Arthur J. Shannon - Vice President-Global Corporate Affairs and European Investor Relations Joseph C. Papa - Chairman & Chief Executive Officer Judy L. Brown - Chief Financial Officer & Executive Vice President.

Elliot Wilbur - Raymond James Louise Chen - Guggenheim Securities LLC Marc Goodman - UBS Securities LLC David R. Risinger - Morgan Stanley & Co. LLC Christopher Schott - JPMorgan Securities LLC Gregg Gilbert - Deutsche Bank Securities, Inc. Linda Bolton Weiser - B. Riley & Co. LLC Douglas Tsao - Barclays Capital, Inc.

Annabel Samimy - Stifel, Nicolaus & Co., Inc. Tim Chiang - BTIG LLC Jami Rubin - Goldman Sachs & Co. Jason M. Gerberry - Leerink Partners LLC David Michael Steinberg - Jefferies LLC David William Maris - Wells Fargo Securities Sumant S. Kulkarni - Bank of America Merrill Lynch.

Good morning. My name is Holly, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Perrigo's Calendar 2015 Fourth Quarter Earnings Results Conference Call. All lines have been muted to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

I'll now turn today's conference over to Art Shannon, Vice President of Corporate Affairs and European Investor Relations. Please go ahead, sir..

Welcome to – thank you, Holly. Welcome to Perrigo's fourth quarter and calendar 2015 earnings conference call. I hope you all had a chance to review our press release which we issued earlier this morning. A copy of the release is available on our website, and also on the website is the slide presentation for this call.

Before we proceed with the call, I'd like to remind everyone that during this call, management will make certain forward-looking statements. Please refer to the important information for investors and shareholders and Safe Harbor language regarding these statements in our press release issued this morning.

In addition, in the appendix for today's presentation, we have provided reconciliations for all non-GAAP financial measures presented.

I'd also like to note that calendar year data for 2015 was derived from the company's audited results for the six-month period ended December 31, 2015 and unaudited results for the fiscal quarters ended March 28, 2015 and June 27, 2015.

Calendar year data for 2014 was derived from the company's unaudited results for the fiscal quarters ended March 29, 2014, June 28, 2014, September 27, 2014 and December 27, 2014. Following management's review of the presentation, we'll open up the call for questions. I'd now like to turn the call over to Perrigo's Chairman and CEO, Joe Papa..

Thank you, Art, and welcome everyone to Perrigo's Fourth Quarter and Calendar Year 2015 Earnings Conference Call. Joining me today is Judy Brown, Perrigo's Executive Vice President and Chief Financial Officer. Now here's the agenda for today's call.

First, I will walk through some of the key financial highlights for calendar 2015, then I'll highlight the advantages of our focus strategy within our consumer-facing OTC global platform, which, when coupled with the earnings power of our Prescription Pharmaceutical businesses, creates a truly unique, diversified and sustainable business.

After that, Judy will go through the details of the fourth quarter results and guidance for calendar 2016. Then, we'll close with an opportunity for Q&A. Before starting into the call, I'd like to take a moment to highlight some changes in our Investor Relations group.

As part of previously announced consolidation of certain functions in Ireland, Art Shannon will relocate to Ireland and will be assuming the role of Vice President of Global Corporate Affairs and European Investor Relationship.

Art will continue to oversee both internal and external global communications, and will continue to be the lead point of contact for media and government relations. In addition, he will now be responsible for establishing a global government relations based in Dublin, and expanding Perrigo's shareholder-focused Investors Relation program in Europe.

I hope you can join me in congratulating both of them. On slide 5, you can see this was a record year for Perrigo across all key metrics, from record net sales to record adjusted operating income.

This highlights our continued growth from a combination of our durable Consumer Healthcare model to our diversified Rx portfolio in inorganic acquisition strategy. Overall, 2015 was another great year. Perrigo achieved record net sales for the year of $5.4 billion, a 28% increase, with record adjusted operating margins.

We expanded adjusted gross margin by 400 basis points to 48% driven by strong business mix, including the addition of our new Branded Consumer Healthcare, our Omega business, and of course, supply chain efficiencies. Adjusted operating income increased 29% year-over-year to $1.5 billion.

Finally, as you see here, our net operating cash flow for the full year increased to $1.05 billion, also another record for Perrigo. 2015 included a number of key growth drivers. We introduced over 160 new products in key categories, including the store brand version of Mucinex D and the generic prescription version of Clobex Spray.

We also expanded our business by completing seven acquisitions including five focused on building geographic scale and capabilities within our Consumer Healthcare platform. We've created our pan-European platform with the acquisition of Omega. We added softgel capabilities from the acquisition from Patheon in Mexico.

We acquired a new portfolio of leading OTC brands from GSK. We added the Yokebe product line to our BCH portfolio. And we added our first U.S. Branded Consumer Healthcare product, ScarAway. I'd like to take a moment to thank the dedicated Perrigo employees, who, amid some uncertainty last year, weathered a demanding year.

Your unwavering commitment to delivering quality, affordable healthcare product to customers and patients across the globe was truly outstanding. And you did it all while delivering record financial performance for the year. Thank you for all your dedication and great work. You can see on slide 6 the operational achievements by segment on slide 6.

CHC experienced a 3% growth in net sales on a constant currency basis. Meanwhile, operating and manufacturing efficiencies enhanced operating margins, which were a record in 2015. This equated to an impressive adjusted operating income for Consumer Healthcare, which represented a 22% increase from calendar 2014.

To put this in context, adjusted operating margin increased by 330 basis points. Our store brand business is doing great and without the benefit of a normal cough/cold/flu season. Another key highlight for Consumer Healthcare was the strength of our infant formula category.

We have continued to invest in this business, implementing key strategies including increasing our direct-to-consumer and doctor marketing efforts. These and other efforts have led to infant nutrition business growing 6% in 2015. I am confident we can translate the learning from this business to other areas of our global consumer-facing platform.

Congratulations to the entire CHC team for another great year of record earnings. The Perrigo Rx pharmaceutical business had another great year, delivering net sales growth of 14% year-over-year on a constant currency basis. We continue to have the best Rx pipeline in our company's history and remain excited about the future of this segment.

Thanks to the entire Rx team for a great performance they delivered this year. Further, you can see in our Specialty segment net sales increased 12% compared to last year on a constant currency basis. Now, let me turn to Branded Consumer Healthcare segment. This segment had a number of achievements in 2015.

First, our Top 20 Brands grew 7% on a constant currency basis during 2015 since our ownership in April. Second, our new product launch, Bronchostop, became the fastest-growing cough/cold product in the U.K. market.

Third, we acquired the NiQuitin family of products from GlaxoSmithKline, which performed above our expectations as we relaunched this product in key markets in the Branded Consumer Healthcare platform.

We have a great European platform in place, which provides a broad distribution network, highlighted by unique access to the greater than $30 billion OTC European space, representing a great opportunity in a number of markets with high barriers to entry. Many of our branded products rank first or second in net sales in their respective markets.

They are growing organically through line extensions and by launching existing products into other European markets. We also plan to continue growing inorganically through strategic product acquisitions in our European platform.

Perrigo is in a unique position as a top five OTC company by revenue in Europe contributing to our geographic diversification within the global OTC marketplace. And due to the reasons outlined, we continue to expect the BCH OTC platform to have a growth rate higher than the market averages.

Now, notwithstanding these comments, the fourth quarter results in our BCH segment were below our expectations. Let me review a few factors that contributed to the underperformance. First, as you're likely aware, we did not get the benefits of a normal cough/cold/flu season in Europe.

Second, the Branded Consumer Healthcare segment continued to experience lower net sales due to channel dynamics with the generic distribution that I discussed last quarter. These dynamics accounted for approximately 25% of the Branded Consumer Healthcare's net sales miss against our expectations.

Third, and additionally, in December, the Branded Consumer Healthcare team made considerable A&P investments – advertising and promotion investments – to grow certain branded lifestyle products, including a weight-loss product, which typically peak during summer months.

They did so with the expectation of converting these products into a full-year maintenance product. Unfortunately, these investments did not generate the desired sales in the quarter even though they may still prove useful for longer-term perspective.

In any event, it is clear that this large A&P investment adversely affected the adjusted operating margin this quarter. Finally, in certain end markets we have some challenges, including most notably Spain and Germany, which accounted for nearly 60% of the sales miss to our internal expectations.

We are taking actions to restructure our business in these locations. As outlined in this morning's release, we've realized a pre-tax noncash impairment charge of approximately $185 million related to intangible assets acquired in conjunction with the $4.5 billion Omega acquisition, or approximately 4% of the acquisition price.

To be clear, we incurred this impairment because the fair value of certain acquired Branded Consumer Healthcare brands was below the carrying value. However, the fair value of other acquired intangibles improved, but these increases are not recognized under accounting rules.

Let me now spend a few minutes to detail our plan to drive performance in the BCH business. Overall, the plan will focus on improvements in organizational design or people, business processes and product resource allocation.

First, from a people point of view, we are changing the management structure of the BCH segment by expanding the BCH executive committee. Also, we are putting Perrigo's matrix leadership model in place, which we believe will deliver better transparency and accountability and ensure continuing concentration on return on investment.

Also, in order to address these factors at certain geographies in fourth quarter results, we are going to take specific actions in select countries to right-size the business, streamline and restructure sales organizations in the affected geographies including Spain and Germany.

As part of this leadership change, President John Hendrickson of Perrigo has joined the BCH executive team as part of their team. Second, from a process point of view, we are strengthening the alignment of connectivity and functional accountability of the BCH business with Perrigo standards. We are implementing four key process improvements.

Number one, sales forecasting, inventory control, and operations planning. Number two, financial forecasting, planning, and analysis. Number three, supply chain integration. And number four, an incentive-based compensation that is focused on adjusted operating income and return on invested capital similar to the existing Perrigo system.

From a product standpoint, we have a conducted a portfolio review and are taking actions in BCH to exit slower growing or underperforming brands such as Etixx sports drink product, which does not meet our internal return on investment hurdle, and this will allow us to reallocate these resources to higher growth products.

The Branded Consumer Healthcare business results in the fourth quarter were a personal disappointment to me.

I recognize my actions will speak louder than my words so I am committing a significant allocation of my time over the six months to be in Europe, where I will actively work with the BCH executive team and country general managers to drive these initiatives forward.

I'm confident that all these actions, when taken together, will accelerate the BCH segment growth. I again want to stress our commitment and conviction around the long-term prospects of the BCH business and the European OTC marketplace as a whole.

Now, with that said, let me step back and talk about and discuss our overall strategy within OTC and why we continue to be excited about building our Perrigo's position as a global OTC leader. In fact, it is clear we are a top five player with approximately 70% of our sales delivered on the consumer OTC platform.

Turning to slide 11, you can see our strong market position in OTC healthcare will be driven by megatrends within global healthcare. The efficiency and affordability of OTC products versus prescription pharmaceuticals appeal to the strong, growing, aging population and shift in healthcare trends.

Further, new OTC innovation and Rx-to-OTC switches provide us with numerous opportunities to continually launch new products. All this contributes to our 2016 top line organic growth framework of approximately 5% to 10%.

As you can see, slide 12, in 2015 based on IRI MULO data, the store brand OTC dollar growth rate was over 3% as the data beginning to lap the impact from 2013 return of a prominent national brand competitor.

In 2016, we believe the growth in store brands will accelerate, highlighted by the store brand launches of Nasacort, Flonase, and the entire Mucinex family of products. Slide 13 depicts the stress in our infant formula business.

We have focused much attention on accelerating the growth in this category and the great performance we are now seeing as a result of solid execution. The infant formula category has a meaningful contributor to our overall growth, with Perrigo realizing an even larger share of the category.

We have implemented a number of key strategies over the years including enhanced labels and a refresh of the store brand packaging, and now, we are achieving the return on these investments evidenced by the increasing market penetration.

We have done this by leveraging Perrigo's world-class operating model, building cross-functional leadership and investing in infrastructure and marketing. As a result of these investments, we have been able to capture over 13% of the overall market.

As we look ahead over the next three years, we see promising opportunities within our new product pipeline.

We expect to launch greater than $1.2 billion in our new products by 2018 across all segments, and the majority of these will enhance our durable consumer-facing revenue stream with about 70% (15:10) of these new product sales over the next three years being the – in the consumer-facing segments.

Turning to slide 14, our Rx pipeline is strong, new product opportunities ahead, equating to greater than $5.5 billion in prescription brand sales over the next three years. In addition, we have 25 ANDAs pending FDA approval, five Paragraph IV litigations, and six projects in clinical studies.

I also want to take a moment to highlight the record-breaking promotion that was executed by our Consumer Healthcare team, which led to the shipment of over 300 million tablets across the country to a single customer on slide 15. This is a testament to our store brand team and the value of our partnerships with our retail customers.

I want to pass along my congratulations to the team. Great job. Now, let me turn it over to Judy..

over $400 million in new product launches; continued supply chain efficiencies across segments; the contribution from the closed acquisitions, including the most recent tretinoin family of products; and finally, the transformation of our supply chain structure into our global center of excellence headquarters in Ireland.

What has changed in our guidance, however, are the BCH dynamics previously discussed. It will take time to benefit from the people, process and product changes that Joe described earlier.

While these items will reduce our ability to capture the upside originally expected in 2016 in BCH, we expect to continue to drive strong earnings growth for the entire company. Looking at the full P&L, we expect net sales in the range of $5.9 billion to $6.2 billion.

Moving down this slide, we forecast adjusted DSG&A to be approximately 17.5% of net sales and R&D at around 3%. This leads to our expected adjusted operating margin for 2016 of between 29% and 30%, which would represent solid expansion.

Our adjusted effective tax rate is expected to be approximately 14%, which is a much lower rate in the P&L than just three short years ago. Please note that 2016 guidance does not include contributions from the VMS business and we are actively marketing the sale of our India API business as well.

Both of these operations are now classified as assets held for sale. For comparison purposes, please remove net sales of approximately $40 million per quarter for VMS from the Consumer Healthcare net sales line in 2015 from your models.

In addition, we anticipate that approximately 40% of our adjusted EPS contribution will be weighted to the first half of 2016 and 60% to the second half of the year. Let me walk you through the key building blocks of this first half/second half dynamic.

First, we expect our CHC business to experience a shift in product mix due in part to the return of a branded competitor in the smoking cessation category, and in part to the previously announced suspension of sales of the guaifenesin 600mg ER product, which I will remind you is 100% owned by Perrigo.

We expect this product to return to market in the second half of 2016. Looking to the rest of the Mucinex family, we expect volumes to grow, though these products are at lower margins as they are partnered products. Second, we are now in the midst of a lackluster cough/cold season.

However, as always, we are planning for a normal season next fall and therefore our cough/cold categories are more heavily weighted to the second half of the calendar year.

Third, R&D investments are expected to be higher in our legacy CHC and Rx segment in the first half of 2016 compared to the prior year, due to commitments to launching new products.

And fourth, new products are expected to be a sizeable driver for the year with greater than $400 million in new product sales expected to phase in over the course of 2016.

As an example, ProAir will launch late in the year, and given these dynamics, timing of new product launches are expected to have a more sizeable impact on the 60% earnings weighting to the second half of the calendar year. In addition to the items just discussed, I'd like to make a few comments on the first quarter.

First, I'd like to highlight the year-over-year inclusion of shares outstanding and interest expense for the Omega acquisition in the first quarter, which will impact the year-over-year EPS comparison. Second, due to seasonal sell-ins, BCH allocates approximately 27% to 30% of their annual advertising and promotion spending to the first quarter.

The BCH team has been and will continue to be focused on ROI for A&P, so the investments are not always linear with sales patterns.

While we expected adjusted operating income to grow in the first quarter in the mid-teens, with the impact of interest and shares noted a moment ago, we expect adjusted diluted EPS to only grow in the low single digits in the first quarter of calendar 2016 compared to 2015. Turning to slide 25.

You can see we are providing segment guidance as an approximate percentage of total net sales with our consumer-facing businesses still expected to comprise approximately 70% of net sales in 2016. Slide 26 highlights our global OTC platform new product sales.

We expect new product sales to be approximately 70% weighted towards OTC in 2016, including the launches of the store brand version of Flonase in the U.S. and Bronchostop throughout the rest of EU.

Looking at Slide 27, given the large number Rx products pending FDA approval, recent and expected new product launches, such as the generic version of ProAir in mid-December and continued positive momentum in the Rx base business, we expect this segment to drive greater than 20% of consolidated 2016 net sales.

In summary, there are clear action items to deliver results in 2016. We're excited about the deep pipeline of new product launches and remain focused on solid execution in operating efficiency as a basis for our continued growth. We will continue to refine and improve our operating model across all segments of the business to drive consistent returns.

At the same time, we will continue to leverage our core competitive advantages and seek the right opportunities for inorganic investments that create sustained growth and meet our stringent investment criteria while still maintaining our investment grade rating. Now I'll turn the call back to Joe..

Thanks, Judy. Let me provide a few comments on our 2016 and beyond. We see immense promise as we look forward into 2016. Slide 29, these are key growth drivers for 2016 and beyond. What are they? They talk all about building our global Branded Consumer Healthcare platform.

It's all about delivering $1.2 billion of new products over the next three years, and it's about M&A, taking a disciplined M&A strategy and focusing on adjacent OTC categories of ophthalmic, pet health, diabetes, adult nutrition and looking at geographic expansion as opportunities in M&A; and finally continuing to build moats around our durable business model, including the globalization of our supply chain in Ireland.

In summary, we believe the Perrigo Company is a very unique asset. It's a top five global OTC player with an industry-leading growth rate. We are building off a record year with expected 2016 top line growth of 10% to 16% and expect a 2016 bottom line growth of 25% to 29%, with over 70% of our net sales coming from the consumer products.

I'll now open it up to Q&A operator, so we'll take our first call..

And, Holly, can you please that we keep it to one question per analyst. Thank you..

Our first question will come from the line of Elliot Wilbur with Raymond James..

Thanks. Good morning. Sure there'll be a lot of question on BCH, or maybe I'll actually start off and ask a question on the Rx generics segment.

Judy, if you have the numbers available, could you give us a sense of what the full year contribution was from new products versus decline in the base? Just looking at fourth quarter and it looks like there was about a 10% rate of decline in the base, which maybe seems a little bit higher than average, which kind of leads me into part of my question here.

It just seems like at the margin, certain segments within the generic area are seeing more pricing erosion, particularly dermatologics, and just kind of wondering how you're thinking about potential headwinds there in terms of accelerated pricing erosion in 2016. Obviously, it's been a very strong tailwind the past couple of years. Thanks..

Judy, why don't you take the first part of it and I'll take that latter part..

So were you to go through and accumulate the comments we made each quarter throughout calendar 2015 on new products in Rx, new product contributed approximately $121 million over the course of those four quarters. And pricing wise, we did see some pressure, give or take, in the total portfolio over the course of the year, approximately 1%..

And the latter part of your question really talks about the pricing dynamics and what we're thinking about and looking at for the future. And I'd say the following. Are there some incremental product competition that we're going to face? The answer is yes.

However, what we've tried to do at the Perrigo Group is not just stay focused only on dermatology, as you know, we've moved into what I would refer to as extended topicals. So those are things beyond just certainly dermatology, but respiratory, nasal, ophthalmic.

And with those product categories, for example, at the end of the year, we'll launch our ProAir product in terms of a metered dose inhaler for respiratory, those are the things that are giving us great strength in our Rx category.

And as we believe, that will give us a very high gross margin and operating margin, certainly as we think about the 2016 and beyond. So we like what we see in terms of our ability to launch these new products and what they mean for gross margin and operating margin..

And our next question will come from the line of Louise Chen with Guggenheim..

Hi. Thanks for taking my question. Wanted to dig into a little bit more on BCH. And curious on two things here.

Number one, as you mentioned, you did give guidance in January, so curious, when did you actually see a change relative to your expectations on the top end of the range? And then secondly, just curious how much, if any, of the lower sales in Omega than you had originally forecasted were results of Perrigo spending more time defending itself against the hostile last year, or if it was something else? Thank you..

Okay. On the first question, on the question of when did we become aware of some of the challenges with the BCH business. It was really in the middle of January as we were consolidating our business doing the close. Really, it wasn't till that middle part of January that we became aware of some of the issues specifically with the BCH business.

Now there's clearly – you get some revenue numbers ahead of time – but you don't get to the full bottom line and the consolidated income as a company until we close out our full auditing process and look at everything. So it was really very late in the January timeframe as we looked at the full consolidated part of it.

The second part with the Branded Consumer Healthcare and it was relative to the Mylan question, I think, if I recall?.

Yes. Yes. That's correct, yeah..

So there's no doubt that the events that occurred when we closed the Omega or Branded Consumer Healthcare transaction on March 30, 2015 and followed by a hostile attempt at a takeover starting in around April 8. Did that cause some challenges for us as we focused on the business? Yeah, it did.

I mean did – clearly, you see though through that time period, the latter half of 2015, we had strong business performance in our Rx team. We had strong business performance in our OTC or store brand business.

As we are trying to put resources towards Branded Consumer Healthcare, there were some challenges, and as I said, it's a personal disappointment but clearly it's something we know we can fix.

And we're going to take every effort that we can go forward and put the initiatives that I outlined before by improving the sales and operation planning, improving the financial planning analysis, making the globalized supply chain, things that we know how to do because they fit right into what Perrigo does really well.

So we'll take that on and get that focused and get that righted, but make no mistake, we still believe this was a great opportunity for us. It was an opportunity to move our business from competing in six countries around the world to 39 countries.

So we are really excited about what that means for our future and continue to be very excited about the Omega business.

Operator, next question?.

Your next question will come from the line of Marc Goodman with UBS..

Joe, good morning. You went through some of the changes that you're going to do with the Omega business. They all seem like blocking and tackling issues, I mean things that I guess we'd expected you to do kind of from day one.

Why not take these actions earlier with this basically, we bought a company, it was functioning well, let's not fix it, it's everything's operating well, then all of a sudden it just started to slow? Or maybe you can give us a flavor for that.

And I'm sorry, I have a second question, which is the Rx sales guidance, seems like $1.2 billion-ish or something, you had guided for a higher number than that before, and now you've made some recent acquisitions. I'm guess I'm curious what's changed to offset the acquisitions such that the guidance changed so much in that business? Thanks..

Okay. Let's start out on the first part of your question, Branded Consumer Healthcare, question of the timing of any changes. I think that you said it well. We acquired what we thought is clearly a great business and we continue to believe it is a great business.

As we found though, there's some things that happened in a – it's a private company and some things in private companies we think we can improve on.

Basically as we think about the Perrigo process that we go through, whether it be the sales forecasting, the supply chain integration on all the things that we do really well, the financial planning and analysis, all those things are process things that we can do better.

And clearly, that was why, when I made my comments, it was partially on the people side, partially on the process side and clearly something on the product side. For example, there's some products that just do not meet our return on invested capital hurdles and we're going to make some decisions about those particular products.

Could we have tried to do this earlier? I'd say that the original business performance was very strong. We felt it was moving in the right direction.

I still believe it's going to move in the right direction, but I do think there's some things that we can improve on and that's really the purpose of my comments, and certainly the direct involvement that I plan to take over the next six months to 12 months..

On the revenue growth, Marc, maybe I misinterpreted your question because when we've announced the two acquisitions near the end of 2015 with respect to Rx, we said we anticipated they would contribute approximately $150 million of revenue in the course of 2016. That still stands.

And with the organic growth that we still plan, it adds to whether we're going to grow more than 20% and that still is the case. So we are targeting growth for this segment well ahead of 20% in total. Even with the inclusion of the $150 million from acquisitions, there is still organic growth planned in the Rx portfolio..

I think, Marc, you might have misunderstood Judy's comment because Judy made the comment that the Rx portfolio....

Will represent 20% of consolidated, not net sales..

Will represent 20% of consolidated..

Not downgrading their growth rate..

Okay. Operator, next question..

Your next question is going to come from the line of David Risinger with Morgan Stanley..

Yes. Thank you. So my question is related to Branded Consumer. Could you just talk about the management changes there and the leadership changes? And just explain how that structure is evolving and whether the leadership that was running the business a few months ago is still in place or how that's been altered. Thank you..

Sure, David. Yeah, the people side of our changes are really a couple of different factors. Number one, the management of the Omega business, or Branded Consumer Healthcare, was led by an executive committee of three individuals.

Two of those three individuals are still with us right now; however, we are going to expand the size of that executive committee to a larger executive committee. One of the individuals has departed from the company. Relative – so we're going to expand the size of the executive committee to just make sure we have more inputs into the process.

As I said, in addition, we'll have John Hendrickson, our Perrigo President of the business, to go over there and help them with some of the issues and opportunities to improve the functional or process opportunities.

Final comment on the people side of it would be simply related to some of the restructuring that we're planning to do in a couple of the key markets, specifically country markets that we're planning on. But that's really the full extent of it. And then final comment is just simply on the people side.

I clearly expect to devote some significant attention to this business over the next six months to 12 months from a personal point of view for me too..

Thank you..

Operator, next question?.

Your next question will come from the line of Chris Schott with JPMorgan..

Great. Thanks very much. Just on BCH, how long are you anticipating until these initiatives take hold and we should see improved growth trends? I'm just trying to get a handle on what the near-term outlook for BCH looks like. And then there's a second question on this, just on margins for that division as well.

I know you talked about some quarterly spend dynamics, but just where should we think about the BCH margins for the year? And what's the longer term range we should think about for margins for this business? Thanks very much..

Sure. Well, Judy, I'll take the first part of the question of how long some of this will take and then you could take that margin question. On the initiatives that we have in mind, I just was going to remind everyone it's all about people, processes and products.

Some of the people things, those can happen very quickly and are in place and happening as we speak. So people are underway. There is some restructuring. As with any restructuring, it takes a certain amount of time to do that. I would say that the improvement on process is really, by definition, a longer timeframe.

As you put in a new sales and operation planning process and as you put a new financial planning and analysis process, as you integrate the supply chain, some of those things just take a little bit longer in terms of timeframe.

Having said that, though, we continue to believe that from the product point of view, they're launching – the Omega team or Branded Consumer Healthcare team is launching a number of important products.

We do believe with the addition of the GSK products that I mentioned, from the nicotine replacement therapy, we do think there's some very exciting opportunities for us in 2016. Judy, that's probably on the product side. On the margin side, Chris asked about margins.

You want to take that?.

So on the adjusted gross margin perspective, as we look at the course of the year, there's not a lot of change rolling off of 2015 as you think about modeling 2016. Adjusted gross margins was in a reasonable band, stay in the lower 50%s – lower 50% zone.

Now think about adjusted operating margin and the expansion of growth on the bottom line, that does evolve. I made the comments about the first half, second half dynamics for the company, a portion of that is driven by investments in BCH, ramping up and getting profitability returning to more of the high-teens level over the course of the year.

So, if you're looking at modeling the first half of the year, you would see softer operating income – adjusted operating income in the first half – and then growing and working to recover back to, as I said, adjusted operating margins at a higher level in the second half of the year.

And that's a dynamic of, combination, timing on advertising and promotion spend and the restructuring activities that Joe mentioned earlier, taking hold and getting to see some additional profitability in the back half of the year..

And your next question will come from the line of Gregg Gilbert with Deutsche Bank..

Thanks. I'll keep it to one maybe philosophical question.

Joe, to the extent there's a crisis of confidence here – hopefully a short term one after stiff-arming Mylan, lowering your outlook and having significant structural issues with your latest deal – maybe you could talk about how aggressive the company, or maybe more appropriately the board, is prepared to be in allocating capital for buybacks as opposed to additional M&A.

Of course, in parallel with you getting operations back on track. Thanks..

Well, let me – I've got to take your question into pieces, Gregg. I mean, on the question of, is there some challenges we have with our Branded Consumer Healthcare business, the answer is yes. And that's some things that I mentioned, Judy mentioned, and we're going to take that on. And we feel absolutely confident we will overcome those challenges.

And clearly, we still believe this is a great business opportunity for us. As I said, it took us from competing in six countries around the world to 39. We think that expansion in geographic footprint is very, very important to us for the future.

So on that question, yeah, there's some challenges that we're going to work our way through but it's nothing that we haven't experienced before.

And the good news is that many of the things that we need to get improved are things that we think Perrigo does very well in terms of our world-class approach to the supply chain, the world-class approach to what we plan to do with just our sales forecasting and optimization.

Remember, we manage over somewhere around 20,000 SKUs from a sales and operations planning point of view from forecasting. So, we believe that those things are things that we do very well. We'll put that into the Omega process and we think we'll have, once again, a world-class branded OTC business based on some of the improvements.

Make no mistake about it, some of the marketing activities that Omega has done has been absolutely delivering great returns. As we've taken over the GSK brands, we've shown accelerated growth in the NiQuitin franchise from where they were before.

So we think we're in good shape with that portion of the business in terms of the plan, but we do have some challenges; I don't want to mix words there. On the rest of the business, though, we're excited about it.

If you think about what we've talked about as a business in 2015, revenue up 28%, operating income up 29%, earnings per share up 21%, EBITDA now at somewhere around $1.5 billion, I mean there's a lot of great things that have happened with this business in terms of even just within OTC, a significant – our store brand OTC business – a significant margin expansion.

So, we're in good shape with our total business as we think about it, but I do take the comment that we've got some things to deal with on Branded Consumer Healthcare. On the question of the share repurchase or capital allocation, yeah, that's something that Judy mentioned, and we'll continue to look at that.

As you know, we did a share repurchase in the fourth quarter. As we think about share repurchase in the future, we'll continue to look at that, as Judy said, as there is available free cash flow for us to do that. So, that's something that we are contemplating.

I will make a comment though, just to reflect or magnify what Judy said, is that we're going to look at that relative to not only the share repurchase but also the other M&A opportunities that we have as a company.

Operator, next question?.

The next question will come from the line of Linda Bolton with B. Riley..

Hi. Just first like a small kind of housekeeping thing, I guess. Judy, when you talked about new products in BCH, you said it was $65 million including acquisitions.

So does the $400 million of new product sales for 2016 include acquisitions? So could you just clarify that? And then secondly, on a bigger picture, in terms of the restructuring and cost savings you had outlined when you were fighting the hostile takeover, my understanding was a lot of that was actually taking place in the U.S.

business and that you had a specific targeted amount of savings for 2016. Can you remind us what all that is? Is that getting lost in the shuffle or are you still pursuing those savings? And will you be reporting on how much of those restructuring savings you'll be getting each quarter as we progress through 2016 so we can monitor progress? Thanks..

Sure. This is a JV section. So let me first off comment on the BCH question, new products. You are spot on that for the first time ever, there was a mixture in that comment, $65 million of new products, which included Yokebe and GSK acquired products.

It's an anomaly here because we have an acquisition in a period where we don't have a comparable to last year.

So, the acquired products were approximately half of that $65 million and the new products that the BCH team deemed as new in their calendar year, in the normal kind of metrics that we would use here in the company as launching something within the first 12 months, is the other half.

So going forward, on a like-for-like basis, we will pull out acquired products from GSK and Yokebe until they hit the 12-month acquisition anniversary. And the $400 million in total company new products does not include those two.

But you're right, that is a very good callout, Linda, because it's – we've rarely had an acquired company with a new acquisition on top of it within that window. So going forward, $400 million, no acquired products within that total.

Rolling back to the October 22 announcement and the savings that we expected as a company to achieve overall, those are included in our 2016 plan, still. You'll remember that a portion of that announcement related to structural cost savings within the company and for all intents and purposes, those activities are complete.

The migration of our global supply chain center of excellence to our corporate headquarters in Ireland is actively underway as we speak. We mentioned Art will be moving; many people are building up their competencies and getting the business up and running in Ireland. So, those savings are going to be reflected in our 2016 numbers.

And we also made the comment that the sales process for our API location, API factory in India as well as our VMS business, are actively underway and expected to be closed in the not too distant future. So you can consider, essentially, the XLS, the implementation of a streamlining of our operating structure is built in.

We're not necessarily calling those out on a line-by-line basis, but suffice it to say, we'll keep you posted on the sales process for VMS. We'll keep you posted on our ongoing buildout within Ireland, as more and more of our business is operated in our corporate headquarters directly with Europe.

And we'll call out any incremental actions that could take place over the course of the year within BCH, specifically restructuring initiatives and the dollars related to those..

Your next question will come from the line of Douglas Tsao with Barclays..

Hi. Good morning. Thanks for taking the questions. Just maybe turning to the Consumer Healthcare business.

Judy, if we look at the 45% guidance relative to – percentage of sales for Consumer Healthcare relative to the sort of consolidated revenue guidance for the company, it sort of implies Consumer Healthcare to be sort of down a touch relative to this year. Given the progress we've seen in the last couple quarters, it's a little surprising to me.

Just curious if we're sort of interpreting that the right way..

So I'm looking at my Consumer Healthcare segment-specific information, and we definitely have Consumer Healthcare growing in 2016. There we do generally break out revenues for you in total, 45%-25%-20%, but these are approximates.

So what I can tell you is that within our own breakdown segment by segment, we see the Consumer Healthcare business continuing to grow, and both on the sales and on the operating income line for the full year.

So remember, those breakdowns in order to give you a feel for how the business is progressing, those items presented on page 25, again, are approximates, just to give you the continued information that our consumer-facing business continues to generate approximately 7% of our expected sales..

Okay. Great. Thank you very much. That's helpful clarity..

Yes. But to be clear, the only thing I'd add – I think Judy said it exactly right – the only thing I'd add is that we continue to look at our business in terms of growing the consumer-facing business in that 5% to 10% range. I mean, that's what our mindset continues to be as a company..

And your next question will come from the line of Annabel Samimy with Stifel..

Hi. Thanks for taking my question. I know there's been a lot of discussion about BCH, but within generics, even though it's at the highest level ever, the growth seemed to slow pretty meaningfully. So you already talked about price erosion.

I guess I want to gauge your confidence about the new product introductions outside of the Entocort and Retin-A programs, and how do you feel about the base business? How confident do you feel about the other product introductions within the group, as well as any competition on the horizon that could erode your product opportunities of the base business? Thanks..

So let me start with your first kind of assumption. It is correct. We did expect the generic Rx business to slow down. The reason expected it to slow down was because at the end of 2014, we launched a very significant new product, it was the Androgel 1% or testosterone 1% gel. That was a very important launch for us and one which did incredibly well.

We were the only company out there with a generic equivalent to the 1%, so therefore this was all things that we expected. We always knew the comp for the year-over-year was going to be significant for the fourth quarter, and all of that has transpired exactly as what was stated.

I remind you, as Judy was talking about, the opportunities in our Rx business, one of the things we've mentioned was the opportunity to launch a generic equivalent of ProAir. That generic equivalent is, we think, a very exciting opportunity. To our knowledge, no one else has even challenged the patent.

So we challenged the patent, we prevailed and we're at a point where we think it's a very exciting launch for us that will represent a significant upside to us in the later part of 2016, so we're very comfortable with that.

As Judy has talked about in terms of – as we think about the margin opportunities, both on the gross and operating line – we do see calendar year 2016 improving on both of the operating and the gross margins for that business as we continue to show very significant growth even without the equivalent to the Entocort and the Retin-A generic..

So just to clarify, and this probably builds off of perhaps we created a little confusion when we heard Marc's question, too, our plan for Rx reflects, excluding the acquired products, excluding the tretinoin family and the Entocort transaction, is still at the high end of our 8% to 12% growth guidance that we've provided in the past.

So any "slowing" in Q4 relative to that type of a range reflects the fact, to Joe's point, that Q4 2014 was the highest Q4 on record. So relatively, that quarter was outside of our stated 8% to 12% range, but we are at the high end of that range within our 2016 guidance plan for next year..

Okay. Great. Thanks for clarifying..

And your next question will come from the line of Tim Chiang with BTIG..

Hi, Joe. You talked a little bit about – at least you highlighted the over-the-counter Flonase product to launch in 2016.

Could you talk a little bit about what your expectations for the timing of the launch is and sort of how significant you think that product could be here in the states this year?.

Sure. Well, it's currently at the FDA. So we have to await FDA's approval process. But do I believe that the Flonase product will happen sometime in the next 30 days to 90 days, I think that that is a very reasonable assumption. I obviously can't guarantee anything. It's up to the FDA to make their decision.

But I do think that somewhere in that next 30 days to 90 days that we'll see the introduction of a store brand private label of Flonase. On the question of the opportunity, we think Flonase is doing very well so far in terms of the brand. You see a lot of advertising for it, a lot of promotion for it. They're doing very well with it.

Our expectation is that there is a significant store brand opportunity. It's, ball park, it's on track for $300 million for Flonase and rising as a brand. So we think the store brand opportunity is significant..

Okay. Great. Thanks..

Thank you. Operator, next question..

Your next question will come from the line of Jami Rubin with Goldman Sachs..

Thank you. Joe, Perrigo's business model has become increasingly dependent on M&A for growth. And even you are spending more of your time with external business development activities.

Does this experience with Omega give you pause on M&A generally? Will it cause you to reassess your desire to expand globally? Is this a European thing? How does this experience – how does this change your priorities in terms of M&A? And should we continue for you to do M&A over the course of the year in terms of size of deals, types of deals? Does it even make sense for Perrigo to continue along that path just given the setbacks with Omega? Thanks very much..

Sure. Thank you for the question, Jami. I would say a couple comments. Number one, I've had the pleasure of working with the Perrigo team for almost 10 years now, and I would say that through those 10 years, we've done 29, 30 different transactions.

And so I accept that there's some challenges that we have to work with on the Omega business? Yeah, absolutely. But that's nothing different than every other acquisition we've been a part of. Some go faster, some go a little slower.

The European market is one right now that is a little bit slower in terms of – we don't take – we don't blame it on it but certainly we knew that the FX for the euro was coming down.

I mean there's a lot of things that were moving on it, but it makes me still believe, though, that this is a phenomenal future opportunity for us from the point of view of giving us this geographic expansion opportunity, allowing us to move from six countries, where we compete before Omega, to 39 countries.

So we are still very excited about what Omega brings to us. On the question though – or part of your hypothesis, I want to make sure I'm very clear, we still believe that the Perrigo organic growth rate, without any acquisitions, still in that 5% to 10% range.

And I know you know that with many different companies, I think that you'll find that a 5% to 10% growth rate in a business that is 70% of our sales are in the consumer side is a very good consumer-facing business, because you don't find many there growing at that rate.

So we're still very optimistic about our organic growth rate in the consumer-facing part of our business.

Do I still believe though there's a chance to do a growth rate that is about half of the business in organic growth rate and then half of the growth being inorganic? I still believe that makes a lot of sense for us because there's so many more things we could put on the back of our truck that's at Perrigo today going to these large retailers and/or in Europe that we're going to continue to look at them.

And I've said them before to you, I think that for us, we can continue to look to expand in animal health. We can continue to expand ophthalmics, pet care, diabetes, adult nutrition. We do think there's some additional geographic expansion especially in Europe where we think we can bolt on some additional products to our current Omega infrastructure.

So I don't think it changes my view at all. We think we still got a tremendous opportunity with Omega and, importantly, good opportunities with M&A. Thank you. Operator, next question..

Your next question will come from the line of Jason Gerberry with Leerink Partners..

Hey. Good morning. Thanks for taking my questions. Jumped on the call late so apologies if I missed this, but could you provide a little more explanation of what's happening at the tax line? 14% on the quarter is the guidance; I guess 14% was a couple hundred basis points lower than we were forecasting.

Just wanted to get your views in terms of the sustainability of that as a lower tax rate? Thanks..

Judy, you want to speak to that?.

Absolutely. So the quarter was slightly below our own expectations. We had been anticipating a rate more in the 16% zone. In the quarter just ended December, there was a mix shift.

We were not where we expected to be with earnings before tax in Europe where our jurisdictional rates are relatively higher and therefore you see the overall rate lower in Q4.

Looking forward, though, the approximately 14% effective tax rate – adjusted effective tax rate that we're targeting for the full year is a component of jurisdictional mix of our businesses, as well as the programs put in place that we announced on October 22, 2015, with respect to capturing better value and optimizing our tax line through the global supply chain initiatives that have enormous operational activity behind them at the moment.

So those will contribute to an approximately 400 basis point improvement in our tax rate versus our previous run rate tax rate in the past..

Should we be thinking about sort of 2017/2018 reverting back to that kind of historical 17%-ish rate?.

No. So think of it this way. We were – post-Elan, we were talking about a rate in the high-teens, so 17%, 18%. With the implementation of the global supply chain optimization, we said we should now be targeting more like a 14% to 15% run rate, all other things equal.

So I can never comment on jurisdictional mix changes if we do acquisitions or jurisdictional mix changes with a swing, one country versus another in terms of new product timing. But the new run rate should be more mid-teens versus high-teens because of these global supply chain initiatives.

So those initiatives are not one-off, it's changing the way we do business. It's changing our operating model to truly make our global supply chain universal. So all of our operations being run from that one center of excellence, it doesn't revert back, not like a restructuring plan where you lose the year-over-year basis.

It really is a change in the way the company operates, and therefore, you have a sustainable base to build off of for the future..

And your next question will come from the line of David Steinberg with Jefferies..

Thanks. Ever since you bought Elan, there's been some discussion about whether the TYSABRI royalty stream fits for the long-term plans of the company. Just curious what your current thinking is on the subject.

Are you intent on keeping it at this point? Are you looking to divest, and if so, would you only divest it as a whole entity or in pieces? And if you are looking to divest it, what sort of interest is there in the marketplace, particularly given the looming competition down the road from Roche? Thanks..

Sure. Let me probably restate a couple things and then just go forward. We, as we look at TYSABRI, still believe it's a great product. We believe we've got a great partner. We believe it's a product that's very important, and the category of highly-effective drugs is even going to be more important for patients with MS.

So we like what we set – where we sit with it. We also believe it's got a very long life. I mean because of the fact that it's a biologic with a REMS program, we think it's going – it will be very difficult to genericize. Having said that, I would say that we will continue to assess what's the right thing to do with this product.

I would only say that right now, as we think about this from a point of view of strategy, as we think about any potential to monetize part or all of it, we can do part or we could do all of it to part answer one of your questions.

I would say, though, that we're only going to do something like that if it's in association with what we think is a significant transaction. We just don't want to obviously just put it on our balance sheet – cash on our balance sheet. I think if we do something, look to us to do that relative to some other transaction as a company.

But we sit here today, we clearly are aware of the Roche product but we think we've got a great partner in Biogen, and importantly, we think the highly-effective category of MS drugs are only going to continue to expand as, importantly, patients look for better and better therapies in MS.

So we'll make decisions as we get to that point as it would relate to other strategic alternatives for us. Operator, the next question..

Your next question will come from the line of David Maris with Wells Fargo Securities..

Good morning, Joe. Good morning, Judy. Just building on a couple questions that others have asked, I'm going to ask it a little bit different way.

I understand that M&A is still part of the strategy and before GPS was on every phone and every car, whenever I'd go on a road trip and know where I'm going and then ended up a little bit off, my wife would say, pull over and I sometimes would decide to keep driving. And it's always better to pull over and kind of get your bearings.

Why – how are you going to address shareholders that, say, over the next few days I'm sure – why not put a moratorium on deals for the next little bit? Buybacks and debt paydown is pretty straightforward – no risk to those.

And with all the management changes, comp changes, why hoist more deals on a management team that's in a transition? Why not just wait? Is the environment for M&A so uniquely good right now that you don't want to miss things? So maybe if you can address, why not just wait for a year or two or until you right things before doing any further M&A?.

Sure. So, David, I guess a couple comments.

Number one, I start with we believe that the strength of our business in the Consumer Healthcare side of our business and the Rx side of our business are still very strong businesses, and we think that they are still – there's still opportunities there to look to, as I said before, put one more item on the truck that's going from Perrigo today to one of our large retailers.

So, we're going to keep looking at those opportunities. Do I take the point that you're suggesting, though, that we need to continue to improve the Branded Consumer Healthcare business and put a focus on that? The answer is absolutely yes. There's no mistake about that, some of the things that we're working on.

But I want to make sure my message comes across. We think the Branded Consumer Healthcare business is a great business. They've done some great things with new product launches, but is there some things that we think we can help them to improve as we bring some of the Perrigo processes into their business? Yes.

We do think we're going to do that and we will spend the time to do that. But we've got an organization that has certainly a lot of opportunities to think about additional M&A, and we'll think about it. I don't want to suggest to anybody, though, that M&A is going to be – we're going to do it just – no matter what the cost.

We're going to be smart about it and disciplined about it just like we have been in the past. Therefore, we have an alternative; we have a share repurchase opportunity. We're always going to trade the return on investment for doing A or doing B.

So I think the essence of your question is, are we going to look at it strategically and trade it off versus share repurchase? Yes. We will do that, and I think Judy tried to capture that in her comments.

But there may be some opportunities that we think are, from a timing point of view or a strategy point of view, maybe very important to us, and we're going to look at those for the next 12 months. And we don't think putting an absolute moratorium makes sense. It would just simply be smart and disciplined, as we always have been..

Thank you..

Operator, next question?.

Your next question will come from the line of Sumant Kulkarni with Bank of America Merrill Lynch..

Good morning. Thanks for taking my questions. This is more of a strategy question.

Is it fair to characterize the underperformance in Branded Consumer Health as a Perrigo or Omega-specific issue, or is there something specific that's fundamentally new that you've learned about managing the competitive dynamics in European branded consumer health markets, given that's a very different ball game relative to the U.S.

store brands, where the company's traditional expertise lies?.

No, I don't think – so the summary comment – is we clearly still believe the Omega business is a very strong business. And as we've said at the onset, the team that was running it is still the team that is currently running it, with the exception of one individual.

Having said that, we think there's some things we can strengthen, as I mentioned, in terms of a process point of view. We clearly believe there's things we can improve on relative to sales forecasting, sales operation planning, the financial planning and analysis, supply chain.

Those are things that we already had in our minds, we just simply want to accelerate some of that as we get closer to the business and look at it, and also see some of the challenges that we saw in the fourth quarter. So, it's things that we already know we're going to do.

I think what I'm really saying is we're just going to accelerate some of these things faster, based on at least what we think are opportunities to improve. But I don't think it's a – there's any other structural or strategy issues, other than the ones I've outlined – for us to improve on.

Obviously, the only other comment, I guess, I could say on Europe is a known fact, that just obviously the foreign exchange is different than when we acquired it, but that's something that we all face as a company. Operator, we have time for one more question..

Okay. Our final question will then come from the line of Elliot Wilbur with Raymond James..

Thanks. Just want to come back to, I guess, Judy and ask a specific question about gross margins.

Obviously, you don't provide guidance on gross margin parameters anymore, but specifically with respect to Consumer Healthcare, we saw a very strong ramp in gross margin performance over the last couple of quarters and then a pretty significant step down this period.

And obviously, there's a lot of things that go into that in terms of mix and whatnot. And I think you closed the year around 34.5%.

But how do we think about, going forward, whether the 36%-plus rate we saw in the June/September quarters, are those kind of – sort of high-end targets and not really new baseline numbers? Kind of get a sense of what you think the baseline is at this point? And as a follow-up to that, another gross margin question on the generic business.

How are the acquisitions of tretinoin and budesonide going to impact the gross margin line?.

All right. I'll take the lead-off with Consumer Healthcare. You're right; we stepped back from giving very granular line-by-line segment margin analytics in our guidance. But suffice it to say, the Consumer Healthcare team, you have to give props to Jeff Needham and his entire organization.

They have done a yeoman's job in years when there have not been the enormous switch products coming in their portfolio, but blocking and tackling, bringing dozens of new products to the market, positioning those products well, fighting the fight in a world of more challenging pricing dynamics out in today's market, taking advantage of good commodities buying and taking advantage, frankly, of the comments, Joe's talked about the operating model of Perrigo and our lean manufacturing efficiencies that we've continued to get over the years.

That team has capitalized on that. So you've seen the margin expansion. If I think about 2015, we've gotten 37% gross margin, almost 38%.

Yes, it was "down" to only 35% in the fourth quarter, but that – we finished the year at just under 36% adjusted gross margin – which in a year without one giant, blockbuster launch to point to, I think is a phenomenal achievement.

And as they margined out next year and thought about their planning, they are still running in the low to mid-30%s in their adjusted gross margin. It varies quarter by quarter with timing of product, and are also looking at working to maintain the types of adjusted operating margins you saw over the course of 2015 as well.

Remember, in my comments around how to think about the year, the balance of the year is always a factor of timing on new products, investments that are coming through down below the line within selling in terms of promotional support, et cetera, that's why I said second half of the year is slightly heavier because of the fact that you've got more launches in the back half.

But you're still looking at the team working at maintaining those, I'll call it, 32% to 35% zone, that low 30% adjusted gross margin and very high-teens or around 20% operating margin, just again, thinking off that baseline of 2015 into 2016..

And the rest of the question on the Rx side, if you think about where we were from a gross margin in 2014, slightly below 60%, as you think about where we are gross margin in 2015 full year, slightly above 60%, almost 61%.

As we think about the future, there's no doubt that the new product that we plan to launch, whether it be the ProAir product and also the Entocort, the tretinoin product that are now part of our portfolio will help us from a gross margin point of view as we think about our 2016 Rx gross margin.

So we continue to see some upside from where we are currently on the Rx gross margins as a result of new products and also the acquisition products..

Operator, that concludes the call. I just wanted to make a couple of comments. First of all, thank you very much for your interest in the Perrigo Company.

As I think about the business and we think about our guidance for the year, I remind you that we're looking at a revenue growth of 10% to 16%, we think dramatically driven by this concept of a durable business model. We believe that the EPS will grow in that 25% to 29% in 2016.

We think that the improvement that we've shown in our store brand businesses is very important to us if you think about how much the operating margins in the Consumer Healthcare moved from 2014 to 2015, and as we think about 2016, we think there's some – still some slight upside for the operating margin in that business. So we're excited about it.

We clearly know we've got some things to get done with our Branded Consumer Healthcare. We're going to put some focus on that. But importantly, we think that's still a great business for us over the long term as we think about the future of our business, and continuing to grow our business both organically and through M&A.

Thank you everyone for your attention today. Have a great day..

Thank you for dialing in for today's Perrigo Calendar Year 2015 Fourth Quarter Earnings Results Conference Call. You may now disconnect..