Cooper Companies (COO) 10-K risk factor changes: FY2016 vs FY2015

We operate in the highly competitive [removed: healthcare] [added: health care] industry and there can be no assurance that we will be able to compete successfully.

Our major competitors in the contact lens business, Johnson & Johnson Vision Care, Inc., [removed: CIBA Vision] [added: Alcon] (owned by Novartis AG) and Bausch & Lomb, Inc. (owned by Valeant Pharmaceuticals International, Inc.), have substantially greater financial resources, larger research and development budgets, larger sales forces, greater market penetration and/or larger manufacturing volumes than CooperVision.

In the women's [removed: healthcare] [added: health care] market, competitive factors include technological and scientific advances, product quality, price and effective communication of product information to physicians and hospitals.

[removed: CooperSurgical acquired Reprogenetics in fiscal 2015,] CooperVision completed the acquisition of [removed: Sauflon Pharmaceuticals Limited] [added: Soflex] in fiscal [removed: 2014,] [added: 2016] and [removed: CooperSurgical completed the acquisition of Origio a/s] [added: Sauflon Pharmaceuticals Limited] in fiscal [removed: 2012.][added: 2014.]

These acquisitions added [removed: significant] operations to CooperVision and CooperSurgical, respectively, and [removed: greatly] expanded their international businesses.

| • | difficulties in, and expenses related to, the integration of the operations, technologies, products and personnel of the acquired company and establishment of appropriate accounting controls and reporting procedures and other regulatory compliance [removed: procedures;] [added: procedures, including but not limited to third party compliance and due diligence;] |

Product innovations are important in the contact lens market in which CooperVision competes and in the areas of the [removed: healthcare] [added: health care] industry in which CooperSurgical competes.

In addition, our competitors may have developed or may in the future develop new products or technologies, such as contact lenses with anti-microbial or anti-allergenic features, or “smart” contact lenses which [removed: incorporate electronics, that could lead to the obsolescence of one or more of our products.]

[added: Failure to] develop new product offerings and technological changes and to offer products that provide performance that is at least comparable to competing products could have a material adverse effect on our business, financial condition, or results of operations.

| • | acceptance of our products by eye care and [removed: women's healthcare] [added: health care] practitioners; |

Technological developments in the eye [removed: care] [added: care, family] and women's [removed: healthcare] [added: health care] industries, such as new surgical procedures or medical devices, may limit demand for our products.

We have significant manufacturing and distribution sites in North [added: America, Latin] America and Europe.

Over half of our net sales for the fiscal years ended October 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] were derived from the sale of products outside the United States.

| • | we may find it difficult to grow in emerging markets such as China, India, Russia, Brazil and other developing nations due to, among other things, customer acceptance, undeveloped [added: and/or unfamiliar] distribution channels, regulatory restrictions and changes, and business knowledge of these new markets; |

| • | we may find it difficult to comply with a variety of United States and foreign [added: legal,] compliance and regulatory requirements such as the Foreign Corrupt Practices Act, the Dodd-Frank Act, the U.K. Bribery Act and international data security and privacy laws; |

| • | foreign governments may adopt regulations or take other actions that would have a direct or indirect adverse impact on our business and market opportunities, including but not limited to increased enforcement of potentially conflicting and ambiguous anti-bribery laws; [removed: and] |

| • | we may have difficulty enforcing agreements and collecting receivables through some foreign legal [removed: systems.] [added: systems; and] |

As a result, we may have lower than historical performance for market growth in fiscal [removed: 2016.][added: 2017.]

We face risks associated with disruption of [added: our] manufacturing and distribution operations [removed: and] [added: including possible] failure to develop [removed: new] [added: necessary] manufacturing [removed: processes that] [added: processes, or idle or excess capacity] could adversely affect our profitability or competitive position.

CooperVision manufactures molded contact lenses, which represent the majority of our contact lens revenues, primarily at our facilities in the United Kingdom, Puerto [removed: Rico] [added: Rico, Hungary, Costa Rica] and [removed: Hungary.][added: New York.]

CooperSurgical manufactures the majority of its products in [removed: Trumbull,] Connecticut, [removed: Stafford,] Texas, [removed: Malov, Denmark,] and [removed: Pasadena, California.][added: Denmark.]

CooperVision distributes products out of [removed: West Henrietta,] New York, [removed: Hampshire,] [added: the] United Kingdom, [removed: Liege,] Belgium and various smaller international distribution facilities.

CooperSurgical's products are primarily distributed out of its facilities in [removed: Trumbull,] Connecticut, and [removed: Malov,] Denmark.

[removed: Any prolonged disruption in the operations] of [removed: our existing distribution facilities, whether due to technical or labor difficulties, destruction of or damage to any facility (as a result of] natural disaster, use and storage of hazardous materials or other events) or other reasons, could have a material adverse effect on our business, financial condition and results of operations.

We rely on independent suppliers for key raw materials, consisting [removed: primarily] [added: largely] of various chemicals and packaging materials.

To protect our trade secrets and other proprietary information, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements and assignment agreements, which generally provide that inventions conceived by the party in the course of rendering services to us will [added: be our exclusive property.]

| • | require us to redesign or [removed: reengineer] [added: re-engineer] our products, if feasible; |

Future events, such as changes in existing laws and regulations, or the enforcement thereof, or the discovery of contamination at our facilities, may give rise to additional compliance or remediation costs that could have [removed: a material adverse effect on our business, financial condition and results of operations.]

In order to maintain [removed: our] [added: a] desired mix of fixed-rate and variable-rate debt, we may use interest rate swap agreements and exchange fixed and variable-rate interest payment obligations over the life of the arrangements, without exchange of the underlying principal amounts.

We may not be successful in structuring such swap agreements to manage our risks [removed: effectively,] [added: effectively and,] which could adversely affect our business, earnings and financial condition.

[removed: Because our consolidated financial results are reported in U.S. dollars, if we generate sales or earnings in other currencies, the translation of those results into U.S.] dollars can result in a significant increase or decrease in the amount of those sales or earnings and can make it more difficult for our shareholders to understand the relative strengths or weaknesses of the underlying business on a period-over-period comparative basis.

We are also subject to the examination of our income tax returns by other tax authorities and the outcome of these examinations could have [removed: a material] [added: an] adverse effect on our operating results and financial condition.

We manage our businesses utilizing complex [removed: computer] [added: integrated software and hardware information technology operating] systems that are regularly maintained and upgraded; an interruption [added: or disruption] to these systems could disrupt our business or force us to expend excessive costs.

We utilize complex [removed: computer] [added: integrated software and hardware operating] systems, including enterprise resource planning and warehouse management systems, to support our business units and we have a continuous improvement strategy in place to keep our systems and overarching technology stable and in line with business needs and growth.

[removed: We employ controlled change management methodologies to plan, test and execute all such] system upgrades and improvements, and we believe that we assign adequate staffing and other resources to projects to ensure successful implementation.

We are [removed: just beginning] [added: in the midst of] a [removed: six year or more] [added: multiyear] process of implementing a new enterprise resource planning (ERP) system at CooperVision.

[removed: We cannot assure you] [added: There can be no assurance] that we will successfully implement our new ERP system or that we will avoid these and other negative impacts from our implementation efforts.

Increased regulatory scrutiny [removed: and negative opinion] of genetic testing may adversely affect our business through increased costs and risks associated with gaining marketing approvals and potential decreased demand for our genetic testing services.

With our acquisition of Reprogenetics in August 2015, [added: Genesis Genetics in March 2016, Recombine in May 2016 and Reprogenetics UK in May 2016,] we now offer certain genetic testing services to help identify the likelihood of pregnancy as well as identify possible disorders or diseases of a child prior to birth.

[removed: Legislative] [added: Regulatory and legislative] proposals addressing oversight of genetic testing have been introduced in the United States, and we expect that new [removed: legislative] proposals will be introduced from time to time both in the United States and in foreign countries in the future.

CooperSurgical acquired Wallace in November 2016; Reprogenetics UK, Recombine, K-Systems, Genesis Genetics, The Pipette Company, and Research Instruments in fiscal 2016; and Reprogenetics US in fiscal 2015.

incorporate electronics, that could lead to the obsolescence of one or more of our products.

| • | we may be subject to unforseen economic or political events in certain countries that may have an impact on our customers' ability or preferences to buy our products. |

The results of the United Kingdom’s referendum on withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.

We are a multinational company headquartered in the United States with worldwide operations, including significant business operations in Europe, including in the United Kingdom.

In June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union in a national referendum.

The referendum was advisory, and the terms of any withdrawal are subject to a negotiation period that could last at least two years after the government of the United Kingdom formally initiates a withdrawal process.

Nevertheless, the referendum has created significant uncertainty about the future relationship between the United Kingdom and the European Union.

This development has had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets.

Given the lack of comparable precedent, it is unclear what implications the withdrawal of the United Kingdom from the European Union would have and how such withdrawal could affect or could have a material adverse effect on, our business, financial condition and operating results.

Conversely, excess or idle capacity, which could result from acquisitions, inaccurate sales forecasting or unexpected manufacturing efficiencies, could significantly impact our profitability and near term financial condition.

Any prolonged disruption in the operations of our existing distribution facilities, whether due to technical or labor difficulties, destruction of or damage to any facility (as a result

a material adverse effect on our business, financial condition and results of operations.

Because our consolidated financial results are reported in U.S. dollars, if we generate sales or earnings in other currencies, the translation of those results into U.S.

The international tax environment continues to change as a result of both coordinated actions by governments and unilateral measures designed by individual countries, both intended to tackle concerns over base erosion and profit shifting (BEPS) and perceived international tax avoidance techniques.

The recommendations of the BEPS Project led by the Organization for Economic Cooperation and Development (OECD) are involved in much of the coordinated activity, although the timing and methods of implementation vary.

Additionally, comprehensive US tax reform has been stated to be a priority for the US Congress.

We employ controlled change management methodologies to plan, test and execute all such

Although the FDA has statutory authority to assure that medical devices, including IVDs, are safe and effective for their intended uses, the FDA has historically exercised its enforcement discretion and not enforced applicable provisions of the FDCA and regulations with respect to LDTs.

We believe our tests fall within the definition of an LDT.

As a result, we believe our tests are not currently subject to the FDA’s enforcement of its medical device regulations and the applicable FDCA provisions.

However, our tests may in the future become subject to more onerous regulation by the FDA.

Legislative proposals addressing the FDA’s oversight of LDTs have been introduced by Congress in the past and new legislative proposals may be introduced from time to time in the future.

The likelihood that Congress will pass such legislation and the extent to which such legislation may affect the FDA’s ability to enforce its medical device regulations with respect to certain LDTs is difficult to predict at this time.

If the FDA ultimately begins to enforce its medical device requirements with respect to LDTs, our genetic tests may be subject to additional regulatory requirements imposed by the FDA, the nature and extent of which would depend upon applicable final guidance or regulation by the FDA or instruction by Congress.

If the FDA imposes significant changes to the regulation of LDTs it could reduce our revenue or increase our costs and adversely affect our business, prospects, results of operations or financial condition.

Any new FDA enforcement policies affecting LDTs or new legislation, regulations or guidance may result in increased regulatory burdens on our ability to continue marketing our products and to develop and introduce new products in the future, which could reduce our revenue or increase our costs and adversely affect our business, prospects, results of operations or financial condition.

If we fail to comply with applicable federal, state, local and foreign laboratory licensing requirements, we could lose the ability to perform our tests or experience disruptions to our business.

We are subject to the Clinical Laboratory Improvement Amendments of 1988 (CLIA), a federal law regulating clinical laboratories that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment of disease.

Our clinical laboratory must be certified under CLIA in order for us to perform testing on human specimens.

In addition, our proprietary tests must also be recognized as part of our accredited programs under CLIA so that we can offer them in our laboratory.

CLIA is intended to ensure the quality and reliability of clinical laboratories in the United States by mandating specific standards in the areas of personnel qualifications, administration, and participation in proficiency testing, patient test management, quality control, quality assurance and inspections.

The law also requires us to maintain a state laboratory license to conduct testing in that state.

Our laboratories are located in California, Florida, Illinois, Michigan, New Jersey, Oregon, Texas, and internationally in Canada and the United Kingdom, and we must maintain the requisite licenses in each jurisdiction.

| | |

| --- | --- |

There have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future, particularly in the light of the pending change in administrations following the U.S. presidential election.

We may enroll as in-network providers and suppliers with certain payors.

Although, becoming an in-network provider or enrolling as a supplier means that we have agreed with these payors to provide certain of our tests at negotiated rates, it does not obligate any physicians to order our tests or guarantee that we will receive reimbursement for our tests from these or any other payors at adequate levels.

Thus, these payor relationships, or any similar relationships we may establish in the future, may not result in acceptable levels of reimbursement for our tests or meaningful increases in our physician customer base.

Failure to

be our exclusive property.

Recently, a number of countries, including the United States, have proposed changes to their

tax laws, some of which affect taxation of earnings recognized in foreign jurisdictions.

We cannot provide any assurance that FDA regulation or regulation by foreign regulatory authorities, including pre-market review, will not be required for our genetic tests in the future or that other increased regulatory burdens will not be imposed on our genetic tests or any new genetic tests we may develop.

If pre-market review is required, our genetic test business will be negatively impacted until such review is completed and approval or clearance is obtained, and the FDA or other foreign regulatory authorities may require that we stop selling our genetic tests pending pre-market approval or clearance.

In addition to these regulatory burdens, our ability to sell our genetic tests may be negatively impacted by public perception and social or cultural norms.

The information obtained from our genetic tests could be used in a variety of applications, which may have underlying ethical, legal, and social concerns regarding privacy and the appropriate uses of the resulting information which in turn may result in increased regulation and/or decreased demand.

medical devices.

| • | Reporting and disclosure requirements on medical device manufacturers for certain payments or other “transfer of value” made or distributed to prescribers and other healthcare providers, and any ownership |

and investment interests held by physicians or their immediate family members, and any payments or other “transfers of value” to such owners.

At this time, the full effect that the Affordable Care Act would have on our business remains unclear.

For example, the Affordable Care Act imposes a new excise tax of 2.3 percent of the price for which certain medical devices are sold, which went into effect on January 1, 2013.

CooperVision is not affected by this tax because contact lenses are excluded from the tax.

However, United States sales of a significant portion of CooperSurgical's products are subject to this tax.

Although cost controls or other

Previously, HIPAA directly regulated only certain covered entities, such as health care providers and health plans.

ility on us for failure to meet our contractual obligations.

We discuss below the results of our operations for fiscal [removed: 2015] [added: 2016] compared with fiscal [removed: 2014] [added: 2015] and the results of our operations for fiscal [removed: 2014] [added: 2015] compared with fiscal [removed: 2013.][added: 2014.]

Overall, we remain optimistic about the long-term prospects for the worldwide contact lens and [removed: women’s healthcare] [added: health care] markets.

However, events affecting the economy as a whole, including the uncertainty and instability of global markets driven by foreign currency volatility, European debt [removed: concerns and] [added: concerns,] the [removed: Affordable Care Act, including] [added: uncertainty caused by] the [added: United Kingdom's election to withdraw from the European Union, and the] trend of consolidation within the [removed: healthcare] [added: health care] industry, impact our current performance and continue to represent a risk to our performance for fiscal year [removed: 2016.][added: 2017.]

CooperVision - We compete in the worldwide contact lens market with our spherical, toric and multifocal contact lenses offered in a variety of materials including using silicone hydrogel Aquaform® technology and phosphorylcholine [added: technology] (PC) Technology™.

CooperVision is focused on greater worldwide market penetration [removed: as we introduce new] [added: of recently introduced] products and [added: we] continue to expand our presence in existing and emerging markets, including through acquisitions.

CooperVision markets single-use [added: silicone hydrogel] spherical, toric and multifocal lenses under our clariti 1day brand and a single-use silicone hydrogel spherical [removed: lens] [added: and toric lenses] under MyDay®.

Our clariti 1day brand provides the only single-use silicone hydrogel lenses in the marketplace with a complete line of spherical, toric and [removed: multifocal contact lenses.]

We forecast increasing aggregate demand for clariti [removed: 1day, MyDay,] [added: 1day] and [removed: Proclear 1 Day] [added: MyDay] products, as well as future single-use products.

CooperSurgical has established its market presence and distribution system [added: by developing products and acquiring companies and products that complement its business model.]

In [removed: August] [added: our fiscal fourth quarter of] 2015, CooperSurgical acquired [removed: Reprogenetics,] [added: Reprogenetics US,] a genetics laboratory specializing in [removed: preimplantation genetic screening (PGS)] [added: service offerings of PGS] and [removed: preimplantation genetic diagnosis (PGD)] [added: PGD] used during the [removed: in vitro fertilization (IVF)] [added: IVF] process.

CooperSurgical product sales are categorized based on the point of [removed: healthcare] [added: health care] delivery including products used in medical office and surgical procedures [added: primarily] by obstetricians and gynecologists (ob/gyns) that represented [removed: 66%] [added: 55%] of CooperSurgical's net sales in [added: the] fiscal [removed: 2015.][added: 2016 compared to 66% in the prior year.]

CooperSurgical's remaining sales are [added: highly specialized] products [added: and services that target the in vitro fertilization (IVF) process] used in fertility [removed: clinics] that now represent [removed: 34%] [added: 45%] of CooperSurgical's net sales compared to [removed: 35%] [added: 34%] in fiscal [removed: 2014.][added: 2015.]

Capital Resources - At October 31, [removed: 2015,] [added: 2016,] we had [removed: $16.4] [added: $100.8] million in cash, primarily outside the United States, and [removed: $890.8] [added: $999.8] million available under our [added: new syndicated] revolving [removed: Credit Agreement.][added: credit agreement.]

The [added: $830.0 million term loan entered on March 1, 2016, $207.0 million of the] $700.0 million term loan [added: originally] entered into on August 4, 2014, and [added: $285.0 million of] the $300.0 million term loan [added: originally] entered into on September 12, 2013, remain outstanding as of October 31, [removed: 2015.][added: 2016.]

[removed: Our current cash balance and availability under] [added: the] existing credit facilities reflects the use of cash outside the United States and the use of [removed: existing] credit facilities to fund [added: acquisitions, including recent CooperSurgical acquisitions and] the $1.1 billion acquisition of Sauflon in August 2014.

We believe that our cash and cash equivalents, cash flow from operating activities and borrowing capacity under [removed: existing] [added: the new] credit facilities will fund operations both in the next 12 months and in the longer term as well as current and long-term cash requirements for capital expenditures, acquisitions, share repurchases and cash dividends.

Restructuring expenses consist of employee severance, product [added: and equipment] rationalization, facility and other exit costs.

Included in our selling, general and administrative expense is $31.7 million in costs for CooperVision's acquisition of Sauflon and the related integration and restructuring activities, severance costs in our CooperSurgical [removed: fertility] business along with other acquisition costs; and $19.8 million of legal costs.

Included in our selling, general and administrative expense is $44.5 million in costs for CooperVision's acquisition of Sauflon and the related integration and restructuring activities, severance costs in our CooperSurgical [removed: fertility] business along with other acquisition costs.

Research and development [removed: expense] includes [removed: $0.6] [added: $0.4] million [removed: of] [added: primarily for] severance [removed: costs] related to [removed: integration and] restructuring activities.

| • | CooperSurgical develops, manufactures and markets medical devices and procedure solutions to improve [removed: healthcare] [added: health care] delivery to [removed: women.] [added: families.] |

[added: Significantly, the market for] spherical lenses [added: is growing with value-added spherical lenses] to alleviate dry eye symptoms, to [added: reduce eye fatigue from use of digital devices, to] add aspherical optical [removed: properties] [added: properties,] and/or higher oxygen permeable lenses such as silicone hydrogels.

CooperVision’s Proclear brand aspheric, toric and multifocal contact lenses, manufactured using PC [removed: Technology,] [added: TechnologyTM,] help enhance tissue/device compatibility and offer improved lens comfort.

CooperVision’s silicone hydrogel Biofinity brand spherical, toric and multifocal contact lenses, Avaira brand spherical and toric [removed: products] [added: lenses] and MyDay brand spherical [removed: lenses] [added: and toric lenses,] are manufactured using proprietary Aquaform technology to increase oxygen transmissibility for longer wear.

The increase in EMEA net sales was partially offset by the negative impact from the weakening of foreign currencies [removed: as] compared to the United States dollar.

While unit growth and product mix have influenced CooperVision’s [removed: sales growth,] [added: net sales,] average realized prices by product have not materially influenced sales growth.

CooperSurgical supplies the market for [removed: women's healthcare] [added: family health care] with a diversified portfolio of products [added: and services] for use in surgical and other medical procedures that are performed primarily by obstetricians and gynecologists in hospitals, surgical centers, fertility clinics and in the medical office.

Fertility [removed: products] [added: offerings] include highly specialized products and services that target [added: the] in vitro fertilization (IVF) [removed: treatment] [added: process] with a goal to make fertility treatment safer, more efficient and convenient.

CooperSurgical's net sales of medical office and surgical procedures [added: in fiscal 2015] decreased compared to the prior year due to declines in sales of medical equipment partially offset by growth in sales of disposable products.

The net sales decline in fertility products was primarily due to the negative impact from the weakening of foreign currencies [removed: as] compared to the United States dollar.

| • | Net sales up [removed: 8%] [added: 9%] to [removed: $1.72] [added: $1.97] billion from [removed: $1.59] [added: $1.80] billion in fiscal [removed: year 2013] [added: 2015] |

| • | Operating income up [removed: 0.2%] [added: 37%] to [removed: $306.5] [added: $324.1] million from [removed: $305.9] [added: $236.7] million |

| • | Diluted earnings per share [removed: down 8%] [added: up 35%] to [removed: $5.51] [added: $5.59] from [removed: $5.96] [added: $4.14] |

| • | Operating cash flow [removed: $454.8] [added: $509.6] million up [removed: 9%] [added: 30%] from [removed: $415.9] [added: $391.0] million |

Fiscal [removed: 2014] [added: 2016] pre-tax results include [removed: $35.7] [added: $60.8] million for amortization of intangible assets and [removed: $62.8] [added: $95.1] million of acquisition, integration and restructuring costs primarily related to [removed: the acquisition of Sauflon.][added: acquisitions as well as certain legal costs.]

Acquisition related and integration expenses [removed: consist of] [added: include items such as] personnel [removed: related] costs for transitional employees, other acquired employee related costs and integration related professional services.

[removed: Included in our selling, general] and [removed: administrative expense (SGA) is $44.5 million in costs for CooperVision's acquisition of Sauflon and] the related integration and restructuring activities, severance costs in our CooperSurgical [removed: fertility] business along with other acquisition [added: costs; and $19.8 million of legal] costs.

| Years Ended October 31, | [removed: 2014] [added: 2016] | | | [removed: 2014] [added: 2016] vs. [removed: 2013] [added: 2015] % Change | | | [removed: 2013] [added: 2015] | | | [removed: 2013] [added: 2015] vs. [removed: 2012] [added: 2014] % Change | | | [removed: 2012] [added: 2014] | |

| Net sales | 100 | % | | [removed: 8] [added: 9] | % | | 100 | % | | [removed: 10] [added: 5] | % | | 100 | % |

| Cost of sales | [removed: 36] [added: 40] | % | | [removed: 12] [added: 9] | % | | [removed: 35] [added: 40] | % | | [removed: 8] [added: 16] | % | | 36 | % |

On September 6, 2016, we acquired Soflex, a privately-held Isreali manufacturer and distributor of soft contact lenses and aftercare solutions.

The acquisition of Soflex expanded our market presence in Israel.

multifocal contact lenses.

CooperSurgical - Our CooperSurgical business competes in the general health care market with a focus on advancing the health of families through a diversified portfolio of products and services focusing on women's health, fertility and diagnostics.

This change in product mix is primarily attributable to recent acquisitions discussed below.

We have continued to invest in CooperSurgical's business through the acquisition of companies and product lines for new or complementary products and services for the IVF process.

Subsequent to our year end, in November 2016, we acquired Wallace, the IVF segment of Smiths Medical International, Ltd. In our fiscal third quarter of 2016, we acquired the commercial assets of Recombine Inc., a clinical genetic testing company specializing in carrier screening; Kivex Biotec A/S, a manufacturer and distributor of equipment for IVF clinics, and Reprogenetics UK, a genetics laboratory specializing in service offerings of preimplantation genetic screening (PGS) and preimplantation genetic diagnosis (PGD) used during the IVF process.

In our fiscal second quarter of 2016, CooperSurgical acquired Genesis Genetics, Inc., a genetics laboratory specializing in PGS and PGD used during the IVF process, and The Pipette Company, a manufacturer and distributor of micro pipettes for the Assisted Reproductive Technology (ART) market.

In our first quarter of fiscal 2016, CooperSurgical acquired Research Instruments Limited, a manufacturer and supplier of IVF medical devices and systems.

We intend to continue investing in CooperSurgical's business with the goal of expanding our integrated solutions model within the areas of women's health, fertility and diagnostics.

On March 1, 2016, we entered into a new syndicated revolving Credit and Term Loan Agreement with Keybank as administrative agent.

This agreement, maturing on March 1, 2021, replaced our previous revolving Credit Agreement, entered into on January, 12, 2011 and provides for a multi-currency revolving credit facility in an aggregate principal amount of $1.0 billion and a term loan facility in the aggregate principal amount of $830.0 million.

Concurrently, we used funds from the new term loan to repay the $200.0 million outstanding principal amount of the two uncommitted revolving lines of credit, entered into on March 24, 2015 and the outstanding amounts under the previous Credit Agreement.

We also used funds from the new term loan to partially repay outstanding amounts under the term loans entered into on August 4, 2014 and September 12, 2013, and for general corporate purposes.

See Note 5.

Our current cash balance and availability under

2016 Compared with 2015

| • | Gross margin 60% of net sales compared with 60% in fiscal 2015 |

| • | Interest expense increased to $26.2 million from $18.1 million |

Our fiscal 2016 results include $58.9 million of expenses primarily due to product and equipment rationalization costs, and severance related to the Sauflon acquisition, $6.3 million of costs associated with the start-up of new manufacturing facilities, and $4.4 million of integration costs in our CooperSurgical business, all recorded in cost of sales.

Included in our selling, general and administrative expense is $21.2 million of expense for acquisition, restructuring and integration activities, and $2.9 million of certain legal costs.

We also incurred a loss of $1.0 million relating to debt extinguishment and foreign exchange loss on forward contracts for an acquisition, both recorded in other expense.

The legal costs relate to litigation of the class action complaints filed against CooperVision and other contact lens manufacturers, distributors and retailers relating to Unilateral Pricing Policy (UPP) and related lobbying expenses.

Fiscal 2015 pre-tax results include $51.5 million for amortization of intangible assets and $126.4 million of acquisition, integration and restructuring costs primarily related to the acquisition of Sauflon and other recent acquisitions, as well as certain legal costs.

Our fiscal 2015 results include $57.8 million of expenses primarily due to product and equipment rationalization costs related to recent acquisitions, $8.0 million of costs associated with the start-up of new manufacturing facilities, and $4.5 million of severance costs, all recorded in cost of sales.

Included in our selling, general and administrative expense is $31.7 million in costs for CooperVision's acquisition of Sauflon

| CooperVision | $ | 89.4 | | | 6 | % | | $ | 95.1 | | | 7 | % |

| CooperSurgical | 80.3 | | | | 26 | % | | (15.8 | | ) | | (5 | )% |

| | $ | 169.7 | | | 9 | % | | $ | 79.3 | | | 5 | % |

CooperVision fiscal 2016 net sales increased 6% from fiscal 2015 to $1.58 billion.

Total toric lenses grew 9%, representing 30% of net sales, the same as in the prior year, predominantly on sales of Biofinity and clariti products.

| Americas | $ | 650.7 | | | $ | 624.3 | | | 4 | % |

| EMEA | 612.3 | | | | 602.1 | | | | 2 | % |

| Asia Pacific | 314.2 | | | | 261.4 | | | | 20 | % |

| | $ | 1,577.2 | | | $ | 1,487.8 | | | 6 | % |

CooperVision fiscal 2016 net sales growth was partially offset by foreign exchange rate fluctuations which had a net negative impact on net sales of $22.6 million.

EMEA net sales growth was largely due to market gains of silicone hydrogel contact lenses including Biofinity, clariti and MyDay, offset by a decrease in sales of older hydrogel products and weakening foreign currencies, primarily the British pound and euro, compared to the United States dollar.

Net sales growth in the A

sia Pacific region benefited by exchange rate changes of the United States dollar compared to the Japanese yen.

| Fertility | | 175.8 | | | | 45 | % | | 105.2 | | | | 34 | % | | 67 | % |

To meet this anticipated demand, we plan to continue the implementation of capital projects to invest in increased single-use manufacturing capacity.

CooperSurgical - Our CooperSurgical business competes in the highly fragmented medical device segment of the women's healthcare market.

by developing products and acquiring companies and products that complement its business model.

We paid $46.8 million for Reprogenetics and expect the acquisition to be neutral to earnings per share excluding acquisition costs and related amortization through fiscal 2016.

We intend to continue to invest in CooperSurgical's business through acquisitions of companies and product lines.

On March 24, 2015, we entered into two new uncommitted revolving lines of credit with a termination date of March 24, 2016, and a maximum combined capacity of $200.0 million.

At October 31, 2015, all $200.0 million was outstanding and the proceeds had been utilized to pay down higher interest rate debt on our revolving Credit Agreement.

The fiscal 2014 integration and restructuring costs include $16.5 million in charges to cost of sales primarily for product rationalization arising from the acquisition of Sauflon.

Significantly, the market for spherical lenses is growing with value-added

CooperSurgical’s sales primarily include women’s healthcare products used in fertility procedures and by gynecologists and obstetricians in office and surgical procedures.

The balance consists of sales of medical devices outside of women’s healthcare which CooperSurgical does not actively market.

CooperSurgical's sales growth was driven primarily by products from recent acquisitions.

2014 Compared with 2013

Highlights: 2014 vs. 2013

| • | Gross margin 64% of net sales down from 65% |

| • | Interest expense down 13% to $8.0 million from $9.2 million |

We incurred significant expenses in connection with our acquisitions and also incurred certain other operating expenses or income, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations.

Many of these costs relate to our acquisition of Sauflon in our fiscal fourth quarter of 2014.

The charge for product rationalization is based on our review of products, materials and manufacturing processes of Sauflon.

Fiscal 2013 pre-tax results include $30.2 million for amortization of intangible assets, a $21.1 million loss on divestiture of Aime, $14.1 million of insurance proceeds related to a business interruption claim and $0.6 million of costs, included in SGA expense, related to the acquisition of Origio.

| Loss on divestiture of Aime | — | | | — | | | 2 | % | | — | | | — | |

| CooperVision | $ | 124.3 | | | 10 | % | | $ | 79.1 | | | 7 | % |

| CooperSurgical | 5.7 | | | | 2 | % | | 63.5 | | | | 25 | % |

| | $ | 130.0 | | | 8 | % | | $ | 142.6 | | | 10 | % |

CooperVision fiscal 2014 net sales increased 10% from fiscal 2013 to $1.4 billion including Sauflon's net sales, subsequent to the acquisition, of $49.7 million.

Excluding Sauflon, silicone hydrogel products grew 21%.

Proclear product sales grew 6% and represented 24% of net sales compared to 25% in the prior year.

CooperVision's older conventional lens products, including cosmetic lenses, declined 12% and now represent 2% of net sales compared to 3% in the prior year.

The year over year comparison of net sales also reflects no sales in fiscal 2014 of Aime products, divested on October 31, 2013, as compared to $25.8 million of net sales in fiscal 2013.

| Americas | $ | 585.6 | | | $ | 546.2 | | | 7 | % |

| EMEA | 533.5 | | | | 439.4 | | | | 22 | % |

| Asia Pacific | 273.5 | | | | 282.7 | | | | (3 | )% |

| | $ | 1,392.6 | | | $ | 1,268.3 | | | 10 | % |

CooperVision’s worldwide net sales grew 10% in the year-to-year comparison, including Sauflon as discussed above.

CooperVision’s net sales growth was driven primarily by increases in the volume of lenses sold, including recently introduced silicone hydrogel products and products from the August 2014 acquisition of Sauflon.

| Fertility | | 113.2 | | | | 35 | % | | 106.0 | | | | 33 | % | | 7 | % |

| | | $ | 325.1 | | | 100 | % | | $ | 319.4 | | | 100 | % | | 2 | % |

CooperSurgical's net sales of fertility products increased primarily due to market gains of disposable products partially offset by slower growth in sales of medical equipment.

CooperSurgical’s sales primarily comprise women’s healthcare products used in fertility procedures and by gynecologists and obstetricians in surgical procedures and in the medical office.

The balance consists of sales of medical devices outside of women’s healthcare which CooperSurgical does not actively market.

We are also exposed to risks associated with changes in interest rates, as the interest rate on our senior unsecured syndicated credit facilities, including the revolving Credit Agreement and term loans, may vary with the [added: federal funds rate and] London Interbank Offered Rate (LIBOR).

At October 31, [removed: 2015, $700.0] [added: 2016, $207.0] million remained outstanding on this term loan.

At October 31, [removed: 2015, $300.0] [added: 2016, $285.0] million remained outstanding on this term loan.

At October 31, [removed: 2015,] [added: 2016,] we had [removed: $890.8] [added: $999.8] million available under the revolving [removed: Credit Agreement.][added: credit facility and $830.0 million outstanding under the term loan.]

| October 31, (In millions) | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Short-term debt | $ | [removed: 240.4] [added: 17.1] | | | $ | [removed: 101.5] [added: 240.4] | |

| Current portion of long-term debt | [removed: 3.8] [added: 209.3] | | | | [removed: —] [added: 3.4] | | |

| Long-term debt | [removed: 1,105.8] [added: 1,107.4] | | | | [removed: 1,280.8] [added: 1,105.4] | | |

At October 31, [removed: 2015,] [added: 2016,] the scheduled maturities of our fixed and variable rate long-term debt obligations, their weighted average interest rates and their estimated fair values were as follows:

| Expected Maturity Date Fiscal Year ($ in millions) | [removed: 2016 | | | |] 2017 | | | | 2018 | | | | 2019 | | | | 2020 | | | | [added: 2021 | | | |] Thereafter | | | | Total | | | | Fair Value | | |

| Fixed interest rate | $ | — | | | $ | [removed: 0.1] [added: —] | | | $ | [removed: 0.1] [added: —] | | | $ | — | | | $ | — | | | $ | [removed: 0.3] [added: —] | | | $ | [removed: 0.5] [added: —] | | | $ | [removed: 0.5] [added: —] | |

| Average interest rate | [removed: 2.9] [added: —] | | [removed: %] | | [removed: 3.4] [added: —] | | [removed: %] | | [removed: 4.3] [added: —] | | [removed: %] | | — | | | | — | | | | [removed: 6.0] [added: —] | | [removed: %] | | | | | | | | |

| Average interest rate | [removed: 1.3] [added: —] | | [removed: %] | | [removed: 1.3] [added: 1.8] | | % | | [removed: 1.3] [added: —] | | [removed: %] | | — | | | | [removed: —] [added: 1.8] | | [added: %] | | — | | | | | | | | | | |

As the table incorporates only those exposures that existed as of October 31, [removed: 2015,] [added: 2016,] it does not consider those exposures or positions which could arise after that date.

As of October 31, [removed: 2015,] [added: 2016,] we had no interest rate swap outstanding.

On March 1, 2016, we entered into a new syndicated Revolving Credit and Term Loan Agreement (2016 Credit Agreement) with Keybank as administrative agent.

The new agreement provides for a multicurrency revolving credit facility in an aggregate principal amount of $1.0 billion and a term loan facility in the aggregate principal amount of $830.0 million.

The 2016 Credit Agreement replaced our previous credit agreement and funds from the new term loan were used to repay the $200.0 million outstanding principal amount of the two uncommitted revolving lines of credit, entered into on March 24, 2015 and the outstanding amounts under the previous credit agreement.

We also used funds from the new term loan to partially repay outstanding amounts under the term loans entered into on August 4, 2014 and September 12, 2013 and for general corporate purposes.

See Note 5.

Debt for additional information.

| Total | $ | 1,333.8 | | | $ | 1,349.2 | |

| Variable interest rate | $ | — | | | $ | 281.2 | | | $ | — | | | $ | — | | | $ | 830.2 | | | $ | — | | | $ | 1,111.4 | | | $1,111.4 | | |

On March 24, 2015, we entered into two uncommitted line of credit agreements that have termination dates of March 24, 2016, and provide revolving loan amounts of up to $100.0 million each with maturity dates of up to ninety days from the loan origination date.

At October 31, 2015, $200.0 million was outstanding under these facilities.

On May 31, 2012, we entered into an amendment to our Credit Agreement, originally entered into on January 12, 2011.

The aggregate revolving commitment is $1.0 billion with a maturity date of May 31, 2017, and we have the ability to increase the facility by up to an additional $500.0 million.

| Total | $ | 1,350.0 | | | $ | 1,382.3 | |

| Variable interest rate | $ | 3.8 | | | $ | 824.0 | | | $ | 281.3 | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,109.1 | | | $1,109.1 | | |

CooperVision's products are designed to solve vision challenges such as astigmatism, [removed: presbyopia and] [added: presbyopia,] ocular [removed: dryness;] [added: dryness and eye fatigue;] with a broad collection of spherical, toric and multifocal contact lenses.

CooperVision's products are primarily manufactured at its facilities located in [removed: Hampshire,] [added: the] United Kingdom, [removed: Juana Diaz,] Puerto Rico, [removed: Budapest, Hungary] [added: Hungary, Costa Rica,] and [removed: Scottsville,] New York.

CooperVision distributes products [removed: from West Henrietta,] [added: out of its facilities in] New York, [removed: Fareham,] [added: the] United Kingdom, [removed: Liege, Belgium,] [added: Belgium] and various smaller international distribution facilities.

CooperSurgical [removed: products support the] [added: customers are health care professionals and institutions providing care to individuals within these areas including] point of [removed: healthcare] [added: health care] delivery in the hospital, clinician's office and fertility clinics.

Competition in the medical device industry [added: is dynamic and] involves the search for technological and therapeutic innovations.

Both of Cooper's businesses compete [removed: primarily] [added: predominantly] on the basis of product quality and differentiation, technological benefit, service and reliability.

We believe that in order to compete successfully in the numerous [removed: niches] [added: categories] of the contact lens market, companies must offer differentiated products that are priced competitively and manufactured [added: efficiently.]

We believe [removed: that] this manufacturing flexibility allows CooperVision to compete in its markets by:

Sales of contact lenses utilizing silicone hydrogel materials continue to grow and this product material represents about [removed: half] [added: 79%] of the [removed: industry.][added: monthly and two week modalities and 23% of the single use modality of the contact lens market.]

Under the [removed: Biofinity] [added: Biofinity®] brand, CooperVision markets monthly silicone hydrogel spherical, toric and multifocal lens products.

CooperVision markets single-use [added: silicone hydrogel] spherical, toric and multifocal lenses under our [removed: clariti] [added: clariti®] 1day brand and [removed: a] single-use silicone hydrogel spherical [removed: lens] [added: and toric lenses] under MyDay®.

We believe [removed: that] the global market for single-use contact lenses will continue to grow and that [added: our] competitive silicone hydrogel [removed: single-use lens products] [added: and traditional hydrogel product offerings] represent an opportunity for our business.

[removed: Mild discomfort relating to dryness during lens wear is a condition that often causes patients to discontinue contact lens wear and] Proclear lenses are the only lenses with FDA clearance for the claim "… may provide improved comfort for contact lens wearers who experience mild discomfort or symptoms relating to dryness during lens [removed: wear."][added: wear", which is important as mild discomfort relating to dryness during lens wear is a condition that often causes patients to discontinue contact lens use.]

In addition to its PC Technology™ and silicone hydrogel product offerings, CooperVision competes in the contact lens market with [removed: our] [added: other] traditional hydrogel products.

Spheres: Net sales of CooperVision's spherical lenses represented 55 percent of CooperVision's net sales in fiscal [removed: 2015] [added: 2016] including net sales of single-use spherical lens that represented [removed: 24] [added: 26] percent of net sales in the fiscal year.

[removed: Toric and Multifocal:] [added: Toric:] Net sales of CooperVision's toric lenses represented 30 percent of CooperVision's net sales in fiscal [removed: 2015.][added: 2016.]

[added: Multifocal:] Net sales of multifocal lenses represented 11 percent of net sales in the fiscal year.

Proclear: Net sales of CooperVision's PC Technology spherical, toric and multifocal products, including Proclear 1 Day sphere and multifocal products, represented [removed: 21] [added: 19] percent of CooperVision's net sales in fiscal [removed: 2015.][added: 2016.]

Silicone Hydrogel: CooperVision's silicone hydrogel spherical, toric and multifocal lens products, including [removed: clariti] [added: Biofinity, clariti, Avaira] and MyDay products, represented [removed: 55] [added: 60] percent of CooperVision's net sales in fiscal [removed: 2015.][added: 2016.]

CooperVision's three largest competitors in the worldwide market and its primary competitors in the spherical, toric and multifocal lens categories of that market are Johnson & Johnson Vision Care, Inc., [added: Alcon (formerly] CIBA Vision [added: Corporation)] owned by Novartis [removed: AG] [added: AG,] and Bausch & Lomb Incorporated owned by Valeant Pharmaceuticals International, Inc.

[removed: Over the past decade,] [added: As an example,] the contact lens industry has experienced a global shift toward silicone hydrogel lenses that now represent approximately [removed: 50%] [added: 79%] of the [removed: global] [added: monthly and two week modalities and 23% of the single use modality of the] contact lens market.

CooperVision competes in the silicone hydrogel segment of the market with [removed: our] [added: its following products:] Biofinity monthly spherical, toric and multifocal [removed: lenses,] [added: lenses;] Avaira® [added: and Avaira VitalityTM] two-week spherical and toric [removed: lenses,] [added: lenses;] clariti 1day brand of single-use sphere, toric and multifocal [removed: lenses,] [added: lenses;] and MyDay single-use spherical [added: and toric] lenses.

The clariti 1day and MyDay brands of single-use contact lenses [removed: provides] [added: provide] CooperVision with the broadest product portfolio in the single-use silicone hydrogel market.

CooperVision competes based on the fact that its three manufacturing [removed: processes, including the clariti manufacturing platform recently acquired with Sauflon, allows] [added: processes allow CooperVision to produce] a broad range of toric lens parameters, which we believe provides wide choices for patient and practitioner and a high level of visual acuity.

The Company [removed: participates in the women's healthcare market seeking to offer] [added: offers] quality products, innovative technologies and superior [removed: service] [added: services] to clinicians [added: and patients] worldwide.

CooperSurgical collaborates with clinicians to identify products and new technologies from disposable products to [added: diagnostic tests to] sophisticated instruments and [removed: equipment.][added: equipment, to bring new products to market.]

The result is a broad portfolio of products [added: and services] that are intended to aid in the delivery of improved clinical outcomes that [removed: healthcare] [added: health care] professionals use routinely in the diagnosis and treatment of a wide spectrum of [added: family and] women's health [added: and reproductive] issues.

[removed: In August 2015, CooperSurgical expanded its presence] [added: Finally,] in [removed: the fertility market with the acquisition] [added: our fiscal fourth quarter] of [added: 2015, CooperSurgical acquired] Reprogenetics, a genetics laboratory [added: in the US] specializing in [removed: preimplantation genetic screening (PGS)] [added: service offerings of PGS] and [removed: preimplantation genetic diagnosis (PGD)] [added: PGD] used during the IVF process.

CooperSurgical participates in the market for women's [removed: healthcare] [added: health care] with its diversified product lines in three major categories based on the point of [removed: healthcare] [added: health care] delivery: [added: primarily] hospitals and surgical centers, [removed: obstetricians] [added: obstetricians'] and [removed: gynecologists] [added: gynecologists'] (ob/gyns) medical offices and fertility clinics.

Driving [removed: this] [added: the] growth is a steady number of reproductive age women with increasing fertility issues, a large and stable middle-aged population and a growing population of women over the age of 65 according to United States Census estimates.

Office visit activity related to menopause, including abnormal bleeding, incontinence and osteoporosis, are [removed: also] expected to increase slightly over the next decade.

Another trend in the market for women's [removed: healthcare] [added: health care] includes the migration of ob/gyn clinicians away from private practice ownership and toward aligning with group practices or employment with hospitals and [removed: healthcare] [added: health care] systems.

This trend includes the increasing influence of supply chain controls, such as value analysis [removed: committees, on product evaluation and procurement.]

The response in the United States market to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (Affordable Care Act or ACA) includes the development of new models of [removed: healthcare] [added: health care] delivery.

One goal of these new models is to deliver more cost-effective [removed: healthcare] [added: health care] including a trend to move treatment out of hospitals and surgery centers and into the office setting without compromising care.

| • | The trend to move hospital-based procedures to an office or clinical setting is continuing as a method to reduce cost to the [removed: healthcare] [added: health care] system [removed: while maintaining positive] [added: without compromising] clinical outcomes. |

Net sales of CooperSurgical products used in office and surgical procedures represented [removed: 66%] [added: 55%] of CooperSurgical's net sales in fiscal [removed: 2015.][added: 2016.]

Net sales of fertility products [added: and services] represented [removed: 34%] [added: 45%] of CooperSurgical's net sales in fiscal [removed: 2015.][added: 2016.]

CooperSurgical focuses on selected segments of the [added: family and] women's [removed: healthcare] [added: health care] market, supplying diagnostic [removed: products] [added: products, services,] and surgical instruments and accessories.

CooperSurgical is seeking to expand our presence in the significantly larger hospital and outpatient surgical procedure segment of the market that is at present dominated by bigger competitors such as Johnson & Johnson's Ethicon Endo-Surgery, Boston Scientific, Olympus and [removed: Covidien.][added: Medtronic.]

CooperSurgical's business competes in the general health care market with a focus on advancing the health of families through a diversified portfolio of products and services focusing on women's health, fertility and genetic testing.

CooperSurgical's major manufacturing and distribution facilities are located in Connecticut, Texas, Denmark and various smaller international locations, with diagnostic facilities located in multiple locations including California, Florida, Illinois, Michigan, New Jersey, Oregon, Texas, and internationally in Canada and the United Kingdom.

Dailies are the fastest modality in the contact lens segment and comprised approximately 46% and 44% of the contact lens market in 2016 and 2015, respectively, representing a growth of approximately 10% based on recent market estimates.

We also compete effectively in the traditional hydrogel single-use product segment with several lenses including our Proclear® 1 Day lenses.

Non single-use spherical lens represented 29 percent of net sales in fiscal 2016.

Over the past decade, competition has continued to shift its focus.

CooperSurgical offers a broad array of products and services focused on advancing the health of families through a diversified portfolio of products and services focusing on women's health, fertility and diagnostics.

We have continued to invest in CooperSurgical's business through the acquisition of companies and product lines for new or complementary products and services for the IVF process.

Subsequent to our year end, in November 2016, we acquired Wallace, the IVF segment of Smiths Medical International, Ltd. In our fiscal third quarter of 2016, we acquired the commercial assets of Recombine Inc., a clinical genetic testing company specializing in carrier screening; Kivex Biotec A/S (K-Systems), a manufacturer and distributor of equipment for IVF clinics, and Reprogenetics UK, a genetics laboratory specializing in service offerings of preimplantation genetic screening (PGS) and preimplantation genetic diagnosis (PGD) used during the IVF process.

In our fiscal second quarter of 2016, CooperSurgical acquired Genesis Genetics, Inc., a genetics laboratory specializing in PGS and PGD used during the IVF process, and The Pipette Company, a manufacturer and distributor of micro pipettes for the Assisted Reproductive Technology (ART) market.

In our first quarter of fiscal 2016, CooperSurgical acquired Research Instruments Limited, a manufacturer and supplier of IVF medical devices and systems.

We intend to continue investing in CooperSurgical's business with the goal of expanding our integrated solutions model within the areas of women’s health, fertility and diagnostics.

Market for Women's and Family Reproductive Health Care

committees, on product evaluation and procurement.

We believe our broad product portfolio can be a benefit in this changing environment as health systems look to standardize and consolidate vendors.

We expect this trend to continue.

| | |

| --- | --- |

| • | Increased awareness of improved IVF outcomes with preimplantation genetic screening will continue. |

Women's and Family Reproductive Health Care Product Sales

As a percentage of sales, research and development expenditures during fiscal 2016, 2015 and 2014, were 3%, 4% and 4% respectively.

applies, 510(k) premarket notification submissions are subject to user fees.

In addition, the FDA will conduct a preapproval inspection of the

powers.

Laboratory Developed Tests

Our genetic testing laboratory services are not currently regulated by the FDA, or foreign ministries of health.

Although the FDA has statutory authority to regulate in vitro diagnostic products (IVDs) used for clinical purposes as medical devices, and to assure that such products are safe and effective for their intended uses, the FDA has historically exercised its enforcement discretion and not enforced applicable provisions of the FDCA and regulations with respect to laboratory developed tests (LDTs), which are a subset of IVDs that are intended for clinical use and designed, manufactured and used within a single laboratory.

We believe our genetic laboratory tests fall within the definition of an LDT.

As a result, we believe our tests are not currently subject to the FDA’s enforcement of its medical device regulations and the applicable FDCA provisions.

Even though we commercialize our tests as LDTs, our tests may in the future become subject to more onerous regulation by the FDA.

Certain states also mandate implementation of commercial compliance programs, impose restrictions on device manufacturer marketing practices and tracking and/or require the reporting of gifts, compensation and other remuneration to physicians.

On December 18, 2015, President Obama signed the Consolidated Appropriations Act of 2016 which imposed a two year moratorium of the device excise tax for device sales in calendar years 2016 and 2017.

Absent further legislative action, the device excise tax will be reinstated on medical device sales starting January 1, 2018.

CooperVision also sells to distributors and to mass merchandisers who offer eye care services.

To support the sale and use of CooperVision products, CooperVision engages in various activities and offers a variety of services.

These include clinical training, digital marketing for the customer, e-commerce, telemarketing, social media, and journal advertisements.

CooperVision recently launched tools that allow their customers to offer their patients monthly purchase and delivery subscriptions.

In certain smaller countries, CooperVision often uses distributors and leverages our distributors' sales and marketing resources to attract major customers to CooperVision.

One customer, a CooperVision contact lens distributor, accounted for approximately 11% of our consolidated net revenue in the fiscal year ended October 31, 2016 and was approximately 10% in the fiscal year ended October 31, 2014.

No customers accounted for 10% or more of our consolidated net revenue in the fiscal year ended October 31, 2015.

CooperSurgical focuses on supplying women's health clinicians with products and treatment options to improve the delivery of healthcare to women.

CooperSurgical's primary objectives include internal growth and growth through acquisitions to expand its core businesses and the introduction of advanced technology-based products to aid clinicians in the management and treatment of commonly seen conditions.

CooperSurgical customers are healthcare professionals and institutions providing care to and for women.

CooperSurgical's major manufacturing and distribution facilities are located in Trumbull, Connecticut, Malov, Denmark, Pasadena, California, Stafford, Texas, and Berlin, Germany.

efficiently.

The clariti® manufacturing platform may continue to add greater flexibility to the manufacture of our product offerings.

We compete with clariti and MyDay, our single-use silicone hydrogel lenses, and our Proclear 1 Day products.

CooperSurgical offers a broad array of products used in the care and treatment of women.

For the IVF market, CooperSurgical is focused on the objectives of internal growth and growth through acquisitions.

Market for Women's Healthcare

CooperSurgical believes that past trends reflected women visiting clinicians primarily during their reproductive years.

With new treatment options now available and a more educated population, CooperSurgical expects the relationship between the patient and clinician will continue into the middle years and later.

We expect this trend to continue in the near term.

Women's Healthcare Product Sales

We did not participate in any customer-sponsored research and development programs during fiscal 2013 - 2015.

If the FDA disagrees with a

commence clinical trials.

CooperVision augments our United States sales and marketing efforts with e-commerce, telemarketing, social media and advertising in professional journals.

In the EMEA and Asia Pacific regions, CooperVision primarily markets our products through our field sales representatives.

In other countries, CooperVision uses distributors and has given some of them the exclusive right to market our products within specific geographic areas.

Fertility products are marketed globally through our field sales representatives and distributors.

Neither of our business units depends to any material extent on any one customer or any one affiliated group of customers.

[removed: We are] [added: At this time, we do] not [removed: in] [added: believe] a [removed: position to assess whether any] loss or adverse effect on our financial condition is probable [removed: or remote or to estimate the] [added: nor is any] range of potential [removed: loss, if any.][added: loss reasonably estimable.]

CooperVision and the other defendants jointly filed a motion to dismiss the complaints in December 2015.

In June 2016, the motion to dismiss with respect to claims brought under the Maryland Consumer Protection Act was granted, but the motion to dismiss with respect to claims brought under Section 1 of the Sherman Act and other state laws was denied.

The actions currently are in discovery.

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.

The Company does not believe that an estimate of possible loss or a range of loss can be made at this time.

10-K 1 [removed: coo_20151031-10k.htm] [added: coo_20161031-10k.htm] 10-K

FOR THE FISCAL YEAR ENDED OCTOBER 31, [removed: 2015][added: 2016]

On November 30, [removed: 2015,] [added: 2016,] there were [removed: 47,948,696] [added: 48,457,403] shares of the registrant's common stock held by non-affiliates with aggregate market value of [removed: $8.6] [added: $7.5] billion on April 30, [removed: 2015,] [added: 2016,] the last day of the registrant's most recently completed fiscal second quarter.

Number of shares outstanding of the registrant's common stock, as of November 30, [removed: 2015: 48,274,926][added: 2016: 48,786,598]

| Portions of the Proxy Statement for the Annual Meeting of Stockholders scheduled to be held in March [removed: 2016] [added: 2017] | | Part III |

for the Fiscal Year Ended October 31, [removed: 2015][added: 2016]

| Item 1. | Business | [removed: [5](#sE2582589C965FE65B73EAE416C86F0D9)] [added: [5](#s26CDEE48414159E0947CAC1F85B663FE)] |

| Item 1A. | Risk Factors | [removed: [17](#sAFCC9E87D747465F9849AE416CB77E46)] [added: [18](#sCD861CBC19C656AB9051E2A0EF999CB4)] |

| Item 1B. | Unresolved Staff Comments | [removed: [32](#sE7A6A851B76B24FBD542AE416CD94C94)] [added: [35](#s31E05CE95D2958268A5797421AA77A7B)] |

| Item 2. | Properties | [removed: [33](#s9DA5E533021034F11750AE416D0AF95E)] [added: [36](#sC1B0CA79DE425B719709CDDB1F3B239A)] |

| Item 3. | Legal Proceedings | [removed: [34](#s79D8909610BD53A7F5EAAE416D2DFE78)] [added: [37](#s4972CEA0C3C45B749EA1229B8F085576)] |

| Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | [removed: [35](#s1C56433A79047A77B028AE416D804D3D)] [added: [38](#s1272A4F0E2A25C1E8ACACE458B5C5E3B)] |

| Item 6. | Selected Financial Data | [removed: [39](#s98D089BAFFC7C8DFE84CAE4160B16A23)] [added: [42](#s9B31A9A3E78E58C4A1825ADBC423DA4E)] |

| Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations | [removed: [40](#sE60491335BAF1B8D667CAE416E262827)] [added: [43](#sCAD8620B483551758127FE6E06AEB532)] |

| Item 7A. | Quantitative and Qualitative Disclosure about Market Risk | [removed: [63](#s89B03A02D1436C59A16AAE416033E99D)] [added: [67](#s77B1FA74F90E58F29965A3C7E0DEC74B)] |

| Item 8. | Financial Statements and Supplementary Data | [removed: [65](#s7AAD4D9881B7747E93EEAE416F2119CF)] [added: [69](#s60D16F452DF358C291595A96E839A1A3)] |

| Item 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure | [removed: [112](#sFC1CE28CD559E3E5186DAE41745B9D0D)] [added: [117](#sACC15189BD6F509888A7FA319DA344F5)] |

| Item 9A. | Controls and Procedures | [removed: [112](#sAE007BCA9F9B6BD15988AE4174691A98)] [added: [117](#sFEA8725DFD3A5C668EC9C4DC1EE5CB80)] |

| Item 9B. | Other Information | [removed: [113](#s5504E80A81F0BDC42BE1AE4174882F8A)] [added: [118](#s5E31EA21EEF65BFCB99CB39B4579474E)] |

| Item 10. | Directors, Executive Officers and Corporate Governance | [removed: [114](#s10DF689674A9D589186DAE4174DAB6A6)] [added: [119](#sE3B86DA8B6A757FDA3A447BCD08C11F4)] |

| Item 11. | Executive Compensation | [removed: [114](#s2AC4576E1C050746D140AE4174FD9427)] [added: [119](#s556201FFD32C5FCEB33CA393376F6417)] |

| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | [removed: [114](#s82BBBF7234058A7ECB5FAE41752F9FA7)] [added: [119](#sD1602C2B253F500E87F22CEA0E752F6E)] |

| Item 13. | Certain Relationships and Related Transactions, and Director Independence | [removed: [114](#s6FA63D3019AD1BF1408BAE41755085AF)] [added: [119](#s563E01CC179A58058F5176B445E4F57E)] |

| Item 14. | Principal Accounting Fees and Services | [removed: [114](#s2253B0AF70D97BAA8362AE4175863F1E)] [added: [119](#s8DD5A900C5B355B6A83CD5A6E747C07D)] |

| Item 15. | Exhibits and Financial Statement Schedules | [removed: [115](#s359F173A1E0E6EC14B32AE4175D4CCF0)] [added: [120](#s9CA306D31BE15CED8A77912795F4467D)] |

| • | Adverse changes in the global or regional general business, political and economic conditions, including the impact of continuing uncertainty and instability of certain countries that could adversely affect our global [removed: markets.] [added: markets, and the potential adverse economic impact and related uncertainty caused by the United Kingdom’s election to withdraw from the European Union.] |

| • | Acquisition-related adverse effects including the failure to successfully obtain the anticipated revenues, margins and earnings benefits of [removed: acquisitions, including the Sauflon acquisition;] [added: acquisitions;] integration delays or costs and the requirement to record significant adjustments to the preliminary fair value of assets acquired and liabilities assumed within the measurement period, required regulatory approvals for an acquisition not being obtained or being delayed or subject to conditions that are not anticipated, adverse impacts of changes to accounting controls and reporting procedures, contingent liabilities or indemnification obligations, increased leverage and lack of access to available financing (including financing for the acquisition or refinancing of debt owed by us on a timely basis and on reasonable terms). |

| • | A major disruption in the operations of our manufacturing, [added: accounting and financial reporting,] research and development or distribution [removed: facilities,] [added: facilities] due to technological problems, including any related to our information systems maintenance, enhancements or new system [removed: deployments and integrations, integration of acquisitions, natural disasters] [added: deployments, integrations] or [removed: other causes.] [added: upgrades.] |

| • | New U.S. and foreign government laws and regulations, and changes in existing laws, regulations and enforcement guidance, which affect the [added: health care industry, including the] contact lens [removed: industry, specifically, or] [added: industry and] the medical device [removed: and the healthcare industries generally.] [added: industry.] |

| • | Compliance costs and potential liability in connection with U.S. and foreign [removed: healthcare regulations,] [added: laws and health care regulations pertaining to privacy and security of third party information,] including product recalls, warning [removed: letters and potential losses resulting from sales of counterfeit] [added: letters,] and [removed: other infringing products.] [added: data security breaches.] |

| • | Failure [added: of our customers and end users] to obtain adequate coverage and reimbursement from third party payors for our [removed: products.] [added: products and services.] |

| • | The requirement to provide for a significant liability or to write off, or accelerate depreciation on, a significant asset, including [removed: goodwill.] [added: goodwill and idle manufacturing facilities and equipment.] |

| • | Dilution to earnings per share from [removed: the Sauflon acquisition or other] acquisitions or issuing stock. |

| • | Other events described in our Securities and Exchange Commission filings, including the “Business” and “Risk Factors” sections in this Annual Report on Form 10-K for the fiscal year ended October 31, [removed: 2015,] [added: 2016,] as such Risk Factors may be updated in quarterly filings. |

| • | Our indebtedness and associated interest expense, could adversely affect our financial health, prevent us from fulfilling our debt obligations or limit our ability to borrow additional funds. |

| • | A major disruption in the operations of our manufacturing, accounting and financial reporting, research and development or distribution facilities due to integration of acquisitions, natural disasters, or other causes. |

| | |

| --- | --- |

| | |

| --- | --- |

The following is a summary of Cooper's principal facilities as of October 31, [removed: 2015.][added: 2016.]

We generally lease our office and operations facilities but own several manufacturing and research and development facilities, including [removed: 205,850] [added: 224,533] square feet in [removed: Hamble,] [added: the] United Kingdom, [removed: 49,500] [added: 115,486] square feet in [removed: Scottsville, New York,] [added: Costa Rica,] 63,787 square feet in [removed: Malov,] Denmark, [added: 50,000 square feet in New York,] and 33,630 square feet in [removed: Stafford,] Texas.

| California | [removed: 112,109] [added: 106,997] | | | Executive offices; CooperVision research & development and administrative [removed: offices; CooperSurgical manufacturing and distribution] [added: offices] |

| New York | [removed: 377,507] [added: 378,007] | | | CooperVision manufacturing, marketing, distribution and administrative offices |

| Puerto Rico | [removed: 510,792] [added: 509,284] | | | CooperVision manufacturing and distribution |

| Canada | [removed: 11,647] [added: 14,593] | | | CooperVision marketing |

| Other Americas | [removed: 69,295] [added: 54,609] | | | CooperVision marketing and distribution; CooperSurgical manufacturing and marketing |

| United Kingdom | [removed: 666,157] [added: 689,554] | | | CooperVision manufacturing, marketing, distribution, research & development and administrative offices; CooperSurgical marketing |

| Belgium | [removed: 171,400] [added: 226,411] | | | CooperVision distribution |

| Denmark | [removed: 63,787] [added: 66,751] | | | CooperSurgical manufacturing, marketing and administrative offices |

| Germany | [removed: 27,949] [added: 27,610] | | | CooperVision marketing and distribution; CooperSurgical manufacturing, marketing and distribution |

| Hungary | [removed: 150,302] [added: 228,447] | | | CooperVision manufacturing and marketing |

| Other EMEA | [removed: 141,474] [added: 146,958] | | | CooperVision and CooperSurgical marketing and distribution |

| Japan | 73,932 | | | CooperVision [removed: manufacturing,] marketing, distribution and administrative offices; CooperSurgical marketing |

| Australia | [removed: 29,952] [added: 41,382] | | | CooperVision manufacturing, marketing, distribution and administrative offices; CooperSurgical marketing |

| Other Asia Pacific | [removed: 65,117] [added: 55,726] | | | CooperVision and CooperSurgical marketing and distribution |

| Texas | 36,113 | | | CooperSurgical manufacturing |

| Costa Rica | 115,486 | | | CooperVision manufacturing and office |

Cooper's common stock, par value $0.10 per share, is traded on the New York Stock Exchange under the symbol “COO.” In the table that follows, we indicate the high and low selling prices of our common stock for each three-month period of [removed: 2015] [added: 2016] and [removed: 2014:][added: 2015:]

| January 31 | $ | [removed: 171.54] [added: 155.18] | | | $ | [removed: 154.21] [added: 119.28] | | | $ | [removed: 135.00] [added: 171.54] | | | $ | [removed: 118.58] [added: 154.21] | |

| April 30 | $ | [removed: 190.00] [added: 161.17] | | | $ | [removed: 154.80] [added: 123.80] | | | $ | [removed: 145.34] [added: 190.00] | | | $ | [removed: 116.95] [added: 154.80] | |

| July 31 | $ | [removed: 186.37] [added: 183.49] | | | $ | [removed: 170.50] [added: 152.09] | | | $ | [removed: 163.24] [added: 186.37] | | | $ | [removed: 127.02] [added: 170.50] | |

| October 31 | $ | [removed: 179.75] [added: 190.99] | | | $ | [removed: 136.75] [added: 174.51] | | | $ | [removed: 166.52] [added: 179.75] | | | $ | [removed: 143.62] [added: 136.75] | |

At November 30, [removed: 2015,] [added: 2016,] there were [removed: 454] [added: 420] common stockholders of record.

In dollar terms, we paid cash for dividends of about $2.9 million in fiscal [removed: 2015] [added: 2016] and $2.9 million in fiscal [removed: 2014.][added: 2015.]

The following graph compares the cumulative total return on Cooper common stock with the cumulative total return of the Standard & Poor's Midcap [removed: 400] [added: 400, Standard & Poor 500] and the Standard & Poor's Health Care Equipment Index for the five-year period ended October 31, [removed: 2015.][added: 2016.]

The graph assumes that the value of the investment in Cooper and in each index was $100 on October 31, [removed: 2010,] [added: 2011,] and assumes that all dividends were reinvested.

Among The Cooper Companies, Inc., the S&P [removed: Smallcap 600] [added: Midcap 400] Index,

the S&P [removed: Midcap 400] [added: 500] Index and the S&P Health Care Equipment Index

[removed: ][added: ]

*$100 invested on [removed: 10/31/10] [added: 10/31/11] in stock or index, including reinvestment of dividends.

Copyright© [removed: 2015] [added: 2016] S&P, a division of McGraw-Hill Financial.

[removed: During] [added: The Company's share repurchase activity during] the three-month period ended October 31, [removed: 2015, we repurchased shares of our common stock] [added: 2016, was] as follows:

| [removed: 10/1/15] [added: 8/1/16] – [removed: 10/31/15] [added: 8/31/16] | | [removed: 367,539] [added: —] | | | $ | [removed: 139.60] [added: —] | | | [removed: 367,539] [added: —] | | | $ | 118,400,000 | |

At October 31, [removed: 2015, the remaining repurchase authorization] [added: 2016, approximately $118.4 million remained authorized] under the 2012 Share Repurchase [removed: Program was approximately $118.4 million.][added: Program.]

(1) The amount of total securities to be issued under Company equity plans shown in Column A includes [removed: 516,206] [added: 509,819] Restricted Stock Units granted pursuant to the Company's equity plans.

The total also includes [removed: 29,850] [added: 4,950] shares to be issued pursuant to Performance Share Awards which previously vested and receipt of shares was deferred for a specified period of time and [removed: 229,907] [added: 238,805] shares representing the maximum number of share that may be issued subject to Performance Share Awards without a defined payout.

(2) Includes information with respect to the [removed: Second] [added: Third] Amended and Restated 2007 Long-Term Incentive Plan for Employees of the Cooper Companies, Inc. ("2007 Plan"), which was approved by stockholders on March [removed: 16, 2011,] [added: 17, 2016,] and provides for the issuance of up to [removed: 5,230,000] [added: 6,930,000] shares of Common Stock, and the Second Amended and Restated 2006 Long Term Incentive Plan for Non-Employee Directors of the Cooper Companies, Inc. (the “Directors’ Plan”), which was approved by stockholders on March 16, 2011 and provides for the issuance of up to 950,000 shares of Common Stock.

As of October 31, [removed: 2015, 757,747] [added: 2016, 2,010,278] shares remained available under the 2007 Plan and [removed: 185,775] [added: 152,670] shares remained available under the 2006 Directors’ Plan.

| | 2016 | | | | | | | | 2015 | | | | | | |

| | 10/11 | | | | 10/12 | | | | 10/13 | | | | 10/14 | | | | 10/15 | | | | 10/16 | | |

| The Cooper Companies, Inc. | $ | 100.00 | | | $ | 138.61 | | | $ | 186.71 | | | $ | 236.93 | | | $ | 220.33 | | | $ | 254.68 | |

| S&P Midcap 400 | $ | 100.00 | | | $ | 112.11 | | | $ | 149.64 | | | $ | 167.08 | | | $ | 172.80 | | | $ | 183.61 | |

| S&P 500 | $ | 100.00 | | | $ | 115.21 | | | $ | 146.52 | | | $ | 171.82 | | | $ | 180.75 | | | $ | 188.90 | |

| S&P Health Care Equipment | $ | 100.00 | | | $ | 114.17 | | | $ | 143.34 | | | $ | 178.57 | | | $ | 194.72 | | | $ | 220.26 | |

| 9/1/16 – 9/30/16 | | — | | | $ | — | | | — | | | $ | 118,400,000 | |

| 10/1/16 – 10/31/16 | | — | | | $ | — | | | — | | | $ | 118,400,000 | |

| Total | | — | | | | | | | — | | | | | |

During the year ended October 31, 2016, there were no repurchases of shares of common stock under the repurchase program.

| Equity compensation plans approved by shareholders(2) | 1,858,962 | | $107.74 | | 2,162,948 |

| Total | 1,858,962 | | $107.74 | | 2,162,948 |

| | 2015 | | | | | | | | 2014 | | | | | | |

The graph also includes the cumulative total return of the Standard & Poor's Smallcap 600 Stock Index as we presented this information in prior years but now consider the comparison to the Standard & Poor's Midcap 400 as a more appropriate comparison to our size and position in the market.

| | 10/10 | | | | 10/11 | | | | 10/12 | | | | 10/13 | | | | 10/14 | | | | 10/15 | | |

| The Cooper Companies, Inc. | $ | 100.00 | | | $ | 140.58 | | | $ | 194.86 | | | $ | 262.47 | | | $ | 333.08 | | | $ | 309.74 | |

| S&P Smallcap 600 | $ | 100.00 | | | $ | 110.54 | | | $ | 125.57 | | | $ | 174.65 | | | $ | 190.88 | | | $ | 196.32 | |

| S&P Midcap 400 | $ | 100.00 | | | $ | 108.55 | | | $ | 121.69 | | | $ | 162.44 | | | $ | 181.37 | | | $ | 187.57 | |

| S&P Health Care Equipment | $ | 100.00 | | | $ | 106.59 | | | $ | 121.70 | | | $ | 152.79 | | | $ | 190.35 | | | $ | 207.56 | |

| 8/1/15 – 8/31/15 | | — | | | $ | — | | | — | | | $ | 169,700,000 | |

| 9/1/15 – 9/30/15 | | — | | | $ | — | | | — | | | $ | 169,700,000 | |

| Total | | 367,539 | | | | | | | 367,539 | | | | | |

| Equity compensation plans approved by shareholders(2) | 1,866,494 | | $79.85 | | 943,522 |

| Total | 1,866,494 | | $79.85 | | 943,522 |

| Years Ended October 31, (In thousands, except per share amounts) | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Net sales | $ | [removed: 1,797,060] [added: 1,966,814] | | | $ | [removed: 1,717,776] [added: 1,797,060] | | | $ | [removed: 1,587,725] [added: 1,717,776] | | | $ | [removed: 1,445,136] [added: 1,587,725] | | | $ | [removed: 1,330,835] [added: 1,445,136] | |

| Gross profit | $ | [removed: 1,070,262] [added: 1,173,079] | | | $ | [removed: 1,091,570] [added: 1,070,262] | | | $ | [removed: 1,026,808] [added: 1,091,570] | | | $ | [removed: 924,010] [added: 1,026,808] | | | $ | [removed: 804,804] [added: 924,010] | |

| Income before income taxes | $ | [removed: 215,485] [added: 295,633] | | | $ | [removed: 296,534] [added: 215,485] | | | $ | [removed: 312,271] [added: 296,534] | | | $ | [removed: 275,452] [added: 312,271] | | | $ | [removed: 192,764] [added: 275,452] | |

| Net income attributable to Cooper stockholders | $ | [removed: 203,523] [added: 273,917] | | | $ | [removed: 269,856] [added: 203,523] | | | $ | [removed: 296,151] [added: 269,856] | | | $ | [removed: 248,339] [added: 296,151] | | | $ | [removed: 175,430] [added: 248,339] | |

| Diluted earnings per share attributable to Cooper stockholders | $ | [removed: 4.14] [added: 5.59] | | | $ | [removed: 5.51] [added: 4.14] | | | $ | [removed: 5.96] [added: 5.51] | | | $ | [removed: 5.05] [added: 5.96] | | | $ | [removed: 3.63] [added: 5.05] | |

| Number of shares used to compute diluted earnings per share | [removed: 49,179] [added: 49,026] | | | | [removed: 48,960] [added: 49,179] | | | | [removed: 49,685] [added: 48,960] | | | | [removed: 49,152] [added: 49,685] | | | | [removed: 48,309] [added: 49,152] | | |

| Current assets | $ | [removed: 841,818] [added: 934,458] | | | $ | [removed: 791,617] [added: 841,428] | | | $ | [removed: 747,241] [added: 791,617] | | | $ | [removed: 657,860] [added: 747,241] | | | $ | [removed: 540,347] [added: 657,860] | |

| Property, plant and equipment, net | [removed: 967,097] [added: 877,672] | | | | [removed: 937,325] [added: 967,097] | | | | [removed: 739,867] [added: 937,325] | | | | [removed: 640,255] [added: 739,867] | | | | [removed: 609,205] [added: 640,255] | | |

| Goodwill | [removed: 2,197,077] [added: 2,164,748] | | | | [removed: 2,220,921] [added: 2,197,077] | | | | [removed: 1,387,611] [added: 2,220,921] | | | | [removed: 1,370,247] [added: 1,387,611] | | | | [removed: 1,276,567] [added: 1,370,247] | | |

| Other intangible assets, net | [removed: 411,090] [added: 441,086] | | | | [removed: 453,605] [added: 411,090] | | | | [removed: 198,769] [added: 453,605] | | | | [removed: 214,783] [added: 198,769] | | | | [removed: 128,341] [added: 214,783] | | |

| Other assets | [removed: 43,528] [added: 57,954] | | | | [removed: 54,872] [added: 43,172] | | | | [removed: 63,773] [added: 54,872] | | | | [removed: 58,239] [added: 63,773] | | | | [removed: 70,058] [added: 58,239] | | |

| | $ | [removed: 4,460,610] [added: 4,475,918] | | | $ | [removed: 4,458,340] [added: 4,459,864] | | | $ | [removed: 3,137,261] [added: 4,458,340] | | | $ | [removed: 2,941,384] [added: 3,137,261] | | | $ | [removed: 2,624,518] [added: 2,941,384] | |

| Short-term debt | $ | [removed: 244,193] [added: 226,325] | | | $ | [removed: 101,518] [added: 243,803] | | | $ | [removed: 42,987] [added: 101,518] | | | $ | [removed: 25,284] [added: 42,987] | | | $ | [removed: 52,979] [added: 25,284] | |

| Other current liabilities | [removed: 324,979] [added: 310,130] | | | | [removed: 340,664] [added: 324,979] | | | | [removed: 278,266] [added: 340,664] | | | | [removed: 237,268] [added: 278,266] | | | | [removed: 214,227] [added: 237,268] | | |

| Long-term debt | [removed: 1,105,764] [added: 1,107,448] | | | | [removed: 1,280,833] [added: 1,105,408] | | | | [removed: 301,670] [added: 1,280,833] | | | | [removed: 348,422] [added: 301,670] | | | | [removed: 327,453] [added: 348,422] | | |

| Other liabilities | [removed: 111,770] [added: 131,980] | | | | [removed: 146,885] [added: 111,770] | | | | [removed: 90,844] [added: 146,885] | | | | [removed: 117,252] [added: 90,844] | | | | [removed: 92,371] [added: 117,252] | | |

| Total liabilities | [removed: 1,786,706] [added: 1,775,883] | | | | [removed: 1,869,900] [added: 1,785,960] | | | | [removed: 713,767] [added: 1,869,900] | | | | [removed: 728,226] [added: 713,767] | | | | [removed: 687,030] [added: 728,226] | | |

| Stockholders' equity | [removed: 2,673,904] [added: 2,700,035] | | | | [removed: 2,588,440] [added: 2,673,904] | | | | [removed: 2,423,494] [added: 2,588,440] | | | | [removed: 2,213,158] [added: 2,423,494] | | | | [removed: 1,937,488] [added: 2,213,158] | | |

| | $ | [removed: 4,460,610] [added: 4,475,918] | | | $ | [removed: 4,458,340] [added: 4,459,864] | | | $ | [removed: 3,137,261] [added: 4,458,340] | | | $ | [removed: 2,941,384] [added: 3,137,261] | | | $ | [removed: 2,624,518] [added: 2,941,384] | |

In our fiscal fourth quarter of 2014, Cooper acquired Sauflon Pharmaceuticals Limited, as discussed in Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 2 of our notes to consolidated financial statements.

We have audited the accompanying consolidated balance sheets of The Cooper Companies, Inc. and subsidiaries (the Company) as of October 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended October 31, [removed: 2015.][added: 2016.]

In connection with our audits of the consolidated financial statements, we [removed: also] have [added: also] audited financial statement schedule II.

We also have audited the Company’s internal control over financial reporting as of October 31, [removed: 2015,] [added: 2016,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Cooper Companies, Inc. and subsidiaries as of October 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] and the results of its operations and its cash flows for each of the years in the three-year period ended October 31, [removed: 2015,] [added: 2016,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 31, [removed: 2015,] [added: 2016,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

| Years Ended October 31, (In thousands, except per share amounts) | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Net sales | $ | [removed: 1,797,060] [added: 1,966,814] | | | $ | [removed: 1,717,776] [added: 1,797,060] | | | $ | [removed: 1,587,725] [added: 1,717,776] | |

| Cost of sales | [removed: 726,798] [added: 793,735] | | | | [removed: 626,206] [added: 726,798] | | | | [removed: 560,917] [added: 626,206] | | |

| Gross profit | [removed: 1,070,262] [added: 1,173,079] | | | | [removed: 1,091,570] [added: 1,070,262] | | | | [removed: 1,026,808] [added: 1,091,570] | | |

| Selling, general and administrative expense | [removed: 712,543] [added: 722,798] | | | | [removed: 683,115] [added: 712,543] | | | | [removed: 610,735] [added: 683,115] | | |

| Research and development expense | [removed: 69,589] [added: 65,411] | | | | [removed: 66,259] [added: 69,589] | | | | [removed: 58,827] [added: 66,259] | | |

| Amortization of intangibles | [removed: 51,459] [added: 60,790] | | | | [removed: 35,710] [added: 51,459] | | | | [removed: 30,239] [added: 35,710] | | |

| Operating income | [removed: 236,671] [added: 324,080] | | | | [removed: 306,486] [added: 236,671] | | | | [removed: 305,945] [added: 306,486] | | |

| Interest expense | [removed: 18,103] [added: 26,190] | | | | [removed: 7,965] [added: 18,103] | | | | [removed: 9,168] [added: 7,965] | | |

| Other [removed: expense (income),] [added: expense,] net | [removed: 3,083] [added: 2,257] | | | | [removed: 1,987] [added: 3,083] | | | | [removed: (1,410] [added: 1,987] | | [removed: )] |

| Income before income taxes | [removed: 215,485] [added: 295,633] | | | | [removed: 296,534] [added: 215,485] | | | | [removed: 312,271] [added: 296,534] | | |

| Provision for income taxes | [removed: 10,341] [added: 20,699] | | | | [removed: 24,705] [added: 10,341] | | | | [removed: 15,365] [added: 24,705] | | |

| Net income | [removed: 205,144] [added: 274,934] | | | | [removed: 271,829] [added: 205,144] | | | | [removed: 296,906] [added: 271,829] | | |

| Less: [removed: Income] [added: net income] attributable to noncontrolling interests | [removed: 1,621] [added: 1,017] | | | | [removed: 1,973] [added: 1,621] | | | | [removed: 755] [added: 1,973] | | |

| Net income attributable to Cooper stockholders | $ | [removed: 203,523] [added: 273,917] | | | $ | [removed: 269,856] [added: 203,523] | | | $ | [removed: 296,151] [added: 269,856] | |

| Earnings per share attributable to Cooper stockholders - basic | $ | [removed: 4.20] [added: 5.65] | | | $ | [removed: 5.61] [added: 4.20] | | | $ | [removed: 6.09] [added: 5.61] | |

| Earnings per share attributable to Cooper stockholders - diluted | $ | [removed: 4.14] [added: 5.59] | | | $ | [removed: 5.51] [added: 4.14] | | | $ | [removed: 5.96] [added: 5.51] | |

| Basic | [removed: 48,452] [added: 48,520] | | | | [removed: 48,061] [added: 48,452] | | | | [removed: 48,615] [added: 48,061] | | |

| Diluted | [removed: 49,179] [added: 49,026] | | | | [removed: 48,960] [added: 49,179] | | | | [removed: 49,685] [added: 48,960] | | |

| Years Ended October 31, (In thousands) | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Net income | [removed: $] [added: 274,934] | [removed: 205,144] | | | [removed: $] [added: 205,144] | [removed: 271,829] | | | $ | [removed: 296,906] [added: 271,829] | |

| Foreign currency translation adjustment | [removed: (79,424] [added: (289,648] | | ) | | [removed: (87,763] [added: (79,424] | | ) | | [removed: 2,607] [added: (87,763] | | [added: )] |

| Change in value of derivative instruments, net of tax provision of [removed: $30, $630] [added: $0, $30] and [removed: $857,] [added: $630,] respectively | [removed: 47] [added: —] | | | | [removed: 986] [added: 47] | | | | [removed: 1,341] [added: 986] | | |

| Change in minimum pension liability, net of tax (benefit) [removed: provision] of [added: $(5,331),] $(3,908), [removed: $(2,348)] and [removed: $7,399,] [added: $(2,348),] respectively | [removed: (6,084] [added: (8,309] | | ) | | [removed: (3,643] [added: (6,084] | | ) | | [removed: 11,601] [added: (3,643] | | [added: )] |

| Other comprehensive [removed: (loss) income] [added: loss] | [removed: (85,461] [added: (297,957] | | ) | | [removed: (90,420] [added: (85,461] | | ) | | [removed: 15,499] [added: (90,420] | | [added: )] |

| Comprehensive [added: (loss)] income | [removed: 119,683] [added: (23,023] | | [added: )] | | [removed: 181,409] [added: 119,683] | | | | [removed: 312,405] [added: 181,409] | | |

| [removed: Comprehensive (income) loss] [added: Less: comprehensive income] attributable to noncontrolling interests | [removed: (533] [added: 990] | | [removed: )] | | [removed: (733] [added: 533] | | [removed: )] | | [removed: 717] [added: 733] | | |

| Comprehensive [added: (loss)] income attributable to Cooper stockholders | $ | [removed: 119,150] [added: (24,013] | [added: )] | | $ | [removed: 180,676] [added: 119,150] | | | $ | [removed: 313,122] [added: 180,676] | |

| October 31, (In thousands) | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Cash and cash equivalents [removed: | $] [added: at beginning of year] | 16,426 | | | [removed: $] | 25,222 | | [added: | | 77,393 | | |]

| Trade accounts receivable, net of allowance for doubtful accounts of [removed: $5,956] [added: $8,517] at October 31, [removed: 2015] [added: 2016] and [removed: $6,025] [added: $5,956] at October 31, [removed: 2014] [added: 2015] | [removed: 282,918] [added: 291,370] | | | | [removed: 276,280] [added: 282,918] | | |

| Inventories | [removed: 419,692] [added: 417,696] | | | | [removed: 381,474] [added: 419,692] | | |

| Deferred tax assets | [removed: 41,731] [added: 47,103] | | | | [removed: 40,224] [added: 41,731] | | |

| Prepaid expense and other current assets | [removed: 81,051] [added: 77,472] | | | | [removed: 68,417] [added: 80,661] | | |

| Total current assets | [removed: 841,818] [added: 934,458] | | | | [removed: 791,617] [added: 841,428] | | |

December 22, 2016

| | 877,672 | | | | 967,097 | | |

| Other assets | 51,847 | | | | 38,662 | | |

| | $ | 4,475,918 | | | $ | 4,459,864 | |

| Short-term debt | $ | 226,325 | | | $ | 243,803 | |

| Total current liabilities | 536,455 | | | | 568,782 | | |

| Total liabilities | 1,775,883 | | | | 1,785,960 | | |

| | $ | 4,475,918 | | | $ | 4,459,864 | |

| Balance at October 31, 2016 | 48,785 | | | $ | 4,879 | | | 3,290 | | | $ | 329 | | | $ | 1,493,965 | | | $ | (489,600 | ) | | $ | 2,050,443 | | | $ | (360,149 | ) | | $ | 168 | | | $ | 2,700,035 | |

(1) The loan notes issued at acquisition were fully paid in fiscal 2015.

standards.

We performed our annual impairment test in our fiscal third quarter of 2016, and our analysis indicated that we had no impairment of goodwill.

Changes in the geographic mix or

In October 2016, the FASB issued Accounting Standards Update ("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 recognition of the income tax consequences of non-inventory transfers which under current guidance defers the income tax consequences until the asset is 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.

We are currently evaluating the impact of ASU 2016-16 which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2018.

In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is intended to improve the accounting for share-based payment transactions as part of the FASB’s simplification initiative.

The ASU changes the following aspects of the accounting for share-based payment award transactions, including: accounting for income taxes; classification

of excess tax benefits on the statement of cash flows; forfeitures; minimum statutory tax withholding requirements; and classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes.

We are currently evaluating the impact of ASU 2016-09, which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2017.

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.

A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use 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.

We are currently evaluating the impact of ASU 2016-02, which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2019.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which requires entities to present all deferred tax assets and liabilities as noncurrent.

The amendments in the ASU are effective for the Company in our fiscal year and interim periods beginning on November 1, 2017.

The Company does not expect the new guidance to have a material impact on the Company’s consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments (Topic 850).

ASU 2015-16 requires that an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined.

The effect on earnings as a result of the change to the provisional amounts, calculated as if the accounting had been completed as of the acquisition date, must be recorded in the reporting period in which the adjustment amounts are determined rather than retrospectively.

ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years.

The amendment should be applied prospectively to adjustments to provisional amounts that occur after the effective date of the guidance, with early adoption permitted for financial statements that have not been issued.

We elected to early adopt this guidance on a prospective basis for the quarter ended July 31, 2016.

ASU 2015-03 is effective for interim and annual reporting periods beginning after December 15, 2016.

Early adoption is permitted.

We elected to early adopt this guidance as a change in accounting principle on a retrospective basis in the fiscal first quarter ended January 31, 2016.

As of January 31, 2016 and October 31, 2015, we have presented debt issuance costs related

December 18, 2015

| Loss on divestiture of Aime | — | | | | — | | | | 21,062 | | |

| Gain on insurance proceeds | — | | | | — | | | | 14,084 | | |

| Reclassification of realized gain on marketable securities to net income, net of tax provision of $27 in fiscal 2013 | — | | | | — | | | | (50 | | ) |

| | | | | | | | |

| | 967,097 | | | | 937,325 | | |

| Other assets | 39,018 | | | | 39,140 | | |

| | $ | 4,460,610 | | | $ | 4,458,340 | |

| Short-term debt | $ | 244,193 | | | $ | 101,518 | |

| Accrued income taxes | 14,740 | | | | 4,034 | | |

| Total current liabilities | 569,172 | | | | 442,182 | | |

| Total liabilities | 1,786,706 | | | | 1,869,900 | | |

| | $ | 4,460,610 | | | $ | 4,458,340 | |

| Balance at October 31, 2012 | 48,440 | | | $ | 4,844 | | | 1,007 | | | $ | 101 | | | $ | 1,265,202 | | | $ | (31,261 | ) | | $ | 1,018,618 | | | $ | (64,753 | ) | | $ | 20,407 | | | $ | 2,213,158 | |

| Treasury stock repurchase | (1,421 | ) | | (142 | | ) | | 1,421 | | | 142 | | | | — | | | | — | | | | — | | | | (167,334 | | ) | | — | | | | (167,334 | | ) |

| Loss on divestiture of Aime | — | | | | — | | | | 21,062 | | |

| | |

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indicated that we had no impairment of goodwill.

We do not anticipate the adoption of these amendments, which are effective for the Company for the fiscal year beginning on November 1, 2016, will have a material impact on our consolidated results of operations, financial condition or cash flows.

On November 1, 2014, we adopted ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.

ASU 2013-11 requires an unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.

When a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available, or the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets.

Divested Operation

Aime Divestiture - On October 31, 2013, we completed a transaction to sell Aime, our rigid gas-permeable contact lens and solutions business in Japan, to Nippon Contact Lens Inc. The business was originally obtained as part of the December 1, 2010 acquisition which included obtaining the rights to market Biofinity in Japan.

The divestiture was consistent with CooperVision’s strategy to focus on its core soft contact lens business.

The Aime divestiture was originally announced on May 31, 2013 and met the criteria for classification as held for sale during the fiscal fourth quarter of 2013.

During the fourth quarter of 2013, we completed several conditions to closing and facilitated the transfer of manufacturing technology.

We recorded a pre-tax loss of approximately $21.1 million in our Consolidated Statement of Income for fiscal 2013.

Results from operations of Aime are included in our Consolidated Statements of Income for fiscal 2013 and we have not segregated the results of operations or net assets of Aime on our financial statements for any period presented.

The disposition of the assets and liabilities of Aime did not qualify for classification as discontinued operations as CooperVision shall maintain continuing involvement through a distribution arrangement with Aime for a minimum of three years.

The financial statement impact of the Aime product line was not material for any of the fiscal years presented.

We believe that the counterparties with which we

For the years ending October 31, 2014 and 2013, all of our interest rate derivatives were in a liability position and, therefore, were not set-off in the Consolidated Balance Sheet.

On March 10, 2011, we entered into five floating-to-fixed interest rate swaps to fix the floating rate debt under our revolving Credit Agreement or any future credit facility whose variable debt is tied to the London Interbank Offered Rate (LIBOR).

These interest rate swaps with notional values totaling $200.0 million, served to fix the floating rate debt for remaining terms between 2 and 14 months with fixed rates between 1.27% and 1.78%.

The Company's Chief Executive Officer and Chief Financial Officer, based upon their evaluation as of October 31, [removed: 2015,] [added: 2016,] the end of the fiscal period covered in this report, concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level.

Management assessed the effectiveness of the Company's internal control over financial reporting as of October 31, [removed: 2015,] [added: 2016,] based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013).

Based on this assessment, management, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, concluded that the Company's internal control over financial reporting was effective as of October 31, [removed: 2015.][added: 2016.]

The Company's independent registered public accounting firm, KPMG LLP, has audited the effectiveness of the Company's internal control over financial reporting as of October 31, [removed: 2015,] [added: 2016,] as stated in their report in Part II, Item 8 of this Annual Report on Form 10-K.

There has been no change in the Company's internal control over financial reporting during the Company's fiscal quarter ended October 31, [removed: 2015,] [added: 2016,] that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

The information required by this item is incorporated by reference to the subheadings, “Proposal 1 - Election of Directors,” “Executive Officers of the Company,” “Ownership of the Company - Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance - The Board of Directors,” “Corporate Governance - Ethics and Business Conduct Policy,” “Corporate Governance - Board Committees - The Audit Committee” and “Report of the Audit Committee” of the Company's Proxy Statement for the Annual Meeting of Stockholders scheduled to be held in March [removed: 2016] [added: 2017] (the [removed: “2016] [added: “2017] Proxy Statement”).

The information required by this item is incorporated by reference to the subheadings “Report of the Organization and Compensation Committee,” “Compensation Discussion and Analysis,” “Executive Compensation Tables” and “Director Compensation” of the [removed: 2016] [added: 2017] Proxy Statement.

Additional information required by this item is incorporated by reference to the subheadings “Securities Held by Insiders” and “Principal Securityholders” of the “Ownership of the Company” section of the [removed: 2016] [added: 2017] Proxy Statement.

The information required by this item is incorporated by reference to the subheadings “Corporate Governance - Related Party Transactions,” “Proposal 1 - Election of Directors” and “Corporate Governance - The Board of Directors” of the [removed: 2016] [added: 2017] Proxy Statement.

The information required by this item is incorporated by reference to “Report of the Audit Committee” section of the [removed: 2016] [added: 2017] Proxy Statement.

Statements of Income for the years ended October 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013][added: 2014]

Statements of Comprehensive Income for the years ended October 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013][added: 2014]

Balance Sheets as of October 31, [removed: 2015] [added: 2016] and [removed: 2014][added: 2015]