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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________
FORM 10-Q
_____________________________________________________________
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended July 31, 2021
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from              to             
Commission File Number 1-8597
_____________________________________________________________
The Cooper Companies, Inc.
(Exact name of registrant as specified in its charter)
_____________________________________________________________
Delaware94-2657368
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
6101 Bollinger Canyon Road, Suite 500,
San Ramon, California 94583
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (925460-3600
_____________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $.10 par valueCOOThe New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes      No  
On August 27, 2021, 49,304,090 shares of Common Stock, $0.10 par value, were outstanding.



INDEX
 
  Page No.
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2

PART I. FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income and Comprehensive Income
Periods Ended July 31,
(In millions, except for earnings per share)
(Unaudited)
Three MonthsNine Months
  
2021202020212020
Net sales$763.4 $578.2 $2,163.4 $1,749.3 
Cost of sales247.3 217.4 709.5 638.5 
Gross profit516.1 360.8 1,453.9 1,110.8 
Selling, general and administrative expense352.5 232.8 899.6 728.3 
Research and development expense24.8 21.8 67.0 67.8 
Amortization of intangibles38.2 34.2 110.0 103.0 
Operating income100.6 72.0 377.3 211.7 
Interest expense5.6 5.7 18.1 30.1 
Other expense (income), net 1.0 (0.1)(10.7)8.8 
Income before income taxes94.0 66.4 369.9 172.8 
Provision for income taxes (Note 6)(521.8)11.2 (2,464.5)15.6 
Net income $615.8 $55.2 $2,834.4 $157.2 
Earnings per share (Note 7):
Basic$12.50 $1.13 $57.61 $3.20 
Diluted$12.37 $1.12 $57.01 $3.17 
Number of shares used to compute earnings per share:
Basic49.3 49.1 49.2 49.1 
Diluted49.8 49.5 49.7 49.6 
Other comprehensive (loss) income, net of tax:
Cash flow hedges$(8.9)$(4.6)$10.8 $(18.1)
Foreign currency translation adjustment(3.7)72.7 101.4 20.5 
Comprehensive income$603.2 $123.3 $2,946.6 $159.6 

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

3

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Balance Sheets
(In millions, unaudited)
July 31, 2021October 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$112.2 $115.9 
Trade accounts receivable, net of allowance for credit losses of $9.1 at July 31, 2021 and $10.2 at October 31, 2020
535.1 435.4 
Inventories (Note 3)587.9 570.4 
Prepaid expense and other current assets151.3 152.5 
Assets held-for-sale (Note 2)88.1  
Total current assets1,474.6 1,274.2 
Property, plant and equipment, at cost2,618.1 2,474.8 
Less: accumulated depreciation and amortization1,303.8 1,192.9 
1,314.3 1,281.9 
Operating lease right-of-use assets256.3 260.2 
Goodwill (Note 4)2,585.2 2,447.3 
Other intangibles, net (Note 4)1,308.1 1,289.0 
Deferred tax assets (Note 6)2,554.9 80.1 
Other assets117.2 104.8 
Total assets$9,610.6 $6,737.5 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt (Note 5)$440.1 $409.3 
Accounts payable153.0 176.0 
Employee compensation and benefits155.6 119.0 
Operating lease liabilities29.7 33.3 
Other current liabilities283.2 266.8 
Liabilities held-for-sale (Note 2)1.6  
Total current liabilities1,063.2 1,004.4 
Long-term debt (Note 5)1,179.9 1,383.9 
Deferred tax liabilities (Note 6)28.8 25.8 
Long-term tax payable (Note 6)139.6 162.0 
Operating lease liabilities236.7 236.8 
Accrued pension liability and other177.0 99.8 
Total liabilities$2,825.2 $2,912.7 
Contingencies (Note 12)
Stockholders’ equity (Note 9):
Preferred stock, 10 cents par value, 1.0 shares authorized, zero shares issued or outstanding
  
Common stock, 10 cents par value, 120.0 shares authorized, 53.6 issued and 49.2 outstanding at July 31, 2021 and 53.4 issued and 49.1 outstanding at October 31, 2020
5.4 5.3 
Additional paid-in capital1,688.1 1,646.8 
Accumulated other comprehensive loss(359.8)(472.0)
Retained earnings6,091.8 3,261.8 
Treasury stock at cost: 4.4 shares at July 31, 2021 and 4.3 shares at October 31, 2020
(640.3)(617.3)
Total Cooper stockholders’ equity6,785.2 3,824.6 
Noncontrolling interests0.2 0.2 
Stockholders’ equity6,785.4 3,824.8 
Total liabilities and stockholders’ equity$9,610.6 $6,737.5 
    
The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.
4


THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Stockholders' Equity
(In millions, unaudited)
 Common SharesTreasury StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Income (Loss)
Retained EarningsTreasury StockNoncontrolling InterestsTotal
Stockholders'
Equity
SharesAmountSharesAmount
Balance at November 1, 201949.1 $4.9 4.1 $0.4 $1,615.0 $(447.1)$3,026.4 $(571.2)$0.2 $3,628.6 
Net income— — — — — — 90.5 — — 90.5 
Other comprehensive income, net of tax— — — — — 16.7 — — — 16.7 
Issuance of common stock for stock plans, net0.1 — — — (13.2)— — — — (13.1)
Dividends on common stock ($0.03 per share)
— — — — — — (1.5)— — (1.5)
Share-based compensation expense— — — — 9.7 — — — — 9.7 
Balance at January 31, 202049.2 $4.9 4.1 $0.4 $1,611.6 $(430.4)$3,115.4 $(571.2)$0.2 $3,730.9 
Net income— — — — — — 11.5 — — 11.5 
Other comprehensive loss, net of tax— — — — — (82.4)— — — (82.4)
Issuance of common stock for stock plans, net0.1 — — — 5.0 — — — — 5.0 
Issuance of common stock for employee stock purchase plan— — — — 0.6 — — 0.4 — 1.0 
Share-based compensation expense— — — — 9.3 — — — — 9.3 
Treasury stock repurchase(0.2)— 0.2 — — — — (47.8)— (47.8)
Balance at April 30, 202049.1 $4.9 4.3 $0.4 $1,626.5 $(512.8)$3,126.9 $(618.6)$0.2 $3,627.5 
Net income— — — — — — 55.2 — — 55.2 
Other comprehensive income, net of tax— — — — — 68.1 — — — 68.1 
Issuance of common stock for stock plans, net— — — — 0.4 — — — — 0.4 
Issuance of common stock for employee stock purchase plan— — — — 0.4 — — 0.6 — 1.0 
Dividends on common stock ($0.03 per share)
— — — — — — (1.5)— — (1.5)
Share-based compensation expense— — — — 9.7 — — — — 9.7 
Balance at July 31, 202049.1 $4.9 4.3 $0.4 $1,637.0 $(444.7)$3,180.6 $(618.0)$0.2 $3,760.4 

5


THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Stockholders' Equity
(In millions, unaudited)
Common SharesTreasury StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Income (Loss)
Retained EarningsTreasury StockNoncontrolling InterestsTotal
Stockholders'
Equity
SharesAmountSharesAmount
Balance at November 1, 202049.1 $4.9 4.3 $0.4 $1,646.8 $(472.0)$3,261.8 $(617.3)$0.2 $3,824.8 
Net income— — — — — — 2,101.1 — — 2,101.1 
Other comprehensive income, net of tax— — — — — 90.7 — — — 90.7 
Issuance of common stock for stock plans, net0.1 — — — (11.0)— — — — (11.0)
Issuance of common stock for employee stock purchase plan— — — — 0.8 — — 0.6 — 1.4 
Dividends on common stock ($0.03 per share)
— — — — — — (1.5)— — (1.5)
Share-based compensation expense— — — — 10.6 — — — — 10.6 
Treasury stock repurchase(0.1)— 0.1 — — — — (24.8)— (24.8)
ASU 2016-13 adoption— — — — — — (1.4)— — (1.4)
Balance at January 31, 202149.1 $4.9 4.4 $0.4 $1,647.2 $(381.3)$5,360.0 $(641.5)$0.2 $5,989.9 
Net income— — — — — — 117.5 — — 117.5 
Other comprehensive income, net of tax— — — — — 34.1 — — — 34.1 
Issuance of common stock for stock plans, net0.1 0.1 — — 9.7 — — — — 9.8 
Issuance of common stock for employee stock purchase plan— — — — 0.9 — — 0.6 — 1.5 
Share-based compensation expense— — — — 10.0 — — — — 10.0 
Balance at April 30, 202149.2 $5.0 4.4 $0.4 $1,667.8 $(347.2)$5,477.5 $(640.9)$0.2 $6,162.8 
Net income— — — — — — 615.8 — — 615.8 
Other comprehensive loss, net of tax— — — — — (12.6)— — — (12.6)
Issuance of common stock for stock plans, net— — — — 7.3 — — — — 7.3 
Issuance of common stock for employee stock purchase plan— — — — 1.2 — — 0.6 — 1.8 
Dividends on common stock ($0.03 per share)
— — — — — — (1.5)— — (1.5)
Share-based compensation expense— — — — 11.8 — — — — 11.8 
Balance at July 31, 202149.2 $5.0 4.4 $0.4 $1,688.1 $(359.8)$6,091.8 $(640.3)$0.2 $6,785.4 


The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

6



THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows
Nine Months Ended July 31,
(In millions, unaudited)
20212020
Cash flows from operating activities:
Net income $2,834.4 $157.2 
Depreciation and amortization231.9 210.0 
Change in fair value of contingent consideration56.8  
Increase in operating capital(81.6)(155.9)
Deferred income taxes(2,489.5)(3.7)
Other non-cash items12.1 60.7 
Net cash provided by operating activities564.1 268.3 
Cash flows from investing activities:
Purchases of property, plant and equipment(149.4)(203.4)
Acquisitions of businesses and assets, net of cash acquired, and other(234.9)(17.9)
Net cash used in investing activities(384.3)(221.3)
Cash flows from financing activities:
Proceeds from long-term debt815.0 2086.4 
Repayments of long-term debt(1,019.4)(2,022.8)
Net proceeds (repayments) from short-term debt33.0 (13.0)
Net proceeds (payments) related to share-based compensation awards6.0 (7.8)
Dividends on common stock(1.5)(1.5)
Repurchase of common stock(24.8)(47.8)
Issuance of common stock for employee stock purchase plan4.1 1.8 
Debt issuance costs (5.5)
Net cash used in financing activities(187.6)(10.2)
Effect of exchange rate changes on cash, cash equivalents and restricted cash4.0 2.0 
Net (decrease) increase in cash, cash equivalents, restricted cash and cash held for sale(3.8)38.8 
Cash, cash equivalents and restricted cash at beginning of period116.8 89.5 
Cash, cash equivalents, restricted cash and cash held for sale at end of period$113.0 $128.3 
Reconciliation of cash flow information:
Cash and cash equivalents$112.2 $127.4 
Restricted cash included in other current assets0.6 0.9 
Cash held for sale0.2  
Total cash, cash equivalents, restricted cash and cash held for sale at end of period$113.0 $128.3 

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

7

THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
Note 1. General

The accompanying Consolidated Condensed Financial Statements of the Cooper Companies, Inc. and its subsidiaries (the Company) have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the requirements of Regulation S-X, Rule 10-01 for financial statements required to be filed as a part of this Quarterly Report on Form 10-Q. Unless the context requires otherwise, terms "the Company", "we", "us", and "our" are used to refer collectively to the Cooper Companies, Inc. and its subsidiaries.

The accompanying Consolidated Condensed Financial Statements and related notes are unaudited and 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, 2020. The Consolidated Condensed Financial Statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair presentation of the results for the interim periods presented. Readers should not assume that the results reported here either indicate or guarantee future performance.
Accounting Policies

There have been no material changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2020.
Estimates

The World Health Organization categorized the Coronavirus disease 2019 (COVID-19) as a pandemic. The COVID-19 pandemic has caused a severe global health crisis, along with economic and societal disruptions and uncertainties, which have negatively impacted business and healthcare activity globally. As a result of healthcare systems responding to the demands of managing the pandemic, governments around the world imposing measures designed to reduce the transmission of the COVID-19 virus, and individuals responding to the concerns of contracting the COVID-19 virus, many optical practitioners & retailers, hospitals, medical offices and fertility clinics closed their facilities, restricted access, or delayed or canceled patient visits, exams and elective medical procedures, and many customers that have reopened are experiencing reduced patient visits. These factors have had, and in the future may have, an adverse effect on our sales, operating results and cash flows.

The preparation of Consolidated Condensed Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates particularly as it relates to estimates reliant on forecasts and other assumptions reasonably available to the Company and the uncertain future impacts of the COVID-19 pandemic and related economic disruptions. The extent to which the COVID-19 pandemic and related economic disruptions impact our business and financial results will depend on future developments including, but not limited to, the continued spread, duration and severity of the COVID-19 pandemic; the occurrence, spread, duration and severity of any subsequent wave or waves of outbreaks, including the emergence and spread of variants of the COVID-19 virus; the actions taken by the U.S. and foreign governments to contain the COVID-19 pandemic, address its impact or respond to the reduction in global and local economic activity; the occurrence, duration and severity of a global, regional or national recession, depression or other sustained adverse market event; the impact of the developments described above on our customers and suppliers; and how quickly and to what extent normal economic and operating conditions can resume. The accounting matters assessed included, but were not limited to:
allowance for doubtful accounts and credit losses
the carrying value of inventory
the carrying value of goodwill and other long-lived assets
There was not a material impact to the above estimates in the Company’s Consolidated Condensed Financial Statements for the three and nine months ended July 31, 2021. The Company continually monitors and evaluates the estimates used as additional information becomes available. Adjustments will be made to these provisions periodically to reflect new facts and circumstances that may indicate that historical experience may not be indicative of current and/or future results. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material
8

THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
changes to the estimates and material impacts to the Company’s Consolidated Condensed Financial Statements in future reporting periods.
Accounting Pronouncements Recently Adopted

In January 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This guidance addresses accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company early adopted this guidance in the second quarter of fiscal 2021, and it did not have a material impact on our Consolidated Condensed Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, ASU 2019-05 Financial Instruments-Credit Losses, ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments—Credit Losses, ASU 2020-02 Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842) and ASU 2020-03 Codification Improvements to Financial Instruments (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. The Company adopted this guidance in the first quarter of fiscal 2021 on a modified retrospective basis, and the most notable impact was related to the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses. The Company recorded a cumulative-effect adjustment of $1.4 million to the Consolidated Condensed Balance Sheet on November 1, 2020.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This guidance amended Topic 808 and Topic 606 to clarify that transactions in a collaborative arrangement should be accounted for under Topic 606 when the counterparty is a customer for a distinct good or service (i.e., unit of account). The amendments preclude an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. The Company adopted this guidance on November 1, 2020, and it did not have a material impact on our Consolidated Condensed Financial Statements.

Accounting Pronouncements Issued Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance removes certain exceptions to the general principles in Topic 740 and enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently evaluating the impact of ASU 2019-12 on our Consolidated Condensed Financial Statements, which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2021.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and subsequent amendment to the initial guidance: ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance generally can be applied from March 12, 2020 through December 31, 2022. We are currently assessing the impacts of the practical expedients provided in Topic 848 and which, if any, we will adopt.
9

THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related EPS guidance for both Subtopics. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2021, which means it will be effective for our fiscal year beginning November 1, 2022. Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently evaluating the impact of ASU 2020-06 on our Consolidated Condensed Financial Statements.
No other recently issued accounting pronouncements had or are expected to have a material impact on our Consolidated Condensed Financial Statements.

Note 2. Acquisitions and Assets Held for Sale
The following is a summary of the allocation of the total purchase consideration for business and asset acquisitions that the Company completed during the nine months ended July 31, 2021 and fiscal 2020:
(In millions)July 31, 2021October 31, 2020
Technology$178.6 $ 
In-Process Research & Development (IPR&D)20.0  
Customer relationships7.5 11.4 
Trademarks1.3 5.1 
Other0.6 3.9 
Total identifiable intangible assets$208.0 $20.4 
Goodwill93.0 15.3 
Net tangible liabilities(12.3)(0.3)
Fair value of contingent consideration(39.1) 
Total closing purchase price$249.6 $35.4 
All acquisitions were funded by cash generated from operations or facility borrowings.
For business acquisitions, the Company recorded tangible and intangible assets acquired and liabilities assumed at their fair values as of the applicable date of acquisition. For asset acquisitions, the Company recorded tangible and intangible assets acquired and liabilities assumed at their estimated and relative fair values as of the applicable date of acquisition.

The Company believes these acquisitions strengthen CooperSurgical's and CooperVision's businesses through the addition of new distributors or complementary products and services.
Fiscal Year 2021

On May 3, 2021, CooperSurgical completed the acquisition of a privately-held medical device company that develops single-use illuminating medical devices. The purchase price allocation is preliminary, and the Company is in the process of finalizing information primarily related to valuation and the corresponding impact on goodwill.

On April 26, 2021, CooperVision completed the acquisition of a privately-held U.K. contact lens manufacturer focusing on specialty contact lenses. This acquisition expands CooperVision’s specialty eye care portfolio and accelerates its development of myopia management solutions in the U.K. The purchase price allocation is preliminary, and the Company is in the process of finalizing information and the corresponding impact on goodwill.

On March 1, 2021, CooperSurgical completed the acquisition of a privately-held medical device company that designed and developed an innovative obstetric product for use in urgent obstetrics to reduce risks associated with childbirth. The purchase price allocation is preliminary, and the Company is in the process of finalizing information primarily related to valuation and taxes and the corresponding impact on goodwill.

On February 1, 2021, CooperSurgical acquired all of the remaining equity interests of a privately-held medical device company that developed the Mara® Water Vapor Ablation System, which is used for endometrial ablation. The Company accounted for this acquisition as an asset acquisition, whereby the Company allocated the total cost of the acquisition to the net assets acquired on the basis of their estimated relative fair values on the acquisition date with no goodwill recognized. The primary asset acquired in this asset acquisition is Technology.
10

THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)

On January 19, 2021, CooperVision acquired all of the remaining equity interests of a privately-held medical device company that develops spectacle lenses for myopia management. The fair value remeasurement of our previous equity investment immediately before the acquisition resulted in a gain of $11.5 million, which was recorded in other income. The terms of the acquisition include upfront cash consideration paid at closing of approximately $40.9 million attributable to the equity interests not held by the Company on the closing date. The transaction also includes potential payments of future consideration that are contingent upon the achievement of the regulatory approval milestone (the regulatory approval payment) and the acquired business reaching certain revenue thresholds over a specified period (the revenue payments). The undiscounted range of the contingent consideration is zero to $139.1 million payable to the other former equity interest owners. The purchase price allocation is preliminary, and the Company is in the process of finalizing information and the corresponding impact on goodwill.

The estimated fair value of the contingent consideration on the acquisition date was approximately $37.9 million, and, accordingly, the Company recorded a liability of approximately $30.2 million, which represents the fair value of the contingent consideration payable to the other former equity interest owners. The fair value of the regulatory approval payment was determined using an option pricing framework based on the expected payment under the contractual terms and the estimates of the probability of achieving the regulatory approval. The fair value of the revenue payments was determined using a Monte Carlo simulation based on the revenue projections and the expected payment for each simulation.

As of July 31, 2021, no contingent consideration has been paid. The Company remeasured the fair value of the contingent consideration as of July 31, 2021, which resulted in a $56.8 million increase in fair value that was recognized in selling, general and administrative expense in the Consolidated Statements of Income and Comprehensive Income. The increase in fair value of the contingent consideration was primarily driven by an increase in the revenue projections, which increased the estimated fair value of the revenue payments.
On December 31, 2020, CooperSurgical completed the acquisition of a privately-held in vitro fertilization (IVF) cryo-storage software solutions company. The purchase price allocation is preliminary, and the Company is in the process of finalizing information and the corresponding impact on goodwill.
The pro forma results of operations of these acquisitions have not been presented because the effect of the business combinations described above was not material to the consolidated results of operations.
Fiscal Year 2020

On August 7, 2020, CooperVision completed the acquisition of a privately-held U.S. contact lens manufacturer focusing on ortho-k lenses. This acquisition expands CooperVision’s specialty eye care portfolio and its leadership in addressing the increasing severity and prevalence of myopia.

On December 13, 2019, CooperSurgical completed the acquisition of a privately-held distributor of IVF medical devices and systems.

The pro forma results of operations of these acquisitions have not been presented because the effect of the business combinations described above was not material to the consolidated results of operations.

Contingent Consideration

Certain of the Company’s business combinations involve potential payments of future consideration that are contingent upon the achievement of regulatory milestones and/or the acquired business reaching certain revenue thresholds. A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date. The fair value of the contingent consideration is remeasured at each reporting period, and the change in fair value is recognized in selling, general and administrative expense in the Consolidated Statements of Income and Comprehensive Income.

The following table provides a reconciliation of the beginning and ending balances of contingent consideration:

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
Periods Ended July 31,Three MonthsNine Months
(In millions)2021202020212020
Beginning balance$30.8 $ $ $ 
Purchase price contingent consideration0.5  31.3  
Payments    
Change in fair value56.8  56.8  
Ending balance$88.1 $ $88.1 $ 


Assets Held for Sale

On February 2, 2021, CooperVision entered into a stock purchase agreement to sell 50% of the equity interest in a wholly-owned subsidiary that was acquired by CooperVision on January 19, 2021. The closing of this transaction is subject to certain closing conditions including required regulatory approvals. The Company intends to operate the previously wholly-owned subsidiary as a joint venture with the purchaser of the 50% interest once the transaction is closed.

The Company concluded the substantive terms of the joint venture during the third quarter of fiscal 2021, and as of July 31, 2021, the assets and liabilities of this disposal group were reclassified as held for sale. Pursuant to ASC 360, assets held for sale were measured at the lower of their carrying amounts or fair value less cost to sell. Based on the Company's assessment, no impairment was recorded in the three months ended July 31, 2021. The Company has determined that this disposal did not qualify as a discontinued operation as the sale was deemed to not be a strategic shift that has or will have a major effect on the Company's operations and financial results.

Included in the Company's Consolidated Condensed Balance Sheet as of July 31,2021 are the following carrying amounts of the assets and liabilities held for sale:

(In millions)July 31, 2021
ASSETS
Cash$0.2 
Goodwill25.0 
Other intangibles, net83.6 
Deferred tax assets(22.2)
Other assets1.5 
Total assets held-for-sale$88.1 
LIABILITIES
Total liabilities held-for-sale$1.6 

Note 3. Inventories
(In millions)July 31, 2021October 31, 2020
Raw materials$140.6 $151.0 
Work-in-process13.0 12.4 
Finished goods434.3 407.0 
Total inventories$587.9 $570.4 
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.

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
Note 4. Intangible Assets

Goodwill
(In millions)CooperVisionCooperSurgicalTotal
Balance at October 31, 2020$1,779.3 $668.0 $2,447.3 
Current period additions31.9 61.1 93.0 
Amount reclassified to assets held for sale (Note 2)(25.0) (25.0)
Foreign currency translation adjustment64.8 5.1 69.9 
Balance at July 31, 2021$1,851.0 $734.2 $2,585.2 

The Company evaluates 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. The Company accounts for goodwill, evaluates and tests goodwill balances for impairment in accordance with related accounting standards.

The Company performed an annual impairment assessment in the third quarter of fiscal 2021 and 2020, and its analysis indicated that there was no impairment of goodwill in its reporting units. Qualitative factors considered in the assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit. Based on the Company's qualitative assessment, if the Company determines that the fair value of a reporting unit is more likely than not to be less than its carrying amount, the fair value of the reporting unit will be compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value of the reporting unit. A reporting unit is the level of reporting at which goodwill is tested for impairment. The Company has three reporting units: CooperVision, and within the CooperSurgical segment, Office/Surgical and Fertility, reflecting the current way the Company manages its business.

Goodwill impairment analysis and measurement is a process that requires significant judgment. If the Company's common stock price trades below book value per share, there are changes in market conditions or a future downturn in its business, or a future goodwill impairment test indicates an impairment of our goodwill, the Company may have to recognize a non-cash impairment of goodwill that could be material and could adversely affect the Company's results of operations in the period recognized and also adversely affect its total assets and stockholders' equity.

Given the general deterioration in economic and market conditions surrounding the COVID-19 pandemic, the Company considered the impact that the COVID-19 pandemic may have on its near and long-term forecasts and determined that it was not more likely than not that the fair value of reporting units or relevant asset groups was below carrying amounts, and therefore the Company determined that there was no impairment to either its goodwill, definite-lived or indefinite-lived intangible assets at July 31, 2021.
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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
Other Intangible Assets
 July 31, 2021October 31, 2020
(In millions)Gross 
Carrying
Amount
Accumulated
Amortization
Gross 
Carrying
Amount
Accumulated
Amortization
Weighted Average Amortization Period
(in years)
Intangible assets with definite lives:
Composite intangible asset$1,061.9 $265.5 $1,061.9 $212.4 15
Technology513.3 278.9 401.2 251.9 10
Customer relationships379.3 234.9 367.0 216.2 13
Trademarks156.8 46.4 153.4 37.7 14
License and distribution rights and other 33.1 20.7 31.8 18.2 10
2,144.4 $846.4 2,015.3 $736.4 14
Less: accumulated amortization and translation846.4 736.4 
Intangible assets with definite lives, net1,298.0 1,278.9 
Intangible assets with indefinite lives, net (1)
10.1 10.1 
Total other intangibles, net$1,308.1 $1,289.0 
(1) Intangible assets with indefinite lives include technology and trademarks.
Balances include foreign currency translation adjustments.
As of July 31, 2021, the estimate of future amortization expenses for intangible assets with definite lives is as follows:
Fiscal Years:(In millions)
Remainder of 2021$37.0 
2022149.3 
2023147.0 
2024142.8 
2025132.3 
Thereafter689.6 
Total remaining amortization for intangible assets with definite lives$1,298.0 
The Company assesses definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of a definite-lived intangible asset (asset group) may not be recoverable. When events or changes in circumstances indicate that the carrying amount of a definite-lived intangible asset may not be recoverable, in accordance with related accounting standards, the Company evaluates whether the definite-lived intangible asset is impaired by comparing its carrying value to its undiscounted future cash flows.
The Company assesses indefinite-lived intangible assets annually in the third quarter of the fiscal year, or whenever events or circumstances indicate that the carrying amount of an indefinite-lived intangible asset (asset group) may not be recoverable, in accordance with related accounting standards. The Company evaluates whether the indefinite-lived intangible asset is impaired by comparing its carrying value to its fair value.

If the carrying value of a definite-lived or indefinite-lived intangible asset is not recoverable, an impairment loss is recognized based on the amount by which the carrying value exceeds the fair value. The Company performed an annual impairment assessment in the third quarter of fiscal 2021 and 2020 and did not recognize any intangible asset impairment charges.

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
Note 5. Debt
(In millions)July 31, 2021October 31, 2020
Overdraft and other credit facilities$90.2 $59.4 
Term loan350.0 350.0 
Less: unamortized debt issuance cost(