdiction. We update the estimated effective tax rate for the
effect of significant unusual items as they are identified. Changes in the
geographic mix or estimated level of annual pre-tax income can affect the
overall effective tax rate, and such changes could be material.

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 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. 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. All tax reserves are analyzed quarterly and adjustments are made as
events occur that result in changes in judgment.






                                       85
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management report and analysis of the financial position and results of

                                   Operations



Trademarks

Aquaform®, Avaira®, Avaira Vitality®, Biofinity®, Biofinity Energys®, MyDay®,
MiSight®, ActivControl®, Proclear® and Biomedics® are registered trademarks of
The Cooper Companies, Inc., its affiliates and/or subsidiaries. PC Technology™
and FIPS™ are trademarks of The Cooper Companies, Inc., its affiliates and/or
subsidiaries. The clariti® mark is a registered trademark of The Cooper
Companies, Inc., its affiliates and/or subsidiaries worldwide except in the
United States where the use of clariti® is licensed. PARAGARD®, Mara® and Fetal
Pillow® are registered trademarks of CooperSurgical, Inc.
                                       86
--------------------------------------------------------------------------------

                  THE COOPER COMPANIES, INC. AND SUBSIDIARIES

© Edgar online, source Previews

Related posts:

  1. VICTORY OILFIELD TECH: Management Discussion and Analysis of Financial Position and Operating Results (Form 10-Q)
  2. Should you (or anyone) buy Ergo?
  3. Robinhood Revenue Boosted by Dogecoin in Q2
  4. Latest updates: Gas prices in UK and Europe soar by more than 20%
Tagscash flowcovid pandemicfinancial statementslong termshort termsupply chainunited states

Recent Posts

  • Protests across the country against load shedding hours – Pakistan
  • LexaGene Files Form 10 Registration Statement with SEC and Announces Delay in Filing Year-End Annual Canadian Financial Filings
  • One of the best things you can do as a CIO
  • First Bank woos female entrepreneurs with single-digit loans
  • Buhari to Nigerians Abroad: Now You Can Invest Seamlessly in Nigeria

Archives

  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • March 2020
  • April 2019
  • June 2018
  • May 2018
  • June 2016
  • May 2016
  • November 2015

Categories

  • Commerce
  • Normal Value
  • Quota By Country
  • Statement of Financial Accounting
  • York Antwerp Rules
  • Terms and Conditions
  • Privacy Policy