Cooper Companies (COO) 10-K risk factor changes: FY2019 vs FY2018

[removed: Our] [added: *Our] business faces significant risks.

These risks should be read in conjunction with the other information in this [removed: report.][added: report.*]

[removed: Risks] [added: Risks] Relating to Our [removed: Business][added: Business]

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

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

[added: CooperVision’s failure to adapt to the threats posed by] these new and emerging distribution models and Internet driven services may have a material adverse impact on our business, financial condition and results of operations.

In the women's health care market, competitive factors include technological and scientific advances, product quality, [added: access to local markets based on regulatory clearances,] price and effective communication of product information to physicians, hospitals, patients and IVF clinics.

[removed: CooperSurgical competes with a number of manufacturers in each of its niche areas, some of which have substantially] greater financial and personnel resources and sell a much broader range of products, which may give them an advantage in marketing competitive products.

[removed: Acquisitions] [added: Acquisitions] that we have made and may make in the future involve numerous [removed: risks.][added: risks.]

CooperVision acquired [added: Blanchard Contact Lenses in fiscal 2019;] Paragon Vision Sciences and Blueyes in fiscal [removed: 2018; Procornea and Grand Vista LLC in fiscal 2017.][added: 2018.]

CooperSurgical acquired [added: Incisive Surgical Inc. in fiscal 2019;] PARAGARD and LifeGlobal in fiscal [removed: 2018; Wallace in fiscal 2017.][added: 2018.]

[removed: The acquisitions have, correspondingly, added risks] [added: Risks] we could face with respect to [added: these] acquisitions [removed: and] include:

| • | application of and compliance with new and unfamiliar regulatory frameworks such as pharmaceutical regulation applicable to our PARAGARD [removed: IUD;] [added: IUS;] |

[removed: Product] [added: Product] innovations are important in the industry in which we operate, and we face the risk of product obsolescence if we are unable to develop new products or gain regulatory approvals or if our competitors introduce new [removed: products.][added: products.]

Over the past few years, CooperSurgical has invested in expanding the internal research and development function with the goal of [removed: organizational growth and to complement our acquisitions strategy.]

[removed: If] [added: If] our products are not accepted by the market, we will not be able to sustain or expand our [removed: business.][added: business.]

[removed: New] [added: New] medical and technological developments may reduce the need for our [removed: products.][added: products.]

[removed: Our] [added: Our] substantial and expanding international operations are subject to uncertainties which could affect our operating [removed: results.][added: results.]

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

Over half of our net sales for the fiscal years ended October 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] were derived from the sale of products outside the United States.

| • | tax rates in some foreign countries may exceed those of the United States, and foreign earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions, including the tariffs [removed: recently] enacted [removed: and proposed] by the U.S. government on various imports from China and by the Chinese government on certain U.S. goods, the scope and duration of which remain uncertain; |

| • | we may find it difficult to comply with a variety of United States and foreign 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 [removed: laws;] [added: laws and MDR and IVDR;] |

| • | foreign governments may adopt [removed: regulations] [added: regulations, including those similar to MDR and IVDR] 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: Current] [added: Current] market conditions and recessionary pressures in one or more of our markets could impact our ability to grow our [removed: business.][added: business.]

[removed: Concerns about the Euro zone’s] sovereign debt in recent years have caused uncertainty and disruption in the financial markets globally.

Global markets continued to face threats and uncertainty during fiscal [removed: 2018.][added: 2019.]

[removed: The] [added: 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 [removed: business.][added: business.]

In March 2017, the government of the United Kingdom formally gave notice of its intent to withdraw from [added: the European Union.]

[removed: This development has] [added: These developments have] had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets.

[removed: Our] [added: Our] indebtedness could adversely affect our financial health and prevent us from fulfilling our debt [removed: obligations.][added: obligations.]

[removed: We] [added: We] are vulnerable to interest rate risk with respect to our [removed: debt.][added: debt.]

[removed: Exchange] [added: Exchange] rate fluctuations and our foreign currency hedges could adversely affect our financial [removed: results.][added: results.]

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

Conversely, [added: constrained,] excess or idle capacity, which could result from acquisitions, [added: unexpected demand,] inaccurate sales forecasting or unexpected manufacturing efficiencies, could significantly impact our [removed: profitability] [added: profitability, capital investments, customer service levels] and near term financial condition.

CooperVision manufactures molded contact lenses, which represent the majority of our contact lens revenues, primarily at our facilities in the United Kingdom, Puerto Rico, Hungary, Costa [removed: Rica] [added: Rica, Belgium] and the United [removed: States.][added: States with other smaller locations also existing in multiple locations around the world.]

CooperSurgical's products are primarily distributed out of its facilities in [removed: Connecticut, Denmark] [added: United States] and the Netherlands.

[removed: If] [added: If] our manufacturing operations fail to comply with applicable regulations, our manufacturing could be delayed or disrupted, our products could be subject to recall, and sales and profitability could [removed: suffer.][added: suffer.]

[removed: Failure to comply with QSR requirements and other applicable regulatory requirements or to respond to] any adverse inspectional observations or product safety issues could result in disruption of our operations and manufacturing delays in addition to, among other things, warning letters, significant fines, injunctions, suspension of approvals, seizures, recalls or import holds of products, operating restrictions and criminal prosecutions.

[removed: We] [added: We] rely on independent suppliers in our supply chain for raw materials, packaging materials and components, mechanical equipment and some finished goods; we could experience inventory shortages if any of these suppliers encounter a manufacturing or distribution [removed: disruption][added: disruption]

[removed: However] [added: However,] in certain instances we acquire components and materials from sole or primary suppliers to make our silicone hydrogel contact lens, certain medical devices and IVF products.

CooperSurgical competes with a number of manufacturers in each of its niche areas, some of which have substantially

organic growth and to complement our acquisitions strategy.

and Europe.

Concerns about the Euro zone’s

The European Union and the United Kingdom have agreed to delay the United Kingdom’s withdrawal from the European Union multiple times.

Currently, January 31, 2020 is the deadline to reach an agreement regarding the terms of the United Kingdom’s withdrawal from the European Union and their relationship following such a withdrawal.

If an agreement is not reached, or the deadline not postponed, prior to January 31, 2020, the United Kingdom may withdraw from the European Union without an agreement in place.

There is significant uncertainty regarding the terms of any agreement between the United Kingdom and the European Union and the potential for a “no-deal” withdrawal.

The United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (LIBOR), announced in July 2017 that it will no longer persuade or require banks to submit rates for LIBOR after 2021.

We have multiple debt facilities which bear interest at a variable rate based on the Eurodollar LIBOR rate in effect from time to time.

A change or transition away from LIBOR as a common reference rate in the global financial market could have a material, adverse effect on our business.

Management continues to monitor the status and discussions regarding LIBOR.

We are not yet able to reasonably estimate the expected impact.

CooperSurgical manufactures the majority of its products in the United States, Costa Rica, the Netherlands and the United Kingdom with other smaller locations also existing in multiple locations around the world.

Failure to comply with QSR requirements and other applicable domestic or international regulatory requirements or to respond to

provide us with any meaningful protection or commercial advantage.

We continue to evaluate the necessary steps for compliance with regulations as they are enacted.

These regulations include, for example, regulations enacted in the European Union such as the Registration, Evaluation, Authorization and Restriction of Chemical Substances, or REACH, which requires the registration of and regulates use of certain chemicals, the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive, or RoHS, which regulates the use of certain hazardous substances in certain products our CooperSurgical division manufactures.

These and similar legislation that has been or is in the process of being enacted in Japan, China and various states of the U.S. may require us to re-design certain products to ensure compliance with the applicable.

We recently faced an inquiry by the United Kingdom tax authorities regarding the application of the United Kingdom Diverted Profits Tax (DPT) related to the transfer out of the United Kingdom of certain intellectual property rights in connection with the 2014 acquisition of Sauflon Pharmaceutical Ltd., which we resolved in the second quarter of fiscal 2019.

The U.S. enacted the Tax Cuts and Jobs Act (the 2017 Act) on December 22, 2017, as a result of which we recognized in fiscal 2018 a provisional amount of $214.6 million as reasonable estimate of the impact of the provisions of the 2017 Act.

As of October 31, 2019, we have completed our accounting for the tax effects of the enactment of the 2017 Act and did not recognize any material adjustments to the provisional tax expense previously recorded; however, certain provisions of the 2017 Act and the regulations issued thereunder could have a significant impact on our future results of operations.

In addition, government agencies in non-U.S. jurisdictions where we and our affiliates do business and the Organization for Economic Co-operation and Development (OECD), have recently focused on issues related to the taxation of multinational corporations.

One example is in the area of “base erosion and profit shifting,” where profits are claimed to be earned for tax purposes in low-tax jurisdictions, or payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.

The OECD has released several components of its comprehensive plan to create an agreed set of international rules for fighting base erosion and profit shifting.

As a result, the tax laws in the U.S. and other countries in which we and our affiliates do business could change and any such change could be materially and adversely affect our business.

or judicial decisions, changes in accounting principles, changes to the business operations, including acquisitions, as well as the evaluation of new information that results in a change to a tax position taken in a prior period.

reputational harm to us.

Any new FDA enforcement policies affecting LDT or new legislation, regulations such as IVDR or guidance may result in increased regulatory burdens on our ability to continue marketing our products and

These reductions

MDR will become applicable in 2020 and IVDR will become applicable in 2022.

The GDPR implemented more stringent operational requirements for processors and controllers of personal data, including, for example,

Participation in these programs and compliance with the applicable requirements may subject us to potentially significant

CooperVision’s failure to adapt to the threats posed by

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

These acquisitions added operations to CooperVision and CooperSurgical, respectively, and expanded their international businesses.

the European Union.

At this time, it is not certain what steps, may be taken to facilitate the United Kingdom’s exit from the European Union, which has created significant uncertainty about the future relationship between the United Kingdom and the European Union.

CooperSurgical manufactures the majority of its products in Connecticut, Texas, New York, Denmark, Costa Rica and United Kingdom.

CooperSurgical is currently shifting its primary distribution facility from Denmark to Venlo, Netherlands.

We attempt to protect our intellectual property

selling competing products, and thereby have a material adverse effect on our business, financial condition and results of operations.

subject of a claim or recall, or has been counterfeited.

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

The tax rate is 25%.

DPT is intended to apply in two situations; (a) where a foreign company has artificially avoided having a taxable presence in the United Kingdom and (b) where a group adopts a structure which lacks economic substance in order to divert profits from the United Kingdom.

The United Kingdom tax authorities (U.K. Tax Authorities) have begun an inquiry regarding the application of DPT to us for fiscal year 2015.

We believe that the transactions in question were at arm’s length with no intention to divert profit from the United Kingdom and therefore are outside the intended reach of the DPT.

On December 20, 2017, the U.K. Tax Authorities issued a DPT charging notice of approximately GBP 31 million with respect to the transfer out of the United Kingdom of certain intellectual property rights in

connection with the 2014 acquisition of Sauflon Pharmaceutical Ltd. Although the taxes were paid on the transfer, the U.K. Tax Authorities are challenging the value assigned to such property.

We have contested the charging notice.

The process for resolving such a notice can be lengthy and could involve litigation.

The DPT legislation provides a one-year review period; however, it requires prepayment of the charging notice to be made within 30 days of its issuance.

As required, the payment of GBP 31.0 million was made on January 19, 2018.

The Company believes final resolution of the transfer value of intellectual property with the U.K. Tax Authorities is imminent.

The outcome of final resolution is not expected to have a material impact on the financial statements.

For example, the 2017 U.S. Tax Cuts and Jobs Act (2017 Act) significantly changed income tax laws that affect U.S. corporations.

We made significant judgments and assumptions in the interpretation of this new law and in our calculations of the provisional amounts reflected in our financial statements.

Consistent with SEC guidance, the Company has made a reasonable estimate of the effects of the 2017 Act and recorded provisional income tax expense of $214.6 million in the financial statements for fiscal 2018.

The U.S. Treasury Department, the Internal Revenue Service (IRS), and other standard-setting bodies may issue guidance on how the provisions of the 2017 Act will be applied or otherwise administered, and additional accounting guidance or interpretations may be issued in the future that is different from our current interpretation.

As we further analyze the new law and collect relevant information to complete our computations of the related accounting impact, we may adjust the provisional amounts that could materially affect our provision for income taxes in the period in which the adjustments are made.

In addition, other countries are considering fundamental tax law changes.

Any changes in taxing jurisdictions' administrative interpretations, decisions, policies and positions could also impact our tax liabilities.

For example, in December 2016, the 21st Century Cures Act (Cures Act), was signed into law.

The Cures Act, among other things, is intended to modernize the regulation of drugs and medical devices and spur innovation, but its ultimate implementation is unclear.

If the FDA imposes

injury if the malfunction were to recur.

challenges and amendments to the ACA in the future.

Unlike directives, which must be implemented into the

The Medical Devices Regulation will, however, only become applicable in 2020 and the In-Vitro Diagnostic Medical Devices Regulation will become applicable in 2022.

and far-reaching nature of these laws, there can be no assurance that we would not be required to alter one or more of our practices to be in compliance with these laws.

[removed: RESULTS] [added: RESULTS] OF [removed: OPERATIONS][added: OPERATIONS]

In this section, we discuss the results of our operations for fiscal [removed: 2018 compared with fiscal 2017 and the results of our operations for fiscal 2017] [added: 2019] compared with fiscal [removed: 2016.][added: 2018.]

[removed: We discuss our cash flows and current financial condition under “Capital Resources and Liquidity.”] Within the tables presented, percentages are calculated based on the underlying whole-dollar amounts and, therefore, may not recalculate exactly from the rounded numbers used for disclosure purposes.

[removed: Outlook][added: Outlook]

However, events affecting the economy as a whole, including but not limited to the uncertainty and instability of global markets driven by foreign currency volatility, [removed: global] [added: changes in] tax [removed: reform,] [added: legislation,] debt concerns, the uncertainty caused by the United Kingdom's [removed: upcoming] [added: planned] withdrawal from the European Union, [added: global trade barriers including additional tariffs] and the trend of consolidations within the health care industry, impact our current performance and continue to represent a risk to our future performance.

[removed: CooperVision] [added: *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 [removed: phosphorylcholine technology (PC)] [added: PC] Technology™.

[removed: | • |] Blueyes on January 4, 2018 - a long-standing distribution partner, which [removed: has] [added: had] a leading position in the distribution of contact lenses to the optical and pharmacy sector in Israel [removed: |]

| • | Paragon Vision Sciences on December 1, 2017 - a leading provider of ortho-k specialty contact lenses and oxygen permeable rigid contact lens [removed: materials] [added: materials.] |

CooperVision acquired the following [removed: entities in] [added: entity during] fiscal [removed: 2017:][added: 2019:]

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

| • | PARAGARD on November 1, 2017 - CooperSurgical acquired the assets of the PARAGARD [removed: IUD] [added: IUS] business from Teva for $1.1 billion. PARAGARD [removed: broadens] [added: broadened] and [removed: strengthens] [added: strengthened] CooperSurgical's [removed: current] women's health product portfolio and it is the only non-hormonal, long lasting, reversible contraceptive option approved by the FDA and available in the United States. [removed: IUDs] [added: IUS] represent a large and growing segment of the [removed: contraceptive market and this acquisition allows CooperSurgical to accelerate growth providing opportunities for operational synergies.] [added: Long Acting Reversible Contraceptive market.] |

[added: In the second quarter of fiscal 2018,] CooperSurgical [added: recognized an impairment charge of $24.4 million on the intangible assets] acquired [added: from] Recombine [removed: in] [added: Inc. In] fiscal 2016, [added: CooperSurgical acquired Recombine Inc.,] a clinical genetic testing company specializing in carrier screening.

In connection with the impairment charge, on June 1, 2018, CooperSurgical announced the exit of the carrier screening and [removed: non-invasive prenatal testing (NIPT)] [added: NIPT] product [removed: lines in fertility.][added: lines.]

Exit and restructuring charges which were substantially completed at the end of fiscal 2018, consisted primarily of compensation and benefits to terminated employees, [added: which] were approximately $10.0 million.

The net loss from both product lines [removed: are] [added: were] not material to [removed: the Company's] [added: our] consolidated results of operations.

[removed: Capital] [added: *Capital] Resources [removed: -] [added: -*] At October 31, [removed: 2018,] [added: 2019,] we had [removed: $77.7] [added: $89.0] million in [added: unrestricted] cash, primarily [added: held] outside the United States, and [removed: $560.5] [added: $734.8] million available under our 2016 Revolving Credit Facility (as defined below).

[removed: On] [added: At] October 31, [removed: 2018,] [added: 2019,] we had [removed: $125.0] [added: $500.0] million outstanding [removed: on] [added: under] the [removed: $830.0 million 2016] [added: 2019] Term Loan [removed: Facility (as defined below), and we had the full amount of $1.425] [added: Agreement, $1.0] billion outstanding under the 2017 Term Loan [removed: Agreement (as defined below).][added: Agreement, $264.0 million outstanding under the 2016 Revolving Credit Facility and $734.8 million available under the 2016 Revolving Credit Facility.]

[removed: On November 1, 2018, subsequent to our fiscal year ended October 31, 2018, the Company entered into a 364-day, $400.0] [added: | • | A $500.0] million [added: 364-day] senior unsecured term loan [removed: which matures on October 31, 2019] [added: agreement] (the [removed: 2018] [added: 2019] Term Loan [removed: Agreement).][added: Agreement), which matures on September 25, 2020 |]

See Note [removed: 14.][added: 6.]

[removed: On November 1, 2017, we entered into] [added: | • | $1.0 billion outstanding on] a $1.425 billion syndicated Term Loan Agreement [removed: (2017] [added: (the 2017] Term Loan Agreement) [removed: which matures on November 1, 2022,] [added: used] to fund the acquisition of PARAGARD, [removed: to partially repay outstanding amounts under the 2016 Revolving Credit Facility, and for general corporate purposes.][added: which matures on November 1, 2022 |]

[removed: The Company believes] [added: We believe] that current cash, cash equivalents and future cash flow from operating activities will be sufficient to meet [removed: the Company’s] [added: our] anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the financial statements included in this annual report.

[removed: 2018] [added: 2019] Compared with [removed: 2017][added: 2018]

[removed: ][added: ]

[removed: Highlights: 2018] [added: Highlights: 2019] vs. [removed: 2017][added: 2018]

| • | Gross margin [removed: remained at 64%] [added: increased to 66%] of net sales compared with 64% in fiscal [removed: 2017] [added: 2018] |

| • | Operating cash flow [removed: $668.9 million] increased [removed: 12.7% from $593.6] [added: 7% to $713.2] million [added: from $668.9 million.] |

[removed: Selected] [added: Selected] Statistical Information – Percentage of Net [removed: Sales][added: Sales]

| [removed: Years] [added: Years] Ended October [removed: 31, | 2018] [added: 31,] | [added: 2019] | | [removed: 2017] | [added: 2018] | | [removed: 2018] [added: 2019] vs. [removed: 2017] [added: 2018] % Change in Absolute [removed: Values] [added: Values] | |

| Net sales | 100 | % | | 100 | % | [removed: | 18] [added: 5] | % |

| Cost of sales | [removed: 36] [added: 34] | % | | 36 | % | [removed: | 16] [added: —] | % |

| Gross profit | [removed: 64] [added: 66] | % | | 64 | % | [removed: | 20] [added: 8] | % |

| Selling, general and administrative expense | 38 | % | | [removed: 37] [added: 38] | % | [removed: | 22] [added: 2] | % |

| Research and development expense | 3 | % | | 3 | % | [removed: | 23] [added: 2] | % |

| Amortization of intangibles | [removed: 6] [added: 5] | % | | [removed: 3] [added: 6] | % | [removed: | 114] [added: (1] | [removed: %] [added: )%] |

| Impairment of intangibles | [removed: 1] [added: —] | % | | [removed: — |] [added: 1] | [added: %] | — | [added: %] |

| Operating income | [removed: 16] [added: 21] | % | | [removed: 20] [added: 16] | % | [removed: | (6] [added: 36] | [removed: )%] [added: %] |

[removed: Net] [added: Net] Sales Growth by Business [removed: Unit][added: Unit]

| [removed: ($] [added: ($] in [removed: millions)] [added: millions)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: Increase] [added: Increase] | | | | [removed: 2018] [added: 2019] vs [removed: 2017] [added: 2018] % [removed: Change] [added: Change] | |

| Net [removed: Sales] [added: sales] | $ | [removed: 2,532.8] [added: 2,653.4] | | | $ | [removed: 2,139.0] [added: 2,532.8] | | | $ | [removed: 393.8] [added: 120.6] | | | [removed: 18] [added: 5] | % |

[removed: CooperVision] [added: CooperVision] Net [removed: Sales][added: Sales]

We discuss our cash flows and current financial condition under “Capital Resources and Liquidity.” For a discussion related to fiscal 2018 compared with fiscal 2017, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the Year Ended October 31, 2018, which was filed with the United States Securities and Exchange Commission (SEC) on December 21, 2018, and is available on the SEC's website at www.sec.gov and our Investor Relations website at investor.coopercos.com.

Recent acquisitions also expanded CooperVision's access to myopia management and specialty eye care markets with new products, such as ortho-k and scleral lenses.

In November 2019, CooperVision received United States Food & Drug Administration (FDA) approval for its MiSight® 1 day lens, which is the first and only FDA-approved product indicated to slow the progression of myopia in children with treatment initiated between the ages of 8-12 and is expected to be available in the United States in 2020.

Blanchard Contact Lenses on December 28, 2018 - a privately-held scleral lens company, which expands CooperVision's specialty and scleral lens portfolio.

CooperVision manufactures and markets a wide variety of silicone hydrogel contact lenses.

Our single-use silicone hydrogel product franchises, clariti® and MyDay®, remain a focus as we expect increasing demand for these products, as well as future single-use products as the global contact lens market continues to shift to this modality.

Outside of single-use, the Biofinity® and Avaira Vitality® product families comprise our focus in the FRP, or frequent replacement product, market which encompasses the 2-week and monthly modalities.

Included in this segment are unique products such as Biofinity Energys®, which helps individuals with digital eye fatigue.

CooperSurgical acquired the following entity during fiscal 2019:

Incisive Surgical Inc. on December 31, 2018 - a privately-held U.S. medical device company that develops mechanical surgical solutions for skin closure.

LifeGlobal Group on April 3, 2018 - a privately held company that specializes primarily in IVF media.

LifeGlobal’s product categories include media products, IVF laboratory air filtration products and dishware

Debt outstanding at October 31, 2019 consisted of:

| • | $264.0 million outstanding on a $1.0 billion multi-currency revolving credit facility (the 2016 Revolving Credit Facility), which matures on March 1, 2021. |

Transition from LIBOR

The United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (LIBOR), announced in July 2017 that it will no longer persuade or require banks to submit rates for LIBOR after 2021.

We have undertaken an assessment of contracts that will be impacted by the transition away from LIBOR.

To date, we have identified that substantially all of our term loan and credit facility agreements include an adjusted LIBOR option.

We are continuing to evaluate the scope of impacted contracts and the potential impact.

We are also monitoring the developments regarding alternative rates and may amend certain contracts to accommodate those rates if the contract does not already specify a replacement rate.

While the notional value of agreements potentially indexed to LIBOR is material, we are not yet able to reasonably estimate the expected impact.

| • | Interest expense decreased to $68.0 million from $82.7 million due to lower average debt balances, partially offset by higher interest rates |

| Gain on sale of an intangible | 1 | % | | — | % | — | % |

| CooperVision | $ | 1,972.9 | | | $ | 1,882.0 | | | $ | 90.9 | | | 5 | % |

| CooperSurgical | 680.5 | | | | 650.8 | | | | 29.7 | | | | 5 | % |

| | $ | 1,972.9 | | | $ | 1,882.0 | | | 5 | % |

| • | Sales growth in fiscal 2019 was largely organic |

| • | Multifocal lenses increased in fiscal 2019, compared to fiscal 2018 due to higher Biofinity and clariti sales, partially offset by a decrease in sales of older hydrogel products |

| | $ | 1,972.9 | | | $ | 1,882.0 | | | 5 | % |

CooperSurgical supplies the family health care market with a diversified portfolio of products and services.

Our office and surgical offerings include products that facilitate surgical and non-surgical procedures that are commonly performed primarily by OB/GYN in hospitals, surgical centers, fertility clinics and medical offices.

| ($ in millions) | | 2019 | | | | 2018 | | | | 2019 vs 2018 % Change | |

| | | $ | 680.5 | | | $ | 650.8 | | | 5 | % |

In the fiscal year ended October 31, 2019:

| • | Office and surgical products increased compared to prior year due to continued growth in PARAGARD and surgical products, primarily Uterine Manipulators, Surgical Retractors and recently acquired products of Incisive Surgical, partially offset by a decrease in revenue from sales of the Filshie Clip system. On February 1, 2019, the Company agreed to the early termination of an exclusive distribution agreement which had given CooperSurgical the rights to distribute the Filshie Clip System in the United States |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| | 2019 | | | 2018 | |

| • | $14.0 million of costs primarily product transition, integration and manufacturing related costs |

| • | Procornea on August 3, 2017 - a Netherlands based manufacturer of specialty contact lenses, which expanded CooperVision's access to myopia (nearsightedness) management markets with new products |

| • | Grand Vista LLC on June 30, 2017 - a distributor in Russia of soft contact lenses |

CooperVision manufactures and markets a wide variety of silicone hydrogel contact lenses within the daily, two-week and monthly modalities along with manufacturing some of these lenses as toric and/or multifocal lenses, including but not limited to Biofinity®, MyDay®, Avaira Vitality® and clariti®.

Single-use lenses are designed for daily replacement and frequently replaced lenses are designed for two-week or monthly replacement.

We expect increasing demand for clariti® 1day and MyDay® products, as well as future single-use products.

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

| • | LifeGlobal Group on April 3, 2018 - a privately held company that specializes primarily in IVF media. LifeGlobal’s product categories include media products, IVF laboratory air filtration products and dishware. This acquisition fits CooperSurgical product portfolio and strengthens our fertility media offerings |

In fiscal 2017, CooperSurgical acquired Wallace within Fertility, the IVF segment of Smiths Medical International Ltd. Wallace manufactures a range of IVF and ob/gyn products.

In the second quarter of fiscal 2018, CooperSurgical recognized an impairment charge of $24.4 million on the intangible assets acquired from Recombine Inc. (Recombine) as the cash flows expected to be generated by this asset group over its estimated remaining life were not sufficient to recover its carrying value.

The Company used the funds to partially repay outstanding borrowings under the 2016 Revolving Credit Facility.

Subsequent Event of the Consolidated Financial Statements for additional information.

On March 1, 2016, we entered into a syndicated revolving Credit and Term Loan Agreement

(the 2016 Credit Agreement).

This agreement, maturing on March 1, 2021, provides for a multi-currency revolving credit facility in an aggregate principal amount of $1.0 billion (the 2016 Revolving Credit Facility) and a term loan facility in the aggregate principal amount of $830.0 million (the 2016 Term Loan Facility).

We paid down $705.0 million of the 2016 Term Loan Facility in the fiscal fourth quarter of 2018 and had $125.0 million outstanding at October 31, 2018.

| • | Operating income decreased 6% to $403.1 million from $429.1 million, primarily due to an increase in amortization expenses as a result of acquisitions and a non-recurring impairment charge |

| • | Interest expense increased to $82.7 million from $33.4 million due to higher debt balance in connection with acquisitions and higher interest rates |

| • | Diluted earnings per share decreased 63% to $2.81 from $7.52 due to U.S. tax reform charges, an increase in amortization expense and a non-recurring impairment charge |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| CooperVision | $ | 1,882.0 | | | $ | 1,674.1 | | | $ | 207.9 | | | 12 | % |

| CooperSurgical | 650.8 | | | | 464.9 | | | | 185.9 | | | | 40 | % |

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | $ | 1,882.0 | | | $ | 1,674.1 | | | 12 | % |

CooperSurgical supplies the family health care market with a diversified portfolio of products 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 the medical office.

The change in product mix was attributable to recent acquisitions, primarily PARAGARD which increased the revenue of office and surgical products.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | $ | 650.8 | | | $ | 464.9 | | | 40 | % |

| • | CooperSurgical’s net sales growth was primarily due to incremental revenues from the acquisition of PARAGARD IUD, which is categorized in office and surgical products |

| • | Office and surgical products increased compared to prior year periods due to continued growth in surgical products and recently acquired products, primarily PARAGARD |

2017 Compared with 2016


Highlights: 2017 vs. 2016

| • | Gross margin increased to 64% of net sales compared with 60% in fiscal 2016 |

| • | Interest expense increased to $33.4 million from $26.2 million |

We are exposed to risks caused by changes in foreign exchange, [removed: primarily to the] [added: principally our] British pound sterling, [removed: euro,] [added: euro and] Japanese [removed: yen, Danish krone, Swedish krona, Australian dollar] [added: yen denominated debt] and [removed: Canadian dollar.][added: receivables denominated in currencies other than the United States dollar, and from operations in other foreign currencies.]

Although we may enter into foreign exchange agreements with financial institutions to reduce our [removed: nonfunctional] [added: exposure to fluctuations in foreign] currency [removed: exposure,] [added: values relative to our debt or receivables obligations,] these hedging transactions do not eliminate that risk entirely.

At October 31, [removed: 2018,] [added: 2019,] a uniform hypothetical 5% increase or decrease in the foreign currency exchange rates in comparison to the United States dollar would have resulted in a corresponding increase or decrease in approximately [removed: $30.0] [added: $34.1] million in operating income for the fiscal year ended October 31, [removed: 2018.][added: 2019.]

Risk Factors - [removed: "Our] [added: "*Our] substantial and expanding international operations are subject to uncertainties which could affect our operating [removed: results.”] [added: results.*”] and See Note 1.

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

We may decrease this interest rate risk by hedging a portion of variable rate debt effectively converting it to fixed rate [removed: debt.][added: debt for varying periods.]

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

[removed: The Company] [added: We] used the funds [removed: it has drawn under the facility] to partially repay outstanding borrowings under the [removed: Company’s] 2016 Revolving Credit Facility.

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

[added: We used part of the facility to fund the PARAGARD] acquisition and used the remainder of the funds to partially repay outstanding borrowings under our revolving credit agreement.

At October 31, [removed: 2018,] [added: 2019,] we had [removed: $1.425] [added: $1.0] billion outstanding under the 2017 Term Loan Agreement.

On March 1, 2016, we entered into a [added: syndicated] Revolving Credit and Term Loan Agreement [removed: (2016] [added: (the 2016] Credit Agreement) with KeyBank National Association, as administrative agent.

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

The 2016 Credit Agreement replaced our previous credit agreement and funds from the 2016 Term Loan Facility were used to repay [added: the outstanding amounts under the previous credit agreement, to partially repay our] other outstanding [added: term] loans and for general corporate purposes.

At October 31, [removed: 2018,] [added: 2019,] we had [removed: $125.0 million] [added: no] outstanding [added: balance] under the 2016 Term Loan Facility and [removed: $560.5] [added: $264.0] million [removed: available] [added: outstanding] under the 2016 Revolving Credit Facility.

| [removed: October 31, (In millions)] [added: October 31, (In millions)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | |

| Short-term debt | $ | [removed: 37.1] [added: 563.7] | | | $ | [removed: 23.4] [added: 37.1] | |

| Long-term debt | [removed: 1,989.2] [added: 1,264.2] | | | | [removed: 1,153.2] [added: 1,989.2] | | |

| Less: unamortized debt issuance cost | [removed: (3.5] [added: (1.6] | | ) | | [removed: (3.9] [added: (3.5] | | ) |

| Total | $ | [removed: 2,022.8] [added: 1,826.3] | | | $ | [removed: 1,172.7] [added: 2,022.8] | |

At October 31, [removed: 2018,] [added: 2019,] the scheduled maturities of our variable rate long-term debt obligations, their weighted average interest rates:

| [removed: Expected] [added: Expected] Maturity Date Fiscal [removed: Year ($] [added: Year ($] in [removed: millions)] [added: millions)] | [removed: 2019] [added: 2020] | | | | [removed: 2020] [added: 2021] | | | | [removed: 2021] [added: 2022] | | | | [removed: 2022] [added: 2023] | | | | [removed: 2023] [added: 2024] | | | | [removed: Thereafter] [added: Thereafter] | | | | [removed: Total] [added: Total] | | | | [removed: Fair Value] [added: Fair Value] |

| Average interest rate | — | | | | [removed: —] [added: 3.2] | | [added: %] | | [removed: 3.5] [added: —] | | [removed: %] | | [removed: —] [added: 3.2] | | [added: %] | | [removed: 3.5] [added: —] | | [removed: %] | | — | | | | | | | | |

As the table incorporates only those exposures that existed as of October 31, [removed: 2018,] [added: 2019,] it does not consider those exposures or positions which could arise after that date.

As of October 31, [removed: 2018,] [added: 2019,] we had no outstanding interest rate swaps.

If interest rates were to increase or decrease by 1% or 100 basis points, annual interest expense would increase or decrease by approximately [removed: $23.9] [added: $19.6] million based on average debt outstanding for fiscal [removed: 2018.][added: 2019.]

Risk Factors - [removed: “We] [added: *“We] are vulnerable to interest rate risk with respect to our [removed: debt.”] [added: debt.”*] and Note 1.

Most of our operations outside the United States have their local currency as their functional currency.

During fiscal 2019, there were no hedging transactions.

As of October 31, 2019, we did not have any derivative assets or liabilities, including no interest rate swaps, cross currency swaps or foreign currency forward contracts.

On September 27, 2019, we extended the maturity of the 2018 Term Loan Agreement to September 25, 2020 and increased the amount to $500.0 million (as so amended, the 2019 Term Loan Agreement).

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

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

the lenders party thereto and DNB Bank ASA, New York Branch, as administrative agent which matures on November 1, 2022.

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

The 2016 Term Loan Facility was repaid using funds borrowed under the 2017 Term Loan Agreement.

The 2016 Revolving Credit Facility will mature on March 1, 2021.

| Variable interest rate | $ | — | | | $ | 264.2 | | | $ | — | | | $ | 1,000.0 | | | $ | — | | | $ | — | | | $ | 1,264.2 | | | $1,264.2 |

See Note 14.

Subsequent Event of the Consolidated Financial Statements for additional information.

The Company used part of the facility to fund the PARAGARD

| Variable interest rate | $ | — | | | $ | — | | | $ | 564.2 | | | $ | — | | | $ | 1,425.0 | | | $ | — | | | $ | 1,989.2 | | | $1,989.2 |

The Cooper Companies, Inc. (Cooper, we or the Company), a Delaware corporation organized in 1980, is a global medical device company publicly traded on the NYSE [removed: Euronext] (NYSE: COO).

[removed: Recent acquisitions] [added: Acquisitions] also expanded CooperVision's access to myopia management [added: and specialty eye care] markets with new products, such as orthokeratology (ortho-k) [removed: specialty] [added: and scleral] lenses.

[removed: CooperVision's] [added: Further, CooperVision offers] contact lenses [removed: are offered] in a variety of materials including silicone hydrogel Aquaform® technology and phosphorylcholine technology (PC) Technology™.

CooperSurgical's business competes in the general health care market with a focus on advancing the health of women, babies and families through a diversified portfolio of products and services including medical devices, fertility, [removed: genomics, diagnostics,] [added: diagnostics] and contraception.

We categorize CooperSurgical product sales based on the point of health care delivery, which includes products used in medical office and surgical procedures, primarily by [removed: obstetricians and gynecologists (ob/gyns);] [added: Obstetricians/Gynecologists (OB/GYN);] and fertility products/equipment and genetic testing services used primarily in fertility clinics and laboratories.

CooperSurgical's major manufacturing and distribution facilities are located in [removed: Connecticut, Texas, New York, Denmark,] [added: the United States,] Costa Rica, the Netherlands, [added: and] the United Kingdom [removed: and various smaller international locations,] with [removed: diagnostic facilities located] [added: other smaller locations also existing] in multiple locations [removed: in the United States and internationally in Canada and] [added: around] the [removed: United Kingdom.][added: world.]

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

[removed: COOPERVISION][added: COOPERVISION]

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

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

CooperVision believes that our key accounts which include optical chains, global retailers, certain buying groups and mass merchandisers are growing faster than the overall [removed: market and are expected to have a sustainable long-term growth trend.][added: market.]

We are focused on supporting the growth of all our customers by [added: investing in selling, promotional and advertising activities.]

Further, we are increasing investment in our distribution and packaging capabilities to support the growth of our business and to continue [removed: to provide] [added: providing] quality service with our industry leading SKU range and customized offerings.

[removed: Contact] [added: Contact] Lens Product [removed: Sales][added: Sales]

[removed: ][added: ]

[removed: CooperVision Competition][added: CooperVision Competition]

CooperVision's 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., Bausch Health Companies Inc. and Alcon [removed: (formerly CIBA Vision Corporation) owned by Novartis AG.][added: Inc.]

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

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

In addition to a broad offering of silicone hydrogel lenses, CooperVision competes [removed: based on the fact that its three] [added: with different] manufacturing processes [added: which] allow [removed: CooperVision] [added: it] to produce a broad range of spheres, toric and multifocal lens parameters, which we believe provides wide choices for patient and practitioner and a high level of visual acuity.

[removed: COOPERSURGICAL][added: COOPERSURGICAL]

[removed: The Company offers] [added: We offer] quality products, innovative technologies and superior services to clinicians and patients worldwide.

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

In fiscal 2018, [removed: we] [added: CooperSurgical] acquired the assets of [removed: the PARAGARD] [added: PARAGARD, which is an] Intrauterine [removed: Device (IUD) business (PARAGARD)] [added: System (IUS)] from Teva Pharmaceuticals Industries Limited (Teva).

This acquisition broadens and strengthens CooperSurgical's [removed: current] women's health product portfolio in office and surgical procedures.

PARAGARD® is the only hormone-free, long lasting, reversible contraceptive option approved by FDA available in the United States, and [removed: IUDs] [added: IUSs] represent a large and growing segment of the contraceptive market.

[removed: We] [added: CooperSurgical] also acquired in fiscal 2018, The LifeGlobal Group (LifeGlobal) which was a privately held company that specializes primarily in the IVF media marketplace.

[removed: In fiscal 2017, we acquired Wallace, the IVF segment of Smiths Medical International Ltd.] We intend to continue investing in CooperSurgical's business with the goal of expanding our integrated solutions model within the areas of family health, fertility and diagnostics.

[removed: Market] [added: Market] for Women's and Family Reproductive Health [removed: Care][added: Care]

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

CooperSurgical expects patient visits to [removed: ob/gyns] [added: OB/GYN offices] in the United States to increase over the next decade.

Driving the growth is a growing population of women over the age of 65 (according to the United States Census estimates), a large and stable middle-aged population, and a steady number of reproductive age women with increasing fertility issues as well as women interested in contraception that is reversible such as with the PARAGARD® [removed: IUD.][added: IUS.]

| • | We believe that approximately one-third of the office visits to [removed: ob/gyns] [added: OB/GYN] are patients seeking diagnosis and treatment for the symptoms of abnormal uterine bleeding. |

| • | [removed: Ob/gyns] [added: OB/GYN] traditionally provide the initial evaluation for women and their partners who seek infertility assistance. Ovulatory drugs and intrauterine insemination (IUI) are common treatments in these cases. |

| • | IVF is performed by reproductive endocrinologists, a subgroup of [removed: ob/gyns,] [added: OB/GYN,] along with partner embryologists. |

[removed: Women's] [added: Women's] and Family Reproductive Health Care Product [removed: Sales][added: Sales]

[removed: ][added: ]

[removed: CooperSurgical Competition][added: CooperSurgical Competition]

In some instances, CooperSurgical offers all [removed: of] the items needed for a complete procedure.

CooperSurgical [removed: is seeking] [added: continues] to expand [removed: our] [added: its] 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, Boston Scientific, Hologic, Olympus and Medtronic.

In November 2019, CooperVision received United States Food & Drug Administration (FDA) approval for its MiSight® 1day lens, which is the first and only FDA-approved product indicated to slow the progression of myopia in children with treatment initiated between the ages of 8-12 and is expected to be available in the United States in 2020.

CooperVision’s major manufacturing and distribution facilities are located in the United Kingdom, Puerto Rico, Hungary, Costa Rica, Belgium and the United States, with other smaller locations also existing in multiple locations around the world.

In fiscal 2019, CooperVision acquired Blanchard Contact Lenses, a privately-held scleral lens company, which expands CooperVision's specialty and scleral lens portfolio.

CooperSurgical collaborates with clinicians to

In fiscal 2019, CooperSurgical acquired Incisive Surgical Inc., a privately-held U.S. medical device company that develops mechanical surgical solutions for skin closure.

CooperSurgical competes in the IUS market.

However, the IVDR will regulate the testing of human embryos which will be classified as Class C.

In May 2017, the MDR (Regulation 2017/745) was adopted.

The MDR will, however, only become applicable three years after publication (in May 2020).

Once applicable, the new regulations will bring significant new requirements for many medical devices, including enhanced requirements for clinical evidence and documentation, increased focus on device identification and traceability, and additional post market surveillance and vigilance.

Compliance with the MDR will require re-certification of many of our products to the enhanced standards.

Further, products sold as IVDs in Europe will be regulated under the In Vitro Diagnostics Directive (98/79/EC).

A new regulation, the IVDR (EU) 2017/746, the IVDR, has been released and will become fully enforceable in 2022.

These regulations include requirements for both presentation and review of performance data and quality-system requirements.

Both CooperVision and CooperSurgical have been actively deploying regulatory and compliance initiatives designed to allow the continued ability to sell and market their respective products in the EU under the MDR and the IVDR.

With the addition of PARAGARD, CooperSurgical expanded its awareness campaigns to include direct to consumer elements including print, internet/social media, radio and television.

In addition, the Company continues to monitor and comply with environmental health and safety regulations in countries in which it operates throughout the world, in particular, European Union and China Restrictions on the use of certain Hazardous Substances in electrical and electronic equipment (RoHS) and Registration, Evaluation, Authorization and Restriction of Chemical substances, or REACH.

Cooper is dedicated to being A Quality of Life CompanyTM.

CooperVision primarily manufactures its products at its facilities located in the United Kingdom, Puerto Rico, Hungary, Costa Rica and the United States.

CooperVision distributes products out of its facilities in the United States, the United Kingdom, Belgium and various smaller international distribution facilities.

CooperSurgical purchased a manufacturing facility in Costa Rica in November 2017 to consolidate a portion of global manufacturing and is also currently shifting its primary distribution facility from Denmark to Venlo, Netherlands.

investing in selling, promotional and advertising activities.

In fiscal 2017, we acquired Procornea Holding B.V. (Procornea), a Netherlands based manufacturer of specialty contact lenses, which expands CooperVision’s access to myopia (nearsightedness) management markets with new products, and Grand Vista LLC, a distributor in Russia of soft contact lenses.

lenses; clariti 1day brand of single-use sphere, toric and multifocal lenses; and MyDay single-use spherical and toric lenses.

In fertility

With the acquisition of PARAGARD in fiscal 2018, CooperSurgical now competes in the IUD market.

Cooper-sponsored research and development expenditures during fiscal 2018, 2017 and 2016, were $84.8 million, $69.2 million and $65.4 million, respectively.

As a percentage of sales, research and development expenditures were 3% in fiscal 2018, 2017 and 2016.

During fiscal 2018, CooperVision represented 64% and CooperSurgical represented 36% of the total research and development expenses, compared to 69% and 31% in fiscal 2017 for CooperVision and CooperSurgical respectively.

In reviewing a pre-market notification, the FDA may request additional information, including clinical data, which may significantly prolong the review process.

If the FDA determines that the device is not substantially equivalent to a previously cleared device, the device is automatically designated as a Class III device.

and evaluate the application and provide recommendations to the FDA as to the approvability of the device.

labeling, advertising and promotion; new FDA unique device identifier regulations, which require changes to labeling and packaging; and medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur.

FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS, GEOGRAPHIC AREAS, FOREIGN OPERATIONS AND EXPORT SALES

The information required by this item is included in "Business Segment Information" of our notes to the Consolidated Financial Statements and "Risk Factors" as part of this Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

The public may read and copy these materials at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549.

The public may obtain information on the operation of the Public Reference Room by calling

the SEC at 1-800-SEC-0330.

The settlement remains subject to final Court approval at a future hearing [removed: to be set by the Court.][added: currently scheduled for February 25, 2020.]

At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 450, [removed: Contingencies.][added: *Contingencies*.]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: WASHINGTON,] [added: WASHINGTON,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

[removed: ANNUAL] [added: | ☒ | ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF [added: THE SECURITIES EXCHANGE ACT OF 1934 |]

[added: | ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF] THE SECURITIES EXCHANGE ACT OF [removed: 1934][added: 1934 |]

[removed: FOR] [added: FOR] THE FISCAL YEAR [removed: ENDED OCTOBER] [added: ENDED OCTOBER] 31, [removed: 2018][added: 2019]

[removed: COMMISSION] [added: COMMISSION] FILE [removed: NO. 001-08597][added: NO. 001-08597]

[removed: THE] [added: THE] COOPER COMPANIES, [removed: INC.][added: INC.]

[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]

| [removed: Delaware] [added: Delaware] | [removed: 94-2657368] [added: 94-2657368] |

| [removed: (State] [added: (State] or other jurisdiction of [removed: incorporation)] [added: incorporation)] | [removed: (I.R.S.] [added: (I.R.S.] Employer Identification [removed: No.)] [added: No.)] |

[removed: | (Address] [added: (Address] of principal executive offices) [removed: |] (Zip [removed: Code) |][added: Code)]

[removed: (925) 460-3600][added: (925) 460-3600]

[removed: (Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code)][added: code)]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | | [removed: Name] [added: Trading Symbol | | Name] of each exchange on which [removed: registered] [added: registered] |

| Common Stock, $.10 par [removed: value, and associated rights] [added: value] | | [added: COO | | The] New York Stock Exchange |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:][added: Act:]

[removed: None][added: None]

Yes [removed: x] [added: ☒] No [removed: o][added: ☐]

Yes [removed: o] [added: ☐] No [removed: x][added: ☒]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 [removed: months,] [added: months or for such shorter period that the registrant was required to file such reports,] and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated [removed: filer or] [added: filer,] a smaller reporting [added: company or an emerging growth] company.

See definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [removed: company”] [added: company,” and "emerging growth company"] in Rule 12b-2 of the Exchange Act.

Large accelerated filer [removed: x] [added: ☒] Accelerated filer [removed: o] [added: ☐] Non-accelerated filer [removed: o] [added: ☐] Smaller reporting company [removed: o][added: ☐]

Emerging growth company [removed: o][added: ☐]

On November 30, [removed: 2018,] [added: 2019,] there were [removed: 48,938,208] [added: 48,773,952] shares of the registrant's common stock held by non-affiliates with aggregate market value of [removed: $11.3] [added: $14.1] billion [added: based] on [added: the closing price of a share of the registrant's common stock on] April 30, [removed: 2018,] [added: 2019,] 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: 2018: 49,232,061][added: 2019: 49,062,354]

[removed: Documents] [added: Documents] Incorporated by [removed: Reference:][added: Reference:]

| [removed: Document] [added: Document] | | [removed: Part] [added: Part] of Form [removed: 10-K] [added: 10-K] |

| Portions of the Proxy Statement for the Annual Meeting of Stockholders scheduled to be held in March [removed: 2019] [added: 2020] | | Part III |

[removed: THE] [added: THE] COOPER COMPANIES, INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: Annual] [added: Annual] Report on Form [removed: 10-K][added: 10-K]

[removed: Table] [added: Table] of [removed: Contents][added: Contents]

| [removed: PART I] [added: PART I] | | Page |

| Item 1. | Business | [removed: [6](#s59DAAFC3107A1B7A2839FD65F3E6DECF)] [added: [7](#s34506B3966A15E21848D76BE73431202)] |

| Item 1A. | Risk Factors | [removed: [22](#s10CB6BF8E98C5DD2E5D1FD65C5D159AB)] [added: [23](#sEFBA8167363A5A36B59B7E9D8E961952)] |

| Item 1B. | Unresolved Staff Comments | [removed: [42](#s5E30BE7D700FDA456C61FD65F43D35AC)] [added: [42](#s5C853194E37A5310A9F851BA14B73B8A)] |

| Item 2. | Properties | [removed: [43](#s483D480ED19E8C95203AFD65F46E6857)] [added: [43](#sA5AC10767924502D911E5E7FE624968E)] |

| Item 3. | Legal Proceedings | [removed: [44](#sA16F3A0AADAA6FDE144EFD65F48E085C)] [added: [44](#sED7F4B8F3090549CA92E30C945564C68)] |

UNITED STATES

________________________

________________________

FOR THE TRANSITION PERIOD FROM TO

________________________

________________________

6101 Bollinger Canyon Road, Suite 500

San Ramon, California, 94583

________________________

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________________________

Yes ☒ No ☐

Yes ☒ No ☐

Yes ☐ No ☒

for the Fiscal Year Ended October 31, 2019

| | | |

| • | Adverse changes in global political and economic conditions, and related uncertainty caused by the United Kingdom’s election to withdraw from the European Union and its potential impact on, among other things, the movement of goods and materials in our supply chain, additional regulatory approvals and requirements, and increased tariffs and duties. |

| • | Market consolidation of large customers globally through mergers or acquisitions resulting in a larger proportion or concentration of our business being derived from fewer customers. |

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10-K 1 coo_20181031-10k.htm 10-K

________________________

| 6140 Stoneridge Mall Road, Suite 590 Pleasanton, California | 94588 |

| --- | --- | --- |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Item 2. Properties.

The following is a summary of Cooper's principal facilities as of October 31, 2019.

We generally lease our office and operations facilities but own several manufacturing and research and development facilities, including 224,533 square feet in the United Kingdom, 164,946 square feet in Costa Rica, 63,787 square feet in Denmark, 76,778 square feet in New York, 33,630 square feet in Texas and 9,000 square feet in Virginia.

Our lease agreements expire at various dates through the year 2045.

We believe our properties are suitable and adequate for our businesses.

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| Location | Approximate Square Feet | | | Operations |

| *AMERICAS* | | | | |

| United States: | | | | |

| California | 93,594 | | | Executive offices; CooperVision research & development and administrative offices; CooperSurgical laboratory |

| New York | 423,175 | | | CooperVision manufacturing, marketing, distribution and administrative offices; CooperSurgical manufacturing, office and distribution |

| Connecticut | 301,962 | | | CooperSurgical manufacturing, marketing, distribution, research & development and administrative offices |

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

| Puerto Rico | 527,285 | | | CooperVision manufacturing, research & development and distribution |

| Costa Rica | 167,066 | | | CooperVision and CooperSurgical manufacturing and office |

| Brazil | 16,580 | | | CooperVision marketing and distribution |

| Canada | 30,625 | | | CooperVision and CooperSurgical office and laboratory |

| Other Americas | 157,243 | | | CooperVision marketing and distribution; CooperSurgical manufacturing marketing and laboratory |

| | | | | |

| *EMEA* | | | | |

| United Kingdom | 791,754 | | | CooperVision manufacturing, marketing, distribution, research & development and administrative offices; CooperSurgical marketing and manufacturing |

| Hungary | 330,269 | | | CooperVision manufacturing and marketing |

| Belgium | 273,609 | | | CooperVision distribution |

| Spain | 180,058 | | | CooperVision distribution and administrative offices; CooperSurgical marketing |

| Denmark | 63,787 | | | CooperSurgical manufacturing, marketing, administrative, research and development offices |

| Other EMEA | 228,811 | | | CooperVision and CooperSurgical marketing and distribution |

| | | | | |

| *ASIA PACIFIC* | | | | |

| Japan | 113,555 | | | CooperVision marketing, distribution and administrative offices; CooperSurgical marketing |

| Australia | 38,435 | | | CooperVision marketing, distribution and administrative offices; CooperSurgical laboratory |

| Other Asia Pacific | 77,357 | | | CooperVision and CooperSurgical marketing and distribution |

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

[removed: PART II][added: PART II]

Cooper's common stock, par value $0.10 per share, is traded on the New York Stock Exchange under the symbol “COO.” At November 30, [removed: 2018,] [added: 2019,] there were [removed: 355] [added: 332] common stockholders of record.

[removed: Dividend Policy][added: Dividend Policy]

In dollar terms, we paid cash for dividends of [added: $3.0 million and] $2.9 million in each of fiscal [removed: 2018] [added: 2019] and [removed: 2017.][added: 2018 respectively.]

[removed: Performance Graph][added: Performance Graph]

The following graph compares the cumulative total return on [removed: Cooper] [added: Cooper's] common stock with the cumulative total return of the Standard & Poor 500 and the Standard & Poor's Health Care Equipment Index for the five-year period ended October 31, [removed: 2018.][added: 2019.]

The graph assumes that the value of the investment in Cooper and in each index was $100 on October 31, [removed: 2013,] [added: 2014] and assumes that all dividends were reinvested.

[removed: COMPARISON] [added: COMPARISON] OF 5 YEAR CUMULATIVE TOTAL [removed: RETURN*][added: RETURN*]

[removed: ][added: ]

*$100 invested on [removed: 10/31/13] [added: October 31, 2014] in stock or index, including reinvestment of dividends.

Copyright© [removed: 2018] [added: 2019] Standard & Poor's, a division of S&P Global.

| | [removed: October 2013] [added: October 2014] | | | | [removed: October 2014] [added: October 2015] | | | | [removed: October 2015] [added: October 2016] | | | | [removed: October 2016] [added: October 2017] | | | | [removed: October 2017] [added: October 2018] | | | | [removed: October 2018] [added: October 2019] | | |

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

The Company's share repurchase activity during the three-month period ended October 31, [removed: 2018,] [added: 2019,] was as follows:

| [removed: Period] [added: Period] | | [removed: Total Number of Shares Purchased] [added: Total Number of Shares Purchased] | | | [removed: Average Price Paid Per Share] [added: Average Price Paid Per Share] | | | | [removed: Total] [added: Total] Number [removed: of Shares Purchased as] [added: of Shares Purchased as] Part of [removed: Publicly Announced Plans or Programs] [added: Publicly Announced Plans or Programs] | | | [removed: Maximum Approximate Dollar] [added: Maximum Approximate Dollar] Value of [removed: Shares that] [added: Shares that] May Yet [removed: Be Purchased Under Publicly Announced Plans] [added: Be Purchased Under Publicly Announced Plans] or [removed: Programs] [added: Programs] | | |

During the fiscal year ended October 31, [removed: 2018, there were no repurchases] [added: 2019, we repurchased a total] of [added: 537 thousand] shares of common stock [added: for $156.1 million at an average price of $290.67 per share] under the repurchase program.

At October 31, [removed: 2018,] [added: 2019,] approximately [removed: $563.5] [added: $407.4] million remained authorized under the 2012 Share Repurchase Program.

[removed: Equity] [added: Equity] Compensation Plan [removed: Information][added: Information]

The following table sets forth certain information as of October 31, [removed: 2018,] [added: 2019,] concerning the shares of our Common Stock that may be issued under any form of award granted under our equity compensation plans in effect as of October 31, [removed: 2018:][added: 2019:]

| [removed: Plan Category] [added: Plan Category] | [removed: Number] [added: Number] of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and [removed: Rights(1) (A)] [added: Rights(1) (A)] | | [removed: Weighted-Average] [added: Weighted-Average] Exercise Price of Outstanding Options, Warrants and [removed: Rights (B)] [added: Rights (B)] | | [removed: Number] [added: Number] of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column [removed: A) (C)] [added: A) (C)] |

(1) The amount of total securities to be issued under Company equity plans upon exercise of outstanding options, warrants and rights shown in Column A includes [removed: 487,314] [added: 429,571] Restricted Stock Units granted pursuant to the Company's equity plans.

The total also includes [removed: 117,695] [added: 25,698] shares representing the maximum number of shares that may be issued subject to Performance Share Awards outstanding as of the end of the fiscal year.

(2) Includes information with respect to the Third Amended and Restated 2007 Long-Term Incentive Plan for Employees of the Cooper Companies, Inc. (2007 LTIP), which was approved by stockholders on March 17, 2016, and provides for the issuance of up to 6,930,000 shares of Common Stock, [removed: and] the Second Amended and Restated 2006 Long Term Incentive Plan for Non-Employee Directors of the Cooper Companies, Inc. (2006 Directors Plan), which was approved by stockholders on March 16, 2011 and provides for the issuance of up to 950,000 shares of Common [removed: Stock.][added: Stock , and The Cooper Companies, Inc. 2019 Employee Stock Purchase Plan (2019 ESPP), which was approved by stockholders on March 18, 2019 and provides for the issuance of 1,000,000 shares.]

As of October 31, [removed: 2018, 1,441,896] [added: 2019, 1,280,407] shares remained available under the 2007 [removed: LTIP] [added: LTIP,] and [removed: 130,494] [added: nil] shares remained available under the 2006 Directors [removed: Plan.][added: Plan, and 1,000,000 shares remained available under the 2019 ESPP.]

| The Cooper Companies, Inc. | $ | 100.00 | | | $ | 92.99 | | | $ | 107.49 | | | $ | 146.74 | | | $ | 157.81 | | | $ | 177.81 | |

| S&P 500 | $ | 100.00 | | | $ | 105.20 | | | $ | 109.94 | | | $ | 135.93 | | | $ | 145.91 | | | $ | 166.81 | |

| S&P Health Care Equipment | $ | 100.00 | | | $ | 109.04 | | | $ | 123.35 | | | $ | 154.16 | | | $ | 180.71 | | | $ | 223.24 | |

| 8/1/19 – 8/31/19 | | — | | | $ | — | | | — | | | $ | 557,400,000 | |

| 9/1/19 – 9/30/19 | | — | | | $ | — | | | — | | | $ | 557,400,000 | |

| 10/1/19 – 10/31/19 | | 512,472 | | | $ | 292.68 | | | 512,472 | | | $ | 407,400,000 | |

| Total | | 512,472 | | | | | | | 512,472 | | | | | |

| Equity compensation plans approved by shareholders(2) | 1,480,021 | | $186.24 | | 2,280,407 |

| Total | 1,480,021 | | $186.24 | | 2,280,407 |

| The Cooper Companies, Inc. | $ | 100.00 | | | $ | 126.90 | | | $ | 118.01 | | | $ | 136.41 | | | $ | 186.22 | | | $ | 200.26 | |

| S&P 500 | $ | 100.00 | | | $ | 117.27 | | | $ | 123.37 | | | $ | 128.93 | | | $ | 159.40 | | | $ | 171.11 | |

| S&P Health Care Equipment | $ | 100.00 | | | $ | 124.58 | | | $ | 135.85 | | | $ | 153.67 | | | $ | 192.06 | | | $ | 225.13 | |

| 8/1/18 – 8/31/18 | | — | | | $ | — | | | — | | | $ | 563,500,000 | |

| 9/1/18 – 9/30/18 | | — | | | $ | — | | | — | | | $ | 563,500,000 | |

| 10/1/18 – 10/31/18 | | — | | | $ | — | | | — | | | $ | 563,500,000 | |

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

| Equity compensation plans approved by shareholders(2) | 1,692,007 | | $160.31 | | 1,572,390 |

| Total | 1,692,007 | | $160.31 | | 1,572,390 |

[removed: Five] [added: Five] Year Financial [removed: Highlights][added: Highlights]

| [removed: Years] [added: Years] Ended October [removed: 31, (In] [added: 31, (In] millions, except per share [removed: amounts)] [added: amounts)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| [removed: Consolidated Operations] [added: Consolidated Operations] | | | | | | | | | | | | | | | | | | | |

| Net sales | $ | [removed: 2,532.8] [added: 2,653.4] | | | $ | [removed: 2,139.0] [added: 2,532.8] | | | $ | [removed: 1,966.8] [added: 2,139.0] | | | $ | [removed: 1,797.1] [added: 1,966.8] | | | $ | [removed: 1,717.8] [added: 1,797.1] | |

| Gross profit | $ | [removed: 1,632.3] [added: 1,756.8] | | | $ | [removed: 1,365.8] [added: 1,632.3] | | | $ | [removed: 1,173.1] [added: 1,365.8] | | | $ | [removed: 1,070.3] [added: 1,173.1] | | | $ | [removed: 1,091.6] [added: 1,070.3] | |

| Income before income taxes | $ | [removed: 331.9] [added: 477.4] | | | $ | [removed: 394.0] [added: 331.9] | | | $ | [removed: 295.6] [added: 394.0] | | | $ | [removed: 215.5] [added: 295.6] | | | $ | [removed: 296.5] [added: 215.5] | |

| Net income attributable to Cooper stockholders | $ | [removed: 139.9] [added: 466.7] | | | $ | [removed: 372.9] [added: 139.9] | | | $ | [removed: 273.9] [added: 372.9] | | | $ | [removed: 203.5] [added: 273.9] | | | $ | [removed: 269.9] [added: 203.5] | |

| Diluted earnings per share attributable to [removed: Cooper] stockholders | $ | [removed: 2.81] [added: 9.33] | | | $ | [removed: 7.52] [added: 2.81] | | | $ | [removed: 5.59] [added: 7.52] | | | $ | [removed: 4.14] [added: 5.59] | | | $ | [removed: 5.51] [added: 4.14] | |

| Number of shares used to compute diluted earnings per share | [removed: 49.7] [added: 50.0] | | | | [removed: 49.6] [added: 49.7] | | | | [removed: 49.0] [added: 49.6] | | | | [removed: 49.2] [added: 49.0] | | | | [removed: 49.0] [added: 49.2] | | |

| [removed: Consolidated] [added: Consolidated] Financial [removed: Position] [added: Position] | | | | | | | | | | | | | | | | | | | |

| Current assets | $ | [removed: 1,090.9] [added: 1,163.4] | | | $ | [removed: 953.2] [added: 1,090.9] | | | $ | [removed: 937.1] [added: 953.2] | | | $ | [removed: 844.0] [added: 937.1] | | | $ | [removed: 791.6] [added: 844.0] | |

| Property, plant and equipment, net | [removed: 976.0] [added: 1,132.1] | | | | [removed: 910.1] [added: 976.0] | | | | [removed: 877.7] [added: 910.1] | | | | [removed: 967.1] [added: 877.7] | | | | [removed: 937.3] [added: 967.1] | | |

| Goodwill | [removed: 2,392.1] [added: 2,428.9] | | | | [removed: 2,354.8] [added: 2,392.1] | | | | [removed: 2,164.7] [added: 2,354.8] | | | | [removed: 2,197.1] [added: 2,164.7] | | | | [removed: 2,220.9] [added: 2,197.1] | | |

| Other intangible assets, net | [removed: 1,521.3] [added: 1,405.3] | | | | [removed: 504.7] [added: 1,521.3] | | | | [removed: 441.1] [added: 504.7] | | | | [removed: 411.1] [added: 441.1] | | | | [removed: 453.6] [added: 411.1] | | |

| Deferred tax assets and other assets | [removed: 132.5] [added: 144.8] | | | | [removed: 135.9] [added: 132.5] | | | | [removed: 58.0] [added: 135.9] | | | | [removed: 43.2] [added: 58.0] | | | | [removed: 54.9] [added: 43.2] | | |

| | $ | [removed: 6,112.8] [added: 6,274.5] | | | $ | [removed: 4,858.7] [added: 6,112.8] | | | $ | [removed: 4,478.6] [added: 4,858.7] | | | $ | [removed: 4,462.5] [added: 4,478.6] | | | $ | [removed: 4,458.3] [added: 4,462.5] | |

| Short-term debt | $ | [removed: 37.1] [added: 563.7] | | | $ | [removed: 23.4] [added: 37.1] | | | $ | [removed: 226.3] [added: 23.4] | | | $ | [removed: 243.8] [added: 226.3] | | | $ | [removed: 101.5] [added: 243.8] | |

| Other current liabilities | [removed: 499.4] [added: 546.9] | | | | [removed: 372.7] [added: 499.4] | | | | [removed: 316.9] [added: 372.7] | | | | [removed: 331.7] [added: 316.9] | | | | [removed: 340.7] [added: 331.7] | | |

| Long-term debt | [removed: 1,985.7] [added: 1,262.6] | | | | [removed: 1,149.3] [added: 1,985.7] | | | | [removed: 1,107.4] [added: 1,149.3] | | | | [removed: 1,105.4] [added: 1,107.4] | | | | [removed: 1,280.8] [added: 1,105.4] | | |

| Long-term tax payable | [removed: 141.5] [added: 124.8] | | | | [removed: —] [added: 141.5] | | | | — | | | | — | | | | — | | |

| Other liabilities | [removed: 141.3] [added: 147.9] | | | | [removed: 137.5] [added: 141.3] | | | | [removed: 132.1] [added: 137.5] | | | | [removed: 111.8] [added: 132.1] | | | | [removed: 146.9] [added: 111.8] | | |

| Total liabilities | [removed: 2,805.0] [added: 2,645.9] | | | | [removed: 1,682.9] [added: 2,805.0] | | | | [removed: 1,782.7] [added: 1,682.9] | | | | [removed: 1,792.7] [added: 1,782.7] | | | | [removed: 1,869.9] [added: 1,792.7] | | |

| Stockholders' equity | [removed: 3,307.8] [added: 3,628.6] | | | | [removed: 3,175.8] [added: 3,307.8] | | | | [removed: 2,695.9] [added: 3,175.8] | | | | [removed: 2,669.8] [added: 2,695.9] | | | | [removed: 2,588.4] [added: 2,669.8] | | |

| | $ | 6,274.5 | | | $ | 6,112.8 | | | $ | 4,858.7 | | | $ | 4,478.6 | | | $ | 4,462.5 | |

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: The] [added: To the] Stockholders and Board of Directors

[removed: Opinions] [added: *Opinions] on [removed: the] [added: the*] Consolidated [removed: Financial] [added: *Financial] Statements and Internal Control Over Financial [removed: Reporting][added: Reporting*]

We have audited the accompanying consolidated balance sheets of The Cooper Companies, Inc. and subsidiaries (the Company) as of October 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] 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: 2018,] [added: 2019] and the related notes and financial statement Schedule II (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of October 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework (2013)] [added: Framework* *(2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the years in the three-year period ended October 31, [removed: 2018,] [added: 2019,] 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: 2018,] [added: 2019] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework (2013)] [added: Framework* *(2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

[removed: Basis] [added: *Basis] for [removed: Opinions][added: Opinions*]

Our audits also included performing [added: such other procedures as we considered necessary in the circumstances.]

[removed: THE] [added: THE] COOPER COMPANIES, INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: Definition] [added: *Definition] and Limitations of Internal Control Over Financial [removed: Reporting][added: Reporting*]

[removed: Consolidated] [added: Consolidated] Statements of [removed: Income][added: Income]

| [removed: Years] [added: Years] Ended October [removed: 31, (In] [added: 31,(In] millions, except for earnings per [removed: share)] [added: share)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| Net sales | $ | [removed: 2,532.8] [added: 2,653.4] | | | $ | [removed: 2,139.0] [added: 2,532.8] | | | $ | [removed: 1,966.8] [added: 2,139.0] | |

| Cost of sales | [removed: 900.5] [added: 896.6] | | | | [removed: 773.2] [added: 900.5] | | | | [removed: 793.7] [added: 773.2] | | |

| Gross profit | [removed: 1,632.3] [added: 1,756.8] | | | | [removed: 1,365.8] [added: 1,632.3] | | | | [removed: 1,173.1] [added: 1,365.8] | | |

| Selling, general and administrative expense | [removed: 973.3] [added: 996.2] | | | | [removed: 799.1] [added: 973.3] | | | | [removed: 722.8] [added: 799.1] | | |

| Research and development expense | [removed: 84.8] [added: 86.7] | | | | [removed: 69.2] [added: 84.8] | | | | [removed: 65.4] [added: 69.2] | | |

| Amortization of intangibles | [removed: 146.7] [added: 145.8] | | | | [removed: 68.4] [added: 146.7] | | | | [removed: 60.8] [added: 68.4] | | |

| Impairment of intangibles | [removed: 24.4] [added: 0.4] | | | | [removed: —] [added: 24.4] | | | | — | | |

| Operating income | [removed: 403.1] [added: 546.7] | | | | [removed: 429.1] [added: 403.1] | | | | [removed: 324.1] [added: 429.1] | | |

| Interest expense | [removed: 82.7] [added: 68.0] | | | | [removed: 33.4] [added: 82.7] | | | | [removed: 26.2] [added: 33.4] | | |

| Other [removed: (income) expense,] [added: expense (income),] net | [removed: (11.5] [added: 1.3] | | [removed: )] | | [removed: 1.7] [added: (11.5] | | [added: )] | | [removed: 2.3] [added: 1.7] | | |

| Income before income taxes | [removed: 331.9] [added: 477.4] | | | | [removed: 394.0] [added: 331.9] | | | | [removed: 295.6] [added: 394.0] | | |

| Provision for income taxes [added: (Note 5)] | [removed: 192.0] [added: 10.7] | | | | [removed: 21.1] [added: 192.0] | | | | [removed: 20.7] [added: 21.1] | | |

| Net income | [removed: 139.9] [added: 466.7] | | | | [removed: 372.9] [added: 139.9] | | | | [removed: 274.9] [added: 372.9] | | |

| Net income attributable to Cooper stockholders | $ | [removed: 139.9] [added: 466.7] | | | $ | [removed: 372.9] [added: 139.9] | | | $ | [removed: 273.9] [added: 372.9] | |

| Earnings per share - basic [added: (Note 6)] | $ | [removed: 2.85] [added: 9.44] | | | $ | [removed: 7.63] [added: 2.85] | | | $ | [removed: 5.65] [added: 7.63] | |

| Earnings per share - diluted [added: (Note 6)] | $ | [removed: 2.81] [added: 9.33] | | | $ | [removed: 7.52] [added: 2.81] | | | $ | [removed: 5.59] [added: 7.52] | |

| Basic | [removed: 49.1] [added: 49.4] | | | | [removed: 48.9] [added: 49.1] | | | | [removed: 48.5] [added: 48.9] | | |

| Diluted | [removed: 49.7] [added: 50.0] | | | | [removed: 49.6] [added: 49.7] | | | | [removed: 49.0] [added: 49.6] | | |

[removed: Consolidated] [added: Consolidated] Statements of Comprehensive [removed: Income][added: Income]

| [removed: Years] [added: Years] Ended October [removed: 31, (In millions)] [added: 31,(In millions)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| Net income | $ | [removed: 139.9] [added: 466.7] | | | $ | [removed: 372.9] [added: 139.9] | | | $ | [removed: 274.9] [added: 372.9] | |

| Other comprehensive [removed: (loss) income:] [added: income (loss):] | | | | | | | | | | | |

| Foreign currency translation adjustment | [removed: (58.5] [added: 9.0] | | [removed: )] | | [removed: 107.7] [added: (58.5] | | [added: )] | | [removed: (289.6] [added: 107.7] | | [removed: )] |

| Change in minimum pension liability, net of tax [removed: provision] (benefit) [added: provision] of [removed: $3.1, $4.2] [added: $(8.0), $3.1] and [removed: $(5.3),] [added: $4.2,] respectively | [removed: 7.9] [added: (25.4] | | [added: )] | | [removed: 6.6] [added: 7.9] | | | | [removed: (8.4] [added: 6.6] | | [removed: )] |

| Other comprehensive (loss) income | [removed: (50.6] [added: (16.4] | | ) | | [removed: 114.3] [added: (50.6] | | [added: )] | | [removed: (298.0] [added: 114.3] | | [removed: )] |

| Comprehensive income [removed: (loss)] | [removed: 89.3] [added: 450.3] | | | | [removed: 487.2] [added: 89.3] | | | | [removed: (23.1] [added: 487.2] | | [removed: )] |

| Comprehensive income [removed: (loss)] attributable to Cooper stockholders | $ | [removed: 89.3] [added: 450.3] | | | $ | [removed: 487.2] [added: 89.3] | | | $ | [removed: (24.0] [added: 487.2] | [removed: )] |

*Critical Audit Matter*

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate*s* to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

*Assessment of Gross Unrecognized Tax Benefits*

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