Focused on Quality. Delivering Results. ANNUAL REPORT 2010 ANNUAL REPORT 515 Eastern Avenue Allegan, Michigan 49010 (269) 673-8451 www.perrigo.com ©2010 Perrigo Company All rights reserved Shareholder Information Directors Moshe Arkin Laurie Brlas Gary M. Cohen David T. Gibbons Ran Gottfried Ellen R. Hoffi ng Former Vice Chairman, Executive Vice President, Executive Vice President, Former Chairman Consultant and Director Chief Operating Offi cer Perrigo Company Chief Financial Offi cer, Becton, Dickinson of the Board, for public and private and Co-President, Director since 2005 Cliffs Natural Resources, Inc. and Company Perrigo Company companies in Israel Neos Therapeutics Director since 2003 Director since 2003 Director since 2000 Director since 2006 Director since 2008 Michael J. Jandernoa Gary K. Kunkle, Jr. Herman Morris, Jr. Joseph C. Papa Ben-Zion Zilberfarb Former Chairman Retired Chairman and City Attorney of the Chairman, President and Professor of Economics of the Board, Chief Executive Offi cer, City of Memphis, Chief Executive Offi cer, at Bar-Ilan University Perrigo Company DENTSPLY International Inc. Memphis, Tennessee Perrigo Company and consultant Director since 1981 Director since 2002 Director since 1999 Director since 2006 Director since 2007 Executive Offi cers Michael R. Stewart Shareholder Account Information Joseph C. Papa Senior Vice President, Shareholders with requests for information regarding Chairman, President and Global Human Resources their share position, stock certifi cates, address changes Chief Executive Offi cer and other related matters should contact: Dr. Louis W. Yu Judy L. Brown Senior Vice President, Computershare Executive Vice President and Global Quality and Compliance P.O. Box 43078 Chief Financial Offi cer Providence, RI 02940 Share Information (800) 622-6757 Thomas M. Farrington Perrigo Company common stock is traded on The Senior Vice President and NASDAQ Global Select Market® and the Tel Aviv Stock Financial Information Chief Information Offi cer Exchange (TASE) under the symbol PRGO. Shares Annual reports, news releases, earnings announcements, outstanding at June 26, 2010: 91,694,299 dividend announcements, Form 10-K, 10-Q and 8-K John T. Hendrickson reports and other fi nancial information may be obtained Executive Vice President, Annual Meeting by visiting the investor relations section of our Global Operations and Supply Chain The Annual Meeting of Shareholders will be held at Web site: www.perrigo.com/investors. the Allegan County Area Technical & Education Center, Todd W. Kingma 2891 116th Avenue (M-222), Allegan, Michigan, on Investor Relations Contacts Executive Vice President, October 27, 2010, at 10:00 a.m. (EST) Arthur J. Shannon General Counsel and Secretary Vice President – Investor Relations Independent Accountants and Global Communications Sharon Kochan Since Fiscal 2009 (269) 686-1709 Executive Vice President, U.S. Generics Ernst & Young LLP Grand Rapids, Michigan Dan Willard Refael Lebel Manager – Investor Relations Executive Vice President and President, Fiscal 2008 and Global Communications Perrigo Israel BDO USA, LLP (269) 686-1597 (Formerly known as BDO Seidman, LLP) Paul B. Manning Grand Rapids, Michigan Creative services by Executive Vice President, Strategic Communication Advisors General Manager of PBM Fiscal 2010 Cash Dividend Data and Anderson Design Grand Rapids, Michigan Jeffrey R. Needham Fiscal Record Payable Per Share Executive Vice President, Quarter Date Date Amount General Manager Consumer Healthcare 1st 8/28/09 09/15/09 $0.0550 Dr. Jatin Shah 2nd 11/27/09 12/15/09 $0.0625 Senior Vice President and Chief Scientifi c Offi cer 3rd 2/26/10 3/16/10 $0.0625 4th 5/28/10 6/15/10 $0.0625 Contents 2 Financial Highlights 3 Letter To Shareholders 16 Business Portfolio 18 Financial Reconciliation Inside Back Cover Shareholder Information Corporate Profi le Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes over-the-counter (OTC) and generic prescription (Rx) pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients (API), and pharmaceutical and medical diagnostic products. Perrigo is the world’s largest store brand manufacturer of OTC pharmaceutical products and infant formulas. Perrigo’s primary markets and locations of manufacturing and logistics operations are the United States, Israel, Mexico, the United Kingdom and Australia. More than 2,700 Perrigo products are now available in more than 70 countries worldwide. Perrigo ANNUAL REPORT 2010 1 Financial Highlights Year Ended Financial Results – June 27, June 26, % Reported (GAAP) (1) 2009 (2) 2010 (2) Change In millions, except shares and Net Sales $2,006.9 $ 2,268.9 13.1 per share amounts Operating Income $ 247.3 $ 335.9 35.8 Income from Continuing Operations $ 141.1 $ 224.1 58.8 Diluted Earnings Per Share from Continuing Operations $ 1.51 $ 2.41 59.6 Average Diluted Shares Outstanding (000s) 93,629 92,845 (0.8) Year Ended Financial Results – June 27, June 26, % Adjusted (Non-GAAP) (1) 2009 (2,3) 2010 (2,3) Change In millions, except shares Net Sales $2,006.9 $ 2,268.9 13.1 and per share amounts Operating Income $ 267.4 $ 383.5 43.4 (unaudited) Income from Continuing Operations $ 174.6 $ 262.6 50.4 Diluted Earnings Per Share from Continuing Operations $ 1.87 $ 2.83 51.3 Average Diluted Shares Outstanding (000s) 93,629 92,845 (0.8) 2009 2,006.9 Net Sales 2010 2,268.9 ($ in millions) 2009 267.4 Operating Income 2010 383.5 ($ in millions) Income From 2009 174.6 Continuing Operations 2010 262.6 ($ in millions) Diluted Earnings 2009 1.87 Per Share 2010 2.83 (in dollars) (1) All information based on continuing operations. (2) See Item 7 in the Form 10-K report for a discussion of results of operations. (3) See reconciliation of non-GAAP fi nancial measures on page 18. We have excluded certain items that are unusual in nature when monitoring and evaluating Perrigo’s ongoing fi nancial results, because we believe this provides important insight into Perrigo’s ongoing core business operations on a normalized basis. 2 Letter to Shareholders Dear Shareholders, version of Zaditor®, a sterile eye solution for the temporary prevention of itching Fiscal 2010 was a very successful year for due to allergies, and Perrigo. We achieved record sales and earnings. Those results refl ect our commitment - Adding more than 10 products, through to executing on our fi ve key strategic pillars, asset acquisitions and partnerships, whose combined with favorable market dynamics, national brand equivalents had annual including continued growth in consumer sales totaling $3 billion. acceptance of store brand value and more We promised to grow through global frequent generic prescription substitution. expansion, and we delivered by: During fi scal 2010, we delivered on a number - Acquiring Orion Laboratories Pty. Ltd., of promises we made at our fi scal 2009 Australia’s largest OTC independent store year-end analysts’ meeting: brand pharmaceutical manufacturer, and We promised to grow by expanding into - Acquiring PBM, whose international presence new categories, and we delivered by: and strategy of continuous global expansion - Acquiring PBM Holdings, Inc. (PBM), the also contributed to the growth of our world’s largest manufacturer and marketer global footprint. of store brand infant formula products, We promised to grow by expanding our and one of only four U.S. Food and Drug product line, and we delivered by: Administration (FDA)-approved manufacturers of infant formulas in the U.S., - Receiving approval for and introducing several new products in key categories in - Entering the ophthalmics category through our Consumer Healthcare, Rx Pharmaceuticals our introduction of Ketotifen Fumarate and API businesses. Ophthalmic Solution, 0.025%, a generic Our Strategic Pillars Throughout fi scal 2010, we continued to focus Pursuing Industry Leading Innovation – on the fi ve pillars that are at the foundation of In fi scal 2010, we reinforced our leadership our strategic plan by: position through the introduction of new products that contributed more than $125 Ensuring Sustainable High Quality – million to our sales for the year. We invested more than $73 million in quality- related processes and activities in fi scal 2010. In Executing Effective Cost Management – fact, we added 34 employees that are focused Economies of scale and effi ciency are critical purely on maintaining Perrigo quality, and to our ability to consistently deliver affordable expect to add 110 more in fi scal 2011. healthcare products. Despite ever-present cost pressures, our highly skilled and sophisticated Delivering Superior Customer Service – manufacturing and global procurement teams While the complexity of producing 44 billion made signifi cant progress in overall cost tablets and 13,000 SKUs annually sets us management during fi scal 2010. apart from our competitors, it also makes it a challenge for us to meet our customers’ service Unleashing the Power of People – expectations. Perrigo met this challenge, while By developing new programs and training achieving record net sales volumes in fi scal 2010. facilities, we continue to seek, motivate and reward highly talented and skilled people. Perrigo ANNUAL REPORT 2010 3 4 We promised to maximize the effi ciency continuing to raise product quality standards of our operations and businesses, to ensure the highest product safety for and we delivered by: patients. As you may be aware, in April 2010 Perrigo received a warning letter from the - Completing the sale of our German FDA related to our Allegan, Michigan facilities. API facility, In essence, the FDA wants us to ensure that - Divesting non-core assets though the sale of sustainable corrective and preventive actions our Israel Consumer Products business, and take place when deviations occur, and that employees follow established procedures in all - Acquiring an 85 percent stake in a start-up API manufacturing operations. In response to the facility in India that will contribute to our low FDA’s letter and subsequent reviews, we will cost position while enabling us to participate continue to make the necessary investments more fully in the “next generation” of API.