UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
__________________________________________________________ 
FORM 10-Q
 
 __________________________________________________________ 
(Mark One)
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 30, 2017June 25, 2022
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 1-36214
__________________________________________________________ 
Hologic, Inc.HOLOGIC, INC.
(Exact name of registrant as specified in its charter)

__________________________________________________________
Delaware04-2902449
(State or other jurisdiction of incorporation)incorporation or organization)(I.R.S. Employer Identification No.)
250 Campus Drive,
Marlborough, Massachusetts
01752
Marlborough,
Massachusetts
01752
(Address of principal executive offices)(Zip Code)
(508) 263-2900
(Registrant’s telephone number, including area code)

__________________________________________________________
*Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueHOLXNASDAQ
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 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.    Yes  ý☒    No  ¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý☒    No  ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filerý☒Accelerated filer¨☐
Non-accelerated filer
¨ (Do not check if a smaller reporting company)
☐		Smaller reporting company¨☐
Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)Act).    Yes  ¨☐    No  ý☒
As of February 5, 2018, 276,529,054July 21, 2022, 249,653,133 shares of the registrant’s Common Stock, $0.01 par value, were outstanding.


Table of Contents

HOLOGIC, INC.
INDEX
 
Page
Item 1.
Consolidated Statements of Income for the Three and Nine Months Ended December 30, 2017June 25, 2022 and December 31, 2016June 26, 2021
3
4
5
Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended June 25, 2022 and Year Ended September 25, 2021
6
68
79
Item 2.
3233
Item 3.
49
Item 4.
50
Item 1.
52
Item 1A.
52
Item 2.
5253
Item 6.
5354
55
EXHIBITS



2
Table of Contents
PART I – FINANCIAL INFORMATION
 
Item 1.Financial Statements (unaudited)
Item 1.    Financial Statements (unaudited)
HOLOGIC, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

(In millions, except number of shares, which are reflected in thousands, and per share data)
Three Months Ended Three Months EndedNine Months Ended
December 30,
2017		 December 31,
2016		 June 25,
2022		June 26,
2021		June 25,
2022		June 26,
2021
Revenues:   Revenues:
Product$650.7
 $613.4
Product$837.1 $995.2 $3,408.7 $3,829.4 
Service and other140.4
 121.0
Service and other165.6 173.1 500.9 486.3 
791.1
 734.4
1,002.7 1,168.3 3,909.6 4,315.7 
Costs of revenues:   Costs of revenues:
Product213.7
 198.3
Product266.3 303.9 907.0 889.1 
Amortization of acquired intangible assets79.8
 73.5
Amortization of acquired intangible assets75.9 68.1 223.1 194.2 
Impairment of acquired intangible assetsImpairment of acquired intangible assets9.2 — 9.2 — 
Service and other73.1
 57.8
Service and other101.5 94.7 287.6 264.7 
Gross Profit424.5
 404.8
Gross profitGross profit549.8 701.6 2,482.7 2,967.7 
Operating expenses:   Operating expenses:
Research and development54.8
 54.4
Research and development65.1 69.0 207.4 199.8 
Selling and marketing139.5
 110.0
Selling and marketing152.3 142.7 471.0 402.2 
General and administrative77.9
 69.8
General and administrative91.9 117.3 310.5 297.7 
Amortization of acquired intangible assets14.4
 21.4
Amortization of acquired intangible assets11.2 10.4 33.2 30.7 
Restructuring charges3.8
 3.2
Contingent consideration - fair value adjustmentsContingent consideration - fair value adjustments(35.4)— (39.5)(10.1)
Restructuring and divestiture chargesRestructuring and divestiture charges0.8 3.6 0.8 6.6 
290.4
 258.8
285.9 343.0 983.4 926.9 
Income from operations134.1
 146.0
Income from operations263.9 358.6 1,499.3 2,040.8 
Interest income0.8
 0.3
Interest income2.4 0.4 3.6 1.1 
Interest expense(41.0) (40.4)Interest expense(22.7)(21.6)(71.0)(70.9)
Debt extinguishment loss(1.0) —
Debt extinguishment loss— — (0.7)(21.6)
Other income, net2.9
 10.2
Other income, net4.8 0.1 13.6 1.1 
Income before income taxes95.8
 116.1
Income before income taxes248.4 337.5 1,444.8 1,950.5 
(Benefit) provision for income taxes(310.9) 29.6
Provision for income taxesProvision for income taxes20.0 69.4 261.5 409.6 
Net income$406.7
 $86.5
Net income$228.4 $268.1 $1,183.3 $1,540.9 
Net income per common share:   
Net loss attributable to noncontrolling interestNet loss attributable to noncontrolling interest— (0.3)— (1.8)
Net income attributable to HologicNet income attributable to Hologic$228.4 $268.4 $1,183.3 $1,542.7 
Net income per common share attributable to Hologic:Net income per common share attributable to Hologic:
Basic$1.47
 $0.31
Basic$0.91 $1.05 $4.70 $5.98 
Diluted$1.45
 $0.30
Diluted$0.90 $1.04 $4.65 $5.93 
Weighted average number of shares outstanding:   Weighted average number of shares outstanding:
Basic276,856
 278,663
Basic250,756 256,230 251,943 257,769 
Diluted280,802
 284,224
Diluted253,093 258,581 254,273 260,371 
See accompanying notes.

3
Table of Contents
HOLOGIC, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In millions)
 Three Months Ended
 December 30,
2017		 December 31,
2016
Net income$406.7
 $86.5
Changes in foreign currency translation adjustment5.5
 (15.7)
Changes in unrealized holding gains and losses on available-for-sale securities, net of tax of $0.2 and $1.5 for the three months December 30, 2017 and December 31, 2016:   
Gain recognized in other comprehensive income (loss)—
 2.3
Loss reclassified from accumulated other comprehensive loss to the statements of income0.4
 0.1
Changes in pension plans, net of taxes of $0.6 for the three months ended December 30, 20170.6
 —
Changes in value of hedged interest rate caps, net of tax of $(4.9) and $0.5 for the three months ended December 30, 2017 and December 31, 2016:   
(Loss) gain recognized in other comprehensive income (loss), net(4.3) 0.7
Loss reclassified from accumulated other comprehensive loss to the statements of income2.3
 2.1
Other comprehensive income (loss)4.5
 (10.5)
Comprehensive income$411.2
 $76.0
 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		June 25,
2022		June 26,
2021
Net income$228.4 $268.1 $1,183.3 $1,540.9 
Changes in foreign currency translation adjustment(52.0)(9.4)(124.3)(1.0)
Changes in value of hedged interest rate swaps and interest rate caps, net of tax of $2.5 and $11.6 for the three and nine months ended June 25, 2022 and $1.0 and $2.2 for the three and nine months ended June 26, 2021.
Gain recognized in other comprehensive income, net8.4 3.0 35.7 8.0 
Loss reclassified from accumulated other comprehensive loss to the statements of income— — — 0.5 
Other comprehensive (loss) income(43.6)(6.4)(88.6)7.5 
Comprehensive income$184.8 $261.7 $1,094.7 $1,548.4 
Components of comprehensive income attributable to noncontrolling interest:
Net loss attributable to noncontrolling interest— 0.3 — 1.8 
Comprehensive loss attributable to noncontrolling interest— 0.3 — 1.8 
Comprehensive income attributable to Hologic$184.8 $262.0 $1,094.7 $1,550.2 
See accompanying notes.





4
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HOLOGIC, INC.


CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except number of shares, which are reflected in thousands, and par value)
 
December 30,
2017		 September 30,
2017		June 25,
2022		September 25,
2021
ASSETS   ASSETS
Current assets:   Current assets:
Cash and cash equivalents$664.4
 $540.6
Cash and cash equivalents$2,375.3 $1,170.3 
Accounts receivable, less reserves of $11.5 and $9.8, respectively548.0
 533.5
Accounts receivable, less reservesAccounts receivable, less reserves702.9 942.7 
Inventories358.2
 331.6
Inventories581.2 501.2 
Prepaid expenses and other current assetsPrepaid expenses and other current assets213.3 528.8 
Prepaid income taxes14.3
 22.4
Prepaid income taxes36.3 25.7 
Prepaid expenses and other current assets53.5
 50.5
Total current assets1,638.4
 1,478.6
Total current assets3,909.0 3,168.7 
Property, plant and equipment, net467.1
 472.8
Property, plant and equipment, net490.1 564.7 
Intangible assets, net2,681.3
 2,772.3
Intangible assets, net1,436.5 1,659.2 
Goodwill3,176.7
 3,171.2
Goodwill3,285.9 3,281.6 
Other assets84.8
 84.7
Other assets235.9 245.7 
Total assets$8,048.3
 $7,979.6
Total assets$9,357.4 $8,919.9 
LIABILITIES AND STOCKHOLDERS’ EQUITY   LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:   Current liabilities:
Current portion of long-term debt$572.1
 $1,150.8
Current portion of long-term debt$7.5 $313.0 
Accounts payable160.3
 166.6
Accounts payable216.6 215.9 
Accrued expenses412.7
 375.3
Accrued expenses573.7 596.2 
Deferred revenue163.2
 171.2
Deferred revenue199.6 198.0 
Current portion of capital lease obligations1.6
 1.6
Finance lease obligationsFinance lease obligations3.5 3.7 
Total current liabilities1,309.9
 1,865.5
Total current liabilities1,000.9 1,326.8 
Long-term debt, net of current portion2,757.7
 2,172.1
Long-term debt, net of current portion2,814.6 2,712.2 
Capital lease obligations, net of current portion22.3
 22.7
Finance lease obligations, net of current portionFinance lease obligations, net of current portion18.9 22.8 
Deferred income tax liabilities586.4
 973.6
Deferred income tax liabilities208.3 250.5 
Deferred revenue18.8
 20.8
Deferred revenue, net of current portionDeferred revenue, net of current portion10.9 20.3 
Other long-term liabilities159.2
 140.2
Other long-term liabilities305.9 368.7 
Commitments and contingencies (Note 7)
 
Stockholders’ equity:   Stockholders’ equity:
Preferred stock, $0.01 par value – 1,623 shares authorized; 0 shares issued—
 —
Preferred stock, $0.01 par value – 1,623 shares authorized; 0 shares issued— — 
Common stock, $0.01 par value – 750,000 shares authorized; 288,750 and 287,853 shares issued, respectively2.9
 2.9
Common stock, $0.01 par value – 750,000 shares authorized; 298,335 and 297,306 shares issued, respectivelyCommon stock, $0.01 par value – 750,000 shares authorized; 298,335 and 297,306 shares issued, respectively3.0 3.0 
Additional paid-in-capital5,628.9
 5,630.8
Additional paid-in-capital6,017.4 5,965.8 
Accumulated deficit(1,976.0) (2,382.7)
Treasury stock, at cost – 12,560 shares(450.1) (450.1)
Retained earningsRetained earnings1,481.6 298.3 
Treasury stock, at cost – 48,851 and 43,653 shares, respectivelyTreasury stock, at cost – 48,851 and 43,653 shares, respectively(2,356.4)(1,989.4)
Accumulated other comprehensive loss(11.7) (16.2)Accumulated other comprehensive loss(147.7)(59.1)
Total stockholders’ equity3,194.0
 2,784.7
Total stockholders’ equity4,997.9 4,218.6 
Total liabilities and stockholders’ equity$8,048.3
 $7,979.6
Total liabilities and stockholders’ equity$9,357.4 $8,919.9 
See accompanying notes.

5

Table of Contents
Hologic, Inc.
Consolidated Statements of Stockholders' Equity
(In millions, except number of shares, which are reflected in thousands)
 Common StockAdditional
Paid-in-
Capital		Retained
Earnings / (Accumulated Deficit)		Accumulated
Other
Comprehensive
Loss		Treasury StockTotal
Stockholders’
Equity
 Number of
Shares		Par ValueNumber of
Shares		AmountNoncontrolling Interest
Balance at September 26, 2020295,107 $2.9 $5,904.8 $(1,573.2)$(49.7)37,609 $(1,579.6)$2.1 $2,707.3 
Exercise of stock options490 — 18.4 — — — — — 18.4 
Vesting of restricted stock units, net936 0.1 (46.5)— — — — — (46.4)
Stock-based compensation— — 18.6 — — — — — 18.6 
Net income (loss)— — — 654.4 — — — (1.0)653.4 
Other comprehensive income activity— — — — 19.0 — — — 19.0 
Repurchase of common stock— — — — — 1,469 (101.3)— (101.3)
Balance at December 26, 2020296,533 $3.0 $5,895.3 $(918.8)$(30.7)39,078 $(1,680.9)$1.1 $3,269.0 
Exercise of stock options146 — 5.8 — — — — — 5.8 
Vesting of restricted stock units, net17 — (0.3)— — — — — (0.3)
Common stock issued under the employee stock purchase plan191 — 9.2 — — — — — 9.2 
Stock-based compensation— — 17.1 — — — — — 17.1 
Net income (loss)— — — 619.9 — — — (0.5)619.4 
Other comprehensive income activity— — — — (5.1)— — — (5.1)
Repurchase of common stock— — — — — 1,604 (120.1)— (120.1)
Balance at March 27, 2021296,887 $3.0 $5,927.1 $(298.9)$(35.8)40,682 $(1,801.0)$0.6 $3,795.0 
Exercise of stock options53 — 2.1 — — — — — 2.1 
Vesting of restricted stock units, net5 — (0.2)— — — — — (0.2)
Stock-based compensation— — 15.4 — — — — — 15.4 
Net income (loss)— — — 268.4 — — — (0.3)268.1 
Other comprehensive income activity— — — — (6.4)— — — (6.4)
Repurchase of common stock— — — — — 2,971 (188.4)— (188.4)
Purchase of non-controlling interest— — (8.2)— — — — (0.3)(8.5)
Balance at June 26, 2021296,945 $3.0 $5,936.2 $(30.5)$(42.2)43,653 $(1,989.4)$— $3,877.1 
Exercise of stock options168 — 6.6 — — — — — 6.6 
Vesting of restricted stock units, net22 — (0.6)— — — — — (0.6)
Common stock issued under the employee stock purchase plan171 — 9.7 — — — — — 9.7 
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Stock-based compensation— — 13.9 — — — — — 13.9 
Net income— — — 328.8 — — — — 328.8 
Other comprehensive income activity— — — — (16.9)— — — (16.9)
Balance at September 25, 2021297,306 $3.0 $5,965.8 $298.3 $(59.1)43,653 $(1,989.4)$— $4,218.6 
Exercise of stock options45 — 1.9 — — — — — 1.9 
Vesting of restricted stock units, net534 — (22.4)— — — — — (22.4)
Stock-based compensation— — 18.7 — — — — — 18.7 
Net income— — — 499.2 — — — — 499.2 
Other comprehensive income activity— — — — (29.9)— — — (29.9)
Repurchase of common stock— — — — — 2,335 (167.0)— (167.0)
Balance at December 25, 2021297,885 $3.0 $5,964.0 $797.5 $(89.0)45,988 $(2,156.4)$— $4,519.1 
Exercise of stock options140 — 5.8 — — — — — 5.8 
Vesting of restricted stock units, net14 — (0.1)— — — — — (0.1)
Common stock issued under the employee stock purchase plan164 — 9.5 — — — — — 9.5 
Stock-based compensation— — 17.8 — — — — — 17.8 
Net income— — — 455.7 — — — — 455.7 
Other comprehensive income activity— — — — (15.1)— — — (15.1)
Repurchase of common stock— — — — — 2,863 (200.0)— (200.0)
Balance at March 26, 2022298,203 $3.0 $5,997.0 $1,253.2 $(104.1)48,851 $(2,356.4)$— $4,792.7 
Exercise of stock options128 — 5.2 — — — — — 5.2 
Vesting of restricted stock units, net4 — (0.1)— — — — — (0.1)
Stock-based compensation— — 15.3 — — — — — 15.3 
Net income— — — 228.4 — — — — 228.4 
Other comprehensive income activity— — — — (43.6)— — — (43.6)
Balance at June 25, 2022298,335 $3.0 $6,017.4 $1,481.6 $(147.7)48,851 $(2,356.4)$— $4,997.9 


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Table of Contents
HOLOGIC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Three Months EndedNine Months Ended
December 30,
2017		 December 31,
2016		 June 25,
2022		June 26,
2021
OPERATING ACTIVITIES   OPERATING ACTIVITIES
Net income$406.7
 $86.5
Net income$1,183.3 $1,540.9 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:   
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation27.0
 20.4
Depreciation67.2 64.2 
Amortization of acquired intangibles94.2
 94.9
Amortization of acquired intangibles256.3 224.9 
Non-cash interest expense8.7
 14.3
Stock-based compensation expense16.4
 19.2
Stock-based compensation expense51.8 51.0 
Deferred income taxes(390.7) (24.6)Deferred income taxes(60.2)(44.3)
Intangible asset impairment chargeIntangible asset impairment charge9.2 — 
Debt extinguishment loss1.0
 —
Debt extinguishment loss0.7 21.6 
Contingent consideration - fair value adjustmentsContingent consideration - fair value adjustments(39.5)(10.1)
Other adjustments and non-cash items1.2
 (6.0)Other adjustments and non-cash items36.3 29.9 
Changes in operating assets and liabilities, excluding the effect of acquisitions:   Changes in operating assets and liabilities, excluding the effect of acquisitions:
Accounts receivable(6.4) 21.5
Accounts receivable193.9 111.5 
Inventories(23.3) (20.7)Inventories(86.8)(82.4)
Prepaid income taxes8.1
 (0.8)Prepaid income taxes(10.5)(24.3)
Prepaid expenses and other assets(5.0) (17.4)Prepaid expenses and other assets378.3 (22.3)
Accounts payable(7.1) (17.8)Accounts payable2.5 9.4 
Accrued expenses and other liabilities48.9
 14.6
Accrued expenses and other liabilities(23.0)(27.6)
Deferred revenue(10.6) (14.5)Deferred revenue(2.4)22.6 
Net cash provided by operating activities169.1
 169.6
Net cash provided by operating activities1,957.1 1,865.0 
INVESTING ACTIVITIES   INVESTING ACTIVITIES
Acquisition of businesses, net of cash acquired(4.1) —
Acquisition of businesses, net of cash acquired(158.6)(1,163.3)
Capital expenditures(10.2) (11.5)Capital expenditures(50.8)(90.6)
Proceeds from the Department of DefenseProceeds from the Department of Defense75.0 19.4 
Increase in equipment under customer usage agreements(11.6) (13.2)Increase in equipment under customer usage agreements(44.8)(43.4)
Proceeds from sale of available-for-sale marketable securities0.1
 0.4
Purchase of intellectual propertyPurchase of intellectual property— (6.5)
Other activity(0.4) (0.9)Other activity5.0 (2.1)
Net cash used in investing activities(26.2) (25.2)Net cash used in investing activities(174.2)(1,286.5)
FINANCING ACTIVITIES   FINANCING ACTIVITIES
Proceeds from long-term debt, net of issuance costsProceeds from long-term debt, net of issuance costs1,491.2 — 
Repayment of long-term debt(1,331.3) (18.8)Repayment of long-term debt(1,387.5)(56.3)
Proceeds from long-term debt1,500.0
 —
Repayment of amounts borrowed under accounts receivable securitization program—
 (12.0)
Proceeds from senior notes350.0
 —
Payments to extinguish convertible notes(296.9) (6.4)
Proceeds from amounts borrowed under revolving credit line495.0
 —
Repayments of amounts borrowed under revolving credit line(720.0) —
Payment of debt issuance costs(11.9) —
Proceeds from senior notes, net of issuance costsProceeds from senior notes, net of issuance costs— 936.3 
Repayment of senior notesRepayment of senior notes— (970.8)
Proceeds from accounts receivable securitization agreementProceeds from accounts receivable securitization agreement— 320.0 
Repayment under accounts receivable securitization agreementRepayment under accounts receivable securitization agreement(248.5)— 
Repayments under revolving credit lineRepayments under revolving credit line— (250.0)
Payment of contingent considerationPayment of contingent consideration(12.2)— 
Purchase of non-controlling interestPurchase of non-controlling interest— (8.5)
Repayment of acquired long-term debtRepayment of acquired long-term debt(63.7)— 
Repurchases of common stockRepurchases of common stock(367.0)(409.7)
Proceeds from issuance of common stock pursuant to employee stock plans9.5
 13.2
Proceeds from issuance of common stock pursuant to employee stock plans26.9 39.6 
Payments under capital lease obligations(0.4) —
Payment of minimum tax withholdings on net share settlements of equity awards(14.3) (16.4)Payment of minimum tax withholdings on net share settlements of equity awards(22.6)(46.9)
Payments under finance lease obligationsPayments under finance lease obligations(2.8)(1.5)
Net cash used in financing activities(20.3) (40.4)Net cash used in financing activities(586.2)(447.8)
Effect of exchange rate changes on cash and cash equivalents1.2
 (6.4)Effect of exchange rate changes on cash and cash equivalents8.3 (4.1)
Net increase in cash and cash equivalents123.8
 97.6
Net increase in cash and cash equivalents1,205.0 126.6 
Cash and cash equivalents, beginning of period540.6
 548.4
Cash and cash equivalents, beginning of period1,170.3 701.0 
Cash and cash equivalents, end of period$664.4
 $646.0
Cash and cash equivalents, end of period$2,375.3 $827.6 
See accompanying notes.

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HOLOGIC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(all tabular amounts in millions, except number of shares, which are reflected in thousands, and per share data)

(1) Basis of Presentation

The unaudited consolidated financial statements of Hologic, Inc. (“Hologic” or the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”(the “SEC”) for quarterly reports on Form 10-Q and do not include all of the information and disclosures required by U.S. generally accepted accounting principles (“GAAP”). for annual financial statements. These unaudited financial statements should be read in conjunction with the consolidated financial statements and related notes for the fiscal year ended September 30, 201725, 2021 included in the Company’s Form 10-K filed with the SEC on November 21, 2017.16, 2021. In the opinion of management, the unaudited financial statements and notes contain all adjustments (consisting of normal recurring accruals)accruals and all other necessary adjustments) considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented.

The unaudited consolidated financial statements include the accounts of the Company and its wholly ownedwholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management’s estimates if past experience or other assumptions do not turn out to be substantially accurate. Operating results for the three and nine months ended December 30, 2017June 25, 2022 are not necessarily indicative of the results to be expected for any other interim period or the entire fiscal year ending September 29, 2018.24, 2022.
On March 22, 2017, the Company completed the acquisition of Cynosure, Inc. ("Cynosure"), which resulted in the Company expanding into the medical aesthetics market. Cynosure develops, manufactures and markets aesthetic treatment systems that enable medical practitioners to perform non-invasive and minimally invasive procedures. Cynosure's results of operations are reported within the Company's Medical Aesthetics reportable segment. The Company's acquisition of Cynosure is more fully described in Note 3.
Recently Adopted Accounting Pronouncements
In December 2016, the FASB issued Accounting Standards Update No. 2016-19, Technical Corrections and Improvements (ASU 2016-19). This guidance changes how companies classify internal-use software from classification within property, plant, and equipment to intangible assets. The amendments in the update are effective for annual periods beginning after December 15, 2016, and were applicable to the Company in fiscal 2018. The Company adopted ASU 2016-19 in the first quarter of fiscal 2018. As a result of the adoption, the Company has reclassified $17.6 million and $18.4 million of internal-use software from property, plant, and equipment to intangible assets as of December 30, 2017 and September 30, 2017, respectively. Additionally, the Company reclassified $12.9 million and $12.3 million of capitalized software embedded in its products from other assets to intangible assets as of December 30, 2017 and September 30, 2017, respectively.
Subsequent Events Consideration

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that may require additional disclosure. Subsequent events have been evaluated as required. There were no material recognized or unrecognized subsequent events recorded inaffecting the unaudited consolidated financial statements as of and for the three and nine months ended December 30, 2017. On January 19, 2018,June 25, 2022.

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(2) Revenue

The Company accounts for revenue pursuant to ASC 606, Revenue from Contracts with Customer (ASC 606) and generates revenue from the sale of its products, primarily medical imaging systems and related components and software, diagnostic tests and assays and surgical disposable products, and related services, which are primarily support and maintenance services on its medical imaging systems, and to a lesser extent installation, training and repairs. In addition, the Company completedgenerates service revenue from performing laboratory testing services acquired in its Biotheranostics, Inc. acquisition, which are included in its Molecular Diagnostics business. The Company's products are sold primarily through a private placementdirect sales force, and within international markets, there is more reliance on distributors and resellers. Revenue is recorded net of $1.0 billion aggregate principal amountsales tax. The following tables provide revenue from contracts with customers by business and geographic region on a disaggregated basis:    
Three Months Ended June 25, 2022Three Months Ended June 26, 2021
Business (in millions)
United StatesInternationalTotalUnited StatesInternationalTotal
Diagnostics:
Cytology & Perinatal$74.3 $41.6 $115.9 $73.9 $42.0 $115.9 
Molecular Diagnostics304.2 131.1 435.3 270.1 266.3 536.4 
Blood Screening8.9 — 8.9 13.2 — 13.2 
Total$387.4 $172.7 $560.1 $357.2 $308.3 $665.5 
Breast Health:
Breast Imaging$165.5 $46.7 $212.2 $218.4 $61.9 $280.3 
Interventional Breast Solutions56.8 13.8 70.6 54.8 13.9 68.7 
Total$222.3 $60.5 $282.8 $273.2 $75.8 $349.0 
GYN Surgical$112.2 $25.9 $138.1 $103.9 $24.0 $127.9 
Skeletal Health$12.7 $9.0 $21.7 $15.6 $10.3 $25.9 
$734.6 $268.1 $1,002.7 $749.9 $418.4 $1,168.3 


Nine Months Ended June 25, 2022Nine Months Ended June 26, 2021
Business (in millions)
United StatesInternationalTotalUnited StatesInternationalTotal
Diagnostics:
Cytology & Perinatal$227.4 $134.6 $362.0 $230.8 $127.1 $357.9 
Molecular Diagnostics1,395.9 715.2 2,111.1 1,561.7 905.3 2,467.0 
Blood Screening24.5 — 24.5 33.3 — 33.3 
Total$1,647.8 $849.8 $2,497.6 $1,825.8 $1,032.4 $2,858.2 
Breast Health:
Breast Imaging$561.8 $177.7 $739.5 $619.5 $198.3 $817.8 
Interventional Breast Solutions171.1 42.1 213.2 164.9 35.3 200.2 
Total$732.9 $219.8 $952.7 $784.4 $233.6 $1,018.0 
GYN Surgical$315.4 $74.2 $389.6 $296.8 $69.4 $366.2 
Skeletal Health$43.3 $26.4 $69.7 $44.7 $28.6 $73.3 
$2,739.4 $1,170.2 $3,909.6 $2,951.7 $1,364.0 $4,315.7 

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Table of senior notes, allocated between (i) $600 million of its 4.375% Senior Notes due 2025 (the “New 2025 Senior Notes”) at an offering price of 100%Contents
Three Months EndedNine Months Ended
Geographic Regions (in millions)
June 25, 2022June 26, 2021June 25, 2022June 26, 2021
United States$734.6 $749.9 $2,739.4 $2,951.7 
Europe164.5 289.0 750.8 963.9 
Asia-Pacific71.7 89.6 301.1 268.1 
Rest of World31.9 39.8 118.3 132.0 
$1,002.7 $1,168.3 $3,909.6 $4,315.7 

The following table provides revenue recognized by source:

Three Months EndedNine Months Ended
Revenue by type (in millions)
June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Disposables$713.0 $797.7 $2,930.5 $3,239.2 
Capital equipment, components and software124.1 197.5 478.2 590.2 
Service160.8 158.4 486.2 437.2 
Other4.8 14.7 14.7 49.1 
$1,002.7 $1,168.3 $3,909.6 $4,315.7 

The Company considers revenue to be earned when all of the aggregate principal amount of the 2025 Senior Notes, plus accrued and unpaid interest from October 10, 2017, and (ii) $400 million of its new 4.625% Senior Notes due 2028 (the "2028 Senior Notes," and together with the New 2025 Senior Notes, the "New Notes") at an offering price of 100% of the aggregate principal amount of the 2028 Senior Notes. In connection with the offering of the New Notes,following criteria are met: the Company has calleda contract with a customer that creates enforceable rights and obligations; promised products or services are identified; the transaction price, or the amount the Company expects to receive, including an estimate of uncertain amounts subject to a constraint to ensure revenue is not recognized in an amount that would result in a significant reversal upon resolution of the uncertainty, is determinable; and the Company has transferred control of the promised items to the customer. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the contract. The transaction price for the contract is measured as the amount of consideration the Company expects to receive in exchange for the goods and services expected to be transferred. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control of the distinct good or service is transferred. Transfer of control for the Company's products is generally at shipment or delivery, depending on contractual terms, but occurs when title and risk of loss transfers to the customer which represents the point in time when the customer obtains the use of and substantially all of its outstanding 5.250% Senior Notes due 2022 (the "2022 Senior Notes"),the remaining benefits of the product. As such, the Company's performance obligation related to product sales is satisfied at a point in aggregate principaltime. Revenue from support and maintenance contracts, extended warranty, and professional services for installation, training and repairs is recognized over time based on the period contracted or as the services are performed as these methods represent a faithful depiction of the transfer of goods and services.

The Company recognizes a receivable when it has an unconditional right to payment, which represents the amount of $1.0 billion, for redemption on February 15, 2018 at an aggregate redemption pricethe Company expects to collect in a transaction and is most often equal to the principal amounttransaction price in the contract. Payment terms are typically 30 days in the U.S. but may be longer in international markets. The Company treats shipping and handling costs performed after a customer obtains control of the outstanding 2022 Senior Notes, plusgood as a fulfillment cost and records these costs within costs of product revenue when the applicable premium and accrued and unpaid interest through the day immediately preceding the redemption date.corresponding revenue is recognized.


Additionally, on January 29, 2018, the Company announced that pursuant to the terms of the indenture for the 2.00% Convertible Senior Notes due 2042 (the “2042 Notes”), holders of the 2042 Notes had the option of requiring the Company to repurchase their 2042 Notes on March 1, 2018 at a repurchase price payable in cash equal to 100% of the accreted principal amount of the 2042 Notes, plus accrued and unpaid interest to, but not including the put date. The Company also announced on January 29, 2018 that it had electedplaces instruments (or equipment) at customer sites but retains title to redeem, on March 6, 2018, allthe instrument. The customer has the right to use the instrument for a period of time, and the Company recovers the cost of providing the instrument through the sales of disposables, namely tests and assays in Diagnostics and handpieces in GYN Surgical. These types of agreements include an embedded lease, which is generally an operating lease, for the right to use an instrument and no instrument revenue is recognized at the time of instrument delivery. The Company recognizes a portion of the then outstanding 2042 Notes at a redemption price payable in cash equalrevenue allocated to 100%the embedded lease concurrent with the sale of disposables over the term of the accreted principal amountagreement.

Some of the 2042 Notes, plus accruedCompany's contracts have multiple performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract. The Company determines its best estimate of standalone selling price using average selling prices over 3- to 12-month periods of data depending on the products or nature of the services coupled with current market considerations. If the product or service does not have a history of sales or if sales volume is not sufficient, the Company relies on prices set by its pricing committees or applicable marketing department adjusted for expected discounts.
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Variable Consideration

The Company exercises judgment in estimating variable consideration, which includes volume discounts, sales rebates, product returns and unpaid interestother adjustments. These amounts are recorded as a reduction to revenue and classified as a current liability. The Company bases its estimates for volume discounts, sales rebates and product returns on historical information to the extent it is reasonable to be used as a predictive tool of expected future rebates. To the extent the transaction price includes variable consideration, the Company applies judgment in constraining the estimated variable consideration due to factors that may cause reversal of revenue recognized. The Company evaluates constraints based on its historical and projected experience with similar customer contracts. The Company's contracts for the sale of capital equipment and related components, and assays and tests typically do not provide the right to return product, however, its contracts for the sale of its surgical handpieces provide for a right of return for a limited period of time. In general, estimates of variable consideration and constraints are not material to the Company's financial statements.

Remaining Performance Obligations

As of June 25, 2022, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was approximately $844.4 million. These remaining performance obligations primarily relate to support and maintenance obligations and extended warranty in the Company's Breast Health and Skeletal Health reportable segments. The Company expects to recognize approximately 12% of this amount as revenue in fiscal 2022, 39% in fiscal 2023, 26% in fiscal 2024, 15% in fiscal 2025, and 8% thereafter. The Company has applied the practical expedient to not include remaining performance obligations related to contracts with original expected durations of one year or less in the amounts above.

Contract Assets and Liabilities

The Company discloses accounts receivable separately in the Consolidated Balance Sheets at their net realizable value. Contract assets primarily relate to the Company's conditional right to consideration for work completed but not includingbilled at the redemptionreporting date. Holders also haveContract assets at the beginning and end of the period, as well as the changes in the balance, were immaterial.

Contract liabilities primarily relate to payments received from customers in advance of performance under the contract. The Company records a rightcontract liability, or deferred revenue, when it has an obligation to convert their 2042 Notes. In connection with holders’ rightprovide service, and to converta much lesser extent product, to the 2042 Notes,customer and payment is received or due in advance of performance. Deferred revenue primarily relates to support and maintenance contracts and extended warranty obligations within the Company's Breast Health and Skeletal Health reportable segments. Contract liabilities are classified as other current liabilities and other long-term liabilities in the Consolidated Balance Sheets. The Company announcedrecognized revenue of $21.4 million and $108.7 million in the three and nine months ended June 25, 2022, respectively, that it would settlewas included in the contract liability balance at September 25, 2021. The Company recognized $20.1 million and $100.9 million for the three and nine months ended June 26, 2021, respectively, that was included in the contract liability balance at September 26, 2020.

(3) Leases

Lessor Activity - Leases where Hologic is the Lessor

Certain assets, primarily diagnostics instruments, are leased to customers under contractual arrangements that typically include an operating lease and performance obligations for disposables, assays, tests and other consumables. These contractual arrangements are subject to termination provisions which are evaluated in determining the lease term for lease accounting purposes. Contract terms vary by customer and may include options to terminate the contract or options to extend the contract. Where instruments are provided under operating lease arrangements, some portion or the entire lease revenue may be variable and subject to subsequent non-lease component (e.g., reagent) sales. Sales-type leases are immaterial. The allocation of revenue between the lease and non-lease components is based on stand-alone selling prices. Lease revenue represented less than 5% of the Company's consolidated revenue for all conversions of 2042 Notes entirely in cash.periods presented.




(2)(4) Fair Value Measurements

Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The Company has investments in derivative instruments consistingcomprised of an interest rate capsswap and forward foreign currency contracts, which are valued using analyses obtained from independent third party valuation specialists based on market observable inputs, representing Level 2 assets.measurements. The fair values of the Company's interest rate caps and forward foreign currencythese derivative contracts represent the estimated
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amounts the Company would receive or pay to terminate the contracts. Refer to Note 69 for further discussion and information on the interest rate caps and forward foreign currency contracts.derivative instruments.
The Company has a payment obligation to the participants under its Nonqualified Deferred Compensation Plan (“DCP”). This liability is recorded at fair value based on the underlying value of certain hypothetical investments under the DCP as designated by each participant for their benefit. Since the value of the DCP obligation is based on market prices, the liability is classified within Level 1.
Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following at December 30, 2017:
June 25, 2022:
   Fair Value at Reporting Date Using
 Balance as of December 30, 2017 
Quoted Prices in
Active Market for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs (Level 2)
 
Significant
Unobservable
Inputs (Level 3)
Assets:       
Interest rate cap - derivative5.3
 —
 5.3
 —
Forward foreign currency contracts0.4
 —
 0.4
 —
Total$5.7
 $—
 $5.7
 $—
Liabilities:       
Deferred compensation liabilities$49.7
 $49.7
 $—
 $—
Forward foreign currency contracts2.6
 —
 2.6
 —
Total$52.3
 $49.7
 $2.6
 $—

  Fair Value at Reporting Date Using
 Balance as of June 25, 2022Quoted Prices in
Active Market for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs (Level 2)		Significant
Unobservable
Inputs (Level 3)
Assets:
Interest rate swap$28.6 $— $28.6 $— 
Forward foreign currency contracts10.3 — 10.3 — 
Total$38.9 $— $38.9 $— 
Liabilities:
Contingent consideration$23.4 $— $— $23.4 
Total$23.4 $— $— $23.4 

Liabilities Measured and Recorded at Fair Value on a Recurring Basis

Changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3), which solely consisted of contingent consideration liabilities, during the three and nine month periods ended June 25, 2022 and June 26, 2021 were as follows:

Three Month EndedNine Months Ended
June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Balance at beginning of period$58.8 $71.7 $75.1 $81.8 
Contingent consideration recorded at acquisition— — — — 
Fair value adjustments(35.4)— (39.5)(10.1)
Payments— — (12.2)— 
Balance at end of period$23.4 $71.7 $23.4 $71.7 

Assets Measured and Recorded at Fair Value on a Nonrecurring Basis

The Company remeasures the fair value of certain assets and liabilities upon the occurrence of certain events. Such assets consistare comprised of cost-method equity investments and long-lived assets, including property, plant and equipment, intangible assets, goodwill and goodwill.right of use assets. During the third quarter of fiscal 2022, the Company recorded a $9.2 million impairment charge to write-off two developed technology assets acquired in the Faxitron acquisition. During the first quarter of fiscal 2022, the Company recorded a $4.3 million charge to write-off an equity method investment. There were no suchother remeasurements forin the three and nine months ended December 30, 2017June 25, 2022 and December 31, 2016.June 26, 2021.

Disclosure of Fair Value of Financial Instruments

The Company’s financial instruments mainly consist of cash and cash equivalents, accounts receivable, cost-method equity investments, an interest rate caps,swap, forward foreign currency contracts, insurance contracts, DCP liability, accounts payable and debt obligations. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these instruments. The Company’s interest rate capsswap and forward foreign currency contracts are recorded at fair value. The carrying amount of the insurance contracts are recorded at the cash surrender value, as required by U.S. GAAP, which approximates fair value, and the related DCP liability is recorded at fair value. The Company believes the carrying amounts of its cost-method equity investments approximate fair value.

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Amounts outstanding under the Company’s Amended and Restated2021 Credit Agreement and Securitization Program of $1.6$1.5 billion and $200.0 million aggregate principal respectively, as of December 30, 2017June 25, 2022 are subject to variable interest rates of interest based on current market rates, and as such, the Company believes the carrying amount of these obligations approximates fair value.value, representing Level 1 measurements. The Company’s 20224.625% Senior Notes due 2028 (the “2028 Senior Notes”) and 20253.250% Senior Notes due 2029 (the “2029 Senior Notes”) had a fair valuevalues of approximately $1.1 billion$379.9 million and $358.6$817.6 million, respectively, as of December 30, 2017June 25, 2022 based on their trading prices, representing a Level 1 measurement. The fair values of the Company’s Convertible Notes were based on the trading prices of the respective notes and represents a Level 1 measurement.measurements. Refer to Note 57 for the carrying amounts of the various components of the Company’s debt.


The estimated fair values of the Company’s Convertible Notes at December 30, 2017 were as follows:
2042 Notes284.8
2043 Notes0.3
 $285.1

(3)(5) Business Combinations


Cynosure Inc.Fiscal 2022 Acquisitions

Bolder Surgical

On March 22, 2017,November 29, 2021, the Company completed the acquisition of Cynosure and acquired all of the outstanding shares of Cynosure. Each share of common stock of Cynosure outstanding immediately prior to the effective time of the acquisition was canceled and converted into the right to receive $66.00 in cash. In addition, all outstanding restricted stock units, performance stock units, and stock options were canceled and converted into the right to receive $66.00 per share in cash less the applicable exercise price, as applicable. The acquisition was funded through available cash, and the totalBolder Surgical Holdings, Inc. ("Bolder"), for a purchase price was $1.66 billion. The Company incurred $18.8 million of transaction costs, which were recorded within general$160.1 million. Bolder, located in Louisville, Colorado, is a developer and administrative expenses.

Cynosure, headquarteredmanufacturer of energy vessel sealing surgical devices used in Westford, Massachusetts, develops, manufactures,both laparoscopic and markets aesthetic treatment systems that enable plastic surgeons, dermatologists and other medical practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and benign pigmented lesions, remove multi-colored tattoos, revitalize the skin, reduce fat through laser lipolysis, reduce cellulite, clear nails infected by toe fungus, ablate sweat glands and improve women’s health. Cynosure also markets radiofrequency (RF) energy-sourced medical devices for precision surgical applications such as facial plastic and general surgery, gynecology, ear, nose, and throat procedures, ophthalmology, oral and maxillofacial surgery, podiatry and proctology. Cynosure'sopen procedures. Bolder's results of operations are reported in the Company's Medical AestheticsGYN Surgical reportable segment from the date of acquisition and the goodwill within this reportable segment is solely related to Cynosure.acquisition.

The total purchase price was allocated to Cynosure’sBolder's preliminary tangible and identifiable intangible assets and liabilities based on the estimated fair values of those assets as of March 22, 2017,November 29, 2021, as set forth below. The preliminary purchase price allocation is as follows:



Cash$107.2
Marketable securities82.9
Accounts receivable40.2
Inventory121.1
Property, plant and equipment44.1
Other assets and liabilities, net12.2
Accounts payable and accrued expenses(75.3)
Deferred revenue(11.2)
Capital lease obligation(25.2)
Identifiable intangible assets: 
       Developed technology736.0
       In-process research and development107.0
       Distribution agreement42.0
       Customer relationships35.0
       Trade names74.0
Deferred income taxes, net(315.7)
Goodwill683.5
Purchase Price$1,657.8
Cash$1.9 
Accounts receivable1.3 
Inventory3.3 
Other assets3.0 
Accounts payable and accrued expenses(3.2)
Identifiable intangible assets:
Developed technology73.6 
Customer relationship21.7 
Trade names1.4 
Deferred income taxes, net(13.8)
Goodwill70.9 
Purchase Price$160.1 


In performing the preliminary purchase price allocation, the Company considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of Cynosure’s

Bolder's business. The Company has not yet obtained allallocation of the purchase price is preliminary as the Company continues to gather information related to the fair value ofsupporting the acquired assets and liabilities, primarily taxes,including, but not limited to, finalize the purchase price allocation.estimate of fair value of identifiable intangible assets and deferred income taxes.

As part of the preliminary purchase price allocation, the Company has determined the identifiable intangible assets are developed technology, in-process research and development ("IPR&D"), a distribution agreement, customer relationships and trade names. The preliminary fair value of the intangible assets has beenwas estimated using the income approach, and the cash flow projections were discounted using a 16.0% rate. The cash flows were based on estimates used to price the transaction, and the discount rate applied was benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.

The developed technology assets are comprised of know-how, patents and technologies embedded in Bolder's products and relate to currently marketed products. The developed technology assets comprise the primary product families under the JustRight and CoolSeal technology platforms.

The preliminary estimate of the weighted average life for the developed technology, customer relationship, and trade name assets is 10 years. The preliminary calculation of the excess of the purchase price over the estimated fair value of the tangible net assets and intangible assets acquired was recorded to goodwill. Factors contributing to the recognition of the preliminary amount of goodwill were primarily based on anticipated strategic and synergistic benefits that are expected to be
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realized from the Bolder acquisition. These benefits include expanding the Company's surgical portfolio and utilizing GYN Surgical's sales and regulatory expertise to drive adoption and revenue growth. None of the goodwill is expected to be deductible for income tax purposes.

Fiscal 2021 Acquisitions

Mobidiag

On June 17, 2021, the Company completed the acquisition of Mobidiag Oy ("Mobidiag"), for a purchase price of $729.6 million. Mobidiag, located in Finland, manufactures molecular diagnostic solutions for gastrointestinal infections, antimicrobial resistance management and other infections. Mobidiag's results of operations are reported in the Company's Diagnostics reportable segment from the date of acquisition.

The total purchase price was allocated to Mobidiag's tangible and identifiable intangible assets and liabilities based on the estimated fair values as of June 17, 2021, as set forth below.

Cash$7.0 
Accounts receivable4.2 
Inventory12.1 
Other assets29.6 
Accounts payable and accrued expenses(16.5)
Other liabilities(12.2)
Identifiable intangible assets:
Developed technology285.0 
In-process research and development74.0 
Customer relationships20.9 
Trade names20.0 
Long-term debt(66.1)
Deferred income taxes, net(56.1)
Goodwill427.7 
Purchase Price$729.6 

In performing the purchase price allocation, the Company considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of Mobidiag's business.

As part of the purchase price allocation, the Company determined the identifiable intangible assets are development technology, in-process research and development ("IPR&D"), customer relationships and trade names. The fair value of the intangible assets was estimated using the income approach, and the cash flow projections were discounted using rates ranging from 11%15.0% to 12%, except for the IPR&D assets in which the Company used a range of 14% to 22%19.0%. The cash flows arewere based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.


The developed technology assets are comprised of know-how, patents and technologies embedded in Cynosure'sMobidiag's products and relate to currently marketed products. The developed technology assets primarily comprise the significantprimary product families of Cynosure, primarily SculpSure, Icon,under the Novodiag and PicoSure.Amplidiag technology platforms.


The IPR&D projects relateproject relates to an in-process projectsproject that havehad not reached technological feasibility as of the acquisition date and havehas no future alternative future use. The primary basis for determining technological feasibility of these projectsthe project is obtaining regulatory approval to market the underlying product. The asset recorded relates to one project, or expected commercial release depending onand the project. The Company recorded, on a preliminary basis, $107.0 million of IPR&D related to three projects, which were expected to be completed during fiscal 2018 and 2019 with a preliminary costexpects to complete ofthe project in approximately $18.0 million. During the fourth quarter of fiscal 2017, the Company obtained regulatory approval for two projects with an aggregate fair value of $61.0 million and these assets were reclassified to developed technology. The remaining project is expected to be completed during fiscal 2019 with an estimated cost to complete of approximately $4.0 million.three years. Given the uncertainties inherent with product development and introduction, there can be no assurance that any of the Company's product development efforts will be successful, completed on a timely basis or within budget, if at all. All of theThe IPR&D assets wereasset was valued using the multiple-period excess earnings methodincome approach.


The distribution agreement intangible asset relates to Cynosure's exclusive distribution rightsestimate of the weighted average life for the MonaLisa Touch device in certain geographic regions. Thedeveloped technology assets was 11.7 years, for customer relationships intangible asset pertains to Cynosure's relationships with its end customers and related service arrangements and distributors throughout the world. Trade names relate to the Cynosure corporate name and primary product names, and the Company used the Relief-from-Royalty Method to estimate the fair value
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Developed technology, distribution agreement, customer relationships and trade names are being amortized on a straight-line basis over a weighted average period of 11.8 years, 8 years, 7.7was 9.1 years, and 8.9 years, respectively.

for tradenames was 11.6 years. The preliminary calculation of the excess of the purchase price over the estimated fair value of the tangible net assets and intangible assets acquired was recorded to goodwill. The factorsFactors contributing to the recognition of the preliminary amount of goodwill arewere primarily based on severalanticipated strategic and synergistic benefits that are expected to be realized from the CynosureMobidiag acquisition. These benefits include the expectation thatexpanding the Company's entrymolecular diagnostics portfolio into the aestheticsnear-patient testing market will significantly broaden the Company's offering in women's health. The combined company is expectedand utilizing Diagnostic's commercial sales, manufacturing and regulatory expertise to benefit from a broader global presence, synergistic utilization of Hologic's direct sales force, primarily its GYN Surgical sales force, with certain Cynosure products,drive adoption and the Company's entry into an adjacent cash-pay segment.revenue growth. None of the goodwill is expected to be deductible for income tax purposes.


In fiscal 2017, Cynosure's revenue and pre-tax loss, which excludes acquisition expenses incurred by the Company, for the period from the acquisition date to September 30, 2017 were $207.5 million and $96.4 million, respectively. The pre-tax loss includes amortization expense, the impact of the step-up in inventory, retention and integration expenses including legal and consulting fees, and restructuring charges. The following unaudited pro forma information presents the combined financial results for the Company and Cynosure as if the acquisition of Cynosure had been completed at the beginning of the prior fiscal year, September 26, 2015 (fiscal 2016):Biotheranostics



 Three Months Ended
 December 31, 2016
 (unaudited)
Revenue$856.3
Net income$74.1
Basic earnings per common share$0.27
Diluted earnings per common share$0.26

The unaudited pro forma information for the three months ended December 31, 2016 (the first quarter of fiscal 2017) was calculated after applying the Company's accounting policies and the impact of acquisition date fair value adjustments. The pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments to reflect pro forma results of operations as if the acquisition occurred on September 27, 2015 (the beginning of fiscal 2016), such as increased amortization for the fair value of acquired intangible assets. The pro forma information does not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred at the beginning of the period presented, or of future results of the consolidated entities.
Medicor Medical Supply

On April 7, 2017,February 22, 2021, the Company completed the acquisition of MMS Medicor Medical Supplies GmbHBiotheranostics, Inc. ("Medicor"Biotheranostics"), for a purchase price of $231.3 million. Biotheranostics, located in San Diego, California, manufactures molecular diagnostic tests that support physicians in the treatment of breast cancer and all metastatic cancers and performs the lab testing procedures at its Clinical Laboratory Improvement Amendments ("CLIA") certified laboratory. Biotheranostics' results of operations are reported in the Company's Diagnostics reportable segment from the date of acquisition and its revenues are reported within Service and other revenue in the Company's Consolidated Statements of Income and within service revenue in the disclosure of disaggregated revenue in Note 2.

The total purchase price was allocated to Biotheranostics' tangible and identifiable intangible assets and liabilities based on the estimated fair values as of February 22, 2021, as set forth below.

Cash$9.6 
Accounts receivable6.6 
Other assets6.5 
Accounts payable and accrued expenses(8.2)
Other liabilities(8.1)
Identifiable intangible assets:
Developed technology160.3 
Trade names2.1 
Deferred income taxes, net(18.4)
Goodwill80.9 
Purchase Price$231.3 

In performing the purchase price allocation, the Company considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of Biotheranostics' business. As part of the purchase price allocation, the Company determined the identifiable intangible assets are developed technology and trade names. The fair value of the intangible assets was estimated using the income approach, and the cash flow projections were discounted using a 18.0% rate. The cash flows were based on estimates used to price the transaction, and the discount rate applied was benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital. The weighted average life of developed technology and trade names was 10 years. The calculation of the excess of the purchase price over the estimated fair value of the tangible net assets and intangible assets acquired was recorded to goodwill. Factors contributing to the recognition of the amount of goodwill were primarily based on anticipated synergistic benefits of adding Biotheranostics' CLIA lab to the Company's portfolio of offerings and utilizing Diagnostic's marketing and regulatory expertise to drive adoption and revenue growth. None of the goodwill is expected to be deductible for income tax purposes.

Diagenode

On March 1, 2021, the Company completed the acquisition of Diagenode SA ("Diagenode") for a purchase price of approximately $19.0 million, which includes$155.1 million. Diagenode, located in Belgium, is a working capital adjustmentdeveloper and manufacturer of $2.0 million that was paidmolecular diagnostic assays based on PCR (polymerase chain reaction) technology to detect infectious diseases of bacterial, viral and parasite origin. Diagenode's results of operations are reported in the fourth quarter of fiscal 2017, and a holdback of $1.9 million that is payable two yearsCompany's Diagnostics reportable segment from the date of acquisition. Medicor

The total purchase price was allocated to Diagenode's tangible and identifiable intangible assets and liabilities based on the estimated fair values as of March 1, 2021, as set forth below.

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Cash$5.6 
Accounts receivable9.3 
Inventory9.0 
Other assets13.9 
Accounts payable and accrued expenses(16.7)
Other liabilities(9.2)
Identifiable intangible assets:
Developed technology69.8 
Customer relationships9.2 
Deferred income taxes, net(19.3)
Goodwill83.5 
Purchase Price$155.1 

In performing the purchase price allocation, the Company considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of Diagenode's business. As part of the purchase price allocation, the Company determined the identifiable intangible assets are developed technology and customer relationships. The fair value of the intangible assets was estimated using the income approach, and the cash flow projections were discounted using a 14.5% rate for developed technology and a 13.5% rate for customer relationships. The cash flows were based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital. The weighted average life of developed technology and customer relationships was 10 years. The calculation of the excess of the purchase price over the estimated fair value of the tangible net assets and intangible assets acquired was recorded to goodwill. Factors contributing to the recognition of the amount of goodwill were based on anticipated synergistic benefits of Diagenode's products broadening the Diagnostics portfolio of molecular diagnostics products primarily in the transplant and acute care gastrointestinal and respiratory space as customers seek a broader menu of tests, utilizing Diagnostic's sales force to drive menu expansion and revenue growth and gaining additional PCR assay development expertise. None of the goodwill is expected to be deductible for income tax purposes.

Somatex Medical Technologies

On December 30, 2020, the Company completed the acquisition of Somatex Medical Technologies GmbH ("Somatex") for a purchase price of $62.9 million. Somatex, located in Germany, is a manufacturer of biopsy site markers, including the Tumark product line of tissue markers, which were distributed by the Company in the U.S. prior to the acquisition. The allocation of the purchase price was based on the Company's valuation, and it allocated $38.0 million to the value of developed technology with a weighted average life of 8 years, $1.2 million to customer relationships, $0.9 million to trade names and $32.4 million to goodwill. The remaining $9.6 million of the purchase price was allocated to the net acquired tangible assets and liabilities. Somatex's results of operations are reported in the Company's Breast Health reportable segment from the date of acquisition. None of the goodwill is expected to be deductible for income tax purposes.

NXC Imaging

On September 28, 2020, the Company completed the acquisition of assets from NXC Imaging, for a purchase price of $5.6 million. NXC Imaging was a long-standing distributor of the Company's Breast and Skeletal Health products in Germany, Austria and Switzerland. Based on the Company's preliminary valuation, it has allocated $5.4 millionU.S. The majority of the purchase price was allocated to a customer relationships intangible asset with a useful life of 5 years.

Contingent Consideration

The Company has a contingent consideration liability related to its acquisition of Acessa Health, Inc. ("Acessa"), which occurred in August 2020. Acessa was the preliminarydeveloper of the ProVu laparoscopic radiofrequency ablation system. The Company estimated the fair value of intangible assets, which have a weighted average life of 7.7 years, and $8.9this liability to be $81.8 million to goodwill. The remaining $4.7 million of purchase price has been allocated to the acquired tangible assets and liabilities. The allocation of the purchase price is preliminary as the Company continues to gather information supporting the acquired assets and liabilities.

Emsor, S.A.

On December 11, 2017, the Company completed the acquisition of Emsor S.A. ("Emsor") for a purchase price of approximately $13.1 million, which includes a holdback of $0.5 million that is payable eighteen months from the date of acquisition, and contingent consideration which the Company has estimated at $2.0 million. The contingent consideration is payable upon Emsor achieving predefined amounts of cumulative revenue over a two year period from the date of acquisition. Emsor wasThe contingent payments are based on a distributormultiple of annual incremental revenue growth over a three-year period ending annually in December of each of 2021, 2022, and 2023. There is no maximum earnout. Pursuant to ASC 805, Business Combinations (ASC 805), the Company recorded its estimate of the Company's Breastfair value of the contingent consideration liability utilizing the Monte Carlo simulation based on future revenue projections of Acessa, revenue growth rates of comparable companies, implied volatility and Skeletal Health productsapplying a risk adjusted discount
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rate. Each quarter the Company is required to remeasure the fair value of the liability as assumptions change and such adjustments are recorded in Spainoperating expenses. This fair value measurement was based on significant inputs not observable in the market and Portugal. Based onthus represented a Level 3 measurement as defined in ASC 820, Fair Value Measurements. This fair value measurement is directly impacted by the Company's preliminary valuation, it has allocated $2.8 millionestimate of future incremental revenue growth of the purchase pricebusiness. Accordingly, if actual revenue growth is higher or lower than the estimates within the fair value measurement, the Company would record additional charges or benefits, respectively. During the three and nine months ended June 25, 2022, the Company remeasured the contingent consideration liability and recorded a gain of $35.4 million and $39.5 million, respectively, to record the preliminaryliability at fair value as of intangible assetsJune 25, 2022. The reduction in fair value was primarily due to a decrease in forecasted revenues over the measurement period and $3.5to a much lesser extent an increase in the discount rate driven by market rates. For the nine month period ended June 26, 2021, the Company remeasured the contingent consideration liability and recorded a gain of $10.1 million to goodwill.record the liability at fair value. The remaining $6.8 millionreduction in fair value was primarily due to a decrease in forecasted revenues over the measurement period. As of purchase price has been allocated to acquired tangible assets and liabilities. The allocation ofSeptember 25, 2021, the purchase price is preliminary ascontingent consideration liability was $75.1 million. During the Company continues to gather information supporting the acquired assets and liabilities.


(4) Restructuring Charges
The Company evaluates its operations for opportunities to improve operational effectiveness and efficiency, including facility and operations consolidation, and to better align expenses with revenues. In addition, the Company continually assesses its management and organizational structure. As a result of these assessments, the Company has undertaken various restructuring actions, which are described below. The following table displays charges related to these actions recorded in the fiscal 2018 year to date period (threethree months ended December 30, 2017)25, 2021, the first measurement period was completed, and the Company recorded a gain of $4.1 million to decrease the contingent consideration liability to fair value based on actual revenue results in the first earn-out period. During the second quarter of fiscal 2017 (the year ended September 30, 2017) and2022, the Company made a rollforwardpayment of $12.2 million for the accrued balances from September 30, 2017 to December 30, 2017:first earn-out period. As of June 25, 2022, the contingent consideration liability was $23.4 million.


  Fiscal 2018 Actions Fiscal 2017 Actions Fiscal 2016 Actions Total    
Restructuring Charges        
Fiscal 2017 charges:       
Workforce reductions $—
 $8.5
 $—
 $8.5
Facility closure costs —
 —
 4.8
 4.8
Fiscal 2017 restructuring charges $—
 $8.5
 $4.8
 $13.3
Fiscal 2018 charges:        
Workforce reductions $3.8
 $—
 $—
 $3.8
Fiscal 2018 restructuring charges $3.8
 $—
 $—
 $3.8
(6) Restructuring

  Fiscal 2018 Actions Fiscal 2017 Actions Fiscal 2016 Actions Other Total    
Rollforward of Accrued Restructuring          
Balance as of September 30, 2017 $—
 $7.5
 $3.7
 $0.3
 $11.5
Fiscal 2018 charges 3.8
 —
 —
 —
 3.8
Stock-based compensation (1.3) —
 —
 —
 (1.3)
Severance payments and adjustments (0.9) (2.3) (0.2) —
 (3.4)
Other payments —
 —
 (0.3) (0.1) (0.4)
Balance as of December 30, 2017 $1.6
 $5.2
 $3.2
 $0.2
 $10.2
Fiscal 2018 Actions
During the first quarter of fiscal 2018,2022, the Company decidedfinalized its decision to terminate certain employees acrossclose its Danbury, Connecticut facility where it manufactures its Breast Health capital equipment products. The manufacturing of the organization, including a corporate executiveBreast Health capital equipment products and all other support services will be moved to the Company's Newark, Delaware facility. In addition, research and development, sales and marketing personnel in its Diagnosticsservices support and Medical Aesthetics reportable segments. The charges were recorded pursuant to ASC 712, Compensation-Nonretirement Postemployment Benefits (ASC 712) or ASC 420, Exit or Disposal Cost Obligations (ASC 420) depending on the employee. As such, the Company recorded severance and benefits charges of $3.8 million in the first quarter. Included within this charge is $1.3 million relatedadministrative functions will be moved to the modification of equity awards.
Fiscal 2017 Actions
In connection with its acquisition of Cynosure,Newark, Delaware and Marlborough, Massachusetts facilities. The transition is expected to be completed by the Company decided to terminate certain Cynosure executives in the secondthird quarter of fiscal 2017 and recorded $1.5 million2025. The majority of employees located in severance and benefits charges. DuringDanbury were given the third and fourth quartersoption to relocate to the new locations. As a result of fiscal 2017,this plan, the Company terminated additional executives andexpects a number of employees and recorded $4.3 million and $1.3 million, respectively,to not relocate resulting in severance and benefits charges.
Fiscal 2016 Actions
In connection with the closuretheir termination. The employees were notified of the Bedford, Massachusetts facility,closure during the first quarter of fiscal 2017 the Company recorded $3.5 million for lease obligation charges2022, but were not communicated about their termination and related to a section of the facility that the Company had determined met the cease-use date criteria. The Company made certain assumptions regarding the time period it would take to obtain a subtenantseverance and the sublease rates it can obtain. Duringbenefits until the third quarter of fiscal 2017,2022. The Company is recording severance benefits pursuant to pursuant to ASC 420, Exit or Disposal Cost Obligations (ASC 420) and the benefits will be expensed ratably over the required service period. As a result, the Company updated its assumption regardingrecorded $0.8 million of severance and benefits charges in the time period it will take to obtain a subtenant at the Bedford location and as a result recorded an additional $1.3 million lease obligation charge. These estimates may vary from the actual sublease agreements executed, if at all, resulting in an adjustment to the charge.third quarter of fiscal 2022. The Company has vacated other portions of the building but not the entire facility,estimates that total severance and at this time does not meet the cease-use date criteria to record additional restructuring charges.benefits charges, including retention, will be approximately $7.0 million.



(5)(7) Borrowings and Credit Arrangements

The Company’s borrowings consisted of the following:

December 30,
2017		 September 30,
2017		June 25,
2022		September 25,
2021
Current debt obligations, net of debt discount and deferred issuance costs:   Current debt obligations, net of debt discount and deferred issuance costs:
Term Loan$46.7
 $121.3
Term Loan$7.5 $— 
Revolver120.0
 345.0
Securitization Program200.0
 200.0
Securitization Program— 248.5 
Convertible Notes205.4
 484.5
OtherOther— 64.5 
Total current debt obligations$572.1
 $1,150.8
Total current debt obligations$7.5 $313.0 
Long-term debt obligations, net of debt discount and deferred issuance costs:   
Long-term debt obligations, net of debt discount and issuance costs:Long-term debt obligations, net of debt discount and issuance costs:
Term Loan1,430.1
 1,190.5
Term Loan1,482.6 1,382.3 
2022 Senior Notes982.6
 981.6
2025 Senior Notes345.0
 —
2028 Senior Notes2028 Senior Notes395.9 395.4 
2029 Senior Notes2029 Senior Notes936.1 934.5 
Total long-term debt obligations$2,757.7
 $2,172.1
Total long-term debt obligations$2,814.6 $2,712.2 
Total debt obligations$3,329.8
 $3,322.9
Total debt obligations$2,822.1 $3,025.2 
Amended and Restated


2021 Credit Agreement

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On October 3, 2017,September 27, 2021, the Company and certain of its domestic subsidiaries enteredrefinanced its term loan and revolving credit facility under its then credit agreement (the "2018 Credit Agreement") by entering into anRefinancing Amendment No. 2 dated as of September 27, 2021, to the Amended and Restated Credit and Guaranty Agreement as of October 3, 2017, as amended (the "Amended and Restated"2021 Credit Agreement") with Bank of America, N.A. in its capacity as Administrative Agent, Swing Line Lender and L/C Issuer, and certain other lenders from time to time party thereto. The Amended and Restated Credit Agreement amends and restateslenders. Substantially all of the Company's prior credit and guaranty agreement, originally dated as of May 29, 2015 (the "Prior Credit Agreement"). The proceeds under the Amended and Restated2021 Credit Agreement of $1.8$1.5 billion were used among other things, to pay offrepay the Term Loan of $1.32 billion and the Revolver thenamounts outstanding under the Company's Prior2018 Credit Agreement. Borrowings under the Amended and Restated2021 Credit Agreement are secured by first-priority liens on, and a first-priority security interest in, substantially all of the assetsCompany's and its Subsidiary Guarantors' U.S. assets. These liens are subject to release during the term of the Company's U.S. subsidiaries, withfacilities if the Company is able to achieve certain exceptions.

corporate or corporate family ratings and other conditions are met. The credit facilities (the “Amended and Restated Credit Facilities”) under the Amended and Restated2021 Credit Agreement (the "2021 Credit Facilities") consist of:


•A $1.5 billion secured term loan to the Company ("Amended2021 Term Loan") with a maturity date of October 3, 2022;September 25, 2026; and
•A secured revolving credit facility (the "Amended("2021 Revolver") under which the the Company may borrow up to $1.5$2.0 billion, subject to certain sublimits, with a maturity date of October 3, 2022.September 25, 2026.

At the closing, the Company borrowed $345 million under the Amended Revolver, which was fully repaid during October 2017. As of December 30, 2017, the Company had $120.0 million outstanding under the Amended Revolver.


Borrowings under the Amended and Restated2021 Credit FacilitiesAgreement, other than Swing Line Loans, bear interest, at the Company's option, andat the Base Rate, at the Eurocurrency Rate, at the Alternative Currency Daily Rate, or at the LIBOR Daily Floating Rate, in each case plus an applicable margin as follows:

Amended Term Loan: at the Base Rate, Eurocurrency Rate or LIBOR Daily FloatingApplicable Rate (as such terms are defined in the Amended and Restated2021 Credit Agreement), 
.
Amended Revolver: if funded in U.S. dollars, the Base Rate, Eurocurrency Rate, or LIBOR Daily Floating Rate, and, if funded in an alternative currency, the Eurocurrency Rate; and if requested under the swing line sublimit, the Base Rate.


The applicable marginApplicable Rate in regards to the Base Rate, the Eurocurrency Rate, orthe Alternative Currency Daily Rate, the Alternative Currency Term Rate, and the LIBOR Daily Floating Rate is subject to specified changeschange depending on the total net leverage ratio asTotal Net Leverage Ratio (as defined in the Amended and Restated2021 Credit Agreement. The borrowingsAgreement). As of June 25, 2022, the Amendedinterest rate under the 2021 Term Loan initially bear interest at an annual rate equal to the Eurocurrency Rate (i.e., the LIBOR rate) plus an Applicable Rate equal to 1.50%. The borrowings of the Amended Revolver initially bear interest at a rate equal to the LIBOR Daily Floating Rate plus an Applicable Rate equal to 1.50%. was 2.63% per annum.

The Company is also required to pay a quarterly commitment fee calculated on daily basis equal to the Applicable Rate as of such day multiplied by the undrawn committed amount available under the Amended Revolver.2021 Revolver (taking into account any outstanding amounts under the LC Sublimit). As of June 25, 2022, this commitment fee was 0.15% per annum.


Upon the earliest to occur of June 30, 2023 and certain specified events, relating to the planned phase out of LIBOR by the UK Financial Conduct Authority, the interest rate applicable to the loans under the 2021 Credit Agreement denominated in U.S. Dollars will convert to a variant of the secured overnight financing rate (“SOFR”), as established from time to time by the Federal Reserve Bank of New York, plus a corresponding spread.

The Company is required to make scheduled principal payments under the Amended2021 Term Loan in increasing amounts ranging from $9.375$3.75 million per three-month period commencing with the three-month period ending on December 29, 20172022 to $37.5$18.75 million per three-month period commencing with the three-monththree month period ending on December 23, 2021.26, 2025. The remaining balance of $1.335 billion (or such lesser aggregate principal amount of Term Loans then outstanding) on the Amended2021 Term Loan and any amounts outstanding under the Amended2021 Revolver are due at maturity. In addition, subject to the terms and conditions set forth in the Amended and Restated2021 Credit Agreement, the Company is required to make certain mandatory prepayments from the net proceeds of specified types of asset sales (subject to certain reinvestment rights), debt issuances (excluding permitted debt) and insurance recoveries (subject to certain reinvestment rights). Certain of the mandatory prepayments are subject to reduction or elimination if certain financial covenants are met. These mandatory prepayments are required to be applied by the Company, first to the Amended2021 Term Loan, second to any outstanding amount under any Swing Line Loans, (as defined in the Amended and Restated Credit Agreement), third to the Amended2021 Revolver, fourth to prepay any outstanding reimbursement obligations with respect to Lettersletters of Credit (as defined in the Amended and Restated Credit Agreement)credit and fifth to cash collateralize any Letterssuch letters of Credit.credit. Subject to certain limitations, the Company may voluntarily prepay any of the Amended and Restated2021 Credit Facilities without premium or penalty.

Borrowings As of June 25, 2022, the outstanding principal balance of the 2021 Term Loan was $1.5 billion, and there were no amounts outstanding under the Amended and Restated Credit Agreement and the Prior Credit Agreement for the three months ended December 30, 2017 and December 31, 2016 had weighted-average interest rates of 2.75% and 2.05%, respectively. The interest rate on the outstanding Amended Term Loan borrowing at December 30, 2017 was 3.07%. Interest expense under the Amended and Restated Credit Agreement aggregated $12.4 million for the three months ended December 30, 2017, which includes non-cash interest expense of $0.7 million related to the amortization of the deferred issuance costs and accretion of the debt discount. Interest expense under the Prior Credit Agreement aggregated $9.8 million for the three months ended December 31, 2016, which includes $1.1 million of non-cash interest expense related to the amortization of the deferred issuance costs and accretion of the debt discount.2021 Revolver.


The Amended and Restated2021 Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants restricting the ability of the Company, subject to negotiated exceptions, to incur additional indebtedness and grant additional liens on its assets, engage in mergers or acquisitions or dispose of assets, enter into sale-leaseback transactions, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and change the nature of their businesses. In addition, the Amended and Restated2021 Credit Agreement requires the the CompanyBorrowers to maintain certain financial ratios. The Amended and Restated2021 Credit Agreement also contains customary representations and warranties and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross defaults and an event of default upon a change of control of the Company.


Borrowings are secured by first-priority liens on, and a first-priority security interest in, substantially all
19
Table of the assets of the Company, with certain exceptions. For example, borrowings under the Amended and Restated Credit Agreement are not secured by those accounts receivable that are transferred to the special purpose entity under the Company's Accounts Receivable Securitization program. The Amended and Restated Credit Agreement contains total net leverage ratio and interest coverage ratio financial covenants measured as of the last day of each fiscal quarter and an excess cash flow prepayment requirement measured as of the end of each fiscal year. The total net leverage ratio was 5.00:1.00 beginning on the Company's fiscal quarter ended December 30, 2017, and then decreases over time to 4.50:1.00 for the quarter ending March 27, 2021. The interest coverage ratio was 3.75:1.00 beginning on the Company's fiscal quarter ended December 30, 2017, and remains as such for each quarter thereafter. The total net leverage ratio is defined as the ratio of the Company's consolidated net debt as of the quarter end to its consolidated adjusted EBITDA (as defined in the Amended and Restated Credit Agreement) for the four-fiscal quarter period ending on the measurement date. The interest coverage ratio is defined as the ratio of the Company's consolidated adjusted EBITDA for the prior four-fiscal quarter period ending on the measurement date to adjusted consolidated cash interest expense (as defined in the Amended and Restated Credit Agreement) for the same measurement period. The Company was in compliance with these covenants as of December 30, 2017.Contents

The Company evaluated the Amended and Restated2021 Credit Agreement for derivatives pursuant to ASC 815, Derivatives and Hedging, and identified embedded derivatives that required bifurcation as the features are not clearly and closely related to the host instrument. The embedded derivatives were a default provision, which could require additional interest payments, and a provision requiring contingent payments to compensate the lenders for changes in tax deductions. The Company determined that the fair value of these embedded derivatives was nominalimmaterial as of December 30, 2017.June 25, 2022.


Pursuant to ASC 470, Debt(ASC (ASC 470), the accounting for the Amended and Restated Credit Agreementrefinancing was evaluated on a creditor-by-creditor basis with regard to the Amended and Restated Credit Agreement to determine whether each transaction should be accounted for as a modification or extinguishment. Certain creditors under the Amended and Restated2018 Credit Agreement did not participate in this refinancing transaction and ceased being creditors of the Company. As a result, the Company recorded a debt extinguishment loss of $1.0$0.7 million in the first quarter of fiscal 20182022 to write-off the pro-rata amount

of unamortized debt discount and deferred issuance costs related to these creditors. For the remainder of the creditors, this transaction was accounted for as a modification because on a creditor-by-creditor basis the present value of the cash flows between the two debt instruments before and after the transaction was less than 10%.modification. Pursuant to ASC 470, subtopic 50-40, third-party costs of $1.7$7.0 million related to this transaction were recorded as interest expense and $4.9 million was recorded as a reduction to debt representing deferred issuance costs and fees paid directly to the lenders.


2025 Interest expense, weighted average interest rates, and the interest rate at the end of period under the 2021 and 2018 Credit Agreements were as follows: 

Three Months EndedNine Months Ended
June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Interest expense$7.8 $5.1 $18.8 $17.0 
Weighted average interest rate1.67 %1.10 %1.30 %1.15 %
Interest rate at end of period2.63 %1.09 %2.63 %1.09 %

The 2021 Credit Agreement contains two financial covenants; a total leverage ratio and an interest coverage ratio, both of which are measured as of the last day of each fiscal quarter. These terms, and calculations thereof, are defined in further detail in the 2021 Credit Agreement. As of June 25, 2022, the Company was in compliance with these covenants.

Senior Notes


On October 10, 2017,September 28, 2020, the Company completed a private placement of $350$950 million aggregate principal amount of its 4.375% Senior Notes due 2025 (the “2025 Senior Notes”)2029 at an offering price of 100% of the aggregate principal amount of the 20252029 Senior Notes. The 2025Company used the net proceeds of the 2029 Senior Notes are general senior unsecured obligations of the Companyoffering and are guaranteedcash on a senior unsecured basis by certain domestic subsidiaries of Hologic (the “ 2025 Domestic Guarantors”).

The 2025hand to redeem in full its 4.375% Senior Notes mature on October 15,due 2025 and bear interest at the rate of 4.375% per year, payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2018. The Company recorded interest expense of $3.5 million for the three months ended December 30, 2017 which includes non-cash interest expense of $0.1 million related to the amortization of the deferred issuance costs and accretion of the debt discount.

The Company may redeem the 2025(the "2025 Senior Notes at any time prior to October 15, 2020 at a price equal to 100% of the aggregate principal amount so redeemed, plus accrued and unpaid interest, if any, to the redemption date and a make-whole premium set forthNotes") in the Indenture. The Company may also redeem up to 35% of the aggregate principal amount of $950.0 million on October 15, 2020 at an aggregate redemption price of $970.8 million, which included a premium payment $20.8 million.

2025 Senior Notes

Immediately prior to redemption in full of the 2025 Senior Notes with the net cash proceeds of certain equity offerings at any time and from time to time beforeon October 15, 2020, at a redemption price equal to 104.375% of the total aggregate principal amount so redeemed, plus accrued and unpaid interest, if any, tobalance of 2025 Senior Notes was $950.0 million. Since the redemption date. The Company also hasused the optionproceeds from the 2029 Senior Notes offering to redeem the 2025 Senior Notes, on or after: October 15, 2020 through October 14, 2021 at 102.188% of par; October 15, 2021 through October 14, 2022 at 101.094% of par; and October 15, 2022 and thereafter at 100% of par. In addition, if the Company undergoesevaluated the accounting for this transaction under ASC 470 to determine modification versus extinguishment accounting on a change of control coupled withcreditor-by-creditor basis. Certain 2025 Senior Note holders either did not participate in this refinancing transaction or reduced their holdings, and these transactions were accounted for as extinguishments. As a decline in ratings, as provided in the 2025 Indenture,result, the Company will be required to make an offer to purchase each holder’s 2025 Senior Notes atrecorded a price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date.

On January 19, 2018, the Company completed a private placement of $1.0 billion aggregate principal amount of senior notes, which included $600 million of additional 4.375% Senior Notes due 2025 (the “New 2025 Senior Notes”), issued under a supplement to the 2025 Indenture. See “Subsequent Events” below.

2022 Senior Notes

The Company's 5.250% Senior Notes due 2022 (the “2022 Senior Notes”) mature on July 15, 2022 and bear interest at the rate of 5.250% per year, payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2016. The Company recorded interest expense of $14.0 million and $15.1 million for the three months ended December 30, 2017 and December 31, 2016, respectively, which includes non-cash interest expense of $1.0 million and $1.0 million, respectively, related to the amortization of the deferred issuance costs and accretion of the debt discount.

In connection with the offering of the New 2025 Senior Notes and the Company’s 4.625% Senior Notes due 2028, the Company has called all of its outstanding 2022 Senior Notes,extinguishment loss in the aggregate principal amount of $1.0 billion, for redemption on February 15, 2018 at an aggregate redemption price equal to the principal amount of the outstanding 2022 Senior Notes, plus the applicable premium and accrued and unpaid interest through the day immediately preceding the redemption date. See “Subsequent Events” below.

Convertible Notes

On various dates during the first quarter of fiscal 2018,2021 of $21.6 million. For the Company entered into privately negotiated repurchase transactions and extinguished $39.3 million principal amount of its 2.00% Convertible Senior Notes due 2042 (the "2042 Notes") for total payments of $52.8 million. This amount includes the conversion premium resulting from the Company's stock price on the date of the transactions being in excess of the conversion prices of $31.175. As a result, on a gross basis, $13.4 million of the consideration paid was allocated to the reacquisition of the equity component of the original instrument, which was recorded net of deferred taxes of $3.8 million within additional paid-in-capital.
On December 15, 2017, pursuant to the provisions of the indenture governing the Company's 2.00% Convertible Senior Notes due December 15, 2043 (the "2043 Notes"), the Company redeemed or repurchased an aggregate of $201.7 million in original principal amount of the 2043 Notes then outstanding for an aggregate repurchase price of approximately $244.1

million, representing the then accreted principal amount of the 2043 Notes. The remaining $0.3 million in original principal amount of the 2043 Notes were converted, and the Company elected to settle these conversions, which will occur in the second quarter of fiscal 2018.

The term "Convertible Notes" refers to the 2042 Notes and the 2043 Notes.
Interest expense under the Convertible Notes was as follows:
 Three Months Ended
 December 30,
2017		 December 31,
2016
Amortization of debt discount$2.9
 $5.2
Amortization of deferred financing costs0.1
 0.2
Principal accretion1.6
 4.6
Non-cash interest expense4.6
 10.0
2.00% accrued interest (cash)1.1
 2.0
 $5.7
 $12.0
Subsequent Events
2025 Senior Notes holders who participated in the refinancing, these transactions were accounted for as modifications because on a creditor-by-creditor basis the present value of the cash flows between the debt instruments before and after the transaction was less than 10%. The Company recorded a portion of the transaction expenses of $5.8 million to interest expense pursuant to ASC 470, subtopic 50-40. The remaining debt issuance costs of $7.9 million and debt discount of $6.4 million related to the modified debt is being amortized over the new term of the 2029 Senior Notes using the effective interest method.

2028 Senior Notes
On January 19, 2018,
As of June 25, 2022, the Company completed a private placement of $1.0 billion aggregate principal amount of senior notes, allocated between (i) an additional $600 million aggregate principal amounts of its 2025 Senior Notes pursuant to a supplement to the indenture governing the Company's existing 2025 Senior Notes, at an offering price of 100% of the aggregate principal amount of the 2025 Senior Notes, plus accrued and unpaid interest from October 10, 2017 and (ii) $400 million aggregate principal amounts of its 4.625%had Senior Notes due 2028 (the "2028 Senior Notes") at an offering price of 100% ofoutstanding in the aggregate principal amountbalance of the 2028 Senior Notes. The new 2025 Senior Notes have the same terms as the existing 2025 Senior Notes.$400 million. The 2028 Senior Notes are general senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by certain of the Company's domestic subsidiaries of Hologic (the “2028 Domestic Guarantors”).

The 2028 Senior Notes were issued pursuant to an indenture (the “2028 Indenture”), dated as of January 19, 2018 among the Company, the 2028 Domestic Guarantors and Wells Fargo Bank, National Association, as trustee. The 2028 Senior Notes mature on February 1, 2028 and bear interest at2028.

2029 Senior Notes
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As of June 25, 2022, the rateCompany had 2029 Senior Notes due 2029 outstanding in the aggregate principal balance of 4.625% per year, payable semi-annually on February 1 and August 1 of each year, commencing on August 1, 2018.$950 million. The 2028 Indenture contains covenants which limit, among other things, the ability2029 Senior Notes are general senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by certain of the Guarantors to create liensCompany's domestic subsidiaries and engage in certain sale and leaseback transactions. These covenants are subject to a number exceptions and qualifications.mature on February 15, 2029.


The Company may redeemInterest expense for the 2029 Senior Notes, 2028 Senior Notes and 2025 Senior Notes was as follows:

Three Months EndedNine Months Ended
Interest RateJune 25, 2022June 26, 2021June 25, 2022June 26, 2021
2025 Senior Notes4.375 %$— $— $— $2.3 
2028 Senior Notes4.625 %4.8 4.8 14.4 14.4 
2029 Senior Notes3.250 %8.2 8.2 24.6 24.5 
Total$13.0 $13.0 $39.0 $41.2 

Accounts Receivable Securitization Program

During April 2022, the Company repaid the outstanding balance of $248.5 million under the accounts receivable securitization program (the "Securitization Program"). On June 10, 2022, the Company amended the Credit and Security agreement with lenders, temporarily suspending the ability to borrow and the need to comply with covenants for up to a year. As of June 25, 2022, the Company did not have any borrowings under this program.

Other

Other represents debt acquired in the Mobidiag acquisition, which was primarily with the European Investment Bank ("EIB"). Multiple tranches were withdrawn under the agreement and were primarily used to fund research and development projects and expansion efforts. The debt agreement contained change-in-control provisions allowing the EIB to call the debt at any time priorafter a change-in-control, which occurred as a result of Hologic acquiring Mobidiag. The tranches withdrawn under this agreement had interest rates ranging from 6.0% to February 1, 20237.0%. The debt agreement included additional payments to the EIB based on revenues generated by products developed under the funding as well as prepayment penalties. During the first quarter of fiscal 2022, the Company paid off the outstanding debt obligation of $63.7 million, and the debt agreement with the EIB was terminated.

(8) Trade Receivables and Allowance for Credit Losses

Effective September 27, 2020, the Company adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), which requires that financial assets measured at a price equalamortized cost be presented at the net amount expected to 100%be collected. The expected credit losses are developed using an estimated loss rate method that considers historical collection experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the aggregate principal amount so redeemed, plus accruedreported amount. The estimated loss rates are applied to trade receivables with similar risk characteristics such as the length of time the balance has been outstanding and unpaid interest, if any,the location of the customer. In certain instances, the Company may identify individual trade receivable assets that do not share risk characteristics with other trade receivables, in which case the Company records its expected credit losses on an individual asset basis. For example, potential adverse changes to customer liquidity from new macroeconomic events, such as the COVID-19 pandemic, must be taken into consideration. To date, the Company has not experienced significant customer payment defaults, or identified other significant collectability concerns as a result of the COVID-19 pandemic. In connection with assessing credit losses for individual trade receivable assets, the Company considers significant factors relevant to collectability including those specific to the redemption datecustomer such as bankruptcy, length of time an account is outstanding, and a make-whole premium set forth in the Indenture. The Company may also redeem up to 35%liquidity and financial position of the aggregate principal amountcustomer. If a trade receivable asset is evaluated on an individual basis, the Company excludes those assets from the portfolios of trade receivables evaluated on a collective basis.

The following is a rollforward of the 2028 Senior Notes with the net cash proceeds of certain equity offerings at any time and from time to time before February 1, 2021, at a redemption price equal to 104.625% of the aggregate principal amount so redeemed, plus accrued and unpaid interest, if any, to the redemption date. The Company also has the option to redeem the 2028 Senior Notes on or after: February 1, 2023 through February 1, 2024 at 102.312% of par; February 1, 2024 through February 1, 2025 at 101.541% of par; February 1, 2025 through February 1, 2026 at 100.770% of par; and February 1, 2026 and thereafter at 100% of par. In addition, if the Company undergoes a change of control coupled with a decline in ratings, as provided in the 2028 Indenture, the Company will be required to make an offer to purchase each holder’s 2028 Senior Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date.
2042 Notes
On January 29, 2018, the Company announced that pursuant to the terms of the indentureallowance for the 2.00% Convertible Senior Notes due 2042 (the “2042 Notes”), holders of the 2042 Notes had the option of requiring the Company to repurchase their 2042 Notes on March 1, 2018 at a repurchase price payable in cash equal to 100% of the accreted principal amount of the 2042 Notes, plus accrued and unpaid interest to, but not including the put date. The accreted principal amount of the 2042 notes will be $206.0 millioncredit losses as of the repurchase date. The Company also announced on January 29, 2018 that, it had electedJune 25, 2022 compared to redeem, on March 6, 2018, allJune 26, 2021:

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Table of the then outstanding 2042 Notes at a redemption price payable in cash equal to 100% of the accreted principal amount of the 2042 Notes, plus accrued and unpaid interest to, but not including the redemption date.Contents

Balance at
Beginning
of Period		Credit LossWrite-
offs and
Payments		Balance at
End of
Period
Nine Months Ended
June 25, 2022$40.5 $4.4 $(3.9)$41.0 
June 26, 2021$31.6 $11.6 $(3.4)$39.8 
Holders also have a right to convert their 2042 Notes. Based on a closing price of the Company’s common stock of $42.75 per share (the closing price for the Company’s common stock on December 29, 2017), the conversion value for the outstanding 2042 notes would be $1,371 per $1,000 of original principal amount of the notes, or $282.6 million in the aggregate. The conversion value of the notes would increase or decrease to the extent that the trading price of the Company’s common stock increases or decreases. The Company has elected to settle any conversion of the 2042 Notes entirely in cash.


(9) Derivatives
(6) Derivatives
Interest Rate CapSwap - Cash Flow Hedge

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages its exposure to some of its interest rate risk through the use of interest rate caps,swaps, which are derivative financial instruments. The Company does not use derivatives for speculative purposes. For a derivative that is designated as a cash flow hedge, changes in the fair value of the derivative are recognized in accumulated other comprehensive income ("AOCI") to the extent the derivative is effective at offsetting the changes in the cash flows being hedged until the hedged item affects earnings. To the extent there is any hedge ineffectiveness, changes in fair value relating to the ineffective portion are immediately recognized in earnings in other income (expense), net in the Consolidated Statements of Income.
During
In fiscal 2015,2019, in order to hedge a portion of its variable rate debt, the Company entered into separatean interest rate cap agreementsswap contract with multiple counter-parties to help mitigate thean effective date of December 23, 2020 and a termination date of December 17, 2023. The notional amount of this swap is $1.0 billion. The interest rate volatility associated withswap effectively fixes the LIBOR component of the variable interest rate on amounts borrowed$1.0 billion of the notional amount under the term loan feature of its credit facilities (see Note 6)2021 Credit Agreement at 1.23%. Interest rate cap agreements provide the right to receive cash if the reference interest rate rises above a contractual rate. The aggregate premium paid for the interest rate cap agreements was $13.2 million, which was the initial fair value of the instruments recorded in the Company's financial statements.
During fiscal 2017, the Company entered into new separate interest rate cap agreements with multiple counter-parties to extend the expiration date of its hedges by an additional year. The aggregate premium paid for the interest rate cap agreements was $1.9 million, which was the initial fair value of the instruments recorded in the Company's financial statements.
The critical terms of the interest rate caps wereswap are designed to mirror the terms of the Company’s LIBOR-based borrowings under its Prior Credit Agreement and Amended and Restated Credit Agreementcredit agreement and therefore are highly effective at offsetting the cash flows being hedged. The Company designated these derivativesthis derivative as a cash flow hedgeshedge of the variability of the LIBOR-based interest payments on $1.0 billion of principal, which ended on December 29, 2017 and which will end on December 30, 2018 for the interest rate cap agreements entered into in fiscal 2015 and fiscal 2017, respectively.
As of December 30, 2017, the Company determined that the existence of hedge ineffectiveness, if any, was immaterial, and allprincipal. Therefore, changes in the fair value of the interest rate caps wereswap are recorded in the Consolidated Statements of Comprehensive Income as a component of AOCI.
During the three months ended December 30, 2017 and December 31, 2016, $2.3 million and $2.1 million, respectively, was reclassified from AOCI to the Company’s Consolidated Statements of Income related to the interest rate cap agreements. The Company expects to similarly reclassify a loss of approximately $1.9 million from AOCI to the Consolidated Statements of Income in the next twelve months.
The aggregate fair value of these interest rate capsthis derivative was $5.3in an asset position of $28.6 million and $4.8 million at December 30, 2017 and September 30, 2017, respectively, and is included in Prepaid expenses and other current assets on the Company’s Consolidated Balance Sheet. Refer to Note 2 “Fair Value Measurements” above for related fair value disclosures.as of June 25, 2022.

Forward Foreign Currency Contracts and Foreign Currency Option Contracts

The Company enters into forward foreign currency exchange contracts and foreign currency option contracts to mitigate certain operational exposures from the impact of changes in foreign currency exchange rates. Such exposures result from the portion of the Company's cash and operations that are denominated in currencies other than the U.S. dollar, primarily the Euro, the UK Pound, the Australian dollar, the Canadian dollar, the Chinese Yuan and the Japanese Yen. These foreign currency exchange contracts are entered into to support transactions made in the ordinary course of business and are not speculative in nature. The contracts are generally for periods of one year or less. The Company hasdid not electedelect hedge accounting for any of the forward foreign currency contracts it has executed; however, the Company may seek to apply hedge accounting in future scenarios.these contracts. The change in the fair value of these contracts is recognized directly in earningsthe Consolidated Statements of Income as a component of other income (expense), net. During the three months ended December 30, 2017 and December 31, 2016, the Company recorded net realized loss of $0.2 million and a net realized gain of $1.2 million, respectively, from settling forward foreign currency contracts

Realized and unrealized gains and losses from these contracts, which were the only derivative contracts not designated for hedge accounting, for the three and nine months ended June 25, 2022 and June 26, 2021, respectively, were as follows:

Three Months EndedNine Months Ended
June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Amount of realized gain (loss) recognized in income
Forward foreign currency contracts$19.6 $(7.0)$42.4 $(6.5)
Foreign currency option contracts— (1.4)— (4.4)
$19.6 $(8.4)$42.4 $(10.9)
Amount of unrealized gain (loss) recognized in income
Forward foreign currency contracts$2.5 $1.5 $9.2 $(2.0)
Foreign currency option contracts— 0.4 — (5.5)
$2.5 $1.9 $9.2 $(7.5)
Amount of gain (loss) recognized in income
Total$22.1 $(6.5)$51.6 $(18.4)
22
Table of $1.5 million and $8.4 million, respectively, on the mark-to-market for its outstanding forward foreign currency contracts.Contents

As of December 30, 2017,June 25, 2022, the Company had outstanding forward foreign currency contracts that were not designated for hedge accounting and wereare used to hedge fluctuations in the U.S. dollar of certain of the Company's cash balances denominated in the Euro and UK pound, as well as forecasted transactions denominated in the Euro,

UK Pound, Australian dollar,Dollar, Canadian Dollar, Chinese Yuan and Japanese Yen with an aggregate notional amount of $157.4$330.2 million.

Financial Instrument Presentation

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the balance sheet as of December 30, 2017:
June 25, 2022:
 Balance Sheet Location December 30, 2017 September 30, 2017
Assets:     
Derivative instruments designated as a cash flow hedge:     
Interest rate cap agreementsPrepaid expenses and other current assets $5.3
 $3.6
Interest rate cap agreementsOther assets —
 1.2
   $5.3
 $4.8
      
Derivatives not designated as hedging instruments:     
Forward foreign currency contractsPrepaid expenses and other current assets $0.4
 $0.4
      
Liabilities:     
Derivatives not designated as hedging instruments:     
Forward foreign currency contractsAccrued expenses $2.6
 $4.0

Balance Sheet LocationJune 25, 2022September 25, 2021
Assets:
Derivative instruments designated as a cash flow hedge:
Interest rate swap contractPrepaid expenses and other current assets$19.0 $— 
Interest rate swap contractOther assets9.6 — 
$28.6 $— 
Derivatives not designated as hedging instruments:
Forward foreign currency contractsPrepaid expenses and other current assets$10.3 $1.7 
$10.3 $1.7 
Liabilities:
Derivative instruments designated as a cash flow hedge:
Interest rate swap contractAccrued expenses$— $11.1 
Interest rate swap contractOther long-term liabilities— 7.6 
Total$— $18.7 
Derivatives not designated as hedging instruments:
Forward foreign currency contractsAccrued expenses$— $0.6 

The following table presents the unrealized gain (loss) recognized in AOCI related to the interest rate caps and interest rate swap for the following reporting periods:

Three Months EndedNine Months Ended
June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Amount of gain (loss) recognized in other comprehensive income, net of taxes:
Interest rate swap$8.4 $3.0 $35.7 $8.2 
Interest rate cap agreements— — — (0.2)
Total$8.4 $3.0 $35.7 $8.0 

 Three Months Ended
 December 30, 2017 December 31, 2016
Amount of gain (loss) recognized in other comprehensive income, net of taxes:   
Interest rate cap agreements$(4.3) $0.7
The following table presents the adjustment to fair value (realized and unrealized) recorded within the Consolidated Statements of Income for derivative instruments for which the Company did not elect hedge accounting:
Derivatives not classified as hedging instruments Amount of Gain (Loss) Recognized in IncomeLocation of Gain (Loss) Recognized in Income
  Three Months Ended December 30, 2017 Three Months Ended December 31, 2016 
Forward foreign currency contracts $1.2
 $9.6
Other income, net

(7)(10) Commitments and Contingencies

Litigation and Related Matters

On June 9, 2010, Smith & Nephew, Inc. ("Smith & Nephew")November 6, 2015, the Company filed a suit against Interlace Medical,Minerva Surgical, Inc. ("Interlace"(“Minerva”), which the Company acquired on January 6, 2011, in the United States District Court for the District of Massachusetts. The complaint allegedDelaware, alleging that the Interlace MyoSure hysteroscopic tissue removalMinerva’s endometrial ablation device infringedinfringes U.S. patent 7,226,459Patent 6,872,183 (the '459'183 patent), U.S. Patent 8,998,898 and U.S. Patent 9,095,348 (the '348 patent). On November 22, 2011, Smith & NephewJanuary 25, 2016, the Company amended the complaint to include claims against Minerva for unfair competition, deceptive trade practices and tortious interference with
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business relationships. On February 5, 2016, the Company filed suita second amended complaint to additionally allege that Minerva’s endometrial ablation device infringes U.S. Patent 9,247,989 (the '989 patent). On March 4, 2016, Minerva filed an answer and counterclaims against the Company, in the United States District Court for the District of Massachusetts. The complaint alleged that use of the MyoSure tissue removal system infringed U.S. patent 8,061,359 (the '359 patent). Both complaints sought preliminary and permanent injunctive relief and unspecified damages. On

September 4, 2012, following a two week trial, the jury returned a verdict of infringement of both the '459 and '359 patents and assessed damages of $4.0 million. A two-day bench trial regardingseeking declaratory judgment on the Company’s assertionclaims and asserting claims against the Company for unfair competition, deceptive trade practices, interference with contractual relationships, breach of inequitable conduct on the part of Smith & Nephew with regard to the '359 patent began on December 10, 2012contract and oral arguments on the issue of inequitable conduct were presented on February 27, 2013.trade libel. On June 27, 2013,2, 2016, the Court denied the Company’s motionsmotion for a preliminary injunction on its patent claims and denied Minerva’s request for preliminary injunction related to inequitable conductthe Company’s alleged false and allowed Smith & Nephew’s requestdeceptive statements regarding the Minerva product. On June 28, 2018, the Court granted the Company's summary judgment motions on infringement and no invalidity with respect to the ‘183 and ‘348 patents. The Court also granted the Company’s motion for summary judgment on assignor estoppel, which bars Minerva’s invalidity defenses. The Court also denied all of Minerva’s defenses, including its motions for summary judgment on invalidity, non-infringement, no willfulness, and no unfair competition.On July 27, 2018, after a two-week trial, a jury returned a verdict that: (1) awarded the Company $4.8 million in damages for Minerva’s infringement; (2) found that Minerva’s infringement was not willful; and (3) found for the Company regarding Minerva’s counterclaims. Damages continued to accrue as Minerva continues its infringing conduct. On May 2, 2019, the Court issued rulings that denied the parties' post-trial motions, including the Company's motion for a permanent injunction but ordered that enforcement ofseeking to prohibit Minerva from selling infringing devices. Both parties appealed the injunction be stayed until final resolution, including appeal, ofCourt's rulings regarding the current re-examinations of both patentspost-trial motions. On March 4, 2016, Minerva filed 2 petitions at the United States Patent and Trademark Office (“USPTO”("USPTO"). The Court also rejected the jury’s damage award and ordered the parties to identify a mechanism for resolving the damages issue. The USPTO issued final decisions that the claimsinter partes review of the '459 and the '359 patents asserted as part of the litigation are not patentable, which decisions Smith & Nephew appealed to the U.S. Patent Trial and Appeal Board ("PTAB"). In'348 patent. On September 12, 2016, the PTAB (i) affirmed the USPTO decision with respect to the '459 patent, holding that the claims at issue are invalid, and (ii) reversed the USPTO decision with respect to the '359 patent, holding that the claims at issue are not invalid. The Company and Smith & Nephew have appealed the decisions by the Patent Trial and Appeal Board onof the '359 patentUSPTO (“PTAB") declined both petitions to review patentability of the '348 patent. On April 11, 2016, Minerva filed a petition for inter partes review of the '183 patent. On October 6, 2016, the PTAB granted the petition and instituted a review of the '459 patent, respectively,'183 patent. On December 15, 2017, the PTAB issued a final written decision invalidating all claims of the ‘183 patent. On February 9, 2018, the Company appealed this decision to the U.S.United States Court of Appeals for the Federal Circuit ("Court of Appeals"). Briefing on both appeals is completed. Oral arguments were held in the '459 patent appeal on October 24, 2017 and in the '359 patent appeal on December 7, 2017. On January 30, 2018,April 19, 2019, the Court of Appeals issued aaffirmed the PTAB's final written decision regarding the '183 patent. On July 16, 2019, the Court of Appeals denied the Company’s petition for rehearing in the '459 patent appeal regarding the '183 patent. On April 22, 2020, the Court of Appeals affirmed the district court’s summary judgment ruling in favor of the Company of no invalidity and infringement, and summary judgment that affirmed-in-partassignor estoppel bars Minerva from challenging the validity of the ‘348 patent. The Court of Appeals also denied the Company’s motion for a permanent injunction and reversed-in-partongoing royalties for infringement of the PTAB‘183 patent. The Court of Appeals denied Minerva’s arguments for no damages or, alternatively, a new trial. On May 22, 2020 both parties petitioned for en banc review of the Court of Appeals decision. On July 22, 2020, the Court of Appeals denied both parties' petitions for en banc review. On August 28, 2020, the district court entered final judgment against Minerva but stayed execution pending resolution of Minerva’s petition for Supreme Court review. On September 30, 2020, Minerva filed a petition requesting Supreme Court review on the issue of assignor estoppel. On November 5, 2020, the Company filed a cross-petition requesting Supreme Court review on the issue of assignor estoppel. On January 8, 2021, the Supreme Court granted Minerva’s petition to address the issue of assignor estoppel and denied the Company's petition. Oral argument before the Supreme Court was held on April 21, 2021. On June 29, 2021, the Supreme Court ruled 5-4 to uphold the assignor estoppel but limited its application to situations in which an assignor’s claim of invalidity contradicts a prior representation the assignor made in assigning the patent. The Court also vacated the ruling of the Court of Appeals and remanded the matter to the PTABcase for further proceedings. At this time, based on available information regarding this litigation,proceedings consistent with its opinion. An oral argument before the Company is unable to reasonably assessCourt of Appeals was held January 27, 2022 and the ultimate outcome of this case or determine an estimate, orparties are awaiting a range of estimates, of potential losses.decision.

On April 11, 2017, Minerva Surgical, Inc. (“Minerva”) filed suit against the Company and Cytyc Surgical Products, LLC (“Cytyc”) in the United States District Court for the Northern District of California alleging that the Company’s and Cytyc’s NovaSure ADVANCED endometrial ablation device infringes Minerva’s U.S. patent 9,186,208.9,186,208 (the '208 patent). Minerva is seeking a preliminary and permanent injunction against the Company and Cytyc from selling this NovaSure device as well as enhanced damages and interest, including in lost profits, price erosion and/or royalty. On January 5, 2018, the Court denied Minerva's motion for a preliminary injunction. On February 2, 2018, at the parties’ joint request, this action was transferred to the District of Delaware. On March 26, 2019, the Magistrate Judge issued a claims construction ruling regarding the disputed terms in the patent, which the District Court Judge adopted in all respects on October 21, 2019. On July 27, 2021, the Delaware district court granted the Company’s motion for summary judgment on invalidity of the '208 patent and entered judgment in favor of the Company. On August 24, 2021, Minerva appealed this and the other rulings to the Court of Appeals. At this time, based on available information regarding this litigation, the Company is unable to reasonably assess the ultimate outcome of this case or determine an estimate, or a range of estimates, of potential losses.


In January 2012, Enzo Life Sciences, Inc. ("Enzo") filed suit againstconnection with the Company's subsidiary, Gen-Probe Incorporated ("Gen-Probe"), in the United States District Court for the District2019 divestiture of Delaware, alleging that certain of Gen-Probe’s diagnostics products, including products that incorporate Gen-Probe’s hybridization protection assay technology (HPA), which include the Aptima line of products, infringe Enzo’s U.S. patent 6,992,180 (the '180 patent). On March 6, 2012, Enzo filed suit againstits Medical Aesthetics business, the Company agreed to indemnify Clayton Dubilier & Rice for certain legal matters that existed at the date of disposition. This included payment of an $8.5 million settlement in the United States District Court for the Districtresolution of Delaware, alleging that products based on the Company's Invader chemistry platform, such as Cervista HPV HR and Cervista HPV 16/18, infringe the '180 patent. On July 16, 2012, Enzo amended itsa 2016 complaint to include additional products that include HPA or TaqMan reagent chemistry, including the Progensa, AccuProbe and Prodesse product lines. The Company counter-claimed for non-infringement, invalidity and unenforceability of the '180 patent. On September 30, 2013, Enzo filed its infringement contentions which added products including "Torch" probes (e.g., MilliPROBE Real-Time Detection System for Mycoplasma), PACE and certain Procleix assays. Both complaints sought preliminary and permanent injunctive relief and unspecified damages. Summary judgment and Daubert motions were filed by the parties on December 15, 2016. A hearing on the summary judgment motions was held on April 4, 2017, and on June 28, 2017, the Court ruled that the '180 patent is invalid for nonenablement. Final judgment was entered on July 19, 2017, and on August 18, 2017, Enzo filed a notice of appeal with the Court of Appeals for the Federal Circuit. Enzo’s opening appeal brief was filed on November 28, 2017, and the Company’s responsive brief is due March 8, 2018. At this time, based on available information regarding this litigation, the Company is unable to reasonably assess the ultimate outcome of this case or determine an estimate, or a range of estimates, of potential losses.

On March 27, 2015, Enzo filed an additional suit against the Company in the United States District Court for the District of Delaware. The complaint alleges that certain additional Company molecular diagnostic products, including, inter alia, the Procleix Parvo/HAV assays and coagulation products, including the Invader Factor II test and the Invader Factor V test, also infringe the '180 patent. The complaint further alleged that certain of the Company’s molecular diagnostic products, including the Company’s Progensa PCA3, Aptima and Procleix products using target capture technology infringe Enzo’s U. S. Patent 7,064,197 (the '197 patent). On June 11, 2015, this matter was stayed pending the resolution of summary judgment motions in the other related suits involving the '197 patent. The litigation remains stayed. On March 30, 2016, Hologic filed two requests for inter partes review of the ‘197 patent at the USPTO. The USPTO instituted the two inter partes reviews on all challenged claims on October 4, 2016. Combined oral arguments for the two inter partes reviews were held on June 1, 2017. On September 28 and October 2, 2017, the PTAB issued final written decisions in the two inter partes reviews finding that all of the challenged claims of the ‘197 patent are unpatentable. In response to the final written decisions, Enzo filed notices of appeal on November 29, 2017, and the United States Court of Appeals for the Federal Circuit consolidated Enzo’s appeals on December 14, 2017. Enzo’s opening brief is due March 12, 2018. At this time, based on available information regarding this

litigation and the related inter partes reviews, the Company is unable to reasonably assess the ultimate outcome of this case or determine an estimate, or a range of estimates, of potential losses.

On October 3, 2016, Enzo filed an additional suit against the Company in the United States District Court for the District of Delaware. The complaint alleges that all of the Company's Progensa PCA3, Aptima and Procleix products infringe U.S. Patent 6,221,581 (the '581 patent). On November 28, 2016, the Company filed an answer and counterclaims of non-infringement, invalidity and unenforceability. On June 30, 2017, Hologic filed its initial invalidity contentions, which provide support for finding that the asserted claims of the '581 patent are invalid based on anticipation, obviousness, lack of adequate written description and enablement, and indefiniteness. On August 31, 2017, the Company and Enzo filed supplemental invalidity charts and supplemental infringement charts, respectively. The parties filed their proposed claim constructions on September 28, 2017. The parties’ claim construction briefs are due in April 2018. On October 4, 2017, the Company filed for inter partes review of the ‘581 patent with the USPTO based on Enzo’s asserted claims. Enzo filed its preliminary response on January 19, 2018. A decision on whether to institute inter partes review is expected in April 2018. At this time, based on available information regarding this litigation, the Company is unable to reasonably assess the ultimate outcome of this case or determine an estimate, or a range of estimates, of potential losses.

On February 3, 2017, bioMérieux, S.A. and bioMérieux, Inc. (collectively “bioMérieux”) filed suit against the Company in the United States District Court for the Middle District of North Carolina. The complaint alleged that the Company’s Aptima HIV-1 RNA Qualitative assay and Aptima HIV-1 Quant Dx assay, as well as products manufactured by the Company and sold to Grifols, S.A. and Grifols Diagnostic Solutions Inc. (“Grifols USA”) for resale under the names Procleix HIV-1/HCV assay, Procleix Ultrio assay, and Procleix Ultrio Plus assay, infringe U.S. Patent Nos. 8,697,352 and 9,074,262. On April 3, 2017, the Company and Grifols USA filed a Motion to dismiss asking the Court to dismiss the complaint in its entirety for bioMérieux’s failure to state a claim upon which relief can be granted. On June 9, 2017, Hologic and Grifols USA filed a supplemental motion to dismiss for improper venue. bioMérieux filed a response to the venue motion on June 30, 2017, and Hologic and Grifols USA responded by filing a brief in further support of their motion to dismiss for improper venue on July 14, 2017. On January 3, 2018, the district court judge for the Middle District of North Carolina granted the parties’ consent motion to transfer the case to Delaware. At this time, based on available information regarding this litigation, the Company is unable to reasonably assess the ultimate outcome of this case or determine an estimate, or range of estimates, of potential losses.

On July 27, 2016, plaintiff ARcare, Inc. against Cynosure, Inc., individually and as putative representativealleging violations of a purported nationwide class, filed a complaint against Cynosure.  The plaintiff alleges that Cynosure violated the Telephone Consumer Protection Act by: (i) sending fax advertisements that did not comply with statutory and Federal Communications Commission requirements that senders provide recipients with certain information about how to opt out from receiving faxed advertisements inAct.Following court approval on June 6, 2022, the future; and (ii) sending unsolicited fax advertisements. The complaint sought damages, declaratory and injunctive relief, and attorneys’ feesCompany made a final payment of $8.5 million, which was previously accrued, on behalf of a purported class of all recipients of purported fax advertisements that the plaintiff alleges did not receive an adequate opt-out notice. On September 30, 2016, Cynosure, answered the complaint and denied liability. On September 7, 2016, the plaintiff sent a demand letter seeking a class settlement for statutory damages under Massachusetts General Laws, Chapter 93A § 9 (“Chapter 93A”). On October 7, 2016, Cynosure responded denying any liability under Chapter 93A, but offering the plaintiff statutory damages of $25 on an individual basis. In March 2017, Cynosure and ARcare entered into a settlement agreement, subjectInc. to court approval, which requires Cynosure to pay settlement compensation of $8.5 million notwithstanding the number of claims filed. If approved, Cynosure would receive a full release from the settlement class concerning the conduct alleged in the complaint. As a result of the settlement agreement, Cynosure recorded a charge of $9.2 million, in the period ended December 31, 2016, which is still accruedclose out its indemnification obligation on the Company's balance sheet as of December 30, 2017.

On March 17, 2017, a purported shareholder of Cynosure, Michael Guido, filed an action against Cynosure in the Court of Chancery of the State of Delaware pursuant to Section 220 of the Delaware General Corporation Law seeking the production of certain books and records, including books and recordsmatter.There are currently no further accruals related to the acquisition of Cynosure by Hologic. The action follows Cynosure’s rejection of Mr. Guido’s demand for these books and records onCompany’s indemnification obligations under the ground that he had not met the requirements of the statute. In addition to books and records, the complaint seeks reasonable attorneys’ fees. The Company filed an answer to the complaint on April 10, 2017. At this time, based on available information regarding this matter, the Company is unable to reasonably assess the ultimate outcome of this case or determine an estimate, or range of estimates, of potential losses.Medical Aesthetic business divestiture agreements.

The Company is a party to various other legal proceedings and claims arising out of the ordinary course of its business. The Company believes that except for those matters described above there are no other proceedings or claims pending against it
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the ultimate resolution of which could have a material adverse effect on its financial condition or results of operations. In all cases, 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 ASC 450, Contingencies. Contingencies (ASC 450). Legal costs are expensed as incurred.



(8)(11) Net Income Per Share

A reconciliation of basic and diluted share amounts is as follows:

 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		June 25,
2022		June 26,
2021
Basic weighted average common shares outstanding250,756 256,230 251,943 257,769 
Weighted average common stock equivalents from assumed exercise of stock options and issuance of restricted stock units2,337 2,351 2,330 2,602 
Diluted weighted average common shares outstanding253,093 258,581 254,273 260,371 
Weighted-average anti-dilutive shares related to:
Outstanding stock options and restricted stock units1,066 653 1,021 515 

 Three Months Ended
 December 30,
2017		 December 31,
2016
Basic weighted average common shares outstanding276,856
 278,663
Weighted average common stock equivalents from assumed exercise of stock options and stock units2,212
 3,143
Incremental shares from Convertible Notes premium1,734
 2,418
Diluted weighted average common shares outstanding280,802
 284,224
Weighted-average anti-dilutive shares related to:   
Outstanding stock options2,272
 1,442
Stock units216
 13
The Company has outstanding Convertible Notes, and the principal balance and any conversion premium may be satisfied, at the Company’s option, by issuing shares of common stock, cash or a combination of shares and cash. The Company's current policy is that it will settle the principal balance of the Convertible Notes in cash. As such, the Company applies the treasury stock method to these securities and the dilution related to the conversion premium of the 2042 and 2043 Notes is included in the calculation of diluted weighted-average shares outstanding to the extent each issuance is dilutive based on the average stock price during each reporting period being greater than the conversion price of the respective Notes.
(9)(12) Stock-Based Compensation

The following presents stock-based compensation expense in the Company’s Consolidated Statements of Income:

Three Months Ended Three Months EndedNine Months Ended
December 30,
2017		 December 31,
2016		 June 25,
2022		June 26,
2021		June 25,
2022		June 26,
2021
Cost of revenues$2.2
 $2.8
Cost of revenues$2.2 $1.9 $7.1 $6.4 
Research and development2.5
 2.8
Research and development1.8 1.4 7.3 6.2 
Selling and marketing2.9
 2.7
Selling and marketing2.6 2.3 8.0 7.7 
General and administrative7.5
 10.9
General and administrative8.7 8.9 29.4 29.8 
Restructuring1.3
 —
Restructuring— 0.9 — 0.9 
$16.4
 $19.2
$15.3 $15.4 $51.8 $51.0 

The Company granted 1.6options to purchase 0.7 million and 0.90.6 million shares of the Company's common stock options during the threenine months ended December 30, 2017June 25, 2022 and December 31, 2016,June 26, 2021, respectively, with weighted-average exercise prices of $40.82$71.12 and $37.62,$68.62, respectively. There were 6.74.4 million options outstanding at December 30, 2017June 25, 2022 with a weighted-average exercise price of $31.20.$48.49.


The Company uses a binomial model to determine the fair value of its stock options. The weighted-average assumptions utilized to value these stock options are indicated in the following table:

Three Months Ended Three Months EndedNine Months Ended
December 30,
2017		 December 31,
2016		 June 25,
2022		June 26,
2021		June 25,
2022		June 26,
2021
Risk-free interest rate2.1% 1.8%Risk-free interest rate1.1 %0.4 %1.1 %0.4 %
Expected volatility35.3% 36.6%Expected volatility34.2 %35.0 %34.2 %35.0 %
Expected life (in years)4.7
 4.7
Expected life (in years)4.84.84.84.8
Dividend yield—
 —
Dividend yield— — — — 
Weighted average fair value of options granted$13.00
 $12.18
Weighted average fair value of options granted$21.48 $19.17 $21.03 $20.07 

The Company granted 0.80.6 million and 0.90.5 million restricted stock units (RSUs)("RSUs") during each of the threenine months ended December 30, 2017June 25, 2022 and December 31, 2016,June 26, 2021, respectively, with weighted-average grant date fair values of $40.79$71.18 and $37.58$68.45 per unit, respectively. As of December 30, 2017, there were 2.0 million unvested RSUs outstanding with a weighted-average grant date fair value of $37.72 per unit. In addition, the Company granted 0.40.1 million and 0.1 million performance stock units (PSUs)("PSUs") during the threenine months ended December 30, 2017June 25, 2022 and December 31, 2016,June 26, 2021, respectively, to members of its senior management team, which have a weighted-average
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grant date fair value of $40.86$71.16 and $37.64$68.51 per unit, respectively. Each recipient of PSUs is eligible to receive between zero0 and 200% of the target number of shares of the Company’s common stock at the end of three years provided the Company’s defined Return on Invested Capital metrics are achieved. The Company also granted 0.1 million and 0.1 million of PSUs based on a three-year cumulative free cash flow measure ("FCF PSUs") to its senior management team, which had a grant date fair value of $71.16 and $68.51 per unit during the nine months ended June 25, 2022 and June 26, 2021, respectively. Each recipient of FCF PSUs is recognizingeligible to receive between zero and 200% of the target number of shares of the Company's common stock at the end of the three-year measurement period. The PSUs and FCF PSUs cliff-vest three years from the date of grant, and the Company recognizes compensation expense ratably over the required service period based on its estimate of the number of shares that will vest.vest upon achieving the measurement criteria. If there is a change in the estimate of the number of shares that are probable of vesting, the Company will cumulatively adjust compensation expense in the period that the change in estimate is made. The Company also granted 0.30.1 million and 0.1 million market basedmarket-based awards (MSUs)("MSUs") to its senior management team during the threenine months ended December 30, 2017June 25, 2022 and December 31, 2016,June 26, 2021, respectively. Each recipient of MSUs is eligible to receive between zero0 and 200% of the target number of shares of the Company’s common stock at the end of three years based upon achieving a certain total shareholder return relative to a defined peer group. The MSUs were valued at $49.45$75.43 and $48.90$82.31 per share using the Monte Carlo simulation model.model in fiscal 2022 and 2021, respectively. The MSUs cliff-vest three years from the date of grant, and the Company is recognizingrecognizes compensation expense for the MSUs ratably over the service period. At June 25, 2022, there was 1.7 million in aggregate unvested RSUs, PSUs, FCF PSUs and MSUs outstanding.

At December 30, 2017,June 25, 2022, there was $37.0$18.4 million and $98.4$67.4 million of unrecognized compensation expense related to stock options and stock units (comprised of RSUs, PSUs, FCF PSUs and PSUs)MSUs), respectively, to be recognized over a weighted-average period of 3.12.3 and 2.12.0 years, respectively.


(10) Disposition

Blood Screening Business

On December 14, 2016, the Company entered into a definitive agreement to sell the assets of its blood screening business to its long-time commercial partner, Grifols for a sales price of $1.85 billion in cash, subject to adjustment based on an estimated closing amount of inventory. The divestiture was completed on January 31, 2017, and the Company received $1.865 billion. The sale resulted in a gain of $899.7 million recorded in the second quarter of fiscal 2017 within operations in the Consolidated Statements of Income. As a result of this disposition and proceeds received, the Company recorded a tax obligation of $649.5 million, which was paid in fiscal 2017. Upon the closing of the transaction, the Company's existing collaboration agreement with Grifols terminated, and a new collaboration agreement was executed as part of this transaction pursuant to which the Company provides certain research and development services to Grifols. In addition, the Company agreed to provide transition services to Grifols over the next two to three years depending on the nature of the respective service, including the manufacture of inventory. The Company also agreed to sell Panther instrumentation and certain supplies to Grifols as part of a long term supply agreement. In determining the accounting for the multiple elements of the overall arrangement, the Company allocated $13.1 million of the proceeds to these elements based on their estimated fair values.

The Company determined this disposal did not qualify to be reported as a discontinued operation as the blood screening business was deemed not to be strategic to the Company and has not had and will not have a major effect on the Company's operations and financial results. Under the previous collaboration agreement, the Company performed research and development activities and manufacturing, while Grifols performed the commercial and distribution activities. The blood screening business was embedded within the Company's molecular diagnostics business, and the Company retains ownership and will continue to use the intellectual property for the underlying technology of its molecular diagnostics assays and instrumentation.
Income from operations of the disposed business presented below represents the pretax profit of the business as it was operated prior to the date of disposition. The operating expenses include only those that were incurred directly by and were retained by the disposed business and are now incurred by Grifols. As noted above, the Company is performing a number of transition services and the financial impact from these services are not included in income from operations presented below. The Company is in effect serving as a contract manufacturer of assays for Grifols for a two to three year period from the date of disposal. Revenue and income from operations of the disposed business for the three month period ended December 31, 2016 was $65.2 million and $28.6 million, respectively. Under the long term supply agreement, transition services agreement to manufacture assays and research and development services, the Company recorded revenue of $12.6 million for the three months ended December 30, 2017.


(11)(13) Other Balance Sheet Information

June 25,
2022		September 25,
2021
Inventories
Raw materials$228.9 $163.3 
Work-in-process59.5 53.0 
Finished goods292.8 284.9 
$581.2 $501.2 
Property, plant and equipment
Equipment$414.7 $467.1 
Equipment under customer usage agreements492.5 484.6 
Building and improvements196.2 191.2 
Leasehold improvements51.0 49.7 
Land41.1 41.3 
Furniture and fixtures17.5 16.8 
Finance lease right of use asset8.2 9.9 
$1,221.2 $1,260.6 
Less – accumulated depreciation and amortization(731.1)(695.9)
$490.1 $564.7 

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 December 30,
2017		 September 30,
2017
Inventories   
Raw materials$114.2
 $95.7
Work-in-process44.6
 45.0
Finished goods199.4
 190.9
 $358.2
 $331.6
In September 2020 and October 2020, the Company received grants of $7.6 million and $119.3 million, respectively, from the Department of Defense Joint Acquisition Task Force ("DOD") to expand production capacity for the Company's two SARS-CoV-2 assays. These grants are specifically to fund capital equipment and labor investments to increase manufacturing capacity to enable the Company to provide a certain amount of COVID-19 tests per month for the U.S. market. The Company is accounting for the funds received under these grants as a reimbursement of the purchased capital equipment. The Company procures and pays for the capital equipment and necessary resources to build out its facility and construct the manufacturing lines to meet the requirements specified in the grant agreement. Subsequent to the Company paying for the capital equipment, the DOD will reimburse the Company upon it meeting certain requirements. However, the DOD retains title to assets purchased under the agreement, and title is transferred to the Company upon meeting certain milestones of the manufacturing efforts and obtaining approval from the DOD that the respective milestone has been met. As of June 25, 2022, the Company had $20.5 million of capital equipment that was awaiting approval from the DOD pending completion of the defined milestones. During the current three and nine month periods, the Company received $16.2 million and $75.0 million, respectively, from the DOD, which has been recorded as a reduction of the cost basis of the purchased equipment. During the year ended September 25, 2021, the Company received $21.2 million from the DOD under these grants. Payments under these grants are subject to satisfaction of the conditions of the grants, including applicable governmental appropriations.

Property, plant and equipment   
Equipment$363.7
 $357.9
Equipment under customer usage agreements379.0
 368.7
Building and improvements172.7
 172.0
Leasehold improvements61.1
 60.6
Land46.4
 46.3
Furniture and fixtures21.0
 20.8
 1,043.9
 1,026.3
Less – accumulated depreciation and amortization(576.8) (553.5)
 $467.1
 $472.8
(12)(14) Business Segments and Geographic Information

The Company has five4 reportable segments: Diagnostics, Breast Health, Medical Aesthetics, GYN Surgical and Skeletal Health. Certain reportable segments represent an aggregation of operating units within each segment. The Company measures and evaluates its reportable segments based on segment revenues and operating income adjusted to exclude the effect of non-cash charges, such as intangible asset amortization expense, goodwill and intangible asset and goodwill impairment charges, acquisition related fair value adjustmentstransaction and integration expenses for acquisitions, restructuring, consolidation and divestiture and facility consolidationcharges, litigation charges, and other one-time or unusual items. Each segment's operating results include its share of allocated corporate administrative expenses.


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Identifiable assets for the five principal operatingreportable segments consist of inventories, intangible assets, goodwill, and property, plant and equipment. The Company fully allocates depreciation expense to its five reportable segments. The Company has presented all other identifiable assets as corporate assets. There were no inter-segment revenues during the three and nine months ended December 30, 2017June 25, 2022 and December 31, 2016.June 26, 2021. Segment information is as follows:

Three Months Ended Three Months EndedNine Months Ended
December 30,
2017		 December 31,
2016		 June 25,
2022		June 26,
2021		June 25,
2022		June 26,
2021
Total revenues:   Total revenues:
Diagnostics$284.6
 $325.4
Diagnostics$560.1 $665.5 $2,497.6 $2,858.2 
Breast Health288.0
 273.3
Breast Health282.8 349.0 952.7 1,018.0 
Medical Aesthetics91.3
 —
GYN Surgical107.5
 114.8
GYN Surgical138.1 127.9 389.6 366.2 
Skeletal Health19.7
 20.9
Skeletal Health21.7 25.9 69.7 73.3 
$791.1

$734.4
$1,002.7 $1,168.3 $3,909.6 $4,315.7 
Income (loss) from operations:   Income (loss) from operations:
Diagnostics$36.5
 $41.1
Diagnostics$175.0 $260.1 $1,247.4 $1,745.1 
Breast Health89.7
 85.2
Breast Health32.0 81.0 163.1 235.1 
Medical Aesthetics(23.0) —
GYN Surgical30.2
 25.5
GYN Surgical60.1 18.2 92.4 60.5 
Skeletal Health0.7
 (5.8)Skeletal Health(3.2)(0.7)(3.6)0.1 
$134.1

$146.0
$263.9 $358.6 $1,499.3 $2,040.8 
Depreciation and amortization:   Depreciation and amortization:
Diagnostics$64.7
 $84.9
Diagnostics$67.8 $63.9 $205.4 $179.4 
Breast Health4.9
 5.1
Breast Health16.9 13.6 45.5 39.7 
Medical Aesthetics28.5
 —
GYN Surgical22.9
 25.1
GYN Surgical24.7 23.2 72.1 69.5 
Skeletal Health0.2
 0.2
Skeletal Health0.2 0.2 0.5 0.5 
$121.2

$115.3
$109.6 $100.9 $323.5 $289.1 
Capital expenditures:   Capital expenditures:
Diagnostics$11.9
 $10.3
Diagnostics$19.8 $35.7 $77.3 $113.2 
Breast Health3.5
 2.2
Breast Health2.2 4.5 9.2 10.1 
Medical Aesthetics1.6
 —
GYN Surgical2.4
 4.1
GYN Surgical2.8 3.0 6.9 9.5 
Skeletal Health0.7
 0.3
Skeletal Health0.1 0.2 0.3 0.2 
Corporate1.7
 7.8
Corporate0.8 — 1.9 1.0 
$21.8

$24.7
$25.7 $43.4 $95.6 $134.0 
June 25,
2022		September 25,
2021
Identifiable assets:
Diagnostics$3,029.8 $3,348.8 
Breast Health1,244.0 1,233.9 
GYN Surgical1,488.2 1,369.7 
Skeletal Health25.8 31.9 
Corporate3,569.6 2,935.6 
$9,357.4 $8,919.9 
��December 30,
2017		 September 30,
2017
Identifiable assets:   
Diagnostics$2,583.0
 $2,621.6
Breast Health840.5
 824.0
Medical Aesthetics1,723.9
 1,751.2
GYN Surgical1,477.8
 1,494.6
Skeletal Health26.8
 25.5
Corporate1,396.3
 1,262.7
 $8,048.3
 $7,979.6


The Company had no customers that represented greater than 10% of consolidated revenues during the three and nine months ended December 30, 2017June 25, 2022 and December 31, 2016.June 26, 2021.

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The Company operates in the following major geographic areas as noted in the below chart. Revenue data is based upon customer location. Other than the United States, no single country accounted for more than 10% of consolidated revenues. The Company’s sales in Europe are predominantly derived from France, Germany and the United Kingdom.Kingdom and Germany. The Company’s sales in Asia-Pacific are predominantly derived from China, Australia and Japan. The “Rest of World” designation includes Canada, Latin America and the Middle East.

Revenues by geography as a percentage of total revenues were as follows:
 
 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		June 25,
2022		June 26,
2021
United States73.3 %64.2 %70.1 %68.4 %
Europe16.4 %24.7 %19.2 %22.3 %
Asia-Pacific7.1 %7.7 %7.7 %6.2 %
Rest of World3.2 %3.4 %3.0 %3.1 %
100.0 %100.0 %100.0 %100.0 %

 Three Months Ended
 December 30,
2017		 December 31,
2016
United States75.5% 77.9%
Europe11.5% 10.7%
Asia-Pacific8.7% 8.4%
Rest of World4.3% 3.0%
 100.0% 100.0%

(13)(15) Income Taxes

In accordance with ASC 740, Income Taxes (ASC 740), each interim period is considered integral to the annual period, and tax expense is measured using an estimated annual effective tax rate. An entity is required to record income tax expense each quarter based on its annual effective tax rate estimated for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, adjusted for discrete taxable events that occur during the interim period.

The Company’s effective tax raterates for the three and nine months ended December 30, 2017 was (324.5)%June 25, 2022 were 8.1% and 18.1%, respectively, compared to 25.5%20.6% and 21.0%, respectively, for the corresponding periodperiods in the prior year.

The benefit recorded in the current quarter is primarily due to the impact of the Tax Cuts and Jobs Act (the "Act") enacted on December 22, 2017. As a result of this law, US corporations are subject to lower incomeeffective tax rates for the three and the Company is required to remeasure its US net deferred tax liabilities at a lower rate, resulting in a net benefit of $355.2 million recorded in the provision for income taxes. Partially offsetting this benefit, the Company recorded a charge of $26.0 million for transition taxes related to the deemed repatriation of foreign earnings. For the current quarter, in addition to the items noted, the effective tax rate wasnine months ended June 25, 2022 were lower than the U.S. statutory tax rate primarily due to the impact of earnings in jurisdictions subject to lower tax rates,the U.S. deduction for foreign derived intangible income, reserve releases resulting from statute of limitations expirations, and the domestic production activities deduction benefit. Forgeographic mix of income earned by our international subsidiaries, which are taxed at rates lower than the U.S. statutory tax rate, partially offset by state income taxes.

The effective tax rate for the three months ended December 31, 2016, the effective tax rateJune 26, 2021 was lower than the U.S. statutory tax rate primarily due to the tax benefit from restricted stock units upon vesting, earnings in jurisdictions subject toimpact of the U.S. deduction for foreign derived intangible income, the geographic mix of income earned by our international subsidiaries, which are taxed at rates lower tax rates, andthan the domestic production activities deduction benefit.

US Tax Reform
The Act reduces the US federal corporate incomeU.S. statutory tax rate, from 35% to 21%, requires companies to pay a one-time transitionand federal and state tax on earnings of certain foreign subsidiaries that were previouslycredits, partially offset by state income taxes. The effective tax deferred, and creates new taxes on certain foreign sourced earnings.
At December 30, 2017, the Company has not completed its accountingrate for the nine months ended June 26, 2021 was equal to the U.S. statutory tax effects of enactment of the Act; however,rate as described below, the Company has made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax, and recognized a provisional net benefit of $329.2 million, which is included in income tax expense.

On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing SEC registrants to consider the impact of the US legislation as “provisional” when it does not haveU.S. deduction for foreign derived intangible income and the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting forgeographic mix of income earned by our international subsidiaries, which are taxed at rates lower than the change inU.S. statutory tax law. In accordance with SAB 118,rate, was offset by state income taxes.

Through the additional estimated net income tax benefitthird quarter of $329.2 million represents the Company’s best estimate based on its interpretation of the US legislation asfiscal 2022, the Company is still accumulating data to finalize the underlying calculations, orreceived $422.6 million in certain cases, the US Treasury is expected to issue further guidance on the application of certain provisions of the US legislation.


In the three months ended December 30, 2017, the Company revised its estimated annual effective rate to reflect a change in the federal statutory income tax rate from 35% to 21%. The rate change is administratively effective at the beginning of the Company’s fiscal year, using a blended rate for the annual period. The Company's blended statutory income tax rate for fiscal 2018 is 24.5%.

Deferred tax assets and liabilities: The Company re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is 24.5% for fiscal 2018 reversals and 21% for post-fiscal 2018 reversals. However, the Company is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional net benefit amount recordedrefunds related to the re-measurement of the Company’s deferred tax balance was $355.2 million.federal and state carryback claims, including interest.


Foreign tax effects: The one-time transition tax is based on the Company’s total post-1986 earnings and profits (E&P) which were previously deferred from US income taxes. The Company recorded a provisional amount for its one-time transition tax liability related to the deemed repatriation of the earnings of its foreign subsidiaries, resulting in an increase in income tax expense of $26.0 million. The Company has not yet finalized its calculation of the total post-1986 foreign E&P for these foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when the Company finalizes the calculation of its post-1986 foreign E&P previously deferred from US federal taxation and finalizes the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax and any additional outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations. The Company continues to evaluate this assertion in its ongoing analysis of the effects of tax reform on the Company's strategic initiatives. The Company believes that determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one time transition tax) is not practicable.

Further, starting in fiscal 2019, the Act subjects a US shareholder of a controlled foreign corporation to current tax on “global intangible low-taxed income” (GILTI) and establishes a tax on certain payments from corporations subject to US tax to related foreign persons, also referred to as base erosion and anti-abuse tax (BEAT).

Because of the complexity of the new international tax provisions not applicable to the Company until fiscal 2019, the Company is continuing to evaluate these provisions of the Act and the application of ASC 740.

Non-Income Tax Matters


The Company is subject to tax examinations for value added,value-added, sales-based, payroll, and other non-income tax items. A number of these examinations are ongoing in various jurisdictions. The Company takes certain non-income tax positions in the jurisdictions in which it operates pursuant to ASC 450.operates. In the normal course of business, the Company's positions and conclusions related to its non-income tax positions could be challenged, resulting in assessments by governmental authorities. Pursuant to ASC 450, the Company has recorded loss contingencies with respect to some of these positions. While the Company believes its estimated losses recorded are reasonable, certain audits are still ongoing and additional charges could be recorded in the future.


In January 2018,2022, the Company settled an ongoinga state non-income tax audit for approximately $11.0fiscal years 2016-2017 for $5.4 million, resulting in a reversal of $4.0 million recorded to general and administrative expenses inwhich was previously accrued.In the firstthird quarter of fiscal 2018.2022, the Company reversed $5.2 million in non-income tax reserves related to tax credits received for research and development expenditures for calendar years 2018-2020 as a result of a foreign non-income tax audit settlement finalized in July 2022.



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(16) Intangible Assets and Goodwill

Intangible assets consisted of the following:
 
DescriptionAs of June 25, 2022As of September 25, 2021
Gross
Carrying
Value		Accumulated
Amortization		Gross
Carrying
Value		Accumulated
Amortization
Acquired intangible assets:
Developed technology$4,605.7 $3,389.8 $4,597.7 $3,184.2 
In-process research and development64.5 — 71.6 — 
Customer relationships607.9 530.9 591.7 510.1 
Trade names267.1 200.0 268.1 191.8 
Non-competition agreements1.4 1.4 1.5 1.5 
Business licenses2.4 2.4 2.5 2.5 
Total acquired intangible assets$5,549.0 $4,124.5 $5,533.1 $3,890.1 
Internal-use software23.6 17.5 23.5 17.2 
Capitalized software embedded in products26.1 20.2 25.5 15.6 
Total intangible assets$5,598.7 $4,162.2 $5,582.1 $3,922.9 
DescriptionAs of December 30, 2017 As of September 30, 2017
Gross
Carrying
Value
 
Accumulated
Amortization
 
Gross
Carrying
Value
 
Accumulated
Amortization
Acquired intangible assets:       
Developed technology$4,528.8
 $2,266.7
 $4,528.7
 $2,186.8
In-process research and development46.0
 —
 46.0
 —
Customer relationships556.7
 402.8
 552.8
 393.8
Trade names310.3
 161.1
 310.3
 156.4
Distribution agreement42.0
 4.1
 42.0
 2.8
Non-competition agreements1.5
 0.1
 1.5
 0.1
Business licenses2.5
 2.2
 2.4
 2.2
Total acquired intangible assets$5,487.8
 $2,837.0
 $5,483.7
 $2,742.1
        
Internal-use software65.8
 48.2
 64.5
 46.1
Capitalized software embedded in products15.5
 2.6
 14.3
 2.0
Total intangible assets$5,569.1

$2,887.8

$5,562.5

$2,790.2

The estimated remaining amortization expense of the Company's acquired intangible assets as of December 30, 2017June 25, 2022 for each of the five succeeding fiscal years iswas as follows:

Remainder of Fiscal 2022$86.2 
Fiscal 2023$236.6 
Fiscal 2024$227.6 
Fiscal 2025$213.1 
Fiscal 2026$178.8 


Remainder of Fiscal 2018$283.1
Fiscal 2019$366.0
Fiscal 2020$354.8
Fiscal 2021$333.2
Fiscal 2022$320.3
The Company conducted its fiscal 2017 impairment test on the first day of the fourth quarter, and used a discounted cash flow method (DCF) to estimate the fair value of its reporting units as of July 2, 2017. The Company believes it used reasonable estimates and assumptions about future revenue, cost projections, cash flows, market multiples and discount rates as of the measurement date. As a result of completing Step 1, all of the Company's reporting units had fair values exceeding their carrying values, and as such, Step 2 of the impairment test was not required. However, one of its reporting units, Medical Aesthetics, had a fair value as of the measurement date that exceeded its carrying value by 2% with goodwill of $683.5 million. The Medical Aesthetics reporting unit is solely comprised of the Cynosure, Inc. business, which the Company acquired on March 22, 2017. In connection with the Company's annual strategic planning process and annual goodwill impairment test, it lowered its estimated financial projections for this business as a result of its then current operating performance being below expectations, which the Company primarily attributed to the significant turnover in the U.S. sales force in 2017 following the date of acquisition. The Company is continuing its efforts to rebuild the U.S. sales force and this continues to affect short term performance. The Company’s long-term outlook for the Medical Aesthetics business has not materially changed. The Company is continuing to monitor the operating performance of this reporting unit compared to the projections used in the annual impairment test, as well as current market and business conditions, to determine if an event has occurred or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. The Company has evaluated these factors and determined that no significant events occurred or circumstances changed during the period ended December 30, 2017 that would suggest it is more likely than not that the fair value of the reporting unit has declined below its carrying value. In the event the Company is unsuccessful in its efforts to rebuild the U.S. sales force or its efforts take significantly longer than expected, or other adverse conditions are identified, future operating performance may be below forecasted projections. If this occurs, the Company may need to revise its long-term growth rates or increase discount rates, and these factors could result in a decline in the fair value of the reporting unit and the Company may be required to record a goodwill impairment charge.

(15)(17) Product Warranties

Product warranty activity was as follows:
 
Balance at
Beginning of
Period		ProvisionsAcquiredSettlements/
Adjustments		Balance at
End of Period
Nine Months Ended:
June 25, 2022$8.8 $5.1 $— $(5.3)$8.6 
June 26, 2021$9.9 $6.1 $0.3 $(6.7)$9.6 

30
 
Balance at
Beginning of
Period
 Provisions 
Settlements/
Adjustments
 
Balance at
End of Period
Three Months Ended:       
December 30, 2017$17.0
 $4.3
 $(5.1) $16.2
December 31, 2016$5.0
 $2.6
 $(1.7) $5.9
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(16)(18) Accumulated Other Comprehensive Loss


The following tables summarize the changes in accumulated balances of other comprehensive loss for the periods presented:

Three Months Ended June 25, 2022Nine Months Ended June 25, 2022
Foreign Currency TranslationPension PlansHedged Interest Rate SwapsTotalForeign Currency TranslationPension PlansHedged Interest Rate SwapsTotal
Beginning Balance$(115.4)$(1.3)$12.6 $(104.1)$(43.1)$(1.3)$(14.7)$(59.1)
Other comprehensive income (loss) before reclassifications(52.0)— 8.4 (43.6)(124.3)— 35.7 (88.6)
Ending Balance$(167.4)$(1.3)$21.0 $(147.7)$(167.4)$(1.3)$21.0 $(147.7)

Three Months Ended June 26, 2021Nine Months Ended June 26, 2021
Foreign Currency TranslationPension PlansHedged Interest Rate SwapsTotalForeign Currency TranslationPension PlansHedged Interest Rate CapsHedged Interest Rate SwapsTotal
Beginning Balance$(14.5)$(1.8)$(19.5)$(35.8)$(22.9)$(1.8)$(0.9)$(24.1)$(49.7)
Other comprehensive income (loss) before reclassifications(9.4)— 3.0 (6.4)(1.0)— 0.4 7.6 7.0 
Amounts reclassified to statement of income— — — — — — 0.5 — 0.5 
Ending Balance$(23.9)$(1.8)$(16.5)$(42.2)$(23.9)$(1.8)$— $(16.5)$(42.2)

(19) Share Repurchase
 Three Months Ended December 30, 2017
 Foreign Currency Translation Marketable Securities Pension Plans Hedged Interest Rate Caps Total
Beginning Balance$(18.5) $(0.4) $(1.6) $4.3
 $(16.2)
Other comprehensive income (loss) before reclassifications5.5
 —
 0.6
 (4.3) 1.8
Amounts reclassified to statement of income—
 0.4
 —
 2.3
 2.7
Ending Balance$(13.0) $—
 $(1.0) $2.3
 $(11.7)


 Three Months Ended December 31, 2016
 Foreign Currency Translation Marketable Securities Pension Plans Hedged Interest Rate Caps Total
Beginning Balance$(26.1) $(0.3) $(2.5) $(3.4) $(32.3)
Other comprehensive income (loss) before reclassifications(15.7) 2.3
 —
 0.7
 (12.7)
Amounts reclassified to statement of income—
 0.1
 —
 2.1
 2.2
Ending Balance$(41.8) $2.1
 $(2.5) $(0.6) $(42.8)

InOn December 9, 2020, the firstCompany's Board of Directors authorized a new five-year share repurchase plan to repurchase up to $1.0 billion of the Company's outstanding common stock. The prior plan was terminated in connection with this new authorization. During the nine month ended June 25, 2022, the Company repurchased 5.2 million shares of its common stock for total consideration of $367.0 million. There were no share repurchases in the third quarter of fiscal 2017, one2022. As of the Company's cost-method equity investments became a marketable security, and the Company recorded the increase in value on a gross basis of $4.0June 25, 2022, $324.7 million to other comprehensive income.remained available under this authorization.



(17)(20) New Accounting Pronouncements


In January 2017,December 2019, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other2019-12, Income Taxes (Topic 350)740) Simplifying the Accounting for Income Taxes. The FASB issued this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). This guidance simplifies how companies calculate goodwill impairments by eliminating Step 2 ofFor public business entities, the impairment test. The guidance requires companies to compare the fair value of a reporting unit to its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The guidance isamendments in this Update are effective for annualfiscal years, and interim periods within those fiscal years, beginning after December 15, 2019,2020 and isare applicable to the Company in fiscal 2020. Early adoption is permitted.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740).2022. The guidance requires companies to recognize the income tax effects of intercompany sales and transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period in which the transfer occurs. The guidance is effective for annual periods beginning after December 15, 2017, and is applicable to the Company in fiscal 2019. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of the adoption of ASU 2016-16No. 2019-12 did not have a material impact on itsthe Company's consolidated financial position and results of operations.


In August 2016,January 2020, the FASB issued ASU No. 2016-15, Statement of Cash Flow2020-01, Investments - Equity Securities (Topic 230)321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The FASB issued this Update to clarify certain interactions between the guidance reduces diversityto account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815. This update could change how certain cash receipts and cash payments are presented and classified inan entity accounts for an equity security under the Statements of Cash Flows. Certain of ASU

2016-15 requirements are as follows: 1) cash payments for debt prepaymentmeasurement alternative or debt extinguishment costs should be classified as cash outflows for financing activities, 2) contingent consideration payments made soon after a business combination should be classified as cash outflows for investing activities and cash payment made thereafter should be classified as cash outflows for financing upforward contract or purchased option to the amountpurchase securities that, upon settlement of the contingent consideration liability recognized at the acquisition date with any excess classified as operating activities, 3) cash proceeds from the settlement of insurance claims should be classified on the basisforward contract or exercise of the naturepurchased option, would be accounted for under the equity method of accounting or the loss, 4) cash proceeds from the settlement of Corporate-Owned Life Insurance (COLI) Policies should be classified as cash inflows from investing activities and cash payments for premiums on COLI policies may be classified as cash outflows for investing activities, operating activities, or a combination of investing and operating activities, and 5) cash paid to a tax authority by an employer when withholding shares from an employee's award for tax-withholding purposes should be classified as cash outflows for financing activities. The guidance is effective for annual periods beginning after December 15, 2017, and is applicable to the Companyfair value option in fiscal 2019. Early adoption is permitted. The adoption of ASU 2016-15 is not expected to have a material effect on the Company's consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, accordance with Topic 825, Financial Instruments - Credit Losses (Topic 326). The guidance requiresFor entities that financial assets measured at amortized cost be presented athave adopted the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted fromamendments in Update 2020-01, the amortized cost basis. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. The updated guidance is effective for annual periods beginning after December 15, 2019,2020, and is applicable to the Company in fiscal 2021. Early adoption is permitted.2022. The Company is currently evaluating the impact of the adoption of ASU 2016-13No. 2020-01 did not have a material impact on itsthe Company's consolidated financial position and results of operations.

In February 2016,January 2020, the FASB issued ASU No. 2016-02, Leases2020-04, Reference Rate Reform (Topic 842)848). The FASB issued this Update as optional guidance requires an entityfor a limited period of time to recognize a right-of-use assetease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. This update will provide optional expedients and a lease liabilityexceptions for virtually allapplying GAAP to only contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of its leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. Thereference rate reform. For entities that have adopted the amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Thein Update 2020-04, the updated guidance is effective for annual periods beginning afterall entities as of March 12, 2020 through December 15, 2018, and is applicable to the Company in fiscal 2020. Early adoption is permitted. The updated guidance requires a modified retrospective adoption.31, 2022. The Company is currently evaluatingadopted ASU 2020-04 in the anticipatedfirst quarter of fiscal 2022, which did not have a material impact ofon the adoption of ASU 2016-02 on itsCompany's consolidated financial position and results of operations.

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In January 2016, the2021, FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition2021-01, Reference Rate Reform (Topic 848) Scope. The FASB issued this Update in response to stakeholder concerns about potential diversity in practice. The FASB decided to clarify the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and Measurement of Financial Assetsexceptions in Topic 848. This update provides optional expedients and Financial Liabilities. This guidance changes how entities measure equity investments that do not result in consolidationexceptions for applying generally accepted accounting principles (GAAP) to only contracts, hedging relationships, and are not accounted for under the equity method. Entities will be required to measure these investments at fair value at the end of each reporting period and recognize changes in fair value in net income. A practicability exception will be available for equity investments that do not have readily determinable fair values, however; the exception requires the Company to consider relevantother transactions that canreference LIBOR or another reference rate expected to be reasonably known to identify any observable price changesdiscontinued because of reference rate reform. For entities that would impacthave adopted the fair value. This guidance also changes certain disclosure requirements and other aspects of current U.S. GAAP. Thisamendments in Update 2021-01, the updated guidance is effective for annual periods beginning after December 15, 2017, and is applicable to the Company in fiscal 2019. Early adoption is permitted.all entities immediately as of January 2021. The Company is currently evaluatingadopted ASU 2021-01 in the anticipatedfirst quarter of fiscal 2022, which did not have a material impact ofon the adoption of ASU 2016-01 on itsCompany's consolidated financial position and results of operations.


In May 2014,2021, the FASB issued ASU No. 2014-09, Revenue from Contracts2021-05, Leases (Topic 842), Lessors - Certain Leases with Customers (Topic 606), which provides guidanceVariable Lease Payments. This Update addresses an issue related to a lessor's accounting for revenue recognition. This ASU is applicable to any entitycertain leases with variable lease payments. The amendments in this Update affect lessors with lease contracts that either enters into contracts with customers to transfer goods(1) have variable lease payments that do not depend on a reference index or services or enters into contracts for the transfer of nonfinancial assets. ASU 2014-09 will supersede the revenue recognition requirements in Topic 605, Revenue Recognition,a rate and most industry-specific guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to receive in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current U.S. GAAP. These judgments may include identifying performance obligations(2) would have resulted in the contract, estimatingrecognition of a selling loss at lease commencement if classified as a sales-type lease or a direct financing lease. The Company adopted the amount of variable consideration to includeamendments in ASU No. 2021-05 in the transaction price and allocatingfirst quarter of fiscal 2022, which did not have a material effect on the transaction price to each separate performance obligation. ASU 2014-09 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017, which is fiscal 2019 for the Company. The Company will adopt Topic 606 effective September 30, 2018 and has established a cross-functional team to evaluate and implement the new revenue recognition rules. The Company will adopt Topic 606 using the modified retrospective method but has not finalized evaluating the anticipated impact of the adoption of ASU 2014-09 on itsCompany's consolidated financial position and resultsstatements.


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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT

Some of the statements contained in this report and documents incorporated by reference herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.1934, as amended (the "Exchange Act"). These statements involve known and unknown risks, uncertainties and other factors which may cause our or our industry’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements may include, but are not limited to, statements regarding:
 
•the ongoing and possible future effects of the global COVID-19 pandemic, the war in Ukraine and other economic disruptions, including U.S. and global recession concerns, on our business, financial condition, results of operations and cash flows, and our ability to draw down our revolver;
•the ongoing and possible future effects of supply chain constraints and inflation;
•the ongoing and possible future effects of the economic uncertainties and disruptions on our customers and suppliers;
•the possibility of interruptions or delays at our manufacturing facilities, or the failure to secure alternative suppliers if any of our sole source third-party manufacturers fail to supply us;
•continued demand for our COVID-19 assays;
•the timing, scope and effect of further U.S. and international governmental, regulatory, fiscal, monetary and public health responses, including emerging vaccine mandates, to the COVID-19 pandemic;
•our ability to predict accurately the demand for our products, and products under development and to develop strategies to address markets successfully;
•potential cybersecurity threats and targeted computer crime;
•the effect of the continuing worldwide macroeconomic uncertainty, including the impact of the UK's decision to leaveexit from the European Union (known as Brexit), on our business and results of operations;
•the coverageeffect of the worldwide political and reimbursement decisions of third-party payorssocial uncertainty and divisions throughout the guidelines, recommendations,world, including the impact on trade regulation and studies published by various organizations relating totariffs, that may adversely impact the usecost and sale of our products in certain countries, or increase the cost we may incur to purchase materials, parts and treatments;
the uncertainty of the impact of cost containment efforts and federal healthcare reform legislation on our business and results of operations;
the impact to our results of operations from the disposal of our blood screening business to Grifols, and the operational challenges of separating this business unitequipment from our molecular diagnostics business;suppliers;
•the ability to successfully manage ongoing organizationaldevelopment of new competitive technologies and strategic changes, including our ability to attract, motivate and retain key employees;products;
•the impact and anticipated benefits of completed acquisitions including our acquisition of Cynosure, Inc. in the second quarter of fiscal 2017, and acquisitions we may complete in the future;
•the ability to consolidate certain of our manufacturing and other operations on a timely basis and within budget, without disrupting our business and to achieve anticipated cost synergies related to such actions;
•the ability to successfully manage ongoing organizational and strategic changes, including our goal of expanding ability to attract, motivate and retain key employees and maintain engagement and efficiency in remote work environments;
•our market positions;
the development of new competitive technologies and products;
ability to obtain regulatory approvals and clearances for our products;products, including the implementation of the new European Union Medical Device Regulations, and maintain compliance with complex and evolving regulations;
•the coverage and reimbursement decisions of third-party payors;
•the uncertainty of the impact of cost containment efforts and federal healthcare reform legislation on our business and results of operations;
•the guidelines, recommendations, and studies published by various organizations relating to the use of our products;
•the effect of consolidation in the healthcare industry;
•our ability to meet production and delivery schedules for our products;
•our ability to protect our intellectual property rights;
•the possibility that products may contain undetected errors or defects or otherwise not perform as anticipated;
•the anticipated development of markets we sell our products into and the success of our products in these markets;
•the anticipated performance and benefits of our products;
•business strategies;
estimated asset and liability values;
the impact and costs and expenses of any litigation we may be subject to now or in the future;
our compliance with covenants contained in our debt agreements;
•anticipated trends relating to our financial condition or results of operations, including the impact of interest rate and foreign currency exchange fluctuations;fluctuations, including the potential impact of the proposed phase out of LIBOR;
•estimated asset and liability values;
•the impact of future tax legislation;
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•conducting business internationally;
•the impact and costs and expenses of any litigation we may be subject to now or in the future;
•our compliance with covenants contained in our debt agreements; and
•our liquidity, capital resources and the adequacy thereof.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” "intends," “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential”"likely," "future," "strategy." “potential,” "seeks," "goal" and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as otherwise required by law, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this report to reflect any change in our expectations or any change in events, conditions or circumstances on which any of our forward-looking statements are based. Factors that could cause or contribute to differences in our future financial results include the cautionary statements set forth herein and in our other filings with the Securities and Exchange Commission, including those set forth underthe "Risk Factors" set forth or incorporated by reference in Part II, Item 1A of this Quarterly Report if any,on Form 10-Q, as well as those described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.25, 2021 or any other of our subsequently filed reports. We qualify all of our forward-looking statements by these cautionary statements.


OVERVIEW

We are a developer, manufacturer and supplier of premium diagnostics products, medical imaging systems, and surgical products with an emphasisfocused on women's health. On March 22, 2017, we acquired Cynosure, Inc., or Cynosure. Cynosure is a developer, manufacturerhealth and supplier of a broad array of light-based aestheticwell-being through early detection and medical treatment systems. The products are used to provide a diverse range of treatment applications such as non-invasive body contouring, hair removal, skin revitalization and scar reduction, as well as the treatment of vascular lesions. The Cynosure business is referred to as Medical Aesthetics and operates as a separate business segment. As a result of our acquisition of Cynosure, we operate in five segments: Diagnostics, Breast Health, Medical Aesthetics, GYN Surgical and Skeletal Health.treatment. We sell and service our products through a combination of direct sales and service personnel and a network of independent distributors and sales representatives. We operate in four segments: Diagnostics, Breast Health, GYN Surgical and Skeletal Health.
We
Through our Diagnostics segment, we offer a wide range of diagnosticdiagnostics products, which are used primarily to aid in the screening and diagnosis of human diseases and through January 31, 2017, we offered products that screened donated human blood and plasma.diseases. Our primary diagnosticsDiagnostics products include our Aptima family ofmolecular diagnostic assays, which run on our advanced instrumentation systems (Panther, Panther Fusion, and Tigris), our ThinPrep cytology system, and the Rapid Fetal Fibronectin Test and, through January 31, 2017, our Procleix blood screening assays. TheTest. Our Aptima family of molecular diagnostic assays is used to detect, among other things, the infectious microorganisms that cause the common sexually transmitted diseases, or STDs, such as: chlamydia and gonorrhea, or CTGC; certain high-risk strains of human papillomavirus, or HPV, andHPV; Trichomonas vaginalis, the parasite that causes trichomoniasis.trichomoniasis; Mycoplasma genitalium; and Herpes simplex viruses 1 and 2. We also offer viral load tests for HIV, Hepatitis C and Hepatitis B for use on our Panther instrument system. In addition, we offer bacterial vaginosis and candida vaginitis assays for the diagnosis of vaginitis, a common and complex ailment affecting millions of women a year. Our assay portfolio also includes diagnostic tests for a range of acute respiratory infections, including SARS-CoV-2, various strains of influenza and parainfluenza, and respiratory syncytial virus that are run on the Panther Fusion system, a field upgradeable instrument addition to the base Panther system. In response to the COVID-19 pandemic, we developed and launched the Aptima SARS-CoV-2 assay (which runs on our standard Panther system) and the Panther Fusion SARS-CoV-2 assay (which runs on our Panther Fusion system). The Panther Fusion SARS-CoV-2 assay and the Aptima SARS-CoV-2 assay were launched at the end of our second quarter and in the third quarter of fiscal 2020, respectively. The ThinPrep System is primarily used in cytology applications, such as cervical cancer screening, and the Rapid Fetal Fibronectin Test assists physicians in assessing the risk of pre-term birth. In blood screening, we developed and manufactured the Procleix family of assays, which are used to detect various infectious diseases. These blood screening products were marketed worldwide by our former blood screening collaborator, Grifols S.A., or Grifols, to whom we sold the blood screening business.
In the first quarter of fiscal 2017, we entered into a definitive agreement to sell our blood screening business to Grifols for a sales price of $1.85 billion in cash, subject to adjustment based on the closing amount of inventory. The transaction closed on January 31, 2017 and we received $1.865 billion. The sales price was subject to adjustment based on a finalization of inventory provided to Grifols. The sale resulted in a gain of $899.7 million recorded in the second quarter of fiscal 2017. As a result of this disposition and proceeds received, we recorded a tax obligation of $649.5 million, which was paid in fiscal 2017. Upon the closing of the transaction, our existing collaboration agreement with Grifols terminated, and a new collaboration agreement was executed as part of this transaction for us to provide certain research and development services to Grifols. In addition, we agreed to provide transition services to Grifols over a two to three year period depending on the nature of the respective service, including the manufacture of inventory, and we are in effect serving as a contract manufacturer of assays for Grifols for a two to three year period from the disposal date. We also agreedgenerate service revenues from our CLIA-certified laboratory for testing related to sell Panther instrumentationbreast cancer and certain supplies to Grifols as part of a long term supply agreement. Following the closing of this disposition, we no longer operate our blood screening business, except to the limited extent we have agreed to support Grifols. Under the long term supply agreement, transition services agreement to manufacture assays, and research and development services, we recognized revenues of $12.6 million in the first quarter of fiscal 2018. For the disposed blood screening business, in the first quarter of fiscal 2017, revenue was $65.2 million, gross profit was $43.6 million, and operating income was $28.6 million. Revenue, gross profit and operating income of the disposed business represents the financial impact of the business as it was operated prior to the date of disposition. The operating expenses include only those that were incurred directly by and were retained by the disposed business and are now incurred by Grifols. See Note 10 to our consolidated financial statements included herein.all metastatic cancers.

Our Breast Health products includesegment offers a broad portfolio of solutions for breast imagingcancer care primarily in the areas of radiology, breast surgery, pathology and related products and accessories, includingtreatment. These solutions include 3D digital mammography systems, computer-aided detection, or CAD, for mammography andimage analytics software utilizing artificial intelligence, reading workstations, ultrasound imaging, minimally invasive breast biopsy devices,guidance systems, breast biopsy site markers, localization, specimen radiology, connectivity solutions and breast biopsy guidance systems.conserving surgery products. Our most advanced breast imaging platform,platforms, Selenia Dimensions utilizes a technology calledand 3Dimensions, utilize tomosynthesis to produce 3D images that show multiple contiguous slice images of the breast, which we refer to as the Genius 3D Mammography exam, as well as conventional 2D full field digital mammography images. Our clinical results for FDA approval demonstrated that conventional 2D digital mammography with the addition of 3D tomosynthesis is superior to 2D digital mammography alone for both screening and diagnostics.exam.
Our Medical Aesthetics segment offers a portfolio of aesthetic treatment systems, including SculpSure, PicoSure and MonaLisa Touch that enable plastic surgeons, dermatologists and other medical practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and benign pigmented lesions, remove multi-colored tattoos, revitalize the skin, reduce fat through laser lipolysis, reduce cellulite, clear nails infected by toe fungus, ablate sweat glands and improve gynecologic health. This segment also markets radio frequency, or RF, energy sourced medical devices for precision surgical applications such as facial plastic and general surgery, gynecology, ear, nose, and throat procedures, back and thigh procedures, ophthalmology, oral and maxillofacial surgery, podiatry and proctology.
Our GYN Surgical products include our NovaSure Endometrial Ablation System, or NovaSure, and our MyoSure

Hysteroscopic Tissue Removal System, or MyoSure.MyoSure, our Fluent Fluid Management system, or Fluent, as well as our Acessa ProVu laparoscopic radiofrequency ablation system, or Acessa. The NovaSure endometrial ablationportfolio is a one-time procedurecomprised of the NovaSure CLASSIC and NovaSure ADVANCED devices and most recently, the NovaSure V5 device for the treatment of abnormal uterine bleeding. The MyoSure tissuesuite of devices offers four options to provide incision-less removal is a minimally invasive procedure that targets and removesof fibroids, polyps, and
34

other pathology within the uterus. The Fluent system is a fluid management system that provides liquid distention during diagnostic and operative hysteroscopic procedures. The Acessa system is a fully integrated system that uses laparoscopic ultrasound, guidance mapping and radiofrequency ablation to treat nearly all types of fibroids.

Our Skeletal Health segment offers Discovery andsegment's products includes the Horizon X-ray bone densitometers that assess theDXA, a dual energy x-ray system, which evaluates bone density of fracture sites; and performs body composition assessments, and the Fluoroscan Insight FD mini C-arm, imaging systems that assistwhich assists in performing minimally invasive orthopedic surgical procedures on a patient's extremities, such as the hand, wrist, knee, foot, and ankle.

Unless the context otherwise requires, references to we, us, Hologic or our company refer to Hologic, Inc. and its consolidated subsidiaries.

Supply Chain Considerations

The current worldwide supply chain shortages and constraints are impacting our ability to obtain certain critical raw materials and components used primarily in our Breast Health capital equipment products. The supply chain shortages and disruptions primarily affecting our Breast Health manufacturing lines are related to electronic components, primarily semiconductor chips. We are dependent on a small number of semiconductor manufacturers and their allocation of chips to us. Based on our current understanding of their allocation of chips to us for the remainder of fiscal 2022, if such allocation does not increase or we are not able to obtain alternative sources of chips, we believe we will not be able to manufacture sufficient quantities of our capital equipment products, primarily 3D Dimension systems, Trident specimen radiography systems, Affirm Prone biopsy systems and Brevera systems to meet customer demand. As a result, if we are unable to obtain sufficient quantities of chips, sales of these products will decline further in the fourth quarter of fiscal 2022 as compared to the prior year period. Since we expect manufacturing of these products to decline below normal manufacturing capacity, we are anticipating an increase in unfavorable manufacturing variances. In addition, the prices of raw materials and components, as well as freight, have been rising and continued supply chain shortages could increase the costs further. These factors may result in a lower gross margin for Breast Health in the fourth quarter of fiscal 2022 for our affected products. Our procurement team has and will continue to expend significant time and resources to try to secure sufficient quantities to meet demand.

Trademark Notice

Hologic is a trademark of Hologic, Inc. Other trademarks, logos, and slogans registered or used by Hologic and its divisions and subsidiaries in the United States and other countries include, but are not limited to, the following: 2D Dimensions, 3Dimensions, 3D Mammography, AccuProbe,Acessa, Acessa ProVu, Affirm, Affirm Prone, Amplidiag, Aptima, ATEC, Biotheranostics, Brevera, C-View, Cervista, Cynosure, Dimensions, Discovery,CoolSeal, Diagenode, Eviva, Fluent, Fluoroscan, Gen-Probe, Genius, Genius 3D, Genius 3D Mammography, Hologic, Horizon Icon, Invader, Medicor, MedLite, MultiCare,DXA, Insight, JustRight, Mobidiag, MyoSure, Novodiag, NovaSure, PACE,NXC Imaging, Panther, PicoSure, Procleix, Prodesse, Progensa,Panther Fusion, Rapid Fibronectin Test, SculpSure,fFN, Selenia, Selenia Dimensions, Somatex, SuperSonic Imagine, ThinPrep, Tigris, Trident, and Tigris.Tumark.
Procleix, Ultrio, and Ultrio Plus
All other brand names or trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Hologic's use or display of other parties' trademarks, trade dress or products in this offering circular does not imply that Hologic has a relationship with, or endorsement or sponsorship of, Grifols Worldwide Operations Limited. MonaLisa Touch is a registeredthe trademark of DEKA M.E.L.A. Srl-Calenzano-Italy.or trade dress owners.



35


ACQUISITIONS


Cynosure, Inc.The following sets forth descriptions of acquisitions we have completed in fiscal 2022 and 2021.


BolderSurgical

On March 22, 2017,November 29, 2021, we completed the acquisition of Cynosure and acquired all of the outstanding shares of Cynosure. The acquisition was funded through available cash, and the total purchase price was $1.66 billion.

The preliminary allocation of the purchase price is based on estimates of the fair value of assets acquired and liabilities assumed as of March 22, 2017. The Company has not yet obtained all of the information related to the fair value of the acquired assets and liabilities, primarily taxes, to finalize the purchase price allocation. The purchase price has been allocated to the acquired assets and assumed liabilities based on management’s estimate of their fair values.

As part of the preliminary purchase price allocation, the Company has determined the identifiable intangible assets are developed technology of $736.0 million, in-process research and development of $107.0 million, trade names of $74.0 million, a distribution agreement of $42.0 million and customer relationships of $35.0 million. The preliminary fair value of the intangible assets has been estimated using the income approach, specifically the excess earning method and relief from royalty method, and the cash flow projections were discounted using rates ranging from 11% to 12%. The cash flows are based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.

The developed technology assets comprise know-how, patents and technologies embedded in Cynosure’s products and relate to currently marketed products. In-process research and development projects relate to in-process projects that have not reached technological feasibility as of the acquisition date and have no alternative future use. The primary basis for determining technological feasibility of these projects is obtaining regulatory approval to market the underlying productBolder Surgical Holdings, Inc., or expected commercial release depending on the project. We recorded $107.0 million of in-process research and development assets related to three projects, which were expected to be completed during fiscal 2018 and 2019 with a preliminary cost to complete of approximately $18.0 million. During the fourth quarter of fiscal 2017, we obtained regulatory approval for two projects with an aggregate fair value of $61.0 million and these assets were reclassified to developed technology. The remaining project is expected to be completed during fiscal 2019 with an estimated cost to complete of approximately $4.0 million. Given the uncertainties inherent with product development and introduction, we cannot assure that any of our product development efforts will be successful, completed on a timely basis or within budget, if at all. All of the in-process research and development assets were valued using the multiple-period excess earnings method approach using discount rates ranging from 14% to 22%.

The excess of the purchase price over the preliminary estimated fair value of the tangible net assets and intangible assets acquired of $683.5 million was recorded to goodwill. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the Cynosure acquisition. These benefits include the expectation that the Company's entry into the aesthetics market will significantly broaden our offering in women's health. The Company is expected to benefit from a broader global presence, synergistic utilization of Hologic's direct sales force, primarily its GYN Surgical sales force, with certain Cynosure products and entry into an adjacent, cash-pay segment.

Medicor Medical Supply

On April 7, 2017, we completed the acquisition of MMS Medicor Medical Supplies GmbH, or Medicor,Bolder, for a purchase price of approximately $19.0$160.1 million. Medicor wasBolder, located in Louisville, Colorado, is a long-standing distributordeveloper and manufacturer of our Breastenergy vessel sealing surgical devices used in both laparoscopic and Skeletal Health products in Germany, Austria and Switzerland.open procedures. Based on theour preliminary valuation, we have allocated $5.4$96.7 million of the purchase price to the preliminary value of intangible assets and $8.9$70.9 million to goodwill. The allocation of the purchase price is preliminary as we are continuingcontinue to gather information supporting the valuation of the acquired assets and liabilities. Bolder's results of operations are reported in our GYN Surgical segment.


Emsor, S.A.Mobidiag


On December 11, 2017,June 17, 2021, we completed the acquisition of Emsor S.A. ("Emsor")Mobidiag Oy, or Mobidiag, for a purchase price of approximately $13.1 million, which includes contingent consideration which the Company has estimated at $2.0$729.6 million. The contingent consideration is payable upon Emsor achieving predefined amounts of cumulative revenue over a two year period from the date of acquisition. Emsor was a distributor of the Company's BreastMobidiag, located in Finland, manufactures molecular diagnostic solutions for gastrointestinal infections, antimicrobial resistance management and Skeletal Health products in Spain and Portugal.other infections. Based on the Company's preliminaryour valuation, it haswe allocated $2.8$399.9 million of the purchase price to the preliminary value of intangible assets and $3.5$427.7 million to goodwill. The allocationThis acquisition expands our molecular diagnostics portfolio into the near-patient testing market. Mobidiag's results of operations are reported in our Diagnostics segment.

Biotheranostics

On February 22, 2021, we completed the acquisition of Biotheranostics, Inc., or Biotheranostics, for a purchase price of $231.3 million. Biotheranostics, located in San Diego, California, manufactures molecular diagnostic tests that support physicians in the treatment of breast cancer and all metastatic cancers and performs the lab testing procedures at its CLIA-certified laboratory. Based on our valuation, we allocated $162.4 million of the purchase price is preliminary asto the Company continues to gather information supporting the acquiredvalue of intangible assets and liabilities.$80.9 million to goodwill. Biotheranostics' results of operations are included in our Diagnostics segment and its revenues are reported within Service and Other Revenue in our Consolidated Statements of Income.


Diagenode

On March 1, 2021, we completed the acquisition of Diagenode SA, or Diagenode, for a purchase price of $155.1 million. Diagenode, located in Belgium, is a developer and manufacturer of molecular diagnostic assays based on polymerase chain reaction (PCR) technology to detect infectious diseases of bacterial, viral or parasite origin. Based on our valuation, we allocated $79.0 million of the purchase price to the value of intangible assets and $83.5 million to goodwill. Diagenode's results of operations are included in our Diagnostics segment.

Somatex Medical Technologies

On December 30, 2020, we completed the acquisition of Somatex Medical Technologies GmbH, or Somatex, for a purchase price of $62.9 million. Somatex, located in Germany, is a manufacturer of biopsy site markers, including the Tumark product line of tissue markers, which we distributed in the U.S. prior to the acquisition. Somatex's results of operations are included in our Breast Health segment.

RESULTS OF OPERATIONS

All dollar amounts in tables are presented in millions.

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Product Revenues
 
Three Months Ended  Three Months EndedNine Months Ended
December 30, 2017 December 31, 2016 Change  June 25, 2022June 26, 2021ChangeJune 25, 2022June 26, 2021Change
Amount 
% of
Total
Revenue
 Amount 
% of
Total
Revenue
 Amount %  Amount% of
Total
Revenue		Amount% of
Total
Revenue		Amount%Amount% of
Total
Revenue		Amount% of
Total
Revenue		Amount%
Product Revenues            Product Revenues
Diagnostics$279.1
 35.3% $319.1
 43.5% $(40.0) (12.5)% Diagnostics$534.3 53.3 %$637.3 54.6 %$(103.0)(16.2)%$2,428.5 62.1 %$2,793.9 64.7 %$(365.4)(13.1)%
Breast Health175.1
 22.1% 165.4
 22.5% 9.7
 5.9 % Breast Health149.9 15.0 %211.7 18.1 %(61.8)(29.2)%543.3 13.9 %617.7 14.3 %(74.4)(12.0)%
Medical Aesthetics76.7
 9.7% —
 —% 76.7
 100.0 % 
GYN Surgical107.3
 13.6% 114.6
 15.6% (7.3) (6.4)% GYN Surgical137.7 13.7 %127.4 10.9 %10.3 8.1 %388.7 9.9 %365.2 8.5 %23.5 6.4 %
Skeletal Health12.5
 1.6% 14.3
 1.9% (1.8) (12.4)% Skeletal Health15.2 1.5 %18.8 1.6 %(3.6)(19.1)%48.2 1.2 %52.6 1.2 %(4.4)(8.4)%
$650.7
 82.3% $613.4
 83.5% $37.3
 6.1 % 
$837.1 83.5 %$995.2 85.2 %$(158.1)(15.9)%$3,408.7 87.1 %$3,829.4 88.7 %$(420.7)(11.0)%
We generated an increasehad a decrease in product revenues of 6.1% in both the current quarterthree and nine month periods of 15.9% and 11.0%, respectively, compared to the corresponding period in the prior year primarily due to our acquisition of Cynosure on March 22, 2017 and an increase in Breast Health sales. Cynosure's results (after the date of acquisition) are reported in our Medical Aesthetics segment and is the sole business in this segment. Partially offsetting the increase, our Diagnostics business product revenues declined as a result of the sale of our blood screening business effective January 31, 2017, and we had lower revenues in GYN Surgical and Skeletal Health. Excluding blood screening, Diagnostics revenues increased $13.2 million in the current quarter compared to the corresponding periodperiods in the prior year. In addition, the first quarter of fiscal 2017This was a 14-week quarter as fiscal 2017 was a 53-week fiscal period, and we estimate that the four extra selling days in the prior year period contributed approximately $20 million to revenue, primarily in the U.S.
Diagnostics product revenues decreased 12.5% in the current quarter compared to the corresponding period in the prior year primarily due to the decrease in blood screening revenues of $53.2 millionin the Diagnostics business as COVID-19 assay sales were lower, a resultdecrease in Breast Health revenue primarily due to supply chain constraints, and to a lesser extent the negative effect from the unfavorable foreign currency exchange impact of the divestiturestrengthened U.S dollar against a number of the business during the second quarter of FY17, and we had four fewer selling days in the first quarter of fiscal 2018. In connection with the divestiture agreement, we have committed to providing Grifols manufacturing support through the defined transition services period and long term access to Panther instrumentation and certain supplies. As such, we will continue to generate a level of revenues, but much lower than historical trends. For the current three month period, product revenue under the new long term supply agreement and transition services agreement to manufacture assays for Grifols was $10.2 million. Excluding the divestiture of the blood screening business, diagnosticcurrencies.

Diagnostics product revenues grew driven by increases in Molecular Diagnostics of $10.3decreased $103.0 million and Cytology$365.4 million, or 16.2% and Perinatal of $2.9 million.
Molecular Diagnostics product revenue of $146.3 million, and in particular revenue related to our Aptima family of assays, increased $10.3 million in the current quarter on a worldwide basis due to our increased installed base of Panther instruments, which is driving higher volumes of assay testing and an increase in international sales of our virology products as we have recently received regulatory approval for certain of these products. These increases were partially offset by lower instrument sales and the loss of one week13.1%, respectively, in the current three and nine month periodperiods compared to the corresponding period in the prior year. Cytology and Perinatal product revenue increased $2.9 million due to higher international ThinPrep volumes, partially offset by slightly lower domestic volumes as average selling prices remained relatively consistent. In addition, we experienced an increase in Perinatal revenue as domestic volumes increased primarily due to a change in certain customers ordering patterns.
Breast Health product revenues increased 5.9% in the current quarter compared to the corresponding period in the prior year primarily due to increased unit volumes of our 2D and 3D Dimensions systems internationally, increased sales volume of our Affirm Prone table and Brevera breast biopsy system, which was recently commercially released in the US, and an increase in Eviva and ATEC volumes internationally. In addition, the acquisition of Medicor and Emsor, former distributors of our products, resulted in

higher revenues. These increases were partially offset by lower sales volume of our 2D and 3D Dimensions systems and related components in the U.S. due to market and competitive dynamics, as well as a shift to lower priced systems. In addition, we experienced lower sales of our C-View software product and 3D upgrades in the US.
Our Medical Aesthetics business was formed in fiscal 2017 by the acquisition of Cynosure effective March 22, 2017. Accordingly, we did not have any revenues in the prior year period.
GYN Surgical product revenues decreased 6.4% in the current quarter compared to the corresponding periodperiods in the prior year primarily due to a decrease in volumeMolecular Diagnostics of NovaSure system sales$98.7 million and $360.4 million, respectively, a decrease in Blood Screening of $9.9$4.1 million and $8.8 million, respectively, and a decrease in Cytology & Perinatal revenue in the current three month period of $0.2 million. Cytology & Perinatal revenue increased $3.9 million in the US,current nine month period compared to the corresponding prior year period. Molecular Diagnostics product revenue was $412.4 million and $2,050.1 million, respectively, in the current three and nine month periods compared to $511.1 million and $2,410.6 million in the corresponding periods in the prior year. The decrease was primarily attributable to a decrease of $118.3 million and $436.4 million, respectively, in sales from our two SARS-CoV-2 assays due to lower volumes, which we primarily attribute to lower demand from an improvement in the COVID-19 pandemic and to a lesser extent the impact of at-home testing alternatives and lower average selling prices in international markets compared to the prior year. We also had a decrease in the sale of our Panther and Panther Fusion instruments in the current year periods compared to the prior year periods. These decreases were partially offset by an increase in sales of $10.3 million and $49.9 million in the current three and nine month periods, respectively, for our Aptima assays and STD collection kits (exclusive of our Aptima SARS-CoV-2 assays), which primarily consisted of our CTGC, Bacterial Vaginosis, and CV Candida assays, on a worldwide basis as volumes increased, competitionpartially offset by lower HPV assay volumes and a stagnant market for endometrial ablation,decrease in average selling prices partially driven by geographic mix. In addition, we had an increase from our Quant Viral assays and Fusion respiratory assays as well as an increase of $26.5 million in the current nine month period from our Mobidiag and Diagenode acquisitions. We also experienced a decrease in revenue from international sales denominated in foreign currencies from the unfavorable foreign currency exchange impact of the strengthened U.S. dollar against a number of currencies.

Breast Health product revenues decreased $61.8 million and $74.4 million, or 29.2% and 12.0%, respectively, in the current three and nine month periods compared to the corresponding periods in the prior year primarily due to a decrease in volumes of our digital mammography systems, primarily 3D Dimensions systems, related software and workflow products, and Affirm biopsy systems. The decrease in volume was driven by supply chain constraints related to electronic components, primarily semiconductor chips, that impacted our ability to manufacture sufficient quantities to meet customer demand, which was partially offset by an increase in average selling prices. Partially offsetting the decrease in the current three and nine month periods, we had an increase in sales of our interventional breast solutions products, primarily driven by ATEC and Brevera disposables, and Eviva disposables in the current three month period. We also experienced a decrease in revenue from international sales denominated in foreign currencies from the unfavorable foreign currency exchange impact of the strengthened U.S. dollar against a number of currencies.

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GYN Surgical product revenues increased $10.3 million and $23.5 million, or 8.1% and 6.4%, respectively, in the current three and nine month periods compared to the corresponding periods in the prior year primarily due to increases in the sales volume of our Fluent Fluid Management products, MyoSure system sales, CoolSeal vessel sealers acquired in the Bolder acquisition, and Acessa ProVu systems. These increases were partially offset by decreases in NovaSure system sales in the current three and nine month periods compared to the corresponding periods in the prior year. We also experienced a decrease in revenue from international sales denominated in foreign currencies from the unfavorable foreign currency exchange impact of the strengthened U.S. dollar against a number of currencies.

Skeletal Health product revenues decreased $3.6 million and $4.4 million, or 19.1% and 8.4%, respectively, in the current three and nine month periods compared to the corresponding periods in the prior year primarily due to a decrease in sales volume of our Horizon DXA systems and Insight FD Fluoroscan systems and to a lesser extent a decrease in average selling prices of the Insight FD systems in the current nine month period, partially offset by a slight increase in average selling prices from a mix shift to the higher priced NovaSure ADVANCED device and an increase in MyoSure system sales on a worldwide basis. In addition, we had four fewer selling days in the first quarter of fiscal 2018.
Skeletal Health product revenues decreased 12.4% in the current quarter compared to the corresponding period in the prior year, primarily due to a decrease in our mini C-arm sales in the U.S. due to competitive pressures, which was partially offset by increases in Horizon osteoporosis assessment product revenues, primarily attributable to higher sales volumeDXA systems in the current three month period. The sales volume decrease is largely associated with supply chain constraints. We also experienced a decrease in revenue from international sales denominated in foreign currencies from the unfavorable foreign currency exchange impact of the strengthened U.S. dollar against a number of currencies.

Product revenues by geography as a percentage of total product revenues were as follows:

Three Months Ended  Three Months EndedNine Months Ended
December 30, 2017 December 31, 2016  June 25, 2022June 26, 2021June 25, 2022June 26, 2021
United States74.4% 76.8% United States71.3 %61.7 %68.2 %67.4 %
Europe12.0% 11.4% Europe17.8 %26.4 %20.6 %23.0 %
Asia-Pacific9.1% 8.8% Asia-Pacific7.5 %8.1 %8.0 %6.3 %
Rest of World4.5% 3.0% Rest of World3.4 %3.8 %3.2 %3.3 %
100.0% 100.0% 100.0 %100.0 %100.0 %100.0 %

In the current quarterthree month period compared to the corresponding period in the prior year, the percentage of product revenue derived from the U.S. increased while Europe and Asia-Pacific decreased, which we primarily attributed to an increase in the U.S. for Aptima, Fusion, Quant Viral, and RestSARS-CoV-2 assay volumes, and a decrease in SARS-CoV-2 assay volume in both Europe and Asia-Pacific as Covid surges in Europe and Japan receded. Additionally, product revenue decreased in China due to an uptick in Covid resulting in city-wide shutdowns. These decreases were partially offset by an increase in respiratory assay revenue primarily due to the onset of World increased andan early flu season in Australia. In the current nine month period compared to the corresponding period in the prior year, the percentage of product revenue derived from the U.S. and Asia-Pacific increased while Europe decreased, which we primarily as a result of the Cynosure acquisition, andattributed to a lesser extent an increase in digital mammography systemsSARS-CoV-2 assay volume in Europe. A higher percentage of Cynosure's revenues are internationally basedAustralia, New Zealand and North Asia and an increase in volume in ThinPrep and HPV in China, as well as a consistent decline in SARS-CoV-2 assay volume in both Europe and the U.S. partially offset by a greater increase in our domestic Surgical business compared to legacy Hologic's.Europe. In addition, the strengthening of the U.S. Dollar against a number of currencies contributed to the increase in the percentage of product revenue derived from regions other than the U.S., Europe and Asia-Pacific increased as we expanded our international infrastructure and sales efforts in these compared to revenue derived from the other geographic regions.

Service and Other Revenues

 Three Months EndedNine Months Ended
 June 25, 2022June 26, 2021ChangeJune 25, 2022June 26, 2021Change
 Amount% of
Total
Revenue		Amount% of
Total
Revenue		Amount%Amount% of
Total
Revenue		Amount% of
Total
Revenue		Amount%
Service and Other Revenues$165.6 16.5 %$173.1 14.8 %$(7.5)(4.3)%$500.9 12.8 %$486.3 11.3 %$14.6 3.0 %
 Three Months Ended 
 December 30, 2017 December 31, 2016 Change 
 Amount 
% of
Total
Revenue
 Amount 
% of
Total
Revenue
 Amount % 
Service and Other Revenues$140.4
 17.7% $121.0
 16.5% $19.4
 16.0% 

Service and other revenues consist primarily of revenue generated from our field service organization to provide ongoing service, installation, and repair of our products. The majority of these revenues are generated within our Breast Health segment,segment. The decrease in service and other revenue in the current three month period compared to the corresponding period in the prior year was primarily due to a lesser extent, our Medical Aesthetics business.decrease in installation and training services that are provided with capital product sales as a result of lower unit sales in the current quarter. The increase in service and other revenue in the current nine month period compared to the corresponding period in the prior year was primarily due to an increase in Breast Health service contract revenue as the Breast Health business continuescontinued to convert a high percentage of our installed base of digital mammography systems to service contracts upon expiration of the warranty period. Our Medical Aesthetics period, as well as additions from our distributor acquisitions. In our Diagnostics
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business, represented approximately 10%lab testing revenue from the inclusion of service revenues in the first quarter of fiscal 2018. Service and other revenues increased 16.0% in the current quarter compared to the corresponding period in the prior year primarily due to $14.6 million contributed by Cynosure, which was acquiredour Biotheranostics acquisition in the second quarter of fiscal 2017,2021, increased $5.7 million and higher service$33.4 million, respectively, in the current three and nine month periods compared to the corresponding periods in the prior year. This was offset by a decrease in royalty revenue in the current three and nine month periods of $9.8 million and $33.6 million, respectively, from Grifols, S.A., or Grifols, related to licensing our intellectual property to our COVID-19 assays for their sale in Spain, as the contract conversion and renewal rates.expired in December 2021.


Cost of Product Revenues

 Three Months EndedNine Months Ended
 June 25, 2022June 26, 2021ChangeJune 25, 2022June 26, 2021Change
 Amount% of
Product
Revenue		Amount% of
Product
Revenue		Amount%Amount% of
Product
Revenue		Amount% of
Product
Revenue		Amount%
Cost of Product Revenues$266.3 31.8 %$303.9 30.5 %$(37.6)(12.4)%$907.0 26.6 %$889.1 23.2 %$17.9 2.0 %
Amortization of Intangible Assets75.9 9.1 %68.1 6.8 %7.8 11.5 %223.1 6.5 %194.2 5.1 %28.9 14.9 %
Impairment of Intangible Assets9.2 1.1 %— — %9.2 100.0 %9.2 0.3 %— — %9.2 100.0 %
$351.4 42.0 %$372.0 37.3 %$(20.6)(5.5)%$1,139.3 33.4 %$1,083.3 28.3 %$56.0 5.2 %
 Three Months Ended 
 December 30, 2017 December 31, 2016 Change 
 Amount 
% of
Product
Revenue
 Amount 
% of
Product
Revenue
 Amount % 
Cost of Product Revenues$213.7
 32.8% $198.3
 32.3% $15.4
 7.8% 
Amortization of Intangible Assets79.8
 12.3% 73.5
 12.0% 6.3
 8.5% 
 $293.5
 45.1% $271.8
 44.3% $21.7
 8.0% 

Cost of Product Revenues. The cost of product revenues as a percentage of product revenues was 32.8%31.8% and 26.6% in the current quarterthree and nine month periods compared to 32.3%30.5% and 23.2% in the corresponding periodperiods in the prior year.year, respectively. Cost of product revenues as a percentage of product revenuesrevenue increased in the current quarter were relatively consistent within the legacy Hologic segments. However, the cost of product revenues was higherthree and nine month periods primarily due to a decrease in sales of our SARS-CoV-2 assays, which have higher gross margins compared to our other diagnostic products, and comprised 20.7% and 37.5%, respectively, of total product revenue in the inclusion of Cynosure results as Cynosure products have a lower gross margin than our legacy products.current three and nine month periods compared to 29.3% and 44.8%, respectively, in the corresponding periods in the prior year.

Diagnostics' product costs as a percentage of revenue decreased slightlyincreased in the current quarterthree and nine month periods compared to the corresponding periodperiods in the prior year primarily due to increased Aptima assay volumes, increasedlower sales volume of Perinatal products that have high margins, favorable manufacturing variancesour SARS-CoV-2 assays, a slight decline in average selling prices of certain assays, an increase in inventory reserves, higher field service costs for our expanded instrument installed base and lower instrument sales, which have low margins. These improvements were primarilyhigher freight charges internationally, partially offset by the divestiturelower sales of the blood screening business that occurred during the second quarter of fiscal 2017. The products that we supply to Grifols under the new supply and collaboration agreements are at lower gross margins than we earned in the disposed business, and we expect this to continue.instruments, which carry low margins.

Breast Health’s product costs as a percentage of revenue was relatively consistentincreased in the current quarterthree and nine month periods compared to the corresponding periodperiods in the prior year. Higher gross margins fromyear primarily due to the impact of the COVID-19 pandemic on the supply chain resulting in lower sales volume increases in the Affirm Prone table, the Brevera breast biopsy system,volumes of our higher margin products, reduced manufacturing utilization and Evivahigher prices of raw materials and ATEC devices, and favorable manufacturing variances werecomponents, partially offset by a reductionslight increase in 3D Dimensions systems, a mix shift to lower priced 3Daverage selling prices of our 3Dimensions systems and a decrease in 3D upgrades and C-View software sales, which have higher gross margins than capital equipment sales.related workflow products.

GYN Surgical’s product costs as a percentage of revenue was relatively consistentincreased in the current quarterthree and nine month periods compared to the corresponding periodperiods in the prior year.year primarily due to product mix of higher volumes of lower margin products, mostly attributable to sales of our Fluent Fluid Management systems, Acessa ProVu systems and CoolSeal vessel sealers.

Skeletal Health’s product costs as a percentage of revenue decreasedincreased in the current quarterthree and nine month periods compared to the corresponding periodperiods in the prior year primarily due to higher obsolescence charges recordedlower sales volume of our Horizon DXA systems and Insight FD Fluoroscan systems, and to a lesser extent a decrease in average selling prices of the Insight FD systems in the prior year.current nine month period, partially offset by a slight increase in average selling prices of our Horizon DXA systems in the current three month period.

Amortization of Intangible Assets. Amortization of intangible assets relates to acquired developed technology, which is generally amortized over its estimated useful life of between 85 and 15 years using a straight-line method or, if reliably determinable, based on the pattern in which the economic benefits of the assets are expected to be consumed. Amortization expense has increased in the current three month period primarily due to $17.4 million related to intangible assets acquired in the Cynosure acquisition, partially offset by a decrease in amortization expense related to divestiture of the blood screening business of $5.4 million, lower amortization expense related to the Cytyc acquisition intangibles, which are being amortized based on the pattern of economic benefits, and having one less week of expense in the current quarter as compared to the corresponding period in the prior year.

Cost of Service and Other Revenues
 Three Months Ended 
 December 30, 2017 December 31, 2016 Change 
 Amount 
% of
Service
Revenue
 Amount 
% of
Service
Revenue
 Amount % 
Cost of Service and Other Revenue$73.1
 52.1% $57.8
 47.8% $15.3
 26.5% 
Service and other revenues gross margin decreased to 47.9% in the current three month period compared to 52.2% in the corresponding period in the prior year primarily due to Cynosure's service gross margin, which is lower than that generated by the Breast Health business.
Operating Expenses
 Three Months Ended 
 December 30, 2017 December 31, 2016 Change 
 Amount 
% of
Total
Revenue
 Amount 
% of
Total
Revenue
 Amount % 
Operating Expenses            
Research and development$54.8
 6.9% $54.4
 7.4% $0.4
 0.8 % 
Selling and marketing139.5
 17.6% 110.0
 15.0% 29.5
 26.8 % 
General and administrative77.9
 9.9% 69.8
 9.5% 8.1
 11.6 % 
Amortization of intangible assets14.4
 1.8% 21.4
 2.9% (7.0) (32.8)% 
Restructuring and divestiture charges3.8
 0.5% 3.2
 0.4% 0.6
 18.8 % 
 $290.4
 36.7% $258.8
 35.2% $31.6
 12.2 % 
Research and Development Expenses. Research and development expenses increased 0.8% in the current quarter compared to the corresponding period in the prior year primarily due to intangible assets acquired in the inclusionMobidiag and Bolder acquisitions as well as accelerated amortization related to shortening the life of Cynosure research and development expensesan intangible asset acquired in the acquisition of $6.5 million,SuperSonic Imagine SA, or SSI, partially offset by lower amortization of intangible assets acquired in the divestitureCytyc acquisition which reduces over time. In the current nine month period, amortization was
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Table of the blood screening business, lower project spend, a reduction in headcount primarily in Diagnostics, and one less week of expensesContents
higher compared to the prior year firstperiod due to the factors noted in the current three month period as well as the inclusion of intangible assets in the Biotheranostics and Diagenode acquisitions.

Impairment of Intangible Assets. During the third quarter of fiscal 2022, we determined that two developed technology assets acquired in the Faxitron acquisition were impaired as a result of end of sale notifications for certain products. As a result, we recorded an impairment charge of $9.2 million.

Cost of Service and Other Revenues
Three Months EndedNine Months Ended
 June 25, 2022June 26, 2021ChangeJune 25, 2022June 26, 2021Change
 Amount% of
Service
Revenue		Amount% of
Service
Revenue		Amount%Amount% of
Service
Revenue		Amount% of
Service
Revenue		Amount%
Cost of Service and Other Revenue$101.5 61.3 %$94.7 54.7 %$6.8 7.2 %$287.6 57.4 %$264.7 54.4 %$22.9 8.7 %

Service and other revenues gross margin decreased to 38.7% and 42.6%, respectively, in the current three and nine month periods compared to 45.3% and 45.6%, respectively, in the corresponding periods in the prior year. The decrease in the current year periods was primarily due to a decrease in Grifols royalty revenue from licensing of our intellectual property related to our COVID-19 assays for their sale in Spain, which had 14 weeks.has a high margin, as well as a decrease in installation and training services for Breast Health. This decrease is partially offset by the inclusion of lab testing revenue from Biotheranostics, which has higher margins than our legacy service business and an increase in Breast Health service contract revenue.

Operating Expenses

 Three Months EndedNine Months Ended
 June 25, 2022June 26, 2021ChangeJune 25, 2022June 26, 2021Change
 Amount% of
Total
Revenue		Amount% of
Total
Revenue		Amount%Amount% of
Total
Revenue		Amount% of
Total
Revenue		Amount%
Operating Expenses
Research and development$65.1 6.5 %$69.0 5.9 %$(3.9)(5.7)%$207.4 5.3 %$199.8 4.6 %$7.6 3.8 %
Selling and marketing152.3 15.2 %142.7 12.2 %9.6 6.7 %471.0 12.0 %402.2 9.3 %68.8 17.1 %
General and administrative91.9 9.2 %117.3 10.0 %(25.4)(21.7)%310.5 7.9 %297.7 6.9 %12.8 4.3 %
Amortization of intangible assets11.2 1.1 %10.4 0.9 %0.8 7.7 %33.2 0.9 %30.7 0.7 %2.5 8.1 %
Contingent consideration - fair value adjustment(35.4)(3.5)%— — %(35.4)(100.0)%(39.5)(1.0)%(10.1)(0.2)%(29.4)291.1 %
Restructuring and Divestiture charges0.8 0.1 %3.6 0.3 %(2.8)(77.8)%0.8 — %6.6 0.2 %(5.8)(87.9)%
$285.9 28.5 %$343.0 29.4 %$(57.1)(16.6)%$983.4 25.2 %$926.9 21.5 %$56.5 6.1 %

Research and Development Expenses. Research and development expenses decreased 5.7% in the current three month period and increased 3.8% in the current nine month period compared to the corresponding periods in the prior year. The decrease in the current quarter is primarily due to a decrease in Breast Health due to a $5.2 million credit for the release of non-income tax reserves related to tax credits received for international research and development expenditures and lower project spend in Diagnostics and Surgical. Partially offsetting these decreases is the inclusion of incremental expenses from the Mobidiag and Bolder acquisitions in the aggregate of $6.3 million. The increase in the current nine month period compared to the corresponding period in the prior year is primarily due to the inclusion of incremental expenses from the Biotheranostics, Mobidiag, Diagenode and Bolder acquisitions in the aggregate of $25.3 million, partially offset by a $7.0 million charge in the corresponding period in the prior year related to the purchase of intellectual property, the release of the research and development tax credit reserve related to the SSI acquisition and lower project spend in Diagnostics and Surgical. At any point
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in time, we have a number of different research projects and clinical trials being conducted and the timing of these projects and related costs can vary from period to period.

Selling and Marketing Expenses. Selling and marketing expenses increased 26.8%6.7% and 17.1% in the current three and nine month periods, respectively, compared to the corresponding periods in the prior year. The increase was primarily due to increased spend on marketing initiatives including our sponsorship of the Women's Tennis Association, the inclusion of incremental expenses from the Mobidiag and Bolder acquisitions of $2.2 million in the current three month period and in the current nine month period the inclusion of incremental expenses from the Biotheranostics, Diagenode, Mobidiag and Bolder acquisitions of $27.4 million as well as an increase in travel, meetings and trade shows that were lower in the prior year primarily due to canceled or curtailed events as a result of the COVID-19 pandemic. These increases were partially offset by a decrease in commissions in Breast Health due to lower revenues. In the current nine month period, we also had higher expenses from our Super Bowl commercial and grants supporting women's health.

General and Administrative Expenses. General and administrative expenses decreased 21.7% in the current three month period and increased 4.3% in the current nine month period compared to the corresponding periods in the prior year. The decrease in the current quarter is primarily due to lower acquisition and transaction costs of $13.6 million, lower expense from our deferred compensation plan due to the stock market decline, and a decrease in legal expenses, partially offset by the inclusion of incremental expenses from the Mobidiag and Bolder acquisitions of $2.1 million. The increase in the current nine month period compared to the corresponding period in the prior year. The increase in the current quarter wasyear is primarily due to an increase in charitable donations of $17.0 million the inclusion of Cynosure, which contributed $33.1 million. Excluding Cynosure,incremental expenses related to Hologic's legacy business decreasedfrom the Biotheranostics, Mobidiag, Diagenode, and Bolder acquisitions in the current quarter compared to the corresponding prior year period primarily due to lower commissions, loweraggregate of $12.8 million, an increase in non-income tax charges, higher information systems infrastructure projects spend, on travelan increase in tax and meeting expenses, a decline in sales personnel headcount in GYN Surgicalaccounting projects and Diagnostics and one less week of expenses, partially offset by higher salary compensation from increased headcount in Breast Health and increased spending on marketing initiatives in Diagnostics.
General and Administrative Expenses. General and administrative expenses increased 11.6% in the current quarter compared to the corresponding period in the prior year. The current three month period includes expenses related to Cynosure of $13.7 million which includes accelerated depreciation of Cynosure's SAP ERP system. Excluding Cynosure, expenses related to Hologic's legacy business decreased in the current quarter compared to the corresponding period in the prior year primarily duenine month period we recorded a $3.5 million credit related to resolution of a non-income tax matter which resulted in a $4.0 million reduction inservices provided under the Company's expected tax liability, lower compensation from stock compensation as a result terminating certain executives and lower measurement on performance stock units,transition services agreement with Cynosure. These increases were partially offset by a decrease in acquisition and transaction related expensescosts of $17.8 million, lower expense from our deferred compensation plan, a decrease in bad debt expense, and one less week of expenses, partially offset by an increase inlower litigation fees.and settlement costs.


Amortization of Intangible Assets. Amortization of intangible assets primarily results from customer relationships and trade names distributor relationships and business licenses related to our acquisitions. These intangible assets are generally amortized over their estimated useful lives of between 2 and 30 years using a straight-line method or, if reliably determinable, based on the pattern in which the economic benefits of the assets are expected to be consumed utilizing expected undiscounted future cash flows. Amortization expense decreasedincreased slightly in the current quarter comparedyear periods due to recent acquisitions partially offset by assets from older acquisitions becoming fully amortized.

Contingent Consideration Fair Value Adjustments.In connection with the acquisition of Acessa, we are obligated to make contingent earn-out payments. The payments are based on achieving incremental revenue growth over a three-year period ending annually in December of each of 2021, 2022, and 2023. As of the acquisition date for Acessa, we recorded a contingent consideration liability for the estimated fair value of the amount we expected to pay to the corresponding periodformer shareholders of the acquired business. This liability is not contingent on future employment, and we recorded our estimate of the fair value of the contingent consideration liability utilizing the Monte Carlo simulation based on future revenue projections of Acessa, comparable company revenue growth rates, implied volatility and applying a risk adjusted discount rate. Increases or decreases in the prior yearfair value of contingent consideration liability can result from the passage of time, changes in discount rates, and changes in the timing, probabilities and amount of revenue estimates. In the first quarter of fiscal 2022, we recorded a gain of $4.1 million based on actual amounts owed for the first earn-out period being lower than the amount accrued as of September 25, 2021. In the third quarter of fiscal 2022, we recorded a gain of $35.4 million primarily due to lower amortization expense from intangible assets related toa reduction in forecasted revenues over the blood screening business of $10.4 million that was disposed of during the second quarter of fiscal 2017measurement period and one less week of expenses. This decrease was partially offset by intangible asset amortization expense of $4.7 million as a result of the Cynosure acquisition.
Restructuring and Divestiture Charges. In fiscal 2015, we decided to shut down our Bedford, Massachusetts facility and transfer production of our Skeletal Health products to a third-party contract manufacturer and other activities to our Marlborough, Massachusetts and Danbury, Connecticut facilities. We also implemented additional organizational changes to our international operationslesser extent an increase in fiscal 2016. In addition, in connection with our acquisition of Cynosure, we implemented certain organizational changes. Pursuant to U.S. generally accepted accounting principles, the related severance and benefit charges are recognized either ratably over the respective required employee service periods or up-front for contractual benefits, and other charges are being recognized as incurred. In the current quarter, we recorded charges of $3.8 million for severance benefits primarily related to the departure of an executive officer and employees within our Diagnostics and Medical Aesthetics segments. Ininterest rates. For the prior yearnine month period we recorded a chargegain of $3.5$10.1 million related to decrease the closure ofliability to its fair value. The reduction in fair value was primarily due to a decrease in forecasted revenues over the Bedford facility, partially offset by small adjustments to actions noted above for severance and benefits. For additional information pertaining to restructuring actions and charges, please refer to Note 4 to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report.measurement period.

Interest Expense
 
 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		ChangeJune 25,
2022		June 26,
2021		Change
 AmountAmountAmount%AmountAmountAmount%
Interest Expense$(22.7)$(21.6)$(1.1)5.1 %$(71.0)$(70.9)$(0.1)0.1 %
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Interest Expense$(41.0) $(40.4) $(0.6) 1% 


Interest expense consists primarily of the cash interest costs and the related amortization of the debt discount and deferred issuance costs on our Convertible Notes, 2022 Senior Notes, 2025 Senior Notes, and amounts borrowed under our Amended and Restated Credit Agreement and Accounts Receivable Securitization Program.outstanding debt. Interest expense increased in the current quarter has increased fromthree month period compared to the
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corresponding period in the prior year primarily due to an increase in LIBOR year over year, the basis for determining interest ratesexpense under our credit facilities and issuance costs expensed from the refinancing of our credit facilities in the quarter2021 Credit Agreement, partially offset by lower interest from Convertible Note repurchasesrate swap expense. Interest expense increased in fiscal 2017 and fiscal 2018, andthe current nine month period compared to the corresponding period in the prior year quarter hadprimarily due to an additional weekincrease in the variable interest rate based on LIBOR under the 2021 Credit Agreement, interest expense related to debt assumed in the Mobidiag acquisition, higher interest rate swap expense, interest expense from our Securitization Program partially offset by lower debt refinancing costs of expense.$4.0 million recorded as an expense in the prior year, and lower interest on our Senior Notes due to issuing our 2029 Senior Notes and paying off our 2025 Senior Notes in the prior year.

Debt Extinguishment Loss

 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		ChangeJune 25,
2022		June 26,
2021		Change
 AmountAmountAmount%AmountAmountAmount%
Debt Extinguishment Loss$— $— $— — %$(0.7)$(21.6)$20.9 (96.8)%
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Debt Extinguishment Loss$(1.0) $—
 $(1.0) 100.0% 


In the first quarter of fiscal 2018,2022, we entered into an Amended and Restateda Refinancing Amendment No. 2 to the 2021 Credit Agreement with Bank of America, N.A. The proceeds under the Amended and Restated Credit Agreement of $1.8 billion were used among other things, to pay off the Term Loan and Revolverterm loan outstanding under the Prior2018 Credit Agreement. In connection with this transaction we recorded a debt extinguishment charge of $0.7 million. In the first quarter of fiscal 2021, we completed a private placement of $950 million aggregate principal amount of our 2029 Senior Notes. The proceeds under the 2029 Senior Notes offering, together with available cash, were used to redeem our 2025 Senior Notes in the same principal amount. In connection with this transaction, we recorded a debt extinguishment loss of $1.0 million.$21.6 million in the first quarter of fiscal 2021.


Other Income, net
 
 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		ChangeJune 25,
2022		June 26,
2021		Change
 AmountAmountAmount%AmountAmountAmount%
Other Income, net$4.8 $0.1 $4.7 **$13.6 $1.1 $12.5 **
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Other Income, net$2.9
 $10.2
 $(7.3) (71.6)% 
**Percentage not meaningful



For the current three month period, this account primarily consisted of a gain of $1.6 million of net foreign currency exchange gains of $11.4 million, primarily from settling hedging transactions, partially offset by a loss of $7.0 million from the mark-tochange in cash surrender value of life insurance contracts related to our deferred compensation plan driven by stock market losses. For the third quarter of outstanding forward foreign currency exchange contracts,fiscal 2021, this account primarily consisted of a gain of $1.4$3.4 million on the cash surrender value of life insurance contracts related to our deferred compensation plan driven by stock market gains, and a $0.7 million insurance recovery, partially offset by a realized lossnet foreign currency exchange losses of $0.6$3.9 million, on the sale of a marketable security. For the first quarter of fiscal 2017, this account primarily consisted of gains of $8.4 million onfrom the mark-to-market of outstanding forward foreign currency contracts due toexchange and foreign currency option contracts.

For the strengthening US dollar, $0.8 million oncurrent nine month period, this account primarily consisted of net foreign currency exchange gains of $24.1 million, primarily from settling hedging transactions, and $0.8a $2.4 million gain on life insurance proceeds as a result of the death of a former employee, partially offset by a loss of $9.2 million from the change in cash surrender value of life insurance contracts related to our deferred compensation plan driven by stock market losses and a charge of $4.3 million to write off an equity method investment acquired in the Mobidiag acquisition. For the corresponding nine month period in the prior year, this account primarily consisted of a gain of $12.2 million on the cash surrender value of life insurance contracts related to our deferred compensation plan.plan driven by stock market gains, partially offset by net foreign currency exchange losses of $11.4 million, primarily from the mark-to-market of outstanding forward foreign currency exchange and foreign currency option contracts.

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Provision for Income Taxes
 
 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		ChangeJune 25,
2022		June 26,
2021		Change
 AmountAmountAmount%AmountAmountAmount%
Provision for Income Taxes$20.0 $69.4 $(49.4)(71.2)%$261.5 $409.6 $(148.1)(36.2)%
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Provision for Income Taxes$(310.9) $29.6
 $(340.5) ** 

** Percentage not meaningfulOur effective tax rates for the three and nine months ended June 25, 2022 were 8.1% and 18.1%, respectively, compared to 20.6% and 21.0%, respectively, for the corresponding periods in the prior year.

Our effective tax rates for the three and nine months ended June 25, 2022 were lower than the U.S. statutory tax rate primarily due to the impact of the U.S. deduction for foreign derived intangible income, reserve releases resulting from statute of limitations expirations, and the geographic mix of income earned by our international subsidiaries, which are taxed at rates lower than the U.S. statutory tax rate, partially offset by state income taxes.

Our effective tax rate for the three months ended December 30, 2017 was (324.5)% compared to 25.5% for the corresponding period in the prior year. The benefit recorded in the current quarter is due primarily to the impact of the Tax Cuts and Jobs Act (the "Act") enacted on December 22, 2017. We have made reasonable estimates of the effects of the Act and these estimates could change in future periods as we complete our analysis of the effects of the Act (refer to Note 13 of the accompanying notes to the consolidating financial statements for additional discussion). As a result of this law, US corporations are subject to lower income tax rates, and we were required to remeasure our U.S. net deferred tax liabilities at a lower rate, resulting in a net benefit of $355.2 million recorded in the provision for income taxes. Partially offsetting this benefit, we recorded a charge of $26.0 million for transition taxes related to the deemed repatriation of foreign earnings. For the current quarter, in addition to the items noted, the effective tax rateJune 26, 2021 was lower than the U.S. statutory tax rate primarily due to the impact of earnings in jurisdictions subject tothe U.S. deduction for foreign derived intangible income, the geographic mix of income earned by our international subsidiaries, which are taxed at rates lower than the U.S. statutory tax rates,rate, and the domestic production activities deduction benefit. For the three months ended December 31, 2016, thefederal and state tax credits, partially offset by state income taxes. Our effective tax rate for the nine months ended June 26, 2021 was equal to the U.S. statutory tax rate as the impact of the U.S. deduction for foreign derived intangible income and the geographic mix of income earned by our international subsidiaries, which are taxed at rates lower than the U.S. statutory tax rate, primarily due to the tax benefit from restricted stock units upon vesting, earnings in jurisdictions subject to lower tax rates, and the domestic production activities deduction benefit.was offset by state income taxes.

Segment Results of Operations

We report our business as fiveoperate in four segments: Diagnostics, Breast Health, Medical Aesthetics, GYN Surgical and Skeletal Health. The accounting policies of the segments are the same as those described in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.25, 2021. We measure segment performance based on total revenues and operating income or loss.income. Revenues from product sales of each of these segments are described in further detail above. The discussion that follows is a summary analysis of total revenues and the primary changes in operating income or loss by segment.


Diagnostics

 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		ChangeJune 25,
2022		June 26,
2021		Change
 AmountAmountAmount%AmountAmountAmount%
Total Revenues$560.1 $665.5 $(105.4)(15.8)%$2,497.6 $2,858.2 $(360.6)(12.6)%
Operating Income$175.0 $260.1 $(85.1)(32.7)%$1,247.4 $1,745.1 $(497.7)(28.5)%
Operating Income as a % of Segment Revenue31.2 %39.1 %49.9 %61.1 %
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Total Revenues$284.6
 $325.4
 $(40.8) (12.5)% 
Operating Income$36.5
 $41.1
 $(4.6) (11.2)% 
Operating Income as a % of Segment Revenue12.8% 12.7%     

Diagnostics revenues decreased in the current quarterthree and nine month periods compared to the corresponding periodperiods in the prior year primarily due to the fluctuationsa decrease in product revenues discussed above. The primary driversales of the reductionour SARS-CoV-2 assays, a decrease in revenues was the divestitureroyalty revenue from Grifols related to licensing our intellectual property of the blood screening businessour COVID-19 assays for their sale in the second quarter of fiscal 2017.Spain and lower instrument sales, partially offset by revenue from acquisitions and an increase in Aptima and Quant Viral assays.

Operating income for this business segment decreased in the current quarterthree and nine month periods compared to the corresponding periods in the prior year due to a decrease in gross profit from lower COVID-19 assay sales and an increase in operating expenses. Gross margin was 58.0% and 69.1% in the current three and nine month periods, respectively, compared to 62.5% and 74.9% in the corresponding periods in the prior year, respectively. The decrease in gross profit in the current three and nine month periods was primarily due to lower sales volume of our SARS-CoV-2 assays which have a higher margin, an increase in intangible asset amortization expense from recent acquisitions, lower Grifols license revenue, an increase in inventory reserves, higher field service costs for our expanded instrument install bases and an increase in freight internationally.

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Operating expenses decreased in the current three month period primarily due to lower acquisition costs of $12.8 million compared to the corresponding period in the prior year, partially offset by an increase in allocated advertising costs and an increase due to the inclusion of operating expenses from the Mobidiag acquisition. Operating expenses increased in the current nine month period compared to the corresponding periods in the prior year primarily due to the decreaseinclusion of operating expenses from the Biotheranostics, Mobidiag, and Diagenode acquisitions, an increase in gross profit from lower revenuesallocated advertising and charitable contributions, an increase in salaries and bonus, an increase in marketing initiatives and an increase in travel expenses partially offset by lower operating expenses. Gross margin was 48.0%acquisition costs.

Breast Health

 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		ChangeJune 25,
2022		June 26,
2021		Change
 AmountAmountAmount%AmountAmountAmount%
Total Revenues$282.8 $349.0 $(66.2)(19.0)%$952.7 $1,018.0 $(65.3)(6.4)%
Operating Income$32.0 $81.0 $(49.0)(60.5)%$163.1 $235.1 $(72.0)(30.6)%
Operating Income as a % of Segment Revenue11.3 %23.2 %17.1 %23.1 %

Breast Health revenues decreased in the current quarter,three month period compared with 48.8%to the corresponding period in the corresponding prior year period. The decrease in gross margin was primarily due to lowera decrease of $61.8 million in product revenue and a decrease of $4.4 million in service revenue. Breast Health revenues as a result of the disposition of the higher-margin blood screening business and lower margins generated under the new supply and collaboration arrangement. These gross margin decreases were partially offset by the impact of the increase in Aptima assay volumes, increased sales volume of Perinatal products that have high margins, favorable manufacturing variances, lower instrument sales, which have lower margins, and lower amortization expense.
Operating expenses decreased in the current nine month period compared to the corresponding period in the prior year primarily due to lower amortization expense as a resultdecrease in product revenue of $74.4 million for the blood screening divestiture, lower research and development expenses related to a reductionreasons discussed above, partially offset by an increase in project spending as well as the divestitureservice revenue of blood screening, lower headcount, no transaction fees$9.1 million.

Operating income for this business segment decreased in the current quarter,three and one less week of expenses in the current quarter, partially offset by increased spending on marketing initiatives and restructuring charges.
Breast Health
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Total Revenues$288.0
 $273.3
 $14.7
 5.4% 
Operating Income$89.7
 $85.2
 $4.5
 5.2% 
Operating Income as a % of Segment Revenue31.1% 31.2%     
Breast Health revenues increased in the current quarternine month periods compared to the corresponding periodperiods in the prior year primarily due to a decrease in product sales and service gross profit, partially offset by a decrease in operating expenses. Gross margin was 48.2% and 52.7% in the current three and nine month periods, respectively, compared to 56.9% in both the corresponding periods in the prior year, respectively. The decrease in gross margin is primarily due to lower volumes of capital equipment sales, the reduced manufacturing utilization from supply chain shortages, higher costs for raw materials and components, an intangible assets charge of $9.2 million from our Faxitron acquisition and an increase in intangible asset amortization expense.

Operating expenses decreased in the current three and nine month periods compared to the corresponding periods in the prior year primarily due to the $9.7 millionrelease of the research and development credit reserve related to the SSI acquisition, a decrease in compensation and commissions from lower sales and sales force headcount, partially offset by an increase in product revenue inallocated advertising and marketing initiatives. In the current quarter discussed above and increases of $5.0 millionnine month period, there was also an increase in service revenue.allocated charitable donations.
Operating income for this business segment
GYN Surgical

 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		ChangeJune 25,
2022		June 26,
2021		Change
 AmountAmountAmount%AmountAmountAmount%
Total Revenues$138.1 $127.9 $10.2 8.0 %$389.6 $366.2 $23.4 6.4 %
Operating Income$60.1 $18.2 $41.9 230.2 %$92.4 $60.5 $31.9 52.7 %
Operating Income as a % of Segment Revenue43.5 %14.2 %23.7 %16.5 %

GYN Surgical revenues increased in the current quarter primarily due to the increase in gross profit from higher revenues as gross margins were consistent year over year. The overall gross margin decreased to 60.3% in the current quarter compared to 60.6% in the corresponding period in the prior year primarily due to the increase in service revenue. Higher gross margins from sales volume increases in the Affirm Prone table, the Brevera breast biopsy system,three and Eviva and ATEC devices, and favorable manufacturing variances were offset by a reduction in 3D Dimensions systems, a mix shift to lower priced 3D systems and a decrease in 3D upgrades and C-View software sales, which have higher gross margins than capital equipment sales.
Operating expenses increased in the current quarternine month periods compared to the corresponding period in the prior year primarily due to increase in salary compensation from increased headcount in the Breast Health sales organization primarily due to the Medicor

acquisition in the third quarter of fiscal 2017, increased commissions and litigation expenses, partially offset by one less week of expenses.
Medical Aesthetics
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Total Revenues$91.3
 $—
 $91.3
 100.0 % 
Operating Loss$(23.0) $—
 $(23.0) (100.0)% 
Operating Loss as a % of Segment Revenue(25.2)% —%     
Medical Aesthetics revenue increased in the current period related to the acquisition of Cynosure.
The operating loss of $23.0 million in the current period was primarily due to amortization of intangible assets of $22.1 million, and accelerated depreciation expense for Cynosure's SAP ERP system.
GYN Surgical
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Total Revenues$107.5
 $114.8
 $(7.3) (6.4)% 
Operating Income$30.2
 $25.5
 $4.7
 18.4 % 
Operating Income as a % of Segment Revenue28.1% 22.2%     
GYN Surgical revenues decreased in the current quarter compared to the corresponding periodperiods in the prior year primarily due to the increase in product revenues discussed above.

Operating income for this business segment increased in the current quarterthree and nine month periods compared to the corresponding period in the prior year primarily due to lower operating expenses partially offset by lower gross profit driven by lower revenues. Gross margin increased to 64.9% in the current quarter from 63.9% in the corresponding periodperiods in the prior year primarily due to a decrease in amortization expense.operating expenses and an increase in gross profit. Gross margin was 60.4% and 59.8% in the current three and nine month periods, respectively, compared to 62.5% and 61.6% in the corresponding periods in the prior year, respectively. The decrease in gross margin was primarily due to product mix as we sold more lower margin products in the current year periods.
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Table of Contents

Operating expenses decreased in the current quarterthree and nine month periods compared to the corresponding periods in the prior year primarily due to a gain of $35.4 million and $39.5 million, respectively, related to the fair value adjustments to the contingent consideration liability related to the Acessa acquisition, compared to a gain of $10.1 million recorded in the prior nine month period and to a lesser extent a decrease in headcount in the GYN Surgical sales organization and lower commissions, lower research and development project spend, the resolution ofmarketing program spend, as well as a tax matter which resulteddecrease in a $4.0 million reduction in the Company's expected tax liability in the current quarter of which $3.2 million was related to GYN Surgicallegal expenses and one less week of expenses,bad debt expense. These decreases were partially offset by the inclusion of Bolder expenses and an increase in litigation fees.travel expense.



Skeletal Health

 Three Months EndedNine Months Ended
 June 25,
2022		June 26,
2021		ChangeJune 25,
2022		June 26,
2021		Change
 AmountAmountAmount%AmountAmountAmount%
Total Revenues$21.7 $25.9 $(4.2)(16.2)%$69.7 $73.3 $(3.6)(4.9)%
Operating (Loss) Income$(3.2)$(0.7)$(2.5)**$(3.6)$0.1 $(3.7)**
Operating (Loss) Income as a % of Segment Revenue(14.7)%(2.7)%(5.2)%0.1 %
 Three Months Ended 
 December 30,
2017		 December 31,
2016		 Change 
 Amount Amount Amount % 
Total Revenues$19.7
 $20.9
 $(1.2) (5.7)% 
Operating Income (Loss)$0.7
 $(5.8) $6.5
 (111.2)% 
Operating Income (Loss) as a % of Segment Revenue3.3% (27.8)%     
** percentage not meaningful

Skeletal Health revenues decreased in the current quarterthree and nine month periods compared to the corresponding periodperiods in the prior year primarily due to the decrease in product revenues discussed above.above.

Operating income increasedfor this business segment decreased in the current quarterthree and nine month periods compared to the corresponding periodperiods in the prior year primarily due to a $2.0 million increasedecrease in gross profit dueprofit. Gross margin was 24.2% and 30.6% in the current three and nine month periods, respectively, compared to higher obsolescence charges28.5% and 33.1% in the corresponding periods in the prior year, period. Grossrespectively. The decrease in gross margin was primarily due to increased costs from our Horizon DXA systems workstation upgrades and lower Horizon DXA systems and Insight FD sales volume due to 46.4%supply chain constraints, a decrease in average selling prices of our Insight FD systems in the current quarter asnine month period, partially offset by a slight increase in average selling prices of our Horizon DXA systems in the current three month period.

Operating expenses were consistent in the current three and nine month periods compared to 34.3% in the corresponding periodperiods in the prior year. This business also had lower operating expenses due to the prior year period including facility closure costs incurred for the Bedford facility of $3.5 million and we had one less week of expenses.

LIQUIDITY AND CAPITAL RESOURCES

At December 30, 2017,June 25, 2022, we had $328.5$2,908.1 million of working capital and our cash and cash equivalents totaled $664.4$2,375.3 million. Our cash and cash equivalents balance increased by $123.8$1,205.0 million during the first threenine months of fiscal 20182022 primarily due to cash generated through cash flow from our core operating activities, partially offset by netcash used in investing and financing activities primarily related to a business acquisition, repurchases of our common stock and repayments of debt, and capital expenditures.a repayment under the accounts receivable securitization program (the "Securitization Program").

In the first threenine months of fiscal 2018,2022, our operating activities provided cash of $169.1$1,957.1 million, primarily due to net income of $406.7$1,183.3 million, non-cash charges for depreciation and amortization aggregating $121.2$323.5 million, and stock-based compensation expense of $16.4 million and non-cash interest expense of $8.7 million related to our outstanding debt.$51.8 million. These adjustments to net income were partially offset by a decrease in net deferred tax liabilitiestaxes of $390.7$60.2 million primarily from the change in tax rate due to tax reform, and to a lesser extent, the amortization of intangible assets. Cash provided by operations also included a net cash inflow of $4.6$452.0 million from changes in our operating assets and liabilities. ChangesThe net cash inflow was primarily driven by a $378.3 million dollar decrease in our operatingprepaid expenses and other assets and liabilities were driven primarily by an increasedue to tax refunds received in accrued expenses of $48.9 million primarilythe second quarter related to an increase in accrued federal income taxes and interest on debt based on timing of payments,state loss carryback claims partially offset by lower compensation accruals, principally bonus (paid annually),a payment for our Women's Tennis Association sponsorship, and a reductiondecrease in accounts receivable of prepaid income taxes of $8.1 million.$193.9 million due to strong collections in the period and lower revenues in fiscal 2022 compared to fiscal 2021. These cash flow increasesinflows were partially offset by an increase in inventory of $23.3 million as inventory levels were built up to meet anticipated demand and launch newer products, a decrease of deferred revenue of $10.6$86.8 million primarily due to meetinga strategic buildup of emergency sourced components for our Breast Health business to hedge against the required revenue recognition criteria on certain transactionscontinuing worldwide supply constraints and timing of invoicing of supporta $23.0 million decrease related to accrued expenses and maintenance contracts, an increase in accounts receivable of $6.4 million dueother liabilities primarily related to a slight increase in days sales outstanding, and a decrease in accounts payableaccrued compensation and benefits and payments of $7.1 million based onvalue-add taxes partially offset by accrued federal and state income taxes due to timing of payments.

In the first threenine months of fiscal 2018,2022, our investing activities used cash of $26.2$174.2 million primarily relateddue to $21.8net cash paid for our acquisitions of $158.6 million forand capital expenditures of $95.6 million, which primarily consisted of the placement of
45

equipment under customer usage agreements andas purchases of manufacturing equipment and computer hardware, and $4.1 millionwere more than offset by the reimbursement of funds received from the Department of Defense under a grant to acquire Emsor.increase production of our two SARS-CoV-2 assays.

In the first threenine months of fiscal 2018,2022, our financing activities used cash of $20.3$586.2 million primarily due to $367.0 million for paymentsrepurchases of $1.3 billion to pay offour common stock, $248.5 million for the Term Loan outstandingrepayment under the Prior Credit Agreement, $296.9 million to repurchase our 2042 and 2043 Notes including accreted principal on the 2043 Notes and conversion premium on the 2042 Notes, $225.0 million of net repayments on amounts borrowed under our revolving credit facilities, and payments of $14.3Securitization Program, $63.7 million for employee-relatedthe repayment of debt acquired in the Mobidiag acquisition, $22.6 million for the payment of employee taxes withheld for the net share settlement of vested restricted stock units.units, and a $12.2 million contingent consideration payment as a result of the completion of the first annual earn-out period from the Acessa acquisition. Partially offsetting these uses of cash were net proceeds of $1.5 billion$103.7 million from the Amended and Restatedrefinancing of the 2021 Credit Agreement proceeds of $350 million from issuance of the 2025 Senior Notes and $9.5$26.9 million from our equity plans, primarily from the exercise of stock options.

Debt

We had total recorded debt outstanding of $3.3$2.82 billion at December 30, 2017,June 25, 2022, which iswas comprised of amounts outstanding under our Amended and Restated2021 Credit Agreement and Amended Revolver of $1.60$1.49 billion (principal of $1.61$1.5 billion), 2022

2029 Senior Notes of $982.6$936.1 million (principal of $1.0 billion)$950.0 million), 2025and 2028 Senior Notes of $345.0$395.9 million (principal of $350.0$400.0 million) Convertible Notes of $205.4 million (principal of $206.3 million) and amounts outstanding under the accounts receivable securitization program of $200.0 million..
Amended and Restated
2021 Credit Agreement

On October 3, 2017,September 27, 2021, we entered into an Amendedrefinanced our existing term loan and Restated Credit and Guaranty Agreement (the "Amended and Restated Credit Agreement")revolving credit facility with Bank of America, N.A. in its capacity as Administrative Agent, Swing Line Lender and L/C Issuer, and certain other lenders from time to time party thereto. The Amended and Restatedthereto (the "2018 Credit Agreement amends and restates the Company's prior credit and guaranty agreement, originallyAgreement") by entering into Refinancing Amendment No. 2 dated as of May 29, 2015 (the "Prior Credit Agreement"). The proceeds underSeptember 27, 2021, to the Amended and Restated Credit and Guaranty Agreement, dated as of $1.8 billion were used, among other things, to pay off the Term Loan of $1.32 billion and the Revolver then outstanding under the PriorOctober 3, 2017, as amended (the "2021 Credit Agreement.Agreement"). Borrowings under the Amended and Restated2021 Credit Agreement are secured by first-priority liens on, and a first-priorityfirst priority security interest in, substantially all of our and our Subsidiary Guarantors' U.S. assets. These liens are subject to release during the assetsterm of the Company's U.S. subsidiaries, withfacilities if we are able to achieve certain exceptions.

corporate or corporate family ratings and other conditions are met. The credit facilities (the “Amended and Restated"2021 Credit Facilities”Facilities") under the Amended and Restated2021 Credit Agreement consist of:


•A $1.5 billion secured term loan to the Company ("Amended2021 Term Loan") with a stated maturity date of October 3, 2022;September 25, 2026; and
•A secured revolving credit facility (the "Amended"2021 Revolver") under which the weBorrowers may borrow up to $1.5$2.0 billion, subject to certain sublimits, with a stated maturity date of October 3, 2022.September 25, 2026.


At the closing, we borrowed $345 millionBorrowings under the Amended Revolver, which was fully repaid during October 2017.2021 Credit Agreement, other than Swing Line Loans, bear interest, at our option, at the Base Rate, at the Eurocurrency Rate, at the Alternative Currency Daily Rate, or at the LIBOR Daily Floating Rate, in each case plus the Applicable Rate.

The Applicable Rate in regards to the Base Rate, the Eurocurrency Rate, the Alternative Currency Daily Rate, the Alternative Currency Term Rate, and the LIBOR Daily Floating Rate is subject to change depending on the Total Net Leverage Ratio (as such terms are defined in the 2021 Credit Agreement). As of December 30, 2017,June 25, 2022, the Company had $120.0 million outstandinginterest rate under the Amended2021 Term Loan was 2.63% per annum.

We are also required to pay a quarterly commitment fee calculated on a daily basis equal to the Applicable Rate as of such day multiplied by the undrawn committed amount available under the 2021 Revolver. As of June 25, 2022, this commitment fee was 0.15% per annum.


Upon the earliest to occur of June 30, 2023 and certain specified events, relating to the planned phase out of LIBOR by the UK Financial Conduct Authority, the interest rate applicable to the loans under the 2021 Credit Agreement denominated in U.S. Dollars will convert to a variant of the secured overnight financing rate (“SOFR”), as established from time to time by the Federal Reserve Bank of New York, plus a corresponding spread.

We are required to make scheduled principal payments under the Amended2021 Term Loan in increasing amounts ranging from $9.375$3.75 million per three-month period commencing with the three-month period ending on December 29, 20172022 to $37.5$18.75 million per three-month period commencing with the three-month period ending on December 23, 2021.26, 2025. The remaining scheduled balance of $1.335 billion (or such lesser aggregate principal amount then outstanding) on the Amended2021 Term Loan and any amounts outstanding under the Amended2021 Revolver are due at maturity. In addition, subject to the terms and conditions set forth in the Amended and Restated2021 Credit Agreement, we aremay be required to make certain mandatory prepayments from the net proceeds of specified types of asset sales (subject to certain reinvestment rights), debt issuances (excluding permitted debt) and insurance recoveries (subject to certain reinvestment rights). Certain of the mandatory prepayments are subject to reduction or elimination if certain financial
46

covenants are met. These mandatory prepayments are required to be applied by us, first to the Amended2021 Term Loan, second to any outstanding amount under any Swing Line Loans (as defined in the Amended and Restated Credit Agreement)Loans), third to the Amended2021 Revolver, fourth to prepay any outstanding reimbursement obligations with respect to Lettersletters of Credit (as defined in the Amended and Restated Credit Agreement)credit and fifth to cash collateralize any Lettersletters of Credit.credit. Subject to certain limitations, we may voluntarily prepay any of the Amended and Restated2021 Credit Facilities without premium or penalty.

Borrowings are secured by first-priority liens on, and a first-priority security interest in, substantially all As of June 25, 2022, the outstanding principal balance of the assets of the Company, with certain exceptions. For example, borrowings2021 Term Loan was $1.5 billion, and there were no amounts outstanding under the Prior Credit Agreement are not secured by those accounts receivable that are transferred to the special purpose entity under the Company's Accounts Receivable Securitization program.2021 Revolver.


The Amended and Restated2021 Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants restricting theour ability of the Company, subject to negotiated exceptions, to incur additional indebtedness and grant additional liens on itsour assets, engage in mergers or acquisitions or dispose of assets, enter into sale-leaseback transactions, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and change the nature of their businesses.our business. In addition, the Amended and Restated2021 Credit Agreement requires the the CompanyBorrowers to maintain certain financial ratios. The Amended and Restated2021 Credit Agreement also contains customary representations and warranties and events of default, including paymentpayments defaults, breach of representations and warranties, covenant defaults, cross defaults and an event of default upon a change of control of the Company.company.


The Amended and Restated2021 Credit Agreement contains two financial covenants (a total net leverage ratio and an interest coverage ratio) measured as of the last day of each fiscal quarter and an excess cash flow prepayment requirement measured as of the end of each fiscal year.quarter. As of December 30, 2017,June 25, 2022, we were in compliance with these covenants.


20252028 Senior Notes


On October 10, 2017, we completed a private placement of $350 millionThe total aggregate principal amountbalance of 4.375%the 2028 Senior Notes due 2025 (the “2025 Senior Notes”) at an offering price of 100% of the aggregate principal amount of the 2025 Senior Notes.is $400.0 million. The 20252028 Senior Notes are general senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by certain domestic subsidiaries of Hologic (the “ 2025 Domestic Guarantors”).

The 2025 Senior Notes were issued pursuant to an indenture (the “2025 Indenture”), dated as of October 10, 2017, among the Company, the 2025 Domestic Guarantors and Wells Fargo Bank, National Association, as trustee. The 2025 Senior Notes mature on October 15, 2025 and bear interest at the rate of 4.375% per year, payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2018.

We may redeem the 2025 Senior Notes at any time prior to October 15, 2020 at a price equal to 100% of the aggregate principal amount so redeemed, plus accrued and unpaid interest, if any, to the redemption date and a make-whole premium set forth in the Indenture. The Company may also redeem up to 35% of the aggregate principal amount of the 2025 Senior Notes with the net cash proceeds of certain equity offerings at any time and from time to time before October 15, 2020, at a redemption price equal to 104.375% of the aggregate principal amount so redeemed, plus accrued and unpaid interest, if any, to the redemption date. We also have the option to redeem the 2025 Senior Notes on or after: October 15, 2020 through October 14, 2021 at 102.188% of par; October 15, 2021 through October 14, 2022 at 101.094% of par; and October 15, 2022 and thereafter at 100% of par. In addition, if the Company undergoes a change of control coupled with a decline in ratings, as provided in the 2025 Indenture, the Company will be required to make an offer to purchase each holder’s 2025 Senior Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date.

On January 19, 2018, the Company completed a private placement of $1.0 billion aggregate principal amount of senior notes, which included $600 million of additional 4.375% Senior Notes due 2025, issued under a supplement to the 2025 Indenture. See “Subsequent Events” below.

2022 Senior Notes

On July 2, 2015, we issued $1.0 billion aggregate principal amount of our 2022 Senior Notes. The 2022 Senior Notes are our general senior unsecured obligations and are guaranteed on a senior unsecured basis by certain of our domestic subsidiaries. The 2022 Senior Notes mature on July 15, 2022 and bear interest at the rate of 5.250% per year, payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2016.

In connection with the offering of the New 2025 Senior Notes and our 4.625% Senior Notes due 2028, we called all of our outstanding 2022 Senior Notes, in the aggregate principal amount of $1.0 billion, for redemption on February 15, 2018 at an aggregate redemption price equal to the principal amount of the outstanding 2022 Senior Notes, plus the applicable premium and accrued and unpaid interest through the day immediately preceding the redemption date.

Convertible Notes

At December 30, 2017, our Convertible Notes, in the aggregate principal amount of $206.3 million, are recorded at $205.4 million. These notes consist of:
$206.0 million of our 2.00% Convertible Senior Notes due 2042 issued in March 2012 ("2042 Notes"); and
$0.3 million of our 2.00% Convertible Senior Notes due 2043 issued in February 2013 ("2043 Notes").

The 2042 Notes have conversion price of $31.175 and is subject in each case to adjustment. Holders of the 2042 Notes may convert their Convertible Notes at the applicable conversion price under certain circumstances, including without limitation (x) if the last reported sale price of our common stock exceeds 130% of the applicable conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter and (y) if the applicable series of Convertible Notes has been called for redemption. It is our current intent and policy to settle any conversion of the Convertible Notes as if we had elected to make either a net share settlement or all cash election, such that upon conversion, we intend to pay the holders in cash for the principal amount of the Convertible Notes and, if applicable shares of our common stock or cash to satisfy the premium based on a calculated daily conversion value.

Holders may require us to repurchase the 2042 Notes on each of March 1, 2018, 2022, 2027 and 2032, and on March 2, 2037, or upon a fundamental change, as provided in the indenture for the 2012 Notes, at a repurchase price equal to 100% of their accreted principal amount, plus accrued and unpaid interest.

We may redeem any of the 2042 Notes beginning March 6, 2018. We may redeem all or a portion of the 2042 Notes (i.e., in cash or a combination of cash and shares of our common stock) at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the applicable redemption date.

We have recorded deferred tax liabilities related to our Convertible Notes original issuance discount, representing the spread between the stated cash coupon rate and the higher interest rate that is deductible for tax purposes based on the type of security. When our Convertible Notes are extinguished, we are required to recapture the original issuance discount previously deducted for tax purposes. The tax recapture, however, decreases as the fair market value of the Convertible Notes and the amount paid on settlement increases.

On January 29, 2018, we announced that, pursuant to the terms of the indenture governing the 2042 Notes, we had elected to redeem, on March 6, 2018, all of the then outstanding 2042 Notes at a redemption price payable in cash equal to 100% of the accreted principal amount of the 2042 Notes, plus accrued and unpaid interest, including contingent interest, if any, to, but not including the redemption date. See “Subsequent Events” below.

Accounts Receivable Securitization Program
On April 25, 2016, we entered into a one-year $200.0 million accounts receivable securitization program (the "Securitization Program") with several of our wholly owned subsidiaries and certain financial institutions. Under the terms of the Securitization Program, we and certain of our wholly-owned subsidiaries sell our customer receivables to a bankruptcy remote special purpose entity, which is wholly-owned by us. The special purpose entity, as borrower, and we, as servicer, have entered into a Credit and Security Agreement with several lenders pursuant to which the special purpose entity may borrow from the lenders up to $200.0 million, with the loans secured by the receivables. The amount that the special purpose entity may borrow at a given point in time is determined based on the amount of qualifying receivables that are present in the special purpose entity at such point in time. On April 21, 2017, we entered into an amendment to extend the Securitization Program an additional year to April 20, 2018. The amendment allows us to continue to borrow up to $200.0 million and due to structural changes to the terms, the borrowing base has fewer limitations. As of December 30, 2017, $200.0 million was outstanding under the Securitization Program. The assets of the special purpose entity secure the amounts borrowed and cannot be used to pay our other debts or liabilities.
The Credit and Security Agreement contains customary representations and warranties and events of default, including payment defaults, breach of representations and warranties, covenant defaults, and an event of default upon a change of control. In addition, it contains financial covenants consistent with that of the Prior Credit Agreement. As of December 30, 2017, we were in compliance with these covenants.
Subsequent Events
2025 Senior Notes and 2028 Senior Notes
On January 19, 2018, we completed a private placement of $1.0 billion aggregate principal amount of senior notes, allocated between (i) an additional $600 million aggregate principal amounts of our 2025 Senior Notes (the "New 2025 Senior Notes") at an offering price of 100% of the aggregate principal amount of the 2025 Senior Notes, plus accrued and unpaid interest from October 10, 2017 and (ii) $400 million aggregate principal amounts of our 4.625% Senior Notes due 2028 (the "2028 Senior Notes") at an offering price of 100% of the aggregate principal amount of the 2028 Senior Notes. The New 2025 Senior Notes have the same terms as the existing 2025 Senior Notes. The 2028 Senior Notes are general senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by certain domestic subsidiaries of Hologic (the “2028 Domestic Guarantors”). In connection with the offering of the New Notes, we called all of our outstanding 2022 Senior Notes, in aggregate principal amount of $1.0 billion, for redemption on February 15, 2018 at an aggregate redemption price equal to the principal amount of the outstanding 2022 Senior Notes, plus the applicable premium and accrued and unpaid interest through the day immediately preceding the redemption date.

The 2028 Senior Notes were issued pursuant to an indenture (the “2028 Indenture”), dated as of January 19, 2018 among the Company, the 2028 Domestic Guarantors and Wells Fargo Bank, National Association, as trustee. The 2028 Senior Notes mature on February 1, 2028 and bear interest at the rate of 4.625% per year, payable semi-annually on February 1 and August 1 of each year, commencing on August 1, 2018. The 2028 Indenture contains covenants which limit, among other things, the ability of the Company and the Guarantors to create liens and engage in certain sale and leaseback transactions. These covenants are subject to a number exceptions and qualifications.


year. We may redeem the 2028 Senior Notes at any time prior to February 1, 2023 at a price equal to 100% of the aggregate principal amount so redeemed, plus accrued and unpaid interest, if any, to the redemption date and a make-whole premium set forth in the Indenture. The Company mayindenture. We also redeem up to 35% of the aggregate principal amount of the 2028 Senior Notes with the net cash proceeds of certain equity offerings at any time and from time to time before February 1, 2021, at a redemption price equal to 104.625% of the aggregate principal amount so redeemed, plus accrued and unpaid interest, if any, to the redemption date. The Company also hashave the option to redeem the 2028 Senior Notes on or after: February 1, 2023 through February 1, 2024 at 102.312% of par; February 1, 2024 through February 1, 2025 at 101.541% of par; February 1, 2025 through February 1, 2026 at 100.770% of par; and February 1, 2026 and thereafter at 100% of par. In addition, if we undergothere is a change of control coupled with a decline in ratings, as provided in the 2028 Indenture,indenture, we will be required to make an offer to purchase each holder’s 2028 Senior Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date.
2042
2029 Senior Notes

On January 29, 2018, we announced that pursuant to the termsThe total aggregate principal balance of the indenture governing2029 Senior Notes is $950.0 million. The 2029 Senior Notes are general senior unsecured obligations and are guaranteed on a senior unsecured basis by certain domestic subsidiaries. The 2029 Senior Notes mature on February 15, 2029 and bear interest at the 2042rate of 3.250% per year, payable semi-annually on February 15 and August 15 of each year. We may redeem the 2029 Senior Notes holders of the 2042 Notes had the option of requiring usat any time prior to repurchase their 2042 Notes on March 1, 2018September 28, 2023 at a repurchase price payable in cash equal to 100% of the accretedaggregate principal amount of the 2042 Notes,so redeemed, plus accrued and unpaid interest, if any, to but not including the put date. The accretedredemption date and a make-whole premium set forth in the indenture. We may also redeem up to 40% of the aggregate principal amount of the 2042 notes will be $206.0 million as2029 Senior Notes with the net cash proceeds of the repurchase date. We also announced on January 29, 2018 that, pursuantcertain equity offerings at any time and from time to the terms of the indenture governing the 2042 Notes, we had elected to redeem, on March 6, 2018, all of the then outstanding 2042 Notestime before September 28, 2023, at a redemption price payable in cash equal to 100%103.250% of the accretedaggregate principal amount of the 2042 Notes,so redeemed, plus accrued and unpaid interest, including contingentif any, to the redemption date. We have the option to redeem the 2029 Senior Notes on or after: September 28, 2023 through September 27, 2024 at 101.625% of par; September 28, 2024 through September 27, 2025 at 100.813% of par; and September 28, 2025 and thereafter at 100% of par. In addition, if there is a change of control coupled with a decline in ratings, as provided in the indenture, we will be required to make an offer to purchase each holder’s 2029 Senior Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to but not including the redemptionrepurchase date. Holders also have a right to convert their 2042 Notes in accordance

Accounts Receivable Securitization Program

During April 2022, we repaid the outstanding balance of $248.5 million under the Securitization Program. On June 10, 2022, we amended the Credit and Security agreement with the termslenders, temporarily suspending the ability to borrow and the need to comply with covenants for up to a year. As of June 25, 2022, we did not have any borrowings under this program.

Contingent Consideration Earn-Out Payments

In connection with certain of our acquisitions, we have incurred the obligation to make contingent earn-out payments tied to performance criteria, principally revenue growth of the indenture. Ifacquired business over a specified period. In addition, contractual provisions relating to these contingent earn-out obligations may result in the closingrisk of litigation relating to the calculation of the
47

amount due or our operation of the acquired business. Such litigation could be expensive and divert management attention and resources. Our obligation to make contingent payments may also result in significant operating expenses.

Contingent consideration arrangements are recorded as either additional purchase price or compensation expense if continuing employment is required to receive such payments. Pursuant to ASC 805, Business Combinations, contingent consideration that is deemed to be part of the purchase price is recorded as a liability based on the estimated fair value of the consideration we expect to pay to the former shareholders of the acquired business as of the acquisition date. This liability is re-measured each reporting period with the change in fair value recorded through a separate line item within our Consolidated Statements of Income. Increases or decreases in the fair value of contingent consideration liabilities can result from changes in discount rates, changes in the timing, probabilities and amount of revenue estimates, and accretion of the liability for the passage of time.

Currently, our only contingent consideration liability is from our Acessa acquisition. We have an obligation to the former Acessa shareholders to make contingent payments based on a multiple of annual incremental revenue growth over a three-year period ending annually in December. There is no maximum earnout. Pursuant to ASC 805, the contingent consideration was deemed to be part of the purchase price, and we recorded our estimate of the fair value of the contingent consideration liability utilizing the Monte Carlo simulation based on future revenue projections of the business, comparable companies revenue growth rates, implied volatility and applying a risk adjusted discount rate. The first earn-out period was completed in December 2021 and we paid $12.2 million to the former shareholders in the second quarter of fiscal 2022. As of June 25, 2022, this liability was recorded at its fair value of $23.4 million.

Stock Repurchase Program

On December 9, 2020, our Board of Directors authorized a new five-year share repurchase plan, to repurchase up to $1.0 billion of our outstanding common stock. The prior plan was terminated in connection with this new authorization. During the nine months ended June 25, 2022, we repurchased 5.2 million shares of our common stock exceeds the conversion pricefor a total consideration of $367.0 million. As of June 25, 2022, $324.7 million remained available under this authorization. The timing of the 2042 notes,share repurchases will be based upon our continuing analysis of market, financial, and other factors. Repurchases under the authorized share repurchase plan may be made using a variety of methods, which is $31.175 permay include, but are not limited to, open market purchases, privately negotiated transactions, accelerated share holders ofrepurchase agreements, or purchases pursuant to a Rule 10b5-1 planunder the 2042 Notes will likely exercise their conversion rights prior to the redemption date as they would receive more value upon conversion compared to redemption. Based on a closing price of our common stock of $42.75 perExchange Act. The authorized share (the closing price for our common stock on December 29, 2017), the conversion value for the outstanding 2042 notes wouldrepurchase plan may be $1,371 per $1,000 of original principal amount of the notes,suspended, delayed or $282.6 million in the aggregate. The conversion value of the notes would increase or decrease to the extent that the trading price of our common stock increases or decreases. We have elected to settlediscontinued at any conversion of the 2042 Notes entirely in cash.time.
Stock Repurchase Program
On June 21, 2016, the Board of Directors authorized the repurchase of up to $500.0 million of the Company's outstanding common stock over the next five years of which $300.0 million remains available for repurchase under this authorization as of December 30, 2017. There were no repurchases of common stock made under this authorization during the quarter ended December 30, 2017.
Legal Contingencies

We are currently involved in several legal proceedings and claims. In connection with these legal proceedings and claims, management periodically reviews estimates of potential costs to be incurred by us in connection with the adjudication or settlement, if any, of these proceedings. These estimates are developed, as applicable in consultation with outside counsel, and are based on an analysis of potential litigation outcomes and settlement strategies. In accordance with ASC 450, Contingencies, loss contingencies are accrued if, in the opinion of management, an adverse outcome is probable and such financial outcome can be reasonably estimated. It is possible that future results for any particular quarter or annual period may be materially affected by changes in our assumptions or the effectiveness of our strategies relating to these proceedings. Information with respect to this disclosure may be found in Note 710 to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.

Future Liquidity Considerations


We intend to use the net proceeds from the sale of our New 2025 Senior Notes and our 2028 Senior Notes and available cash, which may include borrowings under our Amended Revolver, to redeem our outstanding 2022 Senior Notes on February 15, 2018. Additionally, we intend to use the net proceeds from the sale of our 2025 Senior Notes, our Amended and Restated Credit Agreement and available cash, which may include borrowings under our Amended Revolver, to redeem or repurchase all of our outstanding Convertible Notes in the second quarter of fiscal 2018. We also expect to continue to review and evaluate potential strategic transactions and alliances that we believe will complement our current or future business. Subject to the

“Risk “Risk Factors” set forth or incorporated by reference in Part II, Item 1A of this Quarterly Report on Form 10-Q, as well as those described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2017,25, 2021 or any other of our subsequently filed reports, and the general disclaimers set forth in our Special Note Regarding Forward-Looking Statements"Cautionary Statement" regarding forward-looking statements at the outset of this Quarterly Report,Item 2, we believe that our cash and cash equivalents, cash flows from operations, and the cash available under our Amended2021 Revolver and our Securitization Program will provide us with sufficient funds in order to fund our expected normal operations and debt payments including interest and potential payouts for any Convertible Notes, and the costs of redeeming our outstanding 2022 Senior Notes, including payment of any premium, over the next twelve months. Our longer-term liquidity is contingent upon future operating performance. We may also require additional capital in the future to fund capital expenditures, repayment of debt, and related deferred tax liabilities, as applicable, acquisitions, strategic transactions or other investments. As described above, we have significant indebtedness outstanding under our Amended and Restated2021 Credit Agreement, 2022 Senior Notes, 2025 Senior Notes, 2028 Senior Notes, Convertible Notes and the Securitization Program.2029 Senior Notes. These capital requirements could be substantial. For a description of risks to our operating performance and our indebtedness, see the “Risk
48

Factors” set forth or incorporated by reference in Part II, Item 1A of this Quarterly Report on Form 10-Q, as well as those described in Part I, Item 1A inof our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.25, 2021.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of our financial condition and results of operations are based upon our interim consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition for multiple element arrangements, allowance for doubtful accounts, reserves for excess and obsolete inventories, valuations, purchase price allocations and contingent consideration related to business combinations, expected future cash flows including growth rates, discount rates, terminal values and other assumptions used to evaluate the recoverability of long-lived assets and goodwill, estimated fair values of intangible assets and goodwill, amortization methods and periods, warranty reserves, certain accrued expenses, restructuring and other related charges, stock-based compensation, contingent liabilities, tax reserves and recoverability of our net deferred tax assets and related valuation allowances. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates if past experience or other assumptions do not turn out to be substantially accurate. Any differences may have a material impact on our financial condition and results of operations. For a discussion of how these and other factors may affect our business, see the “Cautionary Statement” aboveregarding forward-looking statements set forth at the outset of this Item 2 and the “Risk Factors” set forth or incorporated by reference in Part II, Item 1A of this Quarterly Report on Form 10-Q as well as those described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.25, 2021 or any other of our subsequently filed reports.

The critical accounting estimates that we believe affect our more significant judgments and estimates used in the preparation of our consolidated financial statements presented in this report are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.25, 2021. There have been no material changes to our critical accounting policies or estimates from those set forth in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.25, 2021.


Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

Financial Instruments, Other Financial Instruments, and Derivative Commodity Instruments. Financial instruments consist of cash and cash equivalents, accounts receivable, cost-method equity investments, insuranceforeign currency derivative contracts, and related deferred compensation plan liabilities,an interest rate cap agreements, forward foreign currencyswap agreement, insurance contracts, accounts payable and debt obligations. Except for our outstanding Convertible Notes, 20222028 Senior Notes and 20252029 Senior Notes, the fair value of these financial instruments approximatesapproximate their carrying amount. As of December 30, 2017, we have $206.3 million in principal amount of Convertible Notes outstanding. The fair value of our 2042 Notes and 2043 Notes as of December 30, 2017 was approximately $284.8 million and $0.3 million, respectively. The fair value of our 20222028 Senior Notes and 20252029 Senior Notes was approximately $379.9 million and $817.6 million, respectively as of December 30, 2017 was approximately $1.10 billion and $358.6 million, respectively.June 25, 2022. Amounts outstanding under our Amended and Restated2021 Credit Agreement and Securitization Program of $1.61$1.5 billion and $200.0 million, respectively,aggregate principal as of December 30, 2017June 25, 2022 are subject to variable rates of interest based on current market rates, and as such, we believe the carrying amount of these obligations approximates fair value.

Primary Market Risk Exposures. Our primary market risk exposure is in the areas of interest rate risk and foreign currency exchange rate risk. We incur interest expense on borrowings outstanding under our Convertible Notes, 20222028 Senior Notes, 20252029 Senior Notes, and Amended and Restated2021 Credit Agreement, as well as under our accounts receivable securitization program.Agreement. The Convertible Notes, 20222028 Senior Notes and 20252029 Senior Notes have fixed interest rates. Borrowings under our Amended and Restated2021 Credit Agreement currently bear interest at the Eurocurrency Rate (i.e., Libor)LIBOR) plus the applicable margin of 1.50%1.00% per annum. Borrowings under our accounts receivable securitization program currently bear interest at Libor plus the applicable margin of 0.7%.


As of December 30, 2017,June 25, 2022, there was $1.61$1.5 billion of aggregate principal outstanding under the Amended and Restated2021 Credit Agreement, including amounts borrowed under the Amended Revolver, and $200.0 million aggregate principal outstanding under the securitization program.Agreement. Since thesethis debt obligations areobligation is a variable rate instruments,instrument, our interest expense associated with these instrumentsthe instrument is subject to change. A hypothetical 10% adverse movement (increase in LIBOR rate) would increase annual interest expense by approximately $2.4 million.$0.8 million, which is net of the impact of our interest rate swap hedge. We entered into multiplean interest rate cap agreementsswap agreement to help mitigate the interest rate volatility associated with the variable rate interest on the amounts outstanding.outstanding under the 2021 Credit Agreement. The critical terms of the interest rate capsswap were designed to mirror the terms of our LIBOR-based borrowings under the Prior2021 Credit Agreement, and therefore the interest rate caps areswap is highly effective at offsetting the cash flows being hedged. We designated these derivativesthis derivative instrument as a cash flow hedgeshedge of the variability of the LIBOR-based interest payments on $1.0 billion of principal which endsprincipal. The interest rate swap contract expires on December 28, 2018.17, 2023.

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The UK Financial Conduct Authority has announced that it intends to phase out LIBOR by the end of 2023. Our 2021 Credit Agreement provides that upon the earliest to occur of June 30, 2023 (as such date may be extended under certain circumstances) and certain specified events, relating to this planned phase out, the interest rate applicable to the loans under the 2021 Credit Agreement denominated in U.S. Dollars will convert to a variant of SOFR, as established from time to time by the Federal Reserve Bank of New York, plus a corresponding spread. If changes are made to the method of calculating LIBOR or LIBOR ceases to exist, we may need to amend certain contracts, including our interest rate swap agreements, and we cannot predict what alternative rate or benchmark would be negotiated or the extent to which this would adversely affect our interest rate and the effectiveness of our interest rate hedging activity.

The return from cash and cash equivalents will vary as short-term interest rates change. A hypothetical 10% increase or decrease in interest rates, however, would not have a material adverse effect on our business, financial condition or results of operations.

Foreign Currency Exchange Risk. Our international business is subject to risks, including, but not limited to: unique economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. Accordingly, our future results could be materially adversely impacted by changes in these or other factors.


We conduct business worldwide and maintain sales and service offices outside the United StatesU.S. as well as manufacturing facilities primarily in Costa Rica and the United Kingdom. Our international sales are denominated in a number of currencies, primarily the Euro, U.S. dollar, UK Pound and Renminbi. The majority of our foreign subsidiaries' functional currency is the local currency, although certain foreign subsidiaries functional currency is the U.S. dollar based on the nature of their operations or functions. Our revenues denominated in foreign currencies are positively affected when the U.S. dollar weakens against them and adversely effectedaffected when the U.S. dollar strengthens. Fluctuations in foreign currency rates could affect our sales, cost of goods and operating margins and could result in exchange losses. In addition, currency devaluations can result in a loss if we hold deposits of that currency. We have executed forward foreign currency contracts to hedge a portion of results denominated in the Euro, UK Pound, Australian dollar, Japanese Yen, Chinese Yuan and Canadian dollar. These contracts do not qualify for hedge accounting. As a result, we may experience volatility in our Consolidated Statements of Income due to (i) the impact of unrealized gains and losses reported in other income, net onfrom the mark-to-market of outstanding contracts and (ii) realized gains and losses recognized in other income, net, whereas the offsetting economic gains and losses are reported in the line item of the underlying cash flow, for example, revenue.

We believe that the operating expenses of our international subsidiaries that are incurred in local currencies will not have a material adverse effect on our business, results of operations or financial condition. Our operating results and certain assets and liabilities that are denominated in foreign currencies are affected by changes in the relative strength of the U.S. dollar against those currencies. Our expenses, denominated in foreign currencies, are positively affected when the U.S. dollar strengthens against them and adversely affected when the U.S. dollar weakens. However, we believe that the foreign currency exchange risk is not significant. AWe believe a hypothetical 10% increase or decrease in foreign currencies in whichthat we transact in would not have a material adverse impact on our business, financial condition or results of operations.

Item 4.    Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of December 30, 2017,June 25, 2022, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934.Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of December 30, 2017.June 25, 2022.

An evaluation was also performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of any change in our internal control over financial reporting that occurred
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during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. That evaluation did not identify any change in our internal control over financial reporting that occurred during our latest fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION
Item 1.    Legal Proceedings.

Information with respect to this Item may be found in Note 710 to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q, and in Part II Item 1 of our Quarterly Report on Form 10-Q for the quarter ended March 26, 2022, which information is incorporated herein by reference.

Additional information on our commitments and contingencies can be found in our Annual Report on Form 10-K for our fiscal year ended September 30, 2017.25, 2021.

Item 1A. Risk Factors.


There are no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for our fiscal year ended September 30, 2017,25, 2021 or any of our subsequently filed reports, except as notedfor the risk factors described below.
The impact of recently enacted U.S. tax laws is not yet clear.

Congress recently enacted legislation commonly known as “ The Tax CutsWorldwide economic disruptions, electronic component shortages and Jobs Act” (the “Act”). The Act made significant changes to U.S. federal income tax laws. Certain provisionsglobal supply chain constraints, including those arising out of the Act could have an adverse effect onCOVID-19 pandemic and the financial conditionwar in Ukraine are impacting our ability to procure critical raw materials and components, including semiconductor chips and are adversely affecting our ability to meet customer demand for, and increasing our costs to manufacture, certain of our products.

Worldwide economic disruptions, electronic component shortages and global supply chain constraints, including those arising out of the CompanyCOVID-19 pandemic and the war in Ukraine, are impacting our ability to procure critical raw materials and components, including semiconductor chips, and are adversely affecting our ability to meet customer demand for, and increasing our costs to manufacture, certain of our products. Continued delays or its affiliates. The interpretationsdisruptions experienced by our suppliers and manufacturers are preventing us from obtaining raw materials and components, including semiconductor chips, for our products in a timely manner, as well as increasing our costs of many provisionsobtaining such materials and components. Obtaining alternative sources of the Act are still unclear. We cannot predict when orraw materials and components could involve significant costs and regulatory challenges and may not be available to what extent any U.S. federal tax laws, regulations, interpretations, or rulings clarifying the Act will be issued or the impact of any such guidanceus on the Company. Certain key provisions of the Act that could impact us include,reasonable terms, if at all. Our ability to manufacture our Breast Health capital equipment products, primarily, but are not limited to, international tax provisions that affect the overall tax rate applicable to income earned from non-U.S. operations, limitationsour 3D Dimensions systems, Trident specimen radiography systems, Affirm Prone biopsy systems and Brevera systems, is dependent on the deductibilitysupply of executive compensationsuch raw materials and limitationscomponents, including semiconductor chips. If we remain unable to obtain sufficient quantities of raw materials and components on commercially reasonable terms or in a timely manner, our ability to manufacture our capital equipment products on a taxpayer’s net interest expense deduction.timely and cost-competitive basis could materially adversely affect our revenues and results of operations and harm our competitive position and reputation.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer's Purchases of Equity Securities

Period of Repurchase
Total Number of
Shares Purchased
(#) (1)
 
Average Price
Paid Per Share
($) (1)
 
Total Number of
Shares Purchased As Part of Publicly
Announced Plans or Programs 
(#) (2)
 Average Price Paid Per Share As Part of Publicly Announced Plans or Programs($) (2) 
Maximum
Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under Our
Programs
(in millions) ($) (2)
October 1, 2017 – October 28, 2017610
 $37.01
 —
 $—
 $300.0
October 29, 2017 – November 25, 2017251,463
 39.61
 —
 —
 300.0
November 26, 2017 – December 30, 2017106,078
 40.92
 —
 —
 300.0
Total358,151
 $39.99
 —
 $—
 $300.0
Period of RepurchaseTotal Number of
Shares Purchased
(#) (1)		Average Price
Paid Per Share
($) (1)		Total Number of
Shares Purchased As Part of Publicly
Announced Plans or Programs 
(#) (2)		Average Price Paid Per Share As Part of Publicly Announced Plans or Programs($) (2)Maximum
Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under Our
Programs
(in millions) ($) (2)
March 27, 2022 – April 23, 2022782 $76.93 — $— $324.7 
April 24, 2022 – May 21, 2022799 71.99 — — 324.7 
May 22, 2022 – June 25, 202293 74.65 — — 324.7 
Total1,674 $74.45 — $— $324.7 
 ___________________________________
(1)For the majority of restricted stock units granted, the number of shares issued on the date that the restricted stock units vest is net of the minimum statutory tax withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. These repurchases of our common stock were to cover employee income tax withholding obligations in connection with the vesting of restricted stock units under our equity incentive plans.
(2)On June 21, 2016, the Board of Directors authorized the repurchase of up to an additional $500.0 million of our outstanding common stock over the next five years. There were no repurchases of common stock made under this authorization during the quarter ended December 30, 2017.

(1)For the majority of restricted stock units granted, the number of shares issued on the date that the restricted stock units vest is net of the minimum statutory tax withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. These repurchases of our common stock were to cover employee income tax withholding obligations in connection with the vesting of restricted stock units under our equity incentive plans.

(2)On December 9, 2020, the Board of Directors authorized a new share repurchase plan to repurchase up to $1.0 billion of the Company's outstanding common stock, effective December 11, 2020. In connection with this authorization, the prior plan was terminated.


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Item 6.    Exhibits.
(a) Exhibits
Incorporated by
Reference
Exhibit
Number		Exhibit DescriptionFormFiling Date/
Period End
Date
Incorporated by
Reference
Exhibit
Number
Exhibit DescriptionForm
Filing Date/
Period End
Date
4.1
Indenture dated October 10, 2017, by and among Hologic, the Guarantors party thereto and Wells Fargo Bank, National Association, as Trustee.
8-K10/10/2017
4.2
Form of 4.375% Senior Note due 2025 (included in Exhibit 4.1).
8-K10/10/2017
4.3
First Supplemental Indenture dated January 19, 2018, by and among Hologic, the Guarantors party thereto and Wells Fargo Bank, National Association, as Trustee
8-K1/19/2018
4.4
Indenture dated January 19, 2018, by and among Hologic, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee.
8-K1/19/2018
4.5
Form of 4.625% Senior Note due 2028 (included in Exhibit 4.4).
8-K1/19/2018
10.1
Amended and Restated Credit and Guaranty Agreement, originally dated as of May 29, 2015 and amended and restated as of October  3, 2017, among Hologic, Hologic GGO 4 Ltd, Hologic UK Finance LTD and each other Designated Borrower from time to time party thereto, the Guarantors from time to time party thereto, each Lender from time to time party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
8-K10/4/2017
10.2
Form of Performance Stock Unit Award Agreement (ROIC) (adopted fiscal 2018)
.8-K11/9/2017
10.3
Form of Performance Stock Unit Award Agreement (relative TSR) (adopted fiscal 2018)
8-K11/9/2017
10.431.1*8-K12/1/2017
10.5*†

Addendum No. 3 to Current Lease by and Between BCR Fondo de Inversion Inmobiliario and Hologic Surgical Products Costa Rica S.R.L.
31.1*
Certification of Hologic’s CEO pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
32.1**
32.2**
101.INS*XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*Inline XBRL Taxonomy Extension Schema DocumentDocument.
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase DocumentDocument.
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase DocumentDocument.
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase DocumentDocument.
101.DEF*Inline XBRL Taxonomy Extension DefinitionDefinition.
104*Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
_______________


* Filed herewith.
**    Furnished herewith.
†    Confidential treatment has been requested as to portions





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Table of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.Contents


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Hologic, Inc.
(Registrant)
Date:July 27, 2022Hologic, Inc.
(Registrant)
Date:February 8, 2018/s/    Stephen P. MacMillan        
Stephen P. MacMillan

Chairman, President and Chief Executive Officer

(Principal Executive Officer)
Date:February 8, 2018July 27, 2022/s/    Robert W. McMahon        Karleen M. Oberton        
Robert W. McMahonKarleen M. Oberton
Chief Financial Officer

(Principal Financial Officer)



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