Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2018 | Aug. 24, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | COOPER COMPANIES INC | |
Entity Central Index Key | 711,404 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 49,139,682 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 660,000 | $ 556,000 | $ 1,881,300 | $ 1,577,500 |
Cost of sales | 233,200 | 199,800 | 679,100 | 565,100 |
Gross profit | 426,800 | 356,200 | 1,202,200 | 1,012,400 |
Selling, general and administrative expense | 251,000 | 208,700 | 724,700 | 590,600 |
Research and development expense | 22,500 | 17,500 | 62,200 | 50,600 |
Amortization of intangibles | 37,700 | 17,200 | 110,500 | 50,600 |
Impairment of intangibles | 0 | 0 | 24,400 | 0 |
Operating income | 115,600 | 112,800 | 280,400 | 320,600 |
Interest expense | 22,800 | 8,300 | 59,900 | 23,300 |
Other expense (income), net | 2,400 | (3,200) | 1,300 | (100) |
Income before income taxes | 90,400 | 107,700 | 219,200 | 297,400 |
(Benefit) provision for income taxes | (10,400) | 4,100 | 180,000 | 13,100 |
Net income | $ 100,800 | $ 103,600 | $ 39,200 | $ 284,300 |
Earnings per share - basic | $ 2.05 | $ 2.12 | $ 0.80 | $ 5.81 |
Earnings per share - diluted | $ 2.03 | $ 2.09 | $ 0.79 | $ 5.74 |
Number of shares used to compute earnings per share: | ||||
Basic (shares) | 49,100 | 48,900 | 49,000 | 48,900 |
Diluted (shares) | 49,700 | 49,600 | 49,600 | 49,500 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 100.8 | $ 103.6 | $ 39.2 | $ 284.3 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustment | (69.7) | 38.3 | (10.3) | 104.8 |
Comprehensive income | $ 31.1 | $ 141.9 | $ 28.9 | $ 389.1 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Millions | Jul. 31, 2018 | Oct. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 155.6 | $ 88.8 |
Trade accounts receivable, net of allowance for doubtful accounts of $18.5 at July 31, 2018 and $10.8 at October 31, 2017 | 375.6 | 316.6 |
Inventories | 479.6 | 454.1 |
Prepaid expense and other current assets | 178 | 93.7 |
Total current assets | 1,188.8 | 953.2 |
Property, plant and equipment, at cost | 1,901.6 | 1,757.5 |
Less: accumulated depreciation and amortization | 934.2 | 847.4 |
Property, plant and equipment, net | 967.4 | 910.1 |
Goodwill | 2,421.3 | 2,354.8 |
Other intangibles, net | 1,558.8 | 504.7 |
Deferred tax assets | 45.7 | 60.3 |
Other assets | 74.9 | 75.6 |
Total assets | 6,256.9 | 4,858.7 |
Current liabilities: | ||
Short-term debt | 45.3 | 23.4 |
Accounts payable | 120.8 | 142.1 |
Employee compensation and benefits | 88.2 | 84.1 |
Other current liabilities | 207.1 | 146.5 |
Total current liabilities | 461.4 | 396.1 |
Long-term debt | 2,248.9 | 1,149.3 |
Deferred tax liabilities | 37.2 | 38.8 |
Long-term tax payable | 171 | 0 |
Accrued pension liability and other | 111.8 | 98.7 |
Total liabilities | 3,030.3 | 1,682.9 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, 10 cents par value, shares authorized: 1.0; zero shares issued or outstanding | 0 | 0 |
Common stock, 10 cents par value, shares authorized: 120.0; issued 52.7 at July 31, 2018 and 52.4 at October 31, 2017 | 5.3 | 5.2 |
Additional paid-in capital | 1,551.4 | 1,526.7 |
Accumulated other comprehensive loss | (385.6) | (375.3) |
Retained earnings | 2,470.5 | 2,434.2 |
Treasury stock at cost: 3.6 shares at July 31, 2018 and 3.6 shares at October 31, 2017 | (415.1) | (415.1) |
Noncontrolling interests | 0.1 | 0.1 |
Stockholders’ equity | 3,226.6 | 3,175.8 |
Total liabilities and stockholders' equity | $ 6,256.9 | $ 4,858.7 |
Consolidated Condensed Balance5
Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jul. 31, 2018 | Oct. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 18.5 | $ 10.8 |
Preferred stock, par value (in dollars per share) | $ 0.1 | $ 0.1 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.1 | $ 0.1 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 52,700,000 | 52,400,000 |
Treasury stock, shares | 3,600,000 | 3,600,000 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 39.2 | $ 284.3 |
Depreciation and amortization | 204.6 | 141.2 |
Impairment of intangibles | 24.4 | 0 |
Increase in operating capital | (141.1) | (58.7) |
Other non-cash items | 305.2 | 27.8 |
Net cash provided by operating activities | 432.3 | 394.6 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (150.2) | (95.4) |
Acquisitions of assets and businesses, net of cash acquired, and other | (1,320.8) | (197) |
Net cash used in investing activities | (1,471) | (292.4) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 2,073.1 | 1,064.8 |
Repayments of long-term debt | (971.1) | (984.6) |
Net proceeds (repayments) from short-term debt | 21 | (202.3) |
Repurchase of common stock | 0 | (29.5) |
Net payments related to share-based compensation awards | (9.8) | (5.6) |
Dividends on common stock | (1.5) | (1.5) |
Debt acquisition costs | (3.9) | 0 |
Payment of contingent consideration | (0.1) | (4.3) |
Proceeds from construction allowance | 0 | 2.1 |
Net cash provided by (used in) financing activities | 1,107.7 | (160.9) |
Effect of exchange rate changes on cash and cash equivalents | (2.2) | 3.9 |
Net increase (decrease) in cash and cash equivalents | 66.8 | (54.8) |
Cash and cash equivalents - beginning of period | 88.8 | 100.8 |
Cash and cash equivalents - end of period | $ 155.6 | $ 46 |
General
General | 9 Months Ended |
Jul. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The accompanying unaudited interim consolidated condensed financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of the Cooper Companies, Inc. and its subsidiaries (the Company) and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. Readers should not assume that the results reported here either indicate or guarantee future performance. The terms "the Company", "we", "us", and "our" are used to refer collectively to the Cooper Companies, Inc. and its subsidiaries. Accounting Pronouncements Issued Not Yet Adopted In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) , which allows a reclassification from accumulated other comprehensive income (loss) to retained earnings (accumulated deficit) for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (2017 Act) and requires certain disclosures regarding stranded tax effects in accumulated other comprehensive income (loss). This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted during interim or annual periods. We are currently evaluating the impact of ASU 2018-02 which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2019. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU requires an entity to disaggregate the service cost component from the other components of net benefit cost. The service cost component is presented in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period and the other components of net benefit costs are presented separately as other income/expense below income from operations. ASU 2017-07 is effective for the Company in fiscal year and interim periods beginning on November 1, 2019, and is not expected to have a significant impact on the Company's consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 provides guidance on the classification and presentation of changes in restricted cash and cash equivalents in the statement of cash flows. ASU 2016-18 will be effective for the Company in fiscal year and interim periods beginning on November 1, 2019, and is not expected to have a significant impact on the Company's Consolidated Statements of Cash Flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which requires entities to recognize the income tax consequences on an intra-entity transfer of an asset other than inventory when the transfer occurs. The ASU changes the timing of the recognition of the income tax consequences of non-inventory transfers which under current guidance defers the income tax consequences until the asset is sold to an outside party or otherwise recognized. The guidance for the amendments of ASU 2016-16 requires companies to apply a modified retrospective approach with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. We are currently evaluating the impact of ASU 2016-16 which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2018. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases Topic 842 Target improvements , which provides an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. We are currently evaluating the impact of ASU 2016-02, ASU 2018-10 and ASU 2019-11, which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2019. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . ASU 2014-09 requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations. The amendments in the ASU can be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of the initial application along with additional disclosures. We have been monitoring the activity of the FASB and the Transition Resource Group as it relates to specific industry interpretive guidance and further overall interpretations and clarifications. In fiscal year 2017, we began our plan on adoption of ASU 2014-09. Our plan entails activities such as reviewing significant revenue streams (and related costs) and representative contracts to determine the potential changes to existing accounting policies, completion of an accounting guidance gap analysis, and identifying and addressing the impact that ASU 2014-09 will have on business processes, systems and internal controls to support the recognition and disclosure requirements. We are currently in the process of finalizing our accounting gap analysis and related disclosures. We do not expect a material impact to the Company’s consolidated financial statements on the adoption of ASU 2014-09, but will continue monitoring any changes in contracts that may occur prior to our planned adoption on November 1, 2018. We will adopt ASU 2014-09, in our fiscal year and interim periods beginning on November 1, 2018 and we will apply the modified retrospective transition method. This would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the ASU 2014-09 to contracts in process as of the adoption date. Under this method, the Company would not restate the prior consolidated financial statements presented. However, the Company would include additional disclosures of the amount by which each financial statement line item is affected in the current reporting period during our fiscal year 2019, as compared to the guidance that was in effect before the change, and an explanation of the reasons for significant changes, if any. Accounting Pronouncements Recently Adopted In January 2018, the Company adopted ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which updates the income tax accounting in U.S. generally accepted accounting principles (GAAP) to reflect the SEC interpretive guidance released on December 22, 2017, when the 2017 Act was signed into law. Additional information regarding the adoption of this standard is contained in Note 6. Income Taxes. In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting . ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Entities will apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. The update did not change the accounting for modifications. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. Early adoption is permitted, including adoption in any interim period. The Company adopted this guidance on May 1, 2018, and it did not have a material impact on the Company's reported financial results. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flow (Topic 230) . The guidance reduces diversity in how certain cash receipts and cash payments are presented and classified in the Statements of Cash Flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. 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. The Company adopted this guidance on May 1, 2018, and it did not have a material impact on the Company's reported financial results. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . Under current guidance, an entity subsequently measures inventory at the lower of cost or market, with market defined as replacement cost, net realizable value (NRV), or NRV less a normal profit margin. An entity uses current replacement cost provided that it is not above NRV (i.e., the ceiling) or below NRV less an approximately normal profit margin (i.e., the floor). ASU 2015-11 eliminates this analysis and requires entities to measure inventory “at the lower of cost and NRV.” ASU 2015-11 is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. The Company adopted this guidance on November 1, 2017, and it did not have a material impact on the Company's reported financial results. Accounts Receivable Factoring Program We may factor certain designated trade receivables with one or more third party financial institutions pursuant to a factoring agreement. These are non-recourse factoring arrangements to assist us in managing operating cash flow and meet the requirements to be accounted for as sales in accordance with the “Transfers and Servicing” guidance in ASC 860, where the Company’s continuing involvement subsequent to the transfer is limited to providing certain servicing and collection actions on behalf of the purchasers of the designated trade receivables. Proceeds from amounts factored by the Company are recorded as an increase to cash and a reduction to accounts receivable outstanding in the Consolidated Balance Sheets. Cash flows attributable to factoring are reflected as cash flows from operating activities in the Company’s Consolidated Statements of Cash Flows. Factoring fees associated with the sale of factored receivables for the three and nine months ended July 31, 2018 were $0.5 million . We did not factor accounts receivables in the nine months ended July 31, 2017. |
Acquisitions
Acquisitions | 9 Months Ended |
Jul. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions The following is a summary of the allocation of the total purchase consideration for business and asset acquisitions that the Company completed during fiscal 2018 and 2017: (In millions) July 31, 2018 October 31, 2017 Technology $ — $ 71.7 Customer relationships 23.5 43.1 Trademarks 100.0 7.1 Composite intangible asset 1,061.9 — Other 4.2 — Total identifiable intangible assets $ 1,189.6 $ 121.9 Goodwill 70.6 123.1 Net tangible assets (liabilities) 59.6 (4.8 ) Total purchase price $ 1,319.8 $ 240.2 All the acquisitions were paid in cash and funded by our debt borrowings. For assets acquisitions, we recorded the tangible and intangible assets acquired and liabilities assumed at their estimated and relative fair values as of the applicable date of acquisition. For business acquisitions, we recorded the tangible and intangible assets acquired and liabilities assumed at their fair values as of the applicable date of acquisition. We believe these acquisitions strengthen CooperSurgical's and CooperVision's businesses through the addition of new or complementary products and services. Fiscal Year 2018 PARAGARD On November 1, 2017, CooperSurgical acquired the assets of the PARAGARD Intrauterine Device (IUD) business (PARAGARD) from Teva Pharmaceuticals Industries Limited for $1.1 billion . This asset acquisition broadens and strengthens CooperSurgical's current product portfolio. PARAGARD ® is the only hormone-free, long lasting, reversible contraceptive approved by the United States Food and Drug Administration (FDA) available in the United States. The Company has accounted for the acquisition of PARAGARD as a purchase of assets in accordance with FASB Accounting Standards Codification (ASC) Topic 805, Business Combinations, and ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, whereby the Company recognized assets acquired based on their estimated fair values on the acquisition date. Due to the required screening test, the acquisition does not meet the definition of a business as substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset. The Company retained independent appraisers to advise management in the determination of the relative fair value of the various assets acquired and liabilities assumed. The values assigned in these financial statements represent management’s best estimate of relative fair values as of the acquisition date. The following table summarizes the relative fair values of net assets acquired and liabilities assumed using the cost accumulation and allocation model: (In millions) Relative Fair Value Composite intangible asset (1) $ 1,061.9 Assembled workforce intangible asset (2) 1.2 Property, plant and equipment 2.0 Inventory (3) 47.3 Other assets 9.4 Total assets acquired $ 1,121.8 Less: liabilities assumed 16.4 Total Purchase Price $ 1,105.4 The Company proportionally allocated the acquisition costs to the net assets acquired. The acquisition-related costs included advisory, legal, valuation and other professional fees. (1) Composite Intangible asset consists of technology, trade name, New Drug Application (NDA) approval and physician relationships, which have been valued as a single composite intangible asset as they are inextricably linked. The composite asset was identified as the primary asset acquired, was valued using the Multi-Period Excess Earnings Method and will be amortized over 15 years . (2) An assembled workforce was recognized as a separate acquired intangible asset, given the purchase of assets and will be amortized over 5 years . (3) Inventory relative fair value includes step up of $45.4 million . As PARAGARD was considered an asset purchase as opposed to a business acquisition in accordance with the guidance under FASB ASC 805, Business Combinations, and ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , the Company has not included proforma financial information which is applicable for a business acquisition. Other Acquisitions On April 3, 2018, CooperSurgical completed the acquisition of The LifeGlobal Group (LifeGlobal). LifeGlobal was a privately held company that specializes primarily in the in vitro fertilization (IVF) media. LifeGlobal’s product categories include media products as well as IVF laboratory air filtration products and dishware. The purchase price allocation is preliminary and we are in the process of finalizing information primarily related to property, plant & equipment, inventories, certain accruals and other liabilities and the corresponding impact on goodwill. On December 1, 2017, CooperVision acquired Paragon Vision Sciences, a leading provider of orthokeratology (ortho-k) specialty contact lenses and oxygen permeable rigid contact lens materials. Ortho-k contact lenses are overnight lenses which enable corneal topography correction for myopia (nearsightedness) patients. The purchase price allocation is preliminary and we are in the process of finalizing information primarily related to property, plant & equipment, inventories and certain other assets and liabilities and the corresponding impact on goodwill. On January 4, 2018, CooperVision acquired Blueyes Ltd, a long-standing distribution partner, with a leading position in the distribution of contact lenses to the Optical and Pharmacy sector in Israel. The purchase price allocation is preliminary and we are in the process of finalizing information related to tax and the corresponding impact on goodwill. The pro forma results of operations of these acquisitions have not been presented because the effects of the business combinations described above, individually and in the aggregate, were not material to our consolidated results of operations. Fiscal Year 2017 On August 3, 2017, CooperVision completed the acquisition of Procornea Holding B.V. (Procornea). Procornea is a Netherlands based manufacturer and distributor of specialty contact lenses, mainly ortho-k which expands CooperVision's access to myopia (nearsightedness) management markets with new products. We have completed the purchase price allocation for this acquisition. On June 30, 2017, CooperVision completed the acquisition of Grand Vista LLC, a long-standing distribution partner in Russia. Grand Vista LLC is engaged in contact lens and contact lens solutions and lens care product distribution business in Russia. We have completed the purchase price allocation for this acquisition. On November 4, 2016, CooperSurgical completed the acquisition of Wallace, the IVF segment of Smiths Medical International, Ltd., a division of Smiths Group plc. Wallace manufactures a range of IVF and ob/gyn products. We have completed the purchase price allocation for this acquisition. |
Inventories
Inventories | 9 Months Ended |
Jul. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories (In millions) July 31, 2018 October 31, 2017 Raw materials $ 115.3 $ 107.0 Work-in-process 12.7 13.3 Finished goods 351.6 333.8 $ 479.6 $ 454.1 Inventories are stated at the lower of cost and net realizable value. Cost is computed using standard cost that approximates actual cost, on a first-in, first-out basis. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Jul. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Goodwill (In millions) CooperVision CooperSurgical Total Balance at October 31, 2016 $ 1,646.4 $ 518.3 $ 2,164.7 Net additions during the year ended October 31, 2017 28.6 94.4 123.0 Translation 60.7 6.4 67.1 Balance at October 31, 2017 1,735.7 619.1 2,354.8 Net additions during the nine months ended July 31, 2018 36.8 34.4 71.2 Translation (4.3 ) (0.4 ) (4.7 ) Balance at July 31, 2018 $ 1,768.2 $ 653.1 $ 2,421.3 We performed our annual impairment assessment in our third quarter of fiscal 2018 and 2017, and our analysis indicated that we had no impairment of goodwill. We evaluate goodwill for impairment annually during the fiscal third quarter and when an event occurs or circumstances change such that it is reasonably possible that impairment may exist. We account for goodwill and evaluate our goodwill balances and test them for impairment in accordance with related accounting standards. We performed a qualitative assessment to test each reporting unit's goodwill for impairment. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit. Based on our qualitative assessment, if we determine that the fair value of a reporting unit is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be compared with its carrying amount and an impairment charge will be recognized for the carrying amount which exceeds the reporting unit's fair value. A reporting unit is the level of reporting at which goodwill is tested for impairment. Our reporting units are the same as our business segments - CooperVision and CooperSurgical - reflecting the current way we manage our business. Goodwill impairment analysis and measurement is a process that requires significant judgment. If our common stock price trades below book value per share, there are changes in market conditions or future downturn in our business, or a future annual goodwill impairment test indicates an impairment of our goodwill, we may have to recognize a non-cash impairment of goodwill that could be material and could adversely affect our results of operations in the period recognized and also adversely affect our total assets and stockholders' equity. Other Intangible Assets July 31, 2018 October 31, 2017 (In millions) Gross Carrying Amount Accumulated Amortization & Translation Gross Carrying Amount Accumulated Amortization & Translation Weighted Average Amortization Period (In years) Trademarks $ 139.6 $ 14.6 $ 44.5 $ 10.3 14 Composite intangible asset 1,061.9 53.1 — — 15 Technology 396.0 183.9 428.8 173.2 11 Customer relationships 354.6 163.6 335.5 145.3 13 License and distribution rights and other 73.3 51.4 69.2 44.5 9 2,025.4 $ 466.6 878.0 $ 373.3 14 Less: accumulated amortization and translation 466.6 373.3 Other intangible assets, net $ 1,558.8 $ 504.7 In the second quarter of fiscal 2018, CooperSurgical recognized an impairment charge of $24.4 million on the intangible assets acquired from Recombine Inc. as the cash flows expected to be generated by this asset group over its estimated remaining life were not sufficient to recover its carrying value. CooperSurgical acquired Recombine Inc. in fiscal 2016, a clinical genetic testing company specializing in carrier screening. The intangible assets impaired consisted of Technology, Trademark and Customer relationships. As of July 31, 2018, the estimation of amortization expenses for intangible assets with finite lives is as follows: Fiscal years: (In millions) Remainder of 2018 $ 36.3 2019 143.3 2020 133.4 2021 132.2 2022 130.3 Thereafter 974.4 Total remaining amortization for intangible assets $ 1,549.9 |
Debt
Debt | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt (In millions) July 31, 2018 October 31, 2017 Short-term: Overdraft and other credit facilities $ 45.3 $ 23.4 Long term: 2016 Credit Agreement $ — $ 323.0 Term loans 2,255.0 830.0 Other 0.2 0.2 Less: unamortized debt issuance cost (6.3 ) (3.9 ) $ 2,248.9 $ 1,149.3 $1.425 billion Term Loan on November 1, 2017 On November 1, 2017, in connection with the PARAGARD acquisition, we entered into a new five -year, $1.425 billion , senior unsecured term loan agreement (2017 Term Loan Agreement) by and among the Company, the lenders party thereto and DNB Bank ASA, New York Branch, as administrative agent which matures on November 1, 2022. The Company used part of the facility to fund the PARAGARD acquisition and used the remainder of the funds to partially repay outstanding borrowings under our revolving credit agreement. Amounts outstanding under the 2017 Term Loan Agreement will bear interest, at our option, at either the base rate, or the adjusted LIBO rate (each as defined in the 2017 Term Loan Agreement), plus, in each case, an applicable rate of, between 0.00% and 0.75% in respect of base rate loans and between 1.00% and 1.75% in respect of adjusted LIBO rate loans, in each case in accordance with a pricing grid tied to the Total Leverage Ratio as defined in the 2017 Term Loan Agreement. The 2017 Term Loan Agreement contains customary restrictive covenants, as well as financial covenants that require the Company to maintain a certain Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2017 Term Loan Agreement) consistent with the 2016 Credit Agreement discussed below. At July 31, 2018 , we had $1.425 billion outstanding under the 2017 Term Loan Agreement. Revolving Credit and Term Loan Agreement on March 1, 2016 On March 1, 2016 , we entered into a Revolving Credit and Term Loan Agreement (2016 Credit Agreement), among the Company, CooperVision International Holding Company, LP, the lenders party thereto and KeyBank National Association, as administrative agent. The 2016 Credit Agreement provides for a multicurrency revolving credit facility in an aggregate principal amount of $1.0 billion and a term loan facility in an aggregate principal amount of $830.0 million , each of which, unless terminated earlier, mature on March 1, 2021 . In addition, we have the ability from time to time to request an increase to the size of the revolving credit facility or establish one or more new term loans under the term loan facility in an aggregate amount up to $750.0 million , subject to the discretionary participation of the lenders. Amounts outstanding under the 2016 Credit Agreement will bear interest, at our option, at either the base rate, or the adjusted LIBO rate or adjusted foreign currency rate (each as defined in the 2016 Credit Agreement), plus, in each case, an applicable rate of between 0.00% and 0.75% in respect of base rate loans and between 1.00% and 1.75% in respect of adjusted LIBO rate or adjusted foreign currency rate loans, in each case in accordance with a pricing grid tied to the Total Leverage Ratio, as defined in the 2016 Credit Agreement. We pay an annual commitment fee that ranges from 0.125% to 0.25% of the unused portion of the revolving credit facility depending on certain financial ratios. In addition to the annual commitment fee described above, we are also required to pay certain letter of credit and related fronting fees and other administrative fees pursuant to the terms of the 2016 Credit Agreement. At July 31, 2018 , we had $830.0 million outstanding under the Term Loan and $999.5 million available under the 2016 Revolving Credit Agreement. The 2016 Credit Agreement contains customary restrictive covenants, as well as financial covenants that require us to maintain a certain Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2016 Credit Agreement): • Interest Coverage Ratio, as defined, to be at least 3.00 to 1.00 at all times. • Total Leverage Ratio, as defined, to be no higher than 3.75 to 1.00 . At July 31, 2018 , we were in compliance with the Interest Coverage Ratio at 12.50 to 1.00 and the Total Leverage Ratio at 2.45 to 1.00 for both the 2017 Term Loan Agreement and the 2016 Credit Agreement. Refer to our Annual Report on Form 10-K for the fiscal year ended October 31, 2017 for more details. |
Income Taxes
Income Taxes | 9 Months Ended |
Jul. 31, 2018 | |
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] | |
Income Taxes | Income Taxes Recent Tax Legislation The 2017 Act was enacted into law on December 22, 2017 and significantly changes existing U.S. tax law. The 2017 Act adopts a territorial tax system, imposes a mandatory one-time transition tax on earnings of foreign subsidiaries that were previously tax deferred, and reduces the U.S. federal statutory tax rate from 35% to 21%. The reduction in the U.S. federal statutory tax rate is effective on January 1, 2018 which requires the Company to use a blended tax rate for fiscal 2018. Our blended tax rate is 23.34% for fiscal 2018 and is calculated by applying a pro-rated percentage based on the number of days in our fiscal 2018 before and after the January 1, 2018 effective date. For fiscal 2019 and subsequent years, the Company will utilize the enacted U.S. federal statutory tax rate of 21%. The 2017 Act includes several provisions that are effective for our fiscal 2019: (i) tax on global intangible low-taxed income (GILTI) of foreign subsidiaries, (ii) tax on certain payments between a U.S. corporation and its foreign subsidiaries referred to as the base erosion and anti-abuse tax (BEAT), (iii) limitation on the tax deduction for interest payments, and (iv) expanded limitation on the tax deduction for compensation paid to certain executives. The 2017 Act was effective in the first quarter of fiscal 2018. As of July 31, 2018, we have not completed our accounting for the tax effects of the enactment of the 2017 Act. Consistent with SEC guidance, we recorded a provisional tax expense in our financial statements for the first quarter ended January 31, 2018, based on reasonable estimates of the tax effects of the 2017 Act. The provisional tax expense is subject to revisions as we gather and prepare additional information to complete our analysis of the 2017 Act, and interpret additional guidance issued by the FASB, Internal Revenue Service and U.S. Treasury Department. The provisional tax expense will be finalized during the measurement period, which should not extend beyond one year from the enactment date, and could be materially different than our provisional tax expense. The provisional tax expense is described in more detail below. During the first quarter, the Company recorded a $177.9 million provisional tax expense for the mandatory deemed repatriation of deferred foreign earnings and plans to pay the applicable amounts over eight years. The 2017 Act requires us to incur a one-time transition tax on deferred foreign income not previously subject to U.S. income tax at a rate of 15.5% for foreign cash and certain other net current assets, and 8% on the remaining deferred foreign income. In the third quarter, the Company decreased the provisional tax expense to $174.1 million after revising its analysis of the earnings and profits and foreign tax credits, which are critical inputs to the calculation. We have not completed our analysis because we are using estimates for part of fiscal 2018 that impact the final transition tax calculation. During the first quarter, the Company recorded a provisional tax expense of $13.2 million to record changes to the deferred taxes resulting from the U.S. federal rate decreasing from 35% to 21%. The amount is calculated using the applicable tax rates in the years in which the deferred tax assets and liabilities are expected to reverse. The Company is still analyzing certain aspects of the 2017 Act and refining the calculations, which could affect the measurement of the deferred taxes or give rise to new deferred tax amounts. The re-measurement of deferred taxes included in our financial statements will be subject to further revisions if our current estimates vary from our actual future operating results. Due to the changes in the 2017 Act, we are reviewing our prior assertion that earnings from our foreign subsidiaries are indefinitely reinvested. For purposes of recording the provisional tax expense in fiscal 2018, we are no longer asserting that earnings from our foreign subsidiaries are indefinitely reinvested. Accordingly, in the first quarter we recorded provisional estimates relating to additional state income taxes of $8.1 million and withholding taxes of $2.8 million relating to the unremitted foreign earnings. In the third quarter, we decreased the provisional estimate relating to additional state taxes to $7.5 million and withholding taxes to $1.9 million mostly due to the changes made to the transition tax. We have not completed our analysis because we are still gathering additional information to quantify the impact to the individual states and to quantify the withholding taxes that would be owed when future dividends are paid to the U.S. As the Company completes its analysis, it will make appropriate changes to the financial statements within the measurement period. The 2017 Act imposes a new tax on foreign earnings and profits in excess of a deemed return on tangible assets of foreign subsidiaries referred to as GILTI. The 2017 Act also imposes a new tax on certain payments between a U.S. corporation and its foreign subsidiaries referred to as BEAT. These new provisions are effective for fiscal 2019. Due to the complexity of the new GILTI and BEAT tax rules, we are continuing to evaluate these new provisions and the application of GAAP. With respect to GILTI, the Company has not progressed sufficiently in its analysis and has not made an accounting policy election to treat taxes due on the GILTI inclusion as a current period expense or factor such amounts into the measurement of our deferred taxes. The Company will continue its evaluation and make a policy election within the measurement period. The 2017 Act limits the future deductions relating to interest expense and certain executive compensation. These provisions are generally effective for the Company in fiscal 2019. Pursuant to transition rules provided in the 2017 Act relating to the deduction for executive compensation, companies will be allowed tax deductions for performance based plans in existence on or before November 2, 2017 and not materially modified after that date. Based on our current interpretation of the transition rules, we believe the Company will be able to deduct the executive compensation relating to those plans. Therefore, we have not recorded any provisional tax expense this quarter or prior quarters. As additional guidance and clarification of the transition rules, is provided by the tax authorities we will make appropriate changes within the measurement period. Effective Tax Rate The Company's effective tax rates were a benefit of 11.5% and expense of 3.8% for the third quarters of fiscal 2018 and 2017, respectively, and an expense of 82.1% and 4.4% for the first nine months of fiscal 2018 and 2017, respectively. The decrease in our effective tax rate for the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017 was due primarily to a reduction in U.S. income related to acquisition and integration activities in CooperSurgical and a decrease of $5.3 million to the provisional tax expense recorded in Q1 relating to the 2017 Act. The increase in our effective tax rate for the first nine months of fiscal 2018 compared to the first nine months of fiscal 2017 was primarily due to the charge of $196.7 million related to the 2017 Act. Our effective tax rate for the first nine months of fiscal 2018 was higher than the U.S. statutory rate because of the discrete tax expense relating to the 2017 Act, which was partially offset by a favorable mix of income from our foreign jurisdictions with lower tax rates and an excess tax benefit from share-based compensation. Our effective tax rate for the first nine months of fiscal 2017 was lower than the U.S. statutory rate primarily because of a favorable mix of income from our foreign jurisdictions with lower tax rates and an excess tax benefit from share-based compensation. We recognize the benefit from a tax position only if it is more likely than not that the position would be sustained upon audit based solely on the technical merits of the tax position. As of July 31, 2018 and October 31, 2017, Cooper had unrecognized tax benefits of $65.3 million and $59.9 million , respectively. The increase is primarily related to current period transfer pricing. It is our policy to recognize interest and penalties directly related to income taxes as additional income tax expense. It is reasonably possible that $25.3 million of unrecognized tax benefits could be settled during the next twelve months. The Company is subject to U.S. Federal income tax examinations for fiscal 2015 through 2017 and the Internal Revenue Service is auditing our U.S. Consolidated Corporation Income Tax Returns for fiscal 2015 and 2016. Cooper remains subject to income tax examinations in other significant tax jurisdictions including the United Kingdom, Japan, France and Australia for the tax years 2013 through 2017. Diverted Profits Tax (DPT) The United Kingdom tax authorities (U.K. Tax Authorities) enacted a Diverted Profits Tax (DPT) as of April 1, 2015 on profits of multinationals that they deemed artificially diverted from the United Kingdom. The tax rate is 25%. DPT is intended to apply in two situations: (a) where a foreign company has artificially avoided having a taxable presence in the United Kingdom; and (b) where a group adopts a structure which lacks economic substance in order to divert profits from the United Kingdom. During fiscal 2017, the U.K. Tax Authorities began an inquiry regarding the application of the DPT in fiscal 2015. We believe that the transactions in question were at arm’s length with no intention to divert profit from the United Kingdom and therefore are outside the intended reach of the DPT. On December 20, 2017, the U.K. Tax Authorities issued a DPT charging notice of approximately GBP 31.0 million with respect to the transfer out of the United Kingdom of certain intellectual property rights in connection with the 2014 acquisition of Sauflon Pharmaceutical Ltd. Although taxes were paid on the transfer, the U.K. Tax Authorities are challenging the value assigned to such property. We intend to contest the charging notice vigorously. The process for resolving such a notice can be lengthy and could involve litigation. The DPT legislation provides a one year review period; however, it requires prepayment of the charging notice to be made within 30 days of its issuance. As required, the payment of GBP 31.0 million was made on January 19, 2018. The Company continues to cooperate with the U.K. Tax Authorities to resolve this issue. The outcome of this matter cannot be predicted with certainty and may have an adverse impact on our financial condition and results. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jul. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Periods Ended July 31, Three Months Nine Months (In millions, except per share amounts) 2018 2017 2018 2017 Net income $ 100.8 $ 103.6 $ 39.2 $ 284.3 Basic: Weighted average shares 49.1 48.9 49.0 48.9 Earnings per share - basic $ 2.05 $ 2.12 $ 0.80 $ 5.81 Diluted: Weighted average shares 49.1 48.9 49.0 48.9 Effect of potential dilutive shares 0.6 0.7 0.6 0.6 Diluted weighted average shares 49.7 49.6 49.6 49.5 Earnings per share - diluted $ 2.03 $ 2.09 $ 0.79 $ 5.74 The following table sets forth stock options to purchase Cooper’s common stock and restricted stock units that were not included in the diluted earnings per share calculation because their effect would have been antidilutive for the periods presented: Periods Ended July 31, Three Months Nine Months (In thousands, except exercise prices) 2018 2017 2018 2017 Number of stock option shares excluded 257 — 257 192 Range of exercise prices $226.30-$230.09 $ — $226.30-$230.09 $ 175.31 Numbers of restricted stock units excluded 78 2 78 3 |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Jul. 31, 2018 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans Cooper has several share-based compensation plans that are described in the Company’s Annual Report on Form 10‑K for the fiscal year ended October 31, 2017 . The compensation expense and related income tax benefit recognized in our consolidated condensed financial statements for share-based awards were as follows: Periods Ended July 31, Three Months Nine Months (In millions) 2018 2017 2018 2017 Selling, general and administrative expense $ 6.7 $ 7.7 $ 30.3 $ 24.9 Cost of sales 0.9 (0.1 ) 2.6 1.9 Research and development expense 0.5 0.3 1.6 0.9 Total share-based compensation expense $ 8.1 $ 7.9 $ 34.5 $ 27.7 Related income tax benefit $ 1.5 $ 2.6 $ 7.1 $ 8.5 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jul. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Analysis of Changes in Accumulated Other Comprehensive (Loss) Income: (In millions) Foreign Currency Translation Adjustment Minimum Pension Liability Total Balance at October 31, 2016 $ (461.4 ) $ (28.2 ) $ (489.6 ) Gross change in value during the year ended October 31, 2017 107.7 10.8 118.5 Tax effect for the period — (4.2 ) (4.2 ) Balance at October 31, 2017 $ (353.7 ) $ (21.6 ) $ (375.3 ) Gross change in value during the nine months ended July 31, 2018 (10.3 ) — (10.3 ) Balance at July 31, 2018 $ (364.0 ) $ (21.6 ) $ (385.6 ) Share Repurchases In December 2011, our Board of Directors authorized the 2012 Share Repurchase Program. In March 2017, the program was amended and approved by the Company's Board of Directors for an increase of $500.0 million providing authorization for a total of $1.0 billion of the Company’s common stock. This program has no expiration date and may be discontinued at any time. Purchases under the 2012 Share Repurchase Program are subject to a review of the circumstances in place at the time and may be made from time to time as permitted by securities laws and other legal requirements. We did no t repurchase shares during the nine months ended July 31, 2018. During the fiscal year ended October 31, 2017, we repurchased 258 thousand shares of our common stock for $55.0 million . At July 31, 2018 , $563.5 million remains authorized for repurchase under the program. Dividends We paid a semiannual dividend of approximately $1.5 million or 3 cents per share on February 9, 2018, to stockholders of record on January 23, 2018. We paid another semiannual dividend of approximately $1.5 million or 3 cents per share on August 7, 2018, to stockholders of record on July 23, 2018 . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jul. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements At July 31, 2018 and October 31, 2017 , the carrying value of cash and cash equivalents, accounts receivable, prepaid expense and other current assets, lines of credit, accounts payable and other current liabilities approximate fair value due to the short-term nature of such instruments and the ability to obtain financing on similar terms. Assets and liabilities are measured and reported at fair value per related accounting standards that define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. An asset’s or liability’s level is based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities carried at fair value are valued and disclosed in one of the following three levels of the valuation hierarchy: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. We believe that the balances of our revolving credit agreement and term loans approximated their fair values at July 31, 2018 and October 31, 2017 and are categorized as Level 2 of the fair value hierarchy. The Company did not have any derivative assets or liabilities that may include interest rate swaps, cross currency swaps or foreign currency forward contracts at July 31, 2018 and October 31, 2017. Nonrecurring fair value measurements On a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. In the second quarter of fiscal 2018, we recorded $24.4 million of impairment charge related to the intangible assets acquired from Recombine Inc. as the cash flows expected to be generated by this asset group over its estimated remaining life were not sufficient to recover its carrying value. The fair value of these intangible assets determined at April 30, 2018 was $0 . Our valuation included unobservable Level 3 inputs and was based on expected sales proceeds and discounted cash flows as of April 30, 2018. There was no significant asset impairment for the three months ended July 31, 2018. |
Employee Benefits
Employee Benefits | 9 Months Ended |
Jul. 31, 2018 | |
Retirement Benefits, Description [Abstract] | |
Employee Benefits | Employee Benefits Cooper’s Retirement Income Plan (Plan), a defined benefit plan, covers substantially all full-time United States employees. Our contributions are designed to fund normal cost on a current basis and to fund the estimated prior service cost of benefit improvements. The unit credit actuarial cost method is used to determine the annual cost. Cooper pays the entire cost of the Plan and funds such costs as they accrue. Virtually all of the assets of the Plan are comprised of equities and participation in equity and fixed income funds. Our results of operations for the three and nine months ended July 31, 2018 and 2017 , reflect the following components of net periodic pension costs: Periods Ended July 31, Three Months Nine Months (In millions) 2018 2017 2018 2017 Service cost $ 2.7 $ 2.5 $ 8.1 $ 7.5 Interest cost 1.3 1.1 3.8 3.3 Expected return on plan assets (2.3 ) (1.8 ) (6.9 ) (5.4 ) Recognized net actuarial loss 0.4 0.7 1.2 2.1 Net periodic pension cost $ 2.1 $ 2.5 $ 6.2 $ 7.5 We contributed $5.0 million to the Plan in the first nine months of fiscal 2018, and expect to contribute $5.0 million during the remainder of fiscal 2018. We contributed $5.0 million to the Plan in the first nine months of fiscal 2017. The expected rate of return on Plan assets for determining net periodic pension cost is 8% . |
Contingencies
Contingencies | 9 Months Ended |
Jul. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Since March 2015, over 50 putative class action complaints were filed by contact lens consumers alleging that contact lens manufacturers, in conjunction with their respective Unilateral Pricing Policy (UPP), conspired to reach agreements between each other and certain distributors and retailers regarding the prices at which certain contact lenses could be sold to consumers. The plaintiffs are seeking damages against CooperVision, Inc., other contact lens manufacturers, distributors and retailers, in various courts around the United States. In June 2015, all of the class action cases were consolidated and transferred to the United States District Court for the Middle District of Florida. In August 2017, CooperVision entered into a settlement agreement with the plaintiffs, without any admission of liability, to settle all claims against CooperVision. In July 2018, the Court approved the plaintiffs’ motion for preliminary approval of the settlement, and the Company paid the $3.0 million settlement amount into an escrow account. The settlement remains subject to final Court approval at a future hearing to be set by the Court. The Company is involved in various lawsuits, claims and other legal matters from time to time that arise in the ordinary course of conducting business, including matters involving our products, intellectual property, supplier relationships, distributors, competitor relationships, employees and other matters. The Company does not believe that the ultimate resolution of these proceedings or claims pending against it could have a material adverse effect on its financial condition or results of operations. 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. Legal fees are expensed as incurred. Diverted Profits Tax (DPT) As discussed in Note 6. Income Taxes, during fiscal 2017, the U.K. Tax Authorities began an inquiry regarding our application of DPT in fiscal 2015. We believe that the transactions in question were at arm’s length with no intention to divert profit from the United Kingdom and therefore are outside the intended reach of the DPT. On December 20, 2017, the U.K. Tax Authorities issued a DPT charging notice of approximately GBP 31.0 million with respect to the transfer out of the United Kingdom of certain intellectual property rights in connection with the 2014 acquisition of Sauflon Pharmaceutical Ltd. Although taxes were paid on the transfer, the U.K. Tax Authorities are challenging the value assigned to such property. We intend to contest the charging notice vigorously. The process for resolving such a notice can be lengthy and could involve litigation. The DPT legislation provides a one year review period, however, it requires prepayment of the charging notice to be made within 30 days of its issuance. As required, the payment of GBP 31.0 million was made on January 19, 2018. The Company continues to cooperate with the U.K. Tax Authorities to resolve this issue. The outcome of this matter cannot be predicted with certainty and may have an adverse impact on our financial condition and results. |
Business Segment Information
Business Segment Information | 9 Months Ended |
Jul. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information Cooper uses operating income, as presented in our financial reports, as the primary measure of segment profitability. We do not allocate costs from corporate functions to segment operating income. Items below operating income are not considered when measuring the profitability of a segment. We use the same accounting policies to generate segment results as we do for our consolidated results. Total assets are those used in continuing operations except cash and cash equivalents, which we include as corporate assets. Segment information: Periods Ended July 31, Three Months Nine Months (In millions) 2018 2017 2018 2017 CooperVision net sales by category: Toric lens $ 153.6 $ 138.3 $ 442.2 $ 390.8 Multifocal lens 52.7 46.8 148.8 132.1 Single-use sphere lens 137.6 115.8 378.3 319.5 Non single-use sphere and other 145.2 136.4 432.1 392.6 Total CooperVision net sales 489.1 437.3 1,401.4 1,235.0 CooperSurgical net sales 170.9 118.7 479.9 342.5 Total net sales $ 660.0 $ 556.0 $ 1,881.3 $ 1,577.5 Operating income (loss): CooperVision $ 125.4 $ 109.5 $ 361.1 $ 308.9 CooperSurgical 1.6 14.9 (37.5 ) 48.2 Corporate (11.4 ) (11.6 ) (43.2 ) (36.5 ) Total operating income 115.6 112.8 280.4 320.6 Interest expense 22.8 8.3 59.9 23.3 Other expense (income), net 2.4 (3.2 ) 1.3 (0.1 ) Income before income taxes $ 90.4 $ 107.7 $ 219.2 $ 297.4 (In millions) July 31, 2018 October 31, 2017 Total assets: CooperVision $ 3,766.4 $ 3,562.6 CooperSurgical 2,221.0 1,107.5 Corporate 269.5 188.6 Total $ 6,256.9 $ 4,858.7 Geographic information: Periods Ended July 31, Three Months Nine Months (In millions) 2018 2017 2018 2017 Net sales to external customers by country of domicile: United States $ 302.1 $ 235.3 $ 856.8 $ 694.8 Europe 224.0 200.6 637.8 544.5 Rest of world 133.9 120.1 386.7 338.2 Total $ 660.0 $ 556.0 $ 1,881.3 $ 1,577.5 (In millions) July 31, 2018 October 31, 2017 Net property, plant and equipment by country of domicile: United States $ 500.6 $ 472.8 Europe 349.5 352.3 Rest of world 117.3 85.0 Total $ 967.4 $ 910.1 |
General (Policies)
General (Policies) | 9 Months Ended |
Jul. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounting Pronouncements Issued Not Yet Adopted and Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted In January 2018, the Company adopted ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which updates the income tax accounting in U.S. generally accepted accounting principles (GAAP) to reflect the SEC interpretive guidance released on December 22, 2017, when the 2017 Act was signed into law. Additional information regarding the adoption of this standard is contained in Note 6. Income Taxes. In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting . ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Entities will apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. The update did not change the accounting for modifications. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. Early adoption is permitted, including adoption in any interim period. The Company adopted this guidance on May 1, 2018, and it did not have a material impact on the Company's reported financial results. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flow (Topic 230) . The guidance reduces diversity in how certain cash receipts and cash payments are presented and classified in the Statements of Cash Flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. 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. The Company adopted this guidance on May 1, 2018, and it did not have a material impact on the Company's reported financial results. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . Under current guidance, an entity subsequently measures inventory at the lower of cost or market, with market defined as replacement cost, net realizable value (NRV), or NRV less a normal profit margin. An entity uses current replacement cost provided that it is not above NRV (i.e., the ceiling) or below NRV less an approximately normal profit margin (i.e., the floor). ASU 2015-11 eliminates this analysis and requires entities to measure inventory “at the lower of cost and NRV.” ASU 2015-11 is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. The Company adopted this guidance on November 1, 2017, and it did not have a material impact on the Company's reported financial results. Accounts Receivable Factoring Program We may factor certain designated trade receivables with one or more third party financial institutions pursuant to a factoring agreement. These are non-recourse factoring arrangements to assist us in managing operating cash flow and meet the requirements to be accounted for as sales in accordance with the “Transfers and Servicing” guidance in ASC 860, where the Company’s continuing involvement subsequent to the transfer is limited to providing certain servicing and collection actions on behalf of the purchasers of the designated trade receivables. Proceeds from amounts factored by the Company are recorded as an increase to cash and a reduction to accounts receivable outstanding in the Consolidated Balance Sheets. Cash flows attributable to factoring are reflected as cash flows from operating activities in the Company’s Consolidated Statements of Cash Flows. Factoring fees associated with the sale of factored receivables for the three and nine months ended July 31, 2018 were $0.5 million . We did not factor accounts receivables in the nine months ended July 31, 2017. |
Acquisitions Acquisitions (Tabl
Acquisitions Acquisitions (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Acquisitions | The following is a summary of the allocation of the total purchase consideration for business and asset acquisitions that the Company completed during fiscal 2018 and 2017: (In millions) July 31, 2018 October 31, 2017 Technology $ — $ 71.7 Customer relationships 23.5 43.1 Trademarks 100.0 7.1 Composite intangible asset 1,061.9 — Other 4.2 — Total identifiable intangible assets $ 1,189.6 $ 121.9 Goodwill 70.6 123.1 Net tangible assets (liabilities) 59.6 (4.8 ) Total purchase price $ 1,319.8 $ 240.2 The following table summarizes the relative fair values of net assets acquired and liabilities assumed using the cost accumulation and allocation model: (In millions) Relative Fair Value Composite intangible asset (1) $ 1,061.9 Assembled workforce intangible asset (2) 1.2 Property, plant and equipment 2.0 Inventory (3) 47.3 Other assets 9.4 Total assets acquired $ 1,121.8 Less: liabilities assumed 16.4 Total Purchase Price $ 1,105.4 The Company proportionally allocated the acquisition costs to the net assets acquired. The acquisition-related costs included advisory, legal, valuation and other professional fees. (1) Composite Intangible asset consists of technology, trade name, New Drug Application (NDA) approval and physician relationships, which have been valued as a single composite intangible asset as they are inextricably linked. The composite asset was identified as the primary asset acquired, was valued using the Multi-Period Excess Earnings Method and will be amortized over 15 years . (2) An assembled workforce was recognized as a separate acquired intangible asset, given the purchase of assets and will be amortized over 5 years . (3) Inventory relative fair value includes step up of $45.4 million . |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | (In millions) July 31, 2018 October 31, 2017 Raw materials $ 115.3 $ 107.0 Work-in-process 12.7 13.3 Finished goods 351.6 333.8 $ 479.6 $ 454.1 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill (In millions) CooperVision CooperSurgical Total Balance at October 31, 2016 $ 1,646.4 $ 518.3 $ 2,164.7 Net additions during the year ended October 31, 2017 28.6 94.4 123.0 Translation 60.7 6.4 67.1 Balance at October 31, 2017 1,735.7 619.1 2,354.8 Net additions during the nine months ended July 31, 2018 36.8 34.4 71.2 Translation (4.3 ) (0.4 ) (4.7 ) Balance at July 31, 2018 $ 1,768.2 $ 653.1 $ 2,421.3 |
Schedule of Other Intangible Assets | Other Intangible Assets July 31, 2018 October 31, 2017 (In millions) Gross Carrying Amount Accumulated Amortization & Translation Gross Carrying Amount Accumulated Amortization & Translation Weighted Average Amortization Period (In years) Trademarks $ 139.6 $ 14.6 $ 44.5 $ 10.3 14 Composite intangible asset 1,061.9 53.1 — — 15 Technology 396.0 183.9 428.8 173.2 11 Customer relationships 354.6 163.6 335.5 145.3 13 License and distribution rights and other 73.3 51.4 69.2 44.5 9 2,025.4 $ 466.6 878.0 $ 373.3 14 Less: accumulated amortization and translation 466.6 373.3 Other intangible assets, net $ 1,558.8 $ 504.7 |
Finite-lived Intangible Assets Amortization Expense | he estimation of amortization expenses for intangible assets with finite lives is as follows: Fiscal years: (In millions) Remainder of 2018 $ 36.3 2019 143.3 2020 133.4 2021 132.2 2022 130.3 Thereafter 974.4 Total remaining amortization for intangible assets $ 1,549.9 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | (In millions) July 31, 2018 October 31, 2017 Short-term: Overdraft and other credit facilities $ 45.3 $ 23.4 Long term: 2016 Credit Agreement $ — $ 323.0 Term loans 2,255.0 830.0 Other 0.2 0.2 Less: unamortized debt issuance cost (6.3 ) (3.9 ) $ 2,248.9 $ 1,149.3 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Periods Ended July 31, Three Months Nine Months (In millions, except per share amounts) 2018 2017 2018 2017 Net income $ 100.8 $ 103.6 $ 39.2 $ 284.3 Basic: Weighted average shares 49.1 48.9 49.0 48.9 Earnings per share - basic $ 2.05 $ 2.12 $ 0.80 $ 5.81 Diluted: Weighted average shares 49.1 48.9 49.0 48.9 Effect of potential dilutive shares 0.6 0.7 0.6 0.6 Diluted weighted average shares 49.7 49.6 49.6 49.5 Earnings per share - diluted $ 2.03 $ 2.09 $ 0.79 $ 5.74 |
Schedule of Stock Options to Purchase Common Stock Not Included in Diluted Net Income Per Share Calculation | The following table sets forth stock options to purchase Cooper’s common stock and restricted stock units that were not included in the diluted earnings per share calculation because their effect would have been antidilutive for the periods presented: Periods Ended July 31, Three Months Nine Months (In thousands, except exercise prices) 2018 2017 2018 2017 Number of stock option shares excluded 257 — 257 192 Range of exercise prices $226.30-$230.09 $ — $226.30-$230.09 $ 175.31 Numbers of restricted stock units excluded 78 2 78 3 |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Share-based Compensation [Abstract] | |
Schedule of Compensation Expense and Related Income Tax Benefit for Share-Based Awards | The compensation expense and related income tax benefit recognized in our consolidated condensed financial statements for share-based awards were as follows: Periods Ended July 31, Three Months Nine Months (In millions) 2018 2017 2018 2017 Selling, general and administrative expense $ 6.7 $ 7.7 $ 30.3 $ 24.9 Cost of sales 0.9 (0.1 ) 2.6 1.9 Research and development expense 0.5 0.3 1.6 0.9 Total share-based compensation expense $ 8.1 $ 7.9 $ 34.5 $ 27.7 Related income tax benefit $ 1.5 $ 2.6 $ 7.1 $ 8.5 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Analysis of Changes in Accumulated Other Comprehensive (Loss) Income: (In millions) Foreign Currency Translation Adjustment Minimum Pension Liability Total Balance at October 31, 2016 $ (461.4 ) $ (28.2 ) $ (489.6 ) Gross change in value during the year ended October 31, 2017 107.7 10.8 118.5 Tax effect for the period — (4.2 ) (4.2 ) Balance at October 31, 2017 $ (353.7 ) $ (21.6 ) $ (375.3 ) Gross change in value during the nine months ended July 31, 2018 (10.3 ) — (10.3 ) Balance at July 31, 2018 $ (364.0 ) $ (21.6 ) $ (385.6 ) |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Retirement Benefits, Description [Abstract] | |
Schedule of Components of Net Periodic Pension Costs | Our results of operations for the three and nine months ended July 31, 2018 and 2017 , reflect the following components of net periodic pension costs: Periods Ended July 31, Three Months Nine Months (In millions) 2018 2017 2018 2017 Service cost $ 2.7 $ 2.5 $ 8.1 $ 7.5 Interest cost 1.3 1.1 3.8 3.3 Expected return on plan assets (2.3 ) (1.8 ) (6.9 ) (5.4 ) Recognized net actuarial loss 0.4 0.7 1.2 2.1 Net periodic pension cost $ 2.1 $ 2.5 $ 6.2 $ 7.5 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information: Periods Ended July 31, Three Months Nine Months (In millions) 2018 2017 2018 2017 CooperVision net sales by category: Toric lens $ 153.6 $ 138.3 $ 442.2 $ 390.8 Multifocal lens 52.7 46.8 148.8 132.1 Single-use sphere lens 137.6 115.8 378.3 319.5 Non single-use sphere and other 145.2 136.4 432.1 392.6 Total CooperVision net sales 489.1 437.3 1,401.4 1,235.0 CooperSurgical net sales 170.9 118.7 479.9 342.5 Total net sales $ 660.0 $ 556.0 $ 1,881.3 $ 1,577.5 Operating income (loss): CooperVision $ 125.4 $ 109.5 $ 361.1 $ 308.9 CooperSurgical 1.6 14.9 (37.5 ) 48.2 Corporate (11.4 ) (11.6 ) (43.2 ) (36.5 ) Total operating income 115.6 112.8 280.4 320.6 Interest expense 22.8 8.3 59.9 23.3 Other expense (income), net 2.4 (3.2 ) 1.3 (0.1 ) Income before income taxes $ 90.4 $ 107.7 $ 219.2 $ 297.4 |
Schedule of Identifiable Assets by Segment | (In millions) July 31, 2018 October 31, 2017 Total assets: CooperVision $ 3,766.4 $ 3,562.6 CooperSurgical 2,221.0 1,107.5 Corporate 269.5 188.6 Total $ 6,256.9 $ 4,858.7 |
Schedule of Net Sales to External Customers by Country of Domicile | Geographic information: Periods Ended July 31, Three Months Nine Months (In millions) 2018 2017 2018 2017 Net sales to external customers by country of domicile: United States $ 302.1 $ 235.3 $ 856.8 $ 694.8 Europe 224.0 200.6 637.8 544.5 Rest of world 133.9 120.1 386.7 338.2 Total $ 660.0 $ 556.0 $ 1,881.3 $ 1,577.5 |
Schedule of Long-Lived Assets by Country of Domicile | (In millions) July 31, 2018 October 31, 2017 Net property, plant and equipment by country of domicile: United States $ 500.6 $ 472.8 Europe 349.5 352.3 Rest of world 117.3 85.0 Total $ 967.4 $ 910.1 |
General (Details)
General (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jul. 31, 2018 | Jul. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Factoring fees associated with sale of factored receivables | $ 500 | $ 500 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | Nov. 01, 2017 | Jul. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,421.3 | $ 2,354.8 | $ 2,164.7 | |
Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | 1,189.6 | 121.9 | ||
Net tangible assets (liabilities) | 59.6 | (4.8) | ||
Total purchase consideration | 1,319.8 | 240.2 | ||
Goodwill | 70.6 | 123.1 | ||
Paragard | ||||
Business Acquisition [Line Items] | ||||
Property, plant and equipment | $ 2 | |||
Inventory | 47.3 | |||
Other assets | 9.4 | |||
Total assets acquired | 1,121.8 | |||
Less: liabilities assumed | 16.4 | |||
Net tangible assets (liabilities) | 1,105.4 | |||
Total purchase consideration | 1,100 | |||
Inventory step up | 45.4 | |||
Technology | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | 0 | 71.7 | ||
Customer relationships | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | 23.5 | 43.1 | ||
Trademarks | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | 100 | 7.1 | ||
Composite intangible asset | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | 1,061.9 | 0 | ||
Composite intangible asset | Paragard | ||||
Business Acquisition [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 1,061.9 | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | |||
Other | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 4.2 | $ 0 | ||
Assembled Workforce | Paragard | ||||
Business Acquisition [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 1.2 | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Millions | Jul. 31, 2018 | Oct. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 115.3 | $ 107 |
Work-in-process | 12.7 | 13.3 |
Finished goods | 351.6 | 333.8 |
Inventories, net | $ 479.6 | $ 454.1 |
Intangible Assets (Schedule of
Intangible Assets (Schedule of Goodwill) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Jul. 31, 2018 | Oct. 31, 2017 | |
Goodwill [Roll Forward] | ||
Balance, beginning | $ 2,354.8 | $ 2,164.7 |
Net additions during the nine months ended July 31, 2018 | 71.2 | 123 |
Translation | (4.7) | 67.1 |
Balance, ending | 2,421.3 | 2,354.8 |
CooperVision | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 1,735.7 | 1,646.4 |
Net additions during the nine months ended July 31, 2018 | 36.8 | 28.6 |
Translation | (4.3) | 60.7 |
Balance, ending | 1,768.2 | 1,735.7 |
CooperSurgical | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 619.1 | 518.3 |
Net additions during the nine months ended July 31, 2018 | 34.4 | 94.4 |
Translation | (0.4) | 6.4 |
Balance, ending | $ 653.1 | $ 619.1 |
Intangible Assets (Schedule o34
Intangible Assets (Schedule of Other Intangible Assets) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2018 | Oct. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,025.4 | $ 878 |
Accumulated Amortization & Translation | 466.6 | 373.3 |
Other intangible assets, net | $ 1,558.8 | 504.7 |
Finite-Lived Intangible Asset, Useful Life | 14 years | |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 139.6 | 44.5 |
Accumulated Amortization & Translation | $ 14.6 | 10.3 |
Finite-Lived Intangible Asset, Useful Life | 14 years | |
Composite intangible asset | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,061.9 | 0 |
Accumulated Amortization & Translation | $ 53.1 | 0 |
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 396 | 428.8 |
Accumulated Amortization & Translation | $ 183.9 | 173.2 |
Finite-Lived Intangible Asset, Useful Life | 11 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 354.6 | 335.5 |
Accumulated Amortization & Translation | $ 163.6 | 145.3 |
Finite-Lived Intangible Asset, Useful Life | 13 years | |
License and distribution rights and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 73.3 | 69.2 |
Accumulated Amortization & Translation | $ 51.4 | $ 44.5 |
Finite-Lived Intangible Asset, Useful Life | 9 years |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Apr. 30, 2018 | Jul. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, Impairment Loss | $ 24,400,000 | $ 0 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,018 | 36,300,000 | |
2,019 | 143,300,000 | |
2,020 | 133,400,000 | |
2,021 | 132,200,000 | |
2,022 | 130,300,000 | |
Thereafter | 974,400,000 | |
Finite-Lived Intangible Assets, Net | $ 1,549,900,000 |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) - USD ($) $ in Millions | Jul. 31, 2018 | Oct. 31, 2017 |
Short-term: | ||
Overdraft and other credit facilities | $ 45.3 | $ 23.4 |
Long term: | ||
2016 Credit Agreement | 0 | 323 |
Term loans | 2,255 | 830 |
Other | 0.2 | 0.2 |
Less: unamortized debt issuance cost | (6.3) | (3.9) |
Long-term debt | $ 2,248.9 | $ 1,149.3 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Nov. 01, 2017USD ($) | Mar. 01, 2016USD ($) | Jul. 31, 2018USD ($) | Oct. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | ||||
Term loans | $ 2,255,000,000 | $ 830,000,000 | ||
Required minimum Interest coverage ratio | 3 | |||
Required maximum total leverage ratio | 3.75 | |||
Interest coverage ratio | 12.50 | |||
Total leverage ratio | 2.45 | |||
Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee percentage | 0.125% | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee percentage | 0.25% | |||
2016 Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, potential additional borrowing capacity | $ 750,000,000 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate commitment amount of credit facility | $ 1,000,000,000 | |||
2016 Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, initiation date | Mar. 1, 2016 | |||
Term loans | $ 830,000,000 | |||
Line of credit facility interest rate margin on base rate loans percentage | 1.00% | |||
Line of credit facility interest rate margin on foreign currency loans percentage | 1.75% | |||
Amount available under the credit agreement | $ 999,500,000 | |||
2016 Credit Agreement | Federal Funds Rate | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.00% | |||
2016 Credit Agreement | Eurodollar | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.75% | |||
Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, maturity date | Mar. 1, 2021 | |||
Two Thousand Seventeen Term Loan Agreement | Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.00% | |||
Two Thousand Seventeen Term Loan Agreement | Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.75% | |||
Two Thousand Seventeen Term Loan Agreement | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.00% | |||
Two Thousand Seventeen Term Loan Agreement | London Interbank Offered Rate (LIBOR) | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.75% | |||
Senior Unsecured Term Loan Agreement | Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Debt term | 5 years | |||
Debt instrument, face amount | $ 1,425,000,000 | |||
Amount outstanding on credit agreement | $ 830,000,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) £ in Millions, $ in Millions | Jan. 19, 2018GBP (£) | Dec. 20, 2017GBP (£) | Jul. 31, 2018USD ($) | Jan. 31, 2018USD ($) | Jul. 31, 2017 | Jul. 31, 2018USD ($) | Jul. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017USD ($) |
Operating Loss Carryforwards [Line Items] | |||||||||
Repatriation tax | $ 174.1 | $ 177.9 | |||||||
Repatriation tax, payment periods | 8 years | ||||||||
Transition tax rate for foreign cash and certain other net current assets | 15.50% | ||||||||
Transition tax rate on remaining deferred foreign income | 8.00% | ||||||||
Provisional tax expense | $ 13.2 | ||||||||
Current state and local tax expense (benefit) | 7.5 | 8.1 | |||||||
Withholding taxes relating to the unremitted foreign earnings | $ 1.9 | $ 2.8 | $ 1.9 | ||||||
Effective income tax rate | 11.50% | 3.80% | 82.10% | 4.40% | |||||
Change of provisional tax expenses related to 2017 Act | $ (5.3) | $ 196.7 | |||||||
Unrecognized tax benefits | 65.3 | 65.3 | $ 59.9 | ||||||
Unrecognized tax benefits that could be settled | $ 25.3 | $ 25.3 | |||||||
UNITED KINGDOM | |||||||||
Operating Loss Carryforwards [Line Items] | |||||||||
Diverted profit tax | £ | £ 31 | ||||||||
Payment for DPT | £ | £ 31 | ||||||||
Scenario, Forecast | |||||||||
Operating Loss Carryforwards [Line Items] | |||||||||
Blended tax rate | 23.34% |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 100,800 | $ 103,600 | $ 39,200 | $ 284,300 |
Basic: | ||||
Weighted average shares | 49,100 | 48,900 | 49,000 | 48,900 |
Earnings per share - basic | $ 2.05 | $ 2.12 | $ 0.80 | $ 5.81 |
Diluted: | ||||
Effect of potential dilutive shares | 600 | 700 | 600 | 600 |
Diluted weighted average shares | 49,700 | 49,600 | 49,600 | 49,500 |
Earnings per share - diluted | $ 2.03 | $ 2.09 | $ 0.79 | $ 5.74 |
Earnings Per Share (Schedule 40
Earnings Per Share (Schedule of Stock Options to Purchase Common Stock Not Included in Diluted Net Income Per Share Calculation) (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Numbers of stock option shares excluded | 257 | 0 | 257 | 192 |
Range of exercise prices, lower limit | $ 226.3 | $ 0 | $ 226.3 | $ 175.31 |
Range of exercise prices, upper limit | $ 230.09 | $ 0 | $ 230.09 | $ 175.31 |
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Numbers of stock option shares excluded | 78 | 2 | 78 | 3 |
Share-Based Compensation Plan41
Share-Based Compensation Plans (Schedule Of Compensation Expense And Related Income Tax Benefit For Share-Based Awards) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 8.1 | $ 7.9 | $ 34.5 | $ 27.7 |
Related income tax benefit | 1.5 | 2.6 | 7.1 | 8.5 |
Selling, general and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 6.7 | 7.7 | 30.3 | 24.9 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 0.9 | (0.1) | 2.6 | 1.9 |
Research and development expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0.5 | $ 0.3 | $ 1.6 | $ 0.9 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Changes in Accumulated Other Comprehensive Income (Loss))(Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Jul. 31, 2018 | Oct. 31, 2017 | |
Foreign Currency Translation Adjustment [Roll Forward] | ||
Foreign Currency Translation Adjustment, Beginning Balance | $ (353.7) | $ (461.4) |
Foreign Currency Translation Adjustment, Gross change in value for the period | (10.3) | 107.7 |
Foreign Currency Translation Adjustment, Tax effect for the period | 0 | |
Foreign Currency Translation Adjustment, Ending Balance | (364) | (353.7) |
Minimum Pension Liability [Roll Forward] | ||
Minimum Pension Liability, Beginning Balance | (21.6) | (28.2) |
Minimum Pension Liability, Gross change in value for the period | 0 | 10.8 |
Minimum Pension Liability, Tax effect for the period | (4.2) | |
Minimum Pension Liability, Ending Balance | (21.6) | (21.6) |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Total, Beginning balance | (375.3) | (489.6) |
Gross change in value for the period | (10.3) | 118.5 |
Tax effect for the period | (4.2) | |
Total, Ending balance | $ (385.6) | $ (375.3) |
Stockholders' Equity (Share Rep
Stockholders' Equity (Share Repurchases) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2018 | Oct. 31, 2017 | Mar. 31, 2017 | |
Equity [Abstract] | |||
Share Repurchase Program, increase amount | $ 500,000,000 | ||
Share Repurchase Program, maximum amount authorized | $ 1,000,000,000 | ||
Number of common stock repurchased, shares | 0 | 258,000 | |
Common stock repurchased, value | $ 55,000,000 | ||
Share Repurchase Program, remaining authorized amount | $ 563,500,000 |
Stockholders' Equity (Dividends
Stockholders' Equity (Dividends) (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 07, 2018 | Feb. 09, 2018 | Jul. 31, 2018 | Jul. 31, 2017 |
Class of Stock [Line Items] | ||||
Dividends on common stock | $ 1.5 | $ 1.5 | $ 1.5 | |
Cash dividend, per share | $ 0.03 | |||
Dividends payable, date of record | Jul. 23, 2018 | |||
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Dividends on common stock | $ 1.5 | |||
Cash dividend, per share | $ 0.03 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2018 | Apr. 30, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Fair Value Disclosures [Abstract] | |||||
Impairment of intangibles | $ 0 | $ 24,400,000 | $ 0 | $ 24,400,000 | $ 0 |
Fair value of intangible assets | $ 0 |
Employee Benefits (Schedule of
Employee Benefits (Schedule of Components of Net Periodic Pension Costs) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Retirement Benefits, Description [Abstract] | ||||
Service cost | $ 2.7 | $ 2.5 | $ 8.1 | $ 7.5 |
Interest cost | 1.3 | 1.1 | 3.8 | 3.3 |
Expected return on plan assets | (2.3) | (1.8) | (6.9) | (5.4) |
Recognized net actuarial loss | 0.4 | 0.7 | 1.2 | 2.1 |
Net periodic pension cost | $ 2.1 | $ 2.5 | $ 6.2 | $ 7.5 |
Employee Benefits (Narrative) (
Employee Benefits (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Retirement Benefits, Description [Abstract] | ||
Defined benefit plan, contributions by employer | $ 5 | $ 5 |
Defined benefit plan, estimated future employer contributions in current fiscal year | $ 5 | |
Expected rate of return on plan assets for determining net periodic pension cost | 8.00% |
Contingencies (Details)
Contingencies (Details) £ in Millions, $ in Millions | Jan. 19, 2018GBP (£) | Dec. 20, 2017GBP (£) | Apr. 30, 2017action | Jul. 31, 2017USD ($) |
Operating Loss Carryforwards [Line Items] | ||||
Number of putative class action complaints filed (over) | action | 50 | |||
Litigation Settlement, Amount | $ | $ 3 | |||
UNITED KINGDOM | ||||
Operating Loss Carryforwards [Line Items] | ||||
Diverted profit tax | £ 31 | |||
Payment for DPT | £ 31 |
Business Segment Information (S
Business Segment Information (Schedule of Segment Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 660,000 | $ 556,000 | $ 1,881,300 | $ 1,577,500 |
Operating income (loss) | 115,600 | 112,800 | 280,400 | 320,600 |
Interest expense | 22,800 | 8,300 | 59,900 | 23,300 |
Other expense (income), net | 2,400 | (3,200) | 1,300 | (100) |
Income before income taxes | 90,400 | 107,700 | 219,200 | 297,400 |
CooperVision | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 489,100 | 437,300 | 1,401,400 | 1,235,000 |
Operating income (loss) | 125,400 | 109,500 | 361,100 | 308,900 |
CooperSurgical | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 170,900 | 118,700 | 479,900 | 342,500 |
Operating income (loss) | 1,600 | 14,900 | (37,500) | 48,200 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | (11,400) | (11,600) | (43,200) | (36,500) |
Toric lens | CooperVision | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 153,600 | 138,300 | 442,200 | 390,800 |
Multifocal lens | CooperVision | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 52,700 | 46,800 | 148,800 | 132,100 |
Single-use sphere lens | CooperVision | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 137,600 | 115,800 | 378,300 | 319,500 |
Non single-use sphere and other | CooperVision | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 145,200 | $ 136,400 | $ 432,100 | $ 392,600 |
Business Segment Information 50
Business Segment Information (Schedule of Identifiable Assets By Segment Information) (Details) - USD ($) $ in Millions | Jul. 31, 2018 | Oct. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total Identifiable assets | $ 6,256.9 | $ 4,858.7 |
CooperVision | ||
Segment Reporting Information [Line Items] | ||
Total Identifiable assets | 3,766.4 | 3,562.6 |
CooperSurgical | ||
Segment Reporting Information [Line Items] | ||
Total Identifiable assets | 2,221 | 1,107.5 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total Identifiable assets | $ 269.5 | $ 188.6 |
Business Segment Information 51
Business Segment Information (Schedule of Net Sales To External Customers By Country Of Domicile) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total net sales to external customers | $ 660,000 | $ 556,000 | $ 1,881,300 | $ 1,577,500 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales to external customers | 302,100 | 235,300 | 856,800 | 694,800 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales to external customers | 224,000 | 200,600 | 637,800 | 544,500 |
Rest of world | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales to external customers | $ 133,900 | $ 120,100 | $ 386,700 | $ 338,200 |
Business Segment Information 52
Business Segment Information (Schedule of Long-Lived Assets By Country Of Domicile) (Details) - USD ($) $ in Millions | Jul. 31, 2018 | Oct. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 967.4 | $ 910.1 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 500.6 | 472.8 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 349.5 | 352.3 |
Rest of world | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 117.3 | $ 85 |