CAUTIONARY STATEMENT



Some of the statements contained in this report and documents incorporated by
reference herein are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). These statements involve
known and unknown risks, uncertainties and other factors which may cause our or
our industry's actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Forward-looking statements may
include, but are not limited to, statements regarding:

•the ongoing and possible future effects of the global COVID-19 pandemic and
economic disruptions on our business, financial condition, results of operations
and cash flows and our ability to draw down our revolver;
•the ongoing and possible future effects on supply chain constraints and
inflation, including from the war in Ukraine, on our business;

•the ongoing and possible future effects of the global COVID-19 pandemic on our customers and suppliers;

•the possibility of interruptions or delays at our manufacturing facilities, or the failure to secure alternative suppliers if any of our sole source third-party manufacturers fail to supply us;

•continued demand for our COVID-19 assays;



•the timing, scope and effect of further U.S. and international governmental,
regulatory, fiscal, monetary and public health responses, including emerging
vaccine mandates, to the COVID-19 pandemic;

•our ability to manufacture, on a scale necessary to meet demand, our COVID-19 assays as well as the systems on which the assays run;

•our ability to predict accurately the demand for our products, and products under development and to develop strategies to address markets successfully;

•potential cybersecurity threats and targeted computer crime;

•the effect of the continuing worldwide macroeconomic uncertainty, including the impact of the UK's exit from the European Union (known as Brexit), on our business and results of operations;



•the effect of the worldwide political and social uncertainty and divisions
throughout the world, including the impact on trade regulation and tariffs, that
may adversely impact the cost and sale of our products in certain countries, or
increase the cost we may incur to purchase materials, parts and equipment from
our suppliers;

•the development of new competitive technologies and products;

•the impact and anticipated benefits of completed acquisitions and acquisitions we may complete in the future;



•the ability to consolidate certain of our manufacturing and other operations on
a timely basis and within budget, without disrupting our business and to achieve
anticipated cost synergies related to such actions;

•the ability to successfully manage ongoing organizational and strategic changes, including our ability to attract, motivate and retain key employees and maintain engagement and efficiency in remote work environments;

•our ability to obtain regulatory approvals and clearances for our products, including the implementation of the new European Union Medical Device Regulations, and maintain compliance with complex and evolving regulations;

•the coverage and reimbursement decisions of third-party payors;

•the uncertainty of the impact of cost containment efforts and federal healthcare reform legislation on our business and results of operations;

•the guidelines, recommendations, and studies published by various organizations relating to the use of our products;

•the effect of consolidation in the healthcare industry;

•our ability to meet production and delivery schedules for our products;

•our ability to protect our intellectual property rights;

•the possibility that products may contain undetected errors or defects or otherwise not perform as anticipated;

•the anticipated development of markets we sell our products into and the success of our products in these markets;

•the anticipated performance and benefits of our products;

•business strategies;

•estimated asset and liability values;

•the impact of future tax legislation;


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•conducting business internationally;

•the impact and costs and expenses of any litigation we may be subject to now or in the future;

•our compliance with covenants contained in our debt agreements;



•anticipated trends relating to our financial condition or results of
operations, including the impact of interest rate and foreign currency exchange
fluctuations, including the potential impact of the proposed phase out of LIBOR;
and

•our liquidity, capital resources and the adequacy thereof.




In some cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "could," "would," "expects," "plans," "intends,"
"anticipates," "believes," "estimates," "projects," "predicts," "likely,"
"future," "strategy." "potential," "seeks," "goal" and similar expressions
intended to identify forward-looking statements. These statements are only
predictions and involve known and unknown risks, uncertainties, and other
factors that may cause our actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels of
activity, performance, or achievements expressed or implied by such
forward-looking statements. Given these uncertainties, you should not place
undue reliance on these forward-looking statements. Also, these forward-looking
statements represent our estimates and assumptions only as of the date of this
report. Except as otherwise required by law, we expressly disclaim any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statement contained in this report to reflect any change in our
expectations or any change in events, conditions or circumstances on which any
of our forward-looking statements are based. Factors that could cause or
contribute to differences in our future financial results include the cautionary
statements set forth herein and in our other filings with the Securities and
Exchange Commission, including those set forth under "Risk Factors" set forth in
Part II, Item 1A of this Quarterly Report on Form 10-Q, as well as those
described in our Annual Report on Form 10-K for the fiscal year ended
September 25, 2021 or any other of our subsequently filed reports. We qualify
all of our forward-looking statements by these cautionary statements.

OVERVIEW



We are a developer, manufacturer and supplier of premium diagnostics products,
medical imaging systems, and surgical products focused on women's health and
well-being through early detection and treatment. We sell and service our
products through a combination of direct sales and service personnel and a
network of independent distributors and sales representatives. We operate in
four segments: Diagnostics, Breast Health, GYN Surgical and Skeletal Health.

Through our Diagnostics segment, we offer a wide range of diagnostics products,
which are used primarily to aid in the screening and diagnosis of human
diseases. Our primary Diagnostics products include our molecular diagnostic
assays, which run on our advanced instrumentation systems (Panther, Panther
Fusion, and Tigris), our ThinPrep cytology system, and the Rapid Fetal
Fibronectin Test. Our Aptima family of molecular diagnostic assays is used to
detect, among other things, the infectious microorganisms that cause the common
sexually transmitted diseases, or STDs, such as: chlamydia and gonorrhea, or
CTGC; certain high-risk strains of human papillomavirus, or HPV; Trichomonas
vaginalis, the parasite that causes trichomoniasis; Mycoplasma genitalium; and
Herpes simplex viruses 1 and 2. We also offer viral load tests for HIV,
Hepatitis C and Hepatitis B for use on our Panther instrument system. In
addition, we offer bacterial vaginosis and candida vaginitis assays for the
diagnosis of vaginitis, a common and complex ailment affecting millions of women
a year. Our assay portfolio also includes diagnostic tests for a range of acute
respiratory infections, including SARS-CoV-2, various strains of influenza and
parainfluenza, and respiratory syncytial virus that are run on the Panther
Fusion system, a field upgradeable instrument addition to the base Panther
system. In response to the COVID-19 pandemic, we developed and launched the
Aptima SARS-CoV-2 assay (which runs on our standard Panther system) and the
Panther Fusion SARS-CoV-2 assay (which runs on our Panther Fusion system). The
Panther Fusion SARS-CoV-2 assay and the Aptima SARS-CoV-2 assay were launched at
the end of our second quarter and in the third quarter of fiscal 2020,
respectively. The ThinPrep System is primarily used in cytology applications,
such as cervical cancer screening, and the Rapid Fetal Fibronectin Test assists
physicians in assessing the risk of pre-term birth.

Our Breast Health segment offers a broad portfolio of solutions for breast
cancer care primarily in the areas of radiology, breast surgery, pathology and
treatment. These solutions include 3D digital mammography systems, image
analytics software utilizing artificial intelligence, reading workstations,
ultrasound imaging, minimally invasive breast biopsy guidance systems, breast
biopsy site markers, localization, specimen radiology, connectivity solutions
and breast conserving surgery products. Our most advanced breast imaging
platforms, Selenia Dimensions and 3Dimensions, utilize tomosynthesis to produce
3D images that show multiple contiguous slice images of the breast, which we
refer to as the Genius 3D Mammography exam.

Our GYN Surgical products include our NovaSure Endometrial Ablation System, or
NovaSure, and our MyoSure Hysteroscopic Tissue Removal System, or MyoSure, our
Fluent Fluid Management system, or Fluent, as well as our Acessa ProVu
laparoscopic radiofrequency ablation system, or Acessa. The NovaSure portfolio
is comprised of the NovaSure CLASSIC and NovaSure ADVANCED devices and most
recently, the NovaSure V5 device for the treatment of abnormal
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uterine bleeding. The MyoSure suite of devices offers four options to provide
incision-less removal of fibroids, polyps, and other pathology within the
uterus. The Fluent system is a fluid management system that provides liquid
distention during diagnostic and operative hysteroscopic procedures. The Acessa
system is a fully integrated system that uses laparoscopic ultrasound, guidance
mapping and radiofrequency ablation to treat nearly all types of fibroids.

Our Skeletal Health segment's products includes the Horizon DXA, a dual energy x-ray system, which evaluates bone density and performs body composition assessments, and the Fluoroscan Insight FD mini C-arm, which assists in performing minimally invasive orthopedic surgical procedures on a patient's extremities, such as the hand, wrist, knee, foot, and ankle.

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

Supply Chain Considerations



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

Trademark Notice



Hologic is a trademark of Hologic, Inc. Other trademarks, logos, and slogans
registered or used by Hologic and its divisions and subsidiaries in the United
States and other countries include, but are not limited to, the following:
3Dimensions, 3D Mammography, Acessa, Acessa ProVu, Affirm, Affirm Prone,
Amplidiag, Aptima, ATEC, Biotheranostics, Brevera, CoolSeal, Diagenode, Fluent,
Fluoroscan, Genius 3D, Genius 3D Mammography, Hologic, Horizon DXA, Insight,
JustRight, Mobidiag, MyoSure, Novodiag, NovaSure, NXC Imaging, Panther, Panther
Fusion, ProVu, Rapid fFN, Selenia, Selenia Dimensions, Somatex, SuperSonic
Imagine, ThinPrep, Tigris, Trident, and Tumark.

All other brand names or trademarks appearing in this Quarterly Report on Form
10-Q are the property of their respective owners. Hologic's use or display of
other parties' trademarks, trade dress or products in this offering circular
does not imply that Hologic has a relationship with, or endorsement or
sponsorship of, the trademark or trade dress owners.

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ACQUISITIONS

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

Bolder Surgical



On November 29, 2021, we completed the acquisition of Bolder Surgical Holdings,
Inc., or Bolder, for a purchase price of $160.1 million. Bolder, located in
Louisville, Colorado, is a developer and manufacturer of energy vessel sealing
surgical devices used in both laparoscopic and open procedures. Based on our
preliminary valuation, we allocated $96.7 million of the purchase price to the
value of intangible assets and $70.9 million to goodwill. The allocation of the
purchase price is preliminary as we continue to gather information supporting
the valuation of the acquired assets and liabilities. Bolder's results of
operations are reported in our GYN Surgical segment.

Mobidiag



On June 17, 2021, we completed the acquisition of Mobidiag Oy, or Mobidiag, for
a purchase price of $729.6 million. Mobidiag, located in Finland, manufactures
molecular diagnostic solutions for gastrointestinal infections, antimicrobial
resistance management and other infections. Based on our preliminary valuation,
we allocated $399.9 million of the purchase price to the value of intangible
assets and $431.7 million to goodwill. The allocation of the purchase price is
preliminary as we continue to gather information supporting the valuation of the
acquired assets and liabilities. This acquisition expands our molecular
diagnostics portfolio into the near-patient testing market. Mobidiag's results
of operations are reported in our Diagnostics segment.

Biotheranostics



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

Diagenode



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

Somatex Medical Technologies



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

RESULTS OF OPERATIONS

All dollar amounts in tables are presented in millions.


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  Table of Contents
Product Revenues

                                                        Three Months Ended                                                            Six Months Ended
                                      March 26, 2022                        March 27, 2021             Change                     March 26, 2022       

     March 27, 2021                         Change
                                                              % of                                    % of                                                                           % of                               % of
                                                              Total                                   Total                                                                          Total                              Total
                                         Amount              Revenue                Amount           Revenue          Amount                %                   Amount              Revenue           Amount           Revenue          Amount             %
Product Revenues
Diagnostics                        $         964.8               67.2  %         $ 1,043.5               67.9  %    $  (78.7)               (7.5) %       $       1,894.2               65.2  %    $ 2,156.5               68.5  %    $ (262.3)           (12.2) %
Breast Health                                173.0               12.1  %             205.8               13.4  %       (32.8)              (15.9) %                 393.3               13.5  %        406.0               12.9  %       (12.7)            (3.1) %
GYN Surgical                                 116.9                8.1  %             113.9                7.4  %         3.0                 2.6  %                 251.0                8.6  %        237.8                7.6  %        13.2              5.6  %
Skeletal Health                               13.5                0.9  %              15.6                1.0  %        (2.1)              (13.5) %                  33.1                1.1  %         33.9                1.1  %        (0.8)            (2.4) %

                                   $       1,268.2               88.3  %         $ 1,378.8               89.7  %    $ (110.6)               (8.0) %       $       2,571.6               88.4  %    $ 2,834.2               90.1  %    $ (262.6)            (9.3) %


We had a decrease in product revenues in both the current three and six month
periods of 8.0% and 9.3%, respectively, compared to the corresponding periods in
the prior year. This was primarily due to the decrease in revenues in the
Diagnostics business as COVID-19 assay sales were lower, and to a lesser extent,
there was also a decrease in Breast Health revenue primarily due to supply chain
constraints.

Diagnostics product revenues decreased $78.7 million and $262.3 million, or 7.5%
and 12.2%, respectively, in the current three and six month periods compared to
the corresponding periods in the prior year primarily due to a decrease in
Molecular Diagnostics of $74.3 million and $261.6 million, respectively, a
decrease in Blood Screening of $2.6 million and $4.7 million, respectively, and
a decrease in Cytology & Perinatal for the current three month period of $1.8
million. Cytology & Perinatal revenue increased $4.0 million in the current six
month period compared to the corresponding prior year period. Molecular
Diagnostics product revenue was $842.9 million and $1,637.7 million,
respectively, in the current three and six month periods compared to $917.2
million and $1,899.4 million in the corresponding periods in the prior year. The
decrease was primarily attributable to a decrease of $95.1 million and $317.8
million, respectively, in sales from our two SARS-CoV-2 assays due to lower
volumes , which we primarily attribute to lower demand from an improvement in
the COVID-19 pandemic compared to the prior year and a decrease in average
selling prices. We also had a decrease in the sale of our Panther and Panther
Fusion instruments in the current year periods compared to the prior year
periods. These decreases were partially offset by an increase in sales of $14.6
million and $39.6 million in the current three and six month periods for our
Aptima assays and STD collection kits (exclusive of our Aptima SARS-CoV-2
assays), which primarily consisted of our CTGC, Bacterial Vaginosis, and CV
Candida assays, on a worldwide basis as volumes increased, partially offset by
lower HPV assay volumes. In addition, we had an increase from our Quant Viral
assays as well as an increase of $8.7 million and $25.0 million, respectively,
in the current three and six month periods from the inclusion of our recent
acquisitions of Mobidiag and Diagenode. We also experienced a decrease in
revenue from the unfavorable foreign currency exchange impact of the
strengthened U.S. dollar against a number of currencies.

Breast Health product revenues decreased $32.8 million and $12.7 million, or
15.9% and 3.1%, respectively, in the current three and six month periods
compared to the corresponding periods in the prior year primarily due to a
decrease in volumes of our 3D Dimensions systems and related software and
workflow products, partially offset by an increase in average selling prices for
these products. In addition, in the current three month period we experienced a
decrease in volumes of our Affirm biopsy systems and interventional breast
solutions products The decrease in volume was driven by supply chain constraints
impacting our ability to manufacture sufficient quantities to meet customer
demand. Partially offsetting the decrease in the current six month period, we
had an increase in sales of our interventional breast solutions products,
primarily driven by ATEC and Brevera disposables. We also experienced a decrease
in revenue from the unfavorable foreign currency exchange impact of the
strengthened U.S. dollar against a number of currencies.

GYN Surgical product revenues increased $3.0 million and $13.2 million, or 2.6%
and 5.6%, respectively, in the current three and six month periods compared to
the corresponding periods in the prior year primarily due to increases in the
sales volume of our Fluent Fluid Management products, CoolSeal vessel sealers
acquired in the Bolder acquisition, and Acessa ProVu systems. We also had an
increase in MyoSure system sales in the current six month period as overall
there has been a recovery in elective procedures year over year. These increases
were partially offset by decreases in NovaSure and MyoSure system sales in the
current three month period and NovaSure system sales in the current six month
period compared to the corresponding periods in the prior year primarily due to
the COVID Omicron variant uptick in January and February resulting in a slowdown
of elective procedures.
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Skeletal Health product revenues decreased $2.1 million and $0.8 million, or
13.5% and 2.4%, respectively, in the current three and six month periods
compared to the corresponding periods in the prior year primarily due to a
decrease in sales volume of our Horizon DXA systems. This decrease is largely
associated with supply chain constraints. We also experienced a decrease in
revenue from the unfavorable foreign currency exchange impact of the
strengthened U.S. dollar against a number of currencies.

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

                          Three Months Ended                         Six Months Ended
                  March 26, 2022        March 27, 2021      March 26, 2022 
March 27, 2021
United States               67.2  %             68.5  %              67.2  %             69.4  %
Europe                      21.7  %             22.4  %              21.5  %             21.9  %
Asia-Pacific                 7.9  %              5.9  %               8.2  %              5.7  %
Rest of World                3.2  %              3.2  %               3.1  %              3.0  %
                           100.0  %            100.0  %             100.0  %            100.0  %



In the current three and six month periods compared to the corresponding periods
in the prior year, the percentage of product revenue derived from the U.S.
decreased while Asia-Pacific increased, which we primarily attributed to a
decrease in SARS-CoV-2 assays volumes as well as lower Breast Health capital
equipment sales in the U.S. and an increase in sales of our SARS-CoV-2 assays in
Australia, New Zealand and Japan. In addition, we had lower SARS-CoV-2 assay
sales in Europe in the current three and six month periods compared to the
corresponding periods in the prior year.

Service and Other Revenues

                                                                Three Months Ended                                                                                                  Six Months Ended
                             March 26, 2022                            March 27, 2021                           Change                          March 26, 2022                             March 27, 2021                           Change
                                              % of                                      % of                                                                     % of                                      % of
                                             Total                                     Total                                                                    Total                                      Total
                        Amount              Revenue               Amount              Revenue           Amount            %                Amount              Revenue               Amount               Revenue           Amount            %
Service and Other
Revenues           $       167.5               11.7  %       $       158.8               10.3  %       $  8.7            5.5  %       $       335.3               11.5  %       $       313.2                10.0  %       $ 22.1            7.1  %



Service and other revenues consist primarily of revenue generated from our field
service organization to provide ongoing service, installation, and repair of our
products. The majority of these revenues are generated within our Breast Health
segment. The increase in service and other revenue in the current three and six
month periods compared to the corresponding periods in the prior year was
primarily due to an increase in Breast Health service contract revenue as the
Breast Health business continued to convert a high percentage of our installed
base of digital mammography systems to service contracts upon expiration of the
warranty period, as well as additions from our distributor acquisitions. In our
Diagnostics business, lab testing revenue from the inclusion of our
Biotheranostics acquisition in the second quarter of fiscal 2021, increased
$12.4 million and $27.7 million, respectively, in the current three and six
month periods compared to the corresponding periods in the prior year. This was
partially offset by a decrease in royalty revenue in the current three and six
month periods of $11.7 million and $23.8 million, respectively, from Grifols,
S.A., or Grifols, related to licensing our intellectual property to our COVID-19
assays for their sale in Spain.

Cost of Product Revenues

                                                                     Three Months Ended                                                                                                     Six Months Ended
                                  March 26, 2022                             March 27, 2021                           Change                            March 26, 2022                             March 27, 2021                           Change
                                                  % of                                       % of                                                                       % of                                       % of
                                                 Product                                    Product                                                                    Product                                    Product
                            Amount               Revenue               Amount               Revenue           Amount             %                Amount               Revenue               Amount               Revenue           Amount             %
Cost of Product
Revenues               $       322.6                25.4  %       $       300.7                21.8  %       $ 21.9             7.3  %       $       640.7                24.9  %       $       585.2                20.6  %       $ 55.5             9.5  %
Amortization of
Intangible Assets               72.3                 5.7  %                64.5                 4.7  %          7.8            12.1  %               147.2                 5.7  %               126.1                 4.4  %         21.1            16.7  %

                       $       394.9                31.1  %       $       365.2                26.5  %       $ 29.7             8.1  %       $       787.9                30.6  %       $       711.3                25.1  %       $ 76.6            10.8  %



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Cost of Product Revenues. The cost of product revenues as a percentage of
product revenues was 25.4% and 24.9% in the current three and six month periods
compared to 21.8% and 20.6% in the corresponding periods in the prior year,
respectively. Cost of product revenues as a percentage of revenue increased in
the current three and six month periods primarily due to a decrease in sales of
our SARS-CoV-2 assays, which have higher gross margins compared to our other
diagnostic products, and comprised 46.0% and 43.0%, respectively, of total
product revenue in the current three and six month periods compared to 49.3% and
50.3%, respectively, in the corresponding periods in the prior year.

Diagnostics' product costs as a percentage of revenue increased in the current
three and six month periods compared to the corresponding periods in the prior
year primarily due to lower sales of our SARS-CoV-2 assays including a decrease
in average selling prices, an increase in inventory reserves, higher field
service costs for our expanded instrument installed base and higher freight
charges internationally, partially offset by lower sales of instruments, which
carry low margins.

Breast Health's product costs as a percentage of revenue increased in the
current three and six month periods compared to the corresponding periods in the
prior year primarily due to the impact of the COVID-19 pandemic on the supply
chain resulting in lower sales volumes of our higher margin products, reduced
manufacturing utilization and higher prices of raw materials and components,
partially offset by a slight increase in average selling prices of our
3Dimensions systems and related workflow products.

GYN Surgical's product costs as a percentage of revenue increased in the current
three and six month periods compared to the corresponding periods in the prior
year primarily due to product mix of higher volumes of lower margin products,
including our Fluent Fluid Management systems, Acessa ProVu systems and CoolSeal
vessel sealers.

Skeletal Health's product costs as a percentage of revenue increased in the current three and six month periods compared to the corresponding periods in the prior year due to lower sales volume of our Horizon DXA systems.



Amortization of Intangible Assets. Amortization of intangible assets relates to
acquired developed technology, which is generally amortized over its estimated
useful life of between 5 and 15 years using a straight-line method or, if
reliably determinable, based on the pattern in which the economic benefits of
the assets are expected to be consumed. Amortization expense increased in the
current quarter compared to the corresponding period in the prior year primarily
due to intangible assets acquired in the Mobidiag, Biotheranostics, Diagenode
and Bolder acquisitions, partially offset by lower amortization of intangible
assets acquired in the Cytyc acquisition which reduces over time.

Cost of Service and Other Revenues



                                                             Three Months Ended                                                                                                 Six Months Ended
                           March 26, 2022                           March 27, 2021                          Change                          March 26, 2022                            March 27, 2021                           Change
                                           % of                                     % of                                                                     % of                                      % of
                                         Service                                  Service                                                                  Service                                   Service
                     Amount              Revenue              Amount              Revenue           Amount            %                Amount              Revenue               Amount              Revenue           Amount            %
Cost of Service
and Other
Revenue          $       94.2               56.2  %       $       86.6               54.5  %       $  7.6            8.8  %       $       186.1               55.5  %       $       170.0               54.3  %       $ 16.1            9.5  %



Service and other revenues gross margin decreased to 43.8% and 44.5%,
respectively, in the current three and six month periods compared to 45.5% and
45.7%, respectively, in the corresponding periods in the prior year. The
decrease in the current year periods was primarily due to a decrease in Grifols
royalty revenue from licensing of our intellectual property related to our
COVID-19 assays for their sale in Spain, which has a high margin, partially
offset by the inclusion of lab testing revenue from Biotheranostics, which has
higher margins than our legacy service business. Also partially offsetting the
decrease in service margin in the current year periods is an increase in Breast
Health service contract revenue.

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Operating Expenses

                                                                        Three Months Ended                                                                                                        Six Months Ended
                                    March 26, 2022                             March 27, 2021                            Change                             March 26, 2022                             March 27, 2021                             Change
                                                    % of                                       % of                                                                         % of                                       % of
                                                    Total                                      Total                                                                        Total                                      Total
                              Amount               Revenue               Amount               Revenue           Amount              %                 Amount               Revenue               Amount               Revenue            Amount              %
Operating Expenses
Research and development $        69.5                 4.8  %       $        71.5                 4.6  %       $ (2.0)             (2.8) %       $       142.3                 4.9  %       $       130.7                 4.2  %       $  11.6                8.9  %
Selling and marketing            171.4                11.9  %               131.5                 8.5  %         39.9              30.3  %               318.7                11.0  %               259.5                 8.2  %          59.2               22.8  %
General and
administrative                   100.5                 7.0  %                88.9                 5.8  %         11.6              13.0  %               218.5                 7.5  %               180.4                 5.7  %          38.1               21.1  %
Amortization of
intangible assets                 11.3                 0.8  %                10.2                 0.7  %          1.1              10.8  %                22.1                 0.8  %                20.4                 0.6  %           1.7                8.3  %

Contingent consideration
- fair value adjustment              -                   -  %               (14.7)               (1.0) %         14.7            (100.0) %                (4.1)               (0.1) %               (10.1)               (0.3) %           6.0              (59.4) %
Restructuring and
Divestiture charges               (0.2)                  -  %                 1.6                 0.1  %         (1.8)           (112.5) %                   -                   -  %                 3.0                 0.1  %          (3.0)            (100.0) %
                         $       352.5                24.6  %       $       289.0                18.8  %       $ 63.5              22.0  %       $       697.5                24.0  %       $       583.9                18.6  %       $ 113.6               19.5  %




Research and Development Expenses. Research and development expenses decreased
2.8% in the current three month period and increased 8.9% in the current six
month period compared to the corresponding periods in the prior year. The
decrease in the current quarter is primarily due to a $7.0 million charge in the
corresponding period in the prior year related to the purchase of intellectual
property and a higher credit in the current quarter of $5.9 million recorded to
research and development expenses for funds received from the Biomedical
Advanced Research and Development Authority (BARDA) grant to obtain FDA approval
of our two SARS-CoV-2 assays. Partially offsetting these decreases is the
inclusion of incremental expenses from the Biotheranostics, Mobidiag, Diagenode
and Bolder acquisitions in the aggregate of $10.1 million. The increase in the
current six month period compared to the corresponding period in the prior year
is primarily due to the inclusion of incremental expenses from the
Biotheranostics, Mobidiag, Diagenode and Bolder acquisitions in the aggregate of
$19.0 million, and higher project spend in Diagnostics and Surgical. At any
point in time, we have a number of different research projects and clinical
trials being conducted and the timing of these projects and related costs can
vary from period to period.

Selling and Marketing Expenses. Selling and marketing expenses increased 30.3%
and 22.8% in the current three and six month periods, respectively, compared to
the corresponding periods in the prior year primarily due to increased spending
on advertising and marketing initiatives primarily related to our Super Bowl
commercial, sponsorship of the Women's Tennis Association and grants supporting
women's health initiatives, the inclusion of incremental expenses from the
Biotheranostics, Diagenode, Mobidiag and Bolder acquisitions in the aggregate of
$11.9 million and $25.2 million, respectively, higher meeting expenses and trade
shows that were lower in the prior year primarily due to canceled or curtailed
events as a result of the COVID-19 pandemic, higher travel expenses and an
increase in Diagnostics commissions. These increases were partially offset by a
decrease in commissions in Breast Health due to lower revenues.

General and Administrative Expenses. General and administrative expenses
increased 13.0% and 21.1% in the current three and six month periods compared to
the corresponding periods in the prior year primarily due to an increase in
charitable contributions of $7.1 million and $17.2 million, respectively, the
inclusion of incremental expenses from the Biotheranostics, Mobidiag, Diagenode,
and Bolder acquisitions in the aggregate of $4.6 million and $10.7 million,
respectively, an increase in salaries and bonus, higher information systems
infrastructure projects spend, and an increase in non-income tax charges. In
addition, in the prior year six month period we recorded a $3.6 million credit
related to services provided under the transition services agreement with
Cynosure. These increases were partially offset by a decrease in bad debt
expense, acquisition costs, litigation and settlement costs, and lower expense
from our deferred compensation plan.

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

Contingent Consideration Fair Value Adjustments. In connection with the
acquisition of Acessa, we are obligated to make contingent earn-out payments.
The payments are based on achieving incremental revenue growth over a three-year
period ending annually in December of each of 2021, 2022, and 2023. As of the
acquisition date for Acessa, we recorded a contingent consideration liability
for the estimated fair value of the amount we expected to pay to the former
shareholders of the acquired business. This liability is not contingent on
future employment, and we recorded our estimate of the fair value of the
contingent consideration liability utilizing the Monte Carlo simulation based on
future revenue projections of Acessa, comparable company revenue growth rates,
implied volatility and applying a risk adjusted discount rate. Increases or
decreases in the fair value of contingent consideration liabilities can result
from the passage of time, changes in discount rates, and changes in the timing,
probabilities and amount of revenue estimates. In the first quarter of fiscal
2022, we recorded a gain of $4.1 million based on actual amounts owed for the
first earn-out period being lower than the amount accrued as of September 25,
2021. There was no change in the fair value of the liability in the second
quarter of fiscal 2022. In the prior year first and second quarters, we recorded
a loss of $4.6 million and a gain of $14.7 million, respectively, to record the
liability at fair value at that time.

Interest Expense

                                             Three Months Ended                                                         Six Months Ended
                       March 26,           March 27,                                            March 26,           March 27,
                         2022                2021                      Change                     2022                2021                       Change
                        Amount              Amount            Amount             %               Amount              Amount             Amount              %

Interest Expense $ (22.6) $ (21.3) $ (1.3)

     6.1  %       $    (48.3)         $    (49.3)         $   1.0              (2.0) %



Interest expense consists primarily of the cash interest costs and the related
amortization of the debt discount and deferred issuance costs on our outstanding
debt. Interest expense increased in the current three month period compared to
the corresponding period in the prior year primarily due to borrowings
outstanding under the Securitization Program in the current year versus in the
prior year period no amounts were outstanding. Interest expense decreased in the
current six month period compared to the corresponding period in the prior year
primarily due to lower debt refinancing costs of $4.0 million recorded as an
expense, lower interest rates on our Senior Notes due to issuing our 2029 Senior
Notes and paying off our 2025 Senior Notes in the prior year, and the pay-off of
amounts outstanding under our Securitization Program in the prior year,
partially offset by higher interest rate swap expense and interest expense
related to debt from the Mobidiag acquisition.

Debt Extinguishment Loss

                                                  Three Months Ended                                                       Six Months Ended
                            March 26,         March 27,                                             March 26,           March 27,
                               2022              2021                     Change                      2022                2021                      Change
                              Amount            Amount            Amount              %              Amount              Amount            Amount              %
Debt Extinguishment Loss    $     -          $       -          $      -               -  %       $     (0.7)         $    (21.6)         $ 20.9             (96.8) %



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

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Other Income, net

                                       Three Months Ended                                  Six Months Ended
                         March 26,       March 27,                           March 26,      March 27,
                            2022            2021             Change            2022            2021             Change
                           Amount          Amount        Amount      %        Amount          Amount        Amount      %

    Other Income, net   $      2.1      $      4.7      $ (2.6)       **    $     8.7      $      0.9      $  7.8        **


**Percentage not meaningful


For the current three month period, this account primarily consisted of net
foreign currency exchange gains of $3.3 million, primarily from settling hedging
transactions, and a $2.4 million gain on life insurance proceeds as a result of
the death of a former employee, partially offset by a loss of $3.5 million from
the change in cash surrender value of life insurance contracts related to our
deferred compensation plan driven by stock market losses. For the second quarter
of fiscal 2021, this account primarily consisted of a gain of $2.7 million on
the cash surrender value of life insurance contracts related to our deferred
compensation plan driven by stock market gains and net foreign currency exchange
gains of $2.1 million, primarily from the mark-to-market of outstanding forward
foreign currency exchange and foreign currency option contracts.

For the current six month period, this account primarily consisted of net
foreign currency exchange gains of $12.6 million, primarily from settling
transactions, and $2.4 million gain on life insurance proceeds, partially offset
by a charge of $4.3 million to write off an equity method investment acquired in
the Mobidiag acquisition and a loss of $2.2 million from the change in cash
surrender value of life insurance contracts related to our deferred compensation
plan driven by stock market losses. For the prior year corresponding six month
period, this account primarily consisted of a gain of $8.9 million on the cash
surrender value of life insurance contracts related to our deferred compensation
plan driven by stock market gains, partially offset by net foreign currency
exchange losses of $7.4 million, primarily from the mark-to-market of
outstanding forward foreign currency exchange and foreign currency option
contracts.

Provision for Income Taxes

                                                Three Months Ended                                                          Six Months Ended
                         March 26,           March 27,                                              March 26,           March 27,
                           2022                2021                       Change                      2022                2021                       Change
                          Amount              Amount             Amount              %               Amount              Amount             Amount              %
Provision for Income
Taxes                  $    118.7          $    161.1          $ (42.4)            (26.3) %       $    241.4          $    340.1          $ (98.7)            (29.0) %



Our effective tax rates for the three and six months ended March 26, 2022 were
20.7% and 20.2%, respectively, compared to 20.6% and 21.1%, respectively, for
the corresponding periods in the prior year.

Our effective tax rates for the three and six months ended March 26, 2022 were
lower than the U.S. statutory tax rate primarily due to the impact of the U.S.
deduction for foreign derived intangible income and the geographic mix of income
earned by our international subsidiaries, which are taxed at rates lower than
the U.S. statutory tax rate, partially offset by state income taxes.

Our effective tax rate for the three months ended March 27, 2021 was lower than
the U.S. statutory tax rate primarily due to the impact of the U.S. deduction
for foreign derived intangible income and the geographic mix of income earned by
our international subsidiaries, which are taxed at rates lower than the U.S.
statutory tax rate, partially offset by state income taxes. Our effective tax
rate for the six months ended March 27, 2021 was higher than the U.S. statutory
tax rate primarily due to state income taxes, partially offset by the impact of
the U.S. deduction for foreign derived intangible income and the geographic mix
of income earned by our international subsidiaries, which are taxed at rates
lower than the U.S. statutory tax rate.

Segment Results of Operations



We operate in four segments: Diagnostics, Breast Health, GYN Surgical and
Skeletal Health. The accounting policies of the segments are the same as those
described in the Notes to the Consolidated Financial Statements included in our
Annual Report on Form 10-K for the fiscal year ended September 25, 2021. We
measure segment performance based on total revenues and operating income.
Revenues from product sales of each of these segments are described in further
detail above. The
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discussion that follows is a summary analysis of total revenues and the primary
changes in operating income or loss by segment.

Diagnostics

                                                   Three Months Ended                                                        Six Months Ended
                            March 26,         March 27,                                              March 26,          March 27,
                              2022               2021                      Change                       2022               2021                      Change
                             Amount             Amount            Amount               %               Amount             Amount            Amount               %
Total Revenues             $  987.1          $ 1,064.5          $  (77.4)             (7.3) %       $ 1,937.5          $ 2,192.7          $ (255.2)            (11.6) %
Operating Income           $  540.6          $   700.6          $ (160.0)            (22.8) %       $ 1,072.4          $ 1,485.0          $ (412.6)            (27.8) %
Operating Income as a % of
Segment Revenue                54.8  %            65.8  %                                                55.3  %            67.7  %



Diagnostics revenues decreased in the current three and six month periods
compared to the corresponding periods in the prior year primarily due to a
decrease in sales of our SARS-CoV-2 assays, a decrease in royalty revenue from
Grifols related to licensing our intellectual property of our COVID-19 assays
for their sale in Spain and lower instrument sales, partially offset by revenue
from acquisitions, an increase in Aptima assays and Quant Viral assays.

Operating income for this business segment decreased in the current three and
six month periods compared to the corresponding periods in the prior year due to
a decrease in gross profit from lower COVID-19 assay sales and an increase in
operating expenses. Gross margin was 71.8% and 72.3% in the current three and
six month periods, respectively, compared to 77.3% and 78.7% in the
corresponding periods in the prior year, respectively. The decrease in gross
profit in the current three and six month periods was primarily due to lower
sales volume of our SARS-CoV-2 assays which have a higher margin, an increase in
intangible asset amortization expense from recent acquisitions, lower Grifols
license revenue, an increase in inventory reserves, higher field service costs
for our expanded instrument install bases and an increase in freight
internationally.

Operating expenses increased in the current three and six month periods compared
to the corresponding periods in the prior year primarily due to the inclusion of
operating expenses from the Biotheranostics, Mobidiag, and Diagenode
acquisitions, an increase in allocated advertising and charitable contributions,
an increase in salaries and bonus, an increase in marketing initiatives, higher
acquisition costs, and an increase in travel expenses partially offset by an
increase in the BARDA credit received and lower bad debt expense.

Breast Health

                                                  Three Months Ended                                                      Six Months Ended
                            March 26,         March 27,                                            March 26,         March 27,
                              2022              2021                      Change                     2022              2021                      Change
                             Amount            Amount            Amount              %              Amount            Amount            Amount              %
Total Revenues             $  310.4          $  336.3          $ (25.9)             (7.7) %       $  669.9          $  669.1          $   0.8               0.1  %
Operating Income           $   49.3          $   67.8          $ (18.5)            (27.3) %       $  131.0          $  154.1          $ (23.1)            (15.0) %
Operating Income as a % of
Segment Revenue                15.9  %           20.2  %                                              19.6  %           23.0  %



Breast Health revenues decreased in the current three month period compared to
the corresponding period in the prior year due to a decrease of $32.8 million in
product revenue partially offset by an increase of $6.9 million in service
revenue discussed above. Breast Health revenues increased in the current six
month period compared to the corresponding period in the prior year primarily
due to an increase in service revenue offset by a decrease in product revenue
discussed above.

Operating income for this business segment decreased in the current three and
six month periods compared to the corresponding periods in the prior year. The
decrease in the current three month period is primarily due to a decrease in
product sales gross profit, partially offset by an increase in service gross
profit from higher service revenue and a decrease in operating expenses. The
decrease in operating income in the current six month period is primarily due to
a decrease in product sales gross profit and an increase in operating expenses,
partially offset by an increase in gross profit from higher service revenue.
Gross margin was 53.4% and 54.6% in the current three and six month periods,
respectively, compared to 56.2% and 57.0% in the corresponding periods in the
prior year, respectively. The decrease in gross margin is primarily due to the
reduced
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Operating expenses decreased in the in the current three month period compared
to the corresponding period in the prior year primarily due to a decrease in
research and development project spend and a decrease in compensation and
commissions from lower sales and sales force headcount, partially offset by an
increase in allocated advertising, marketing initiatives and allocated
charitable donations. Operating expenses increased in the current six month
period compared to the corresponding period in the prior year primarily due to
an increase in allocated advertising and charitable contributions, an increase
in marketing initiatives, trade shows and sales meetings, higher salaries and
bonus and an increase in research and development project spend. These increases
were partially offset by a decrease in compensation and commissions from lower
sales and sales force headcount and lower restructuring charges.

GYN Surgical

                                                  Three Months Ended                                                      Six Months Ended
                            March 26,         March 27,                                            March 26,         March 27,
                              2022              2021                      Change                     2022              2021                      Change
                             Amount            Amount            Amount              %              Amount            Amount            Amount              %
Total Revenues             $  117.3          $  114.2          $   3.1               2.7  %       $  251.6          $  238.2          $  13.4               5.6  %
Operating Income           $    5.7          $   28.6          $ (22.9)            (80.1) %       $   32.3          $   42.3          $ (10.0)            (23.6) %
Operating Income as a % of
Segment Revenue                 4.9  %           25.0  %                                              12.8  %           17.8  %


GYN Surgical revenues increased in the current three and six month periods compared to the corresponding periods in the prior year primarily due to the increase in product revenues discussed above.



Operating income for this business segment decreased in the current three and
six month periods compared to the corresponding periods in the prior year
primarily due to an increase in operating expenses, which was, partially offset
by an increase in gross profit in the current six month period. Gross margin was
56.4% and 59.5% in the current three and six month periods, respectively,
compared to 59.5% and 61.1% in the corresponding periods in the prior year,
respectively. The decrease in gross margin was primarily due to product mix as
we sold more lower margin products in the current year periods.

Operating expenses increased in the current three and six month periods compared
to the corresponding periods in the prior year primarily due to a gain of $14.7
million and $10.1 million recorded in the prior three and six month periods,
respectively, to decrease the contingent consideration liability to fair value
related to the Acessa acquisition, the inclusion of Bolder expenses, and higher
advertising, marketing initiatives and travel, partially offset by lower legal
expenses. In addition, these increases were partially offset in the current six
month period by a decrease in research and development project spend.

Skeletal Health

                                                  Three Months Ended                                                       Six Months Ended
                            March 26,          March 27,                                            March 26,          March 27,
                               2022               2021                     Change                      2022               2021                     Change
                              Amount             Amount           Amount              %               Amount             Amount           Amount             %
Total Revenues             $    20.9          $    22.6          $ (1.7)             (7.5) %       $    47.9          $    47.4          $  0.5              1.1  %
Operating Income (Loss)    $    (1.5)         $    (0.2)         $ (1.3)                  **       $    (0.3)         $     0.8          $ (1.1)

**


Operating Income (Loss) as
a % of Segment Revenue          (7.2) %            (1.0) %                                              (0.6) %             1.7  %


** percentage not meaningful

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

Operating income for this business segment decreased in the current three and
six month periods compared to the corresponding periods in the prior year
primarily due to a decrease in gross profit. Gross margin was 30.4% and 33.5% in
the current three and six month periods, respectively, compared to 35.4% and
35.5% in the corresponding periods in the prior year, respectively. The decrease
in gross margin was primarily due to lower sales volume of our Horizon DXA
systems.

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Operating expenses were consistent in the current three and six month periods
compared to the corresponding periods in the prior year.

LIQUIDITY AND CAPITAL RESOURCES



At March 26, 2022, we had $2,576.3 million of working capital and our cash and
cash equivalents totaled $2,290.8 million. Our cash and cash equivalents
increased by $1,120.5 million during the first six months of fiscal 2022
primarily due to cash generated from operating activities, partially offset by
cash used in investing and financing activities primarily related to a business
acquisition and repurchases of our common stock.

In the first six months of fiscal 2022, our operating activities provided cash
of $1,626.4 million, primarily due to net income of $954.9 million, non-cash
charges for depreciation and amortization aggregating $214.1 million, and
stock-based compensation expense of $36.5 million. These adjustments to net
income were partially offset by a decrease in deferred taxes of $41.5 million
primarily due to the amortization of intangible assets. Cash provided by
operations included a net cash inflow of $443.0 million from changes in our
operating assets and liabilities. The net cash inflow was primarily driven by a
$355.3 million dollar decrease in prepaid expenses and other assets primarily
due to refunds received in the second quarter related to federal and state loss
carryback claims partially offset by a payment for our Women's Tennis
Association sponsorship, a decrease in accounts receivable of $101.6 million due
to strong collections in the quarter as days sales outstanding decreased to 55
days from 68 days in the fourth quarter of fiscal 2021, and an increase in
accounts payable of $9.1 million due to the timing of payments. These cash
inflows were partially offset by an increase in inventory of $26.4 million
primarily due to a strategic buildup of emergency sourced components for our
Breast Health business to hedge against the continuing worldwide supply
constraints.

In the first six months of fiscal 2022, our investing activities used cash of
$164.4 million primarily due to net cash paid for our acquisitions of $158.4
million and net capital expenditures of $69.9 million, which primarily consisted
of the placement of equipment under customer usage agreements as purchases of
equipment were more than offset by the reimbursement of funds received from the
Department of Defense under a grant to increase production of our two SARS-CoV-2
assays.

In the first six months of fiscal 2022, our financing activities used cash of
$346.0 million primarily due to $367.0 million for repurchases of our common
stock, $63.6 million for the repayment of debt acquired in the Mobidiag
acquisition, $22.5 million for the payment of employee taxes withheld for the
net share settlement of vested restricted stock units, and a $12.2 million
contingent consideration payment as a result of the completion of the first
annual earn-out period from the Acessa acquisition. Partially offsetting these
uses of cash were net proceeds of $103.7 million from the refinancing of the
2021 Credit Agreement and $17.3 million from our equity plans, primarily from
the exercise of stock options.

Debt



We had total recorded debt outstanding of $3.07 billion at March 26, 2022, which
was comprised of amounts outstanding under our 2021 Credit Agreement of $1.49
billion (principal of $1.5 billion), 2029 Senior Notes of $935.6 million
(principal of $950.0 million), 2028 Senior Notes of $395.7 million (principal of
$400.0 million) and the Securitization Program of $248.5 million.

2021 Credit Agreement



On September 27, 2021, we refinanced our existing term loan and revolving credit
facility with Bank of America, N.A. in its capacity as Administrative Agent,
Swing Line Lender and L/C Issuer, and certain other lenders from time to time
party thereto (the "2018 Credit Agreement") by entering into Refinancing
Amendment No. 2 dated as of September 27, 2021, to the Amended and Restated
Credit and Guaranty Agreement, dated as of October 3, 2017, as amended(the "2021
Credit Agreement"). Borrowings under the 2021 Credit Agreement are secured by
first-priority liens on, and a first priority security interest in,
substantially all of our and our Subsidiary Guarantors' U.S. assets. These liens
are subject to release during the term of the facilities if we are able to
achieve certain corporate or corporate family ratings and other conditions are
met. The credit facilities (the "2021 Credit Facilities") under the 2021 Credit
Agreement consist of:

•A $1.5 billion secured term loan ("2021 Term Loan") with a stated maturity date of September 25, 2026; and



•A secured revolving credit facility (the "2021 Revolver") under which the
Borrowers may borrow up to $2.0 billion, subject to certain sublimits, with a
stated maturity date of September 25, 2026.


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Borrowings under the 2021 Credit Agreement, other than Swing Line Loans, bear
interest, at our option, at the Base Rate, at the Eurocurrency Rate, at the
Alternative Currency Daily Rate, or at the LIBOR Daily Floating Rate, in each
case plus the Applicable Rate.

The Applicable Rate in regards to the Base Rate, the Eurocurrency Rate, the
Alternative Currency Daily Rate, the Alternative Currency Term Rate, and the
LIBOR Daily Floating Rate is subject to change depending on the Total Net
Leverage Ratio (as such terms are defined in the 2021 Credit Agreement). As of
March 26, 2022, the interest rate under the 2021 Term Loan was 1.46% per annum.

We are also required to pay a quarterly commitment fee calculated on a daily
basis equal to the Applicable Rate as of such day multiplied by the undrawn
committed amount available under the 2021 Revolver. As of March 26, 2022, this
commitment fee was 0.15% per annum.

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



We are required to make scheduled principal payments under the 2021 Term Loan in
increasing amounts ranging from $3.75 million per three-month period commencing
with the three-month period ending on December 29, 2022 to $18.75 million per
three-month period commencing with the three-month period ending on December 26,
2025. The remaining scheduled balance of $1.335 billion (or such lesser
aggregate principal amount then outstanding) on the 2021 Term Loan and any
amounts outstanding under the 2021 Revolver are due at maturity. In addition,
subject to the terms and conditions set forth in the 2021 Credit Agreement, we
may be required to make certain mandatory prepayments from the net proceeds of
specified types of asset sales (subject to certain reinvestment rights), debt
issuances (excluding permitted debt) and insurance recoveries (subject to
certain reinvestment rights). Certain of the mandatory prepayments are subject
to reduction or elimination of certain financial covenants are met. These
mandatory prepayments are required to be applied first to the 2021 Term Loan,
second to any outstanding amount under any Swing Line Loans), third to the 2021
Revolver, fourth to prepay any outstanding reimbursement obligations with
respect to letters of credit and fifth to cash collateralize any letters of
credit. Subject to certain limitations, we may voluntarily prepay any of the
2021 Credit Facilities without premium or penalty. As of March 26, 2022, the
outstanding principal balance of the 2021 Term Loan was $1.5 billion, and there
were no amounts outstanding under the 2021 Revolver.

The 2021 Credit Agreement contains affirmative and negative covenants
customarily applicable to senior secured credit facilities, including covenants
restricting our ability subject to negotiated exceptions, to incur additional
indebtedness and grant additional liens on our assets, engage in mergers or
acquisitions or dispose of assets, enter into sale-leaseback transactions, pay
dividends or make other distributions, voluntarily prepay other indebtedness,
enter into transactions with affiliated persons, make investments, and change
the nature of our business. In addition, the 2021 Credit Agreement requires the
Borrowers to maintain certain financial ratios. The 2021 Credit Agreement also
contains customary representations and warranties and events of default,
including payments defaults, breach of representations and warranties, covenant
defaults, cross defaults and an event of default upon a change of control of the
company.

The 2021 Credit Agreement contains two financial covenants (a total net leverage
ratio and an interest coverage ratio) measured as of the last day of each fiscal
quarter. As of March 26, 2022, we were in compliance with these covenants.

2028 Senior Notes



The total aggregate principal balance of the 2028 Senior Notes is $400.0
million. The 2028 Senior Notes are general senior unsecured obligations and are
guaranteed on a senior unsecured basis by certain of our domestic subsidiaries.
The 2028 Senior Notes mature on February 1, 2028 and bear interest at the rate
of 4.625% per year, payable semi-annually on February 1 and August 1 of each
year. We may redeem the 2028 Senior Notes at any time prior to February 1, 2023
at a price equal to 100% of the aggregate principal amount so redeemed, plus
accrued and unpaid interest, if any, to the redemption date and a make-whole
premium set forth in the indenture. We also have the option to redeem the 2028
Senior Notes on or after: February 1, 2023 through February 1, 2024
at 102.312% of par; February 1, 2024 through February 1, 2025 at 101.541% of
par; February 1, 2025 through February 1, 2026 at 100.770% of par; and February
1, 2026 and thereafter at 100% of par. In addition, if there is a change of
control coupled with a decline in ratings, as provided in the indenture, we will
be required to make an offer to purchase each holder's 2028 Senior Notes at a
price equal to 101% of their principal amount, plus accrued and unpaid interest,
if any, to the repurchase date.

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2029 Senior Notes



The total aggregate principal balance of the 2029 Senior Notes is $950.0
million. The 2029 Senior Notes are general senior unsecured obligations and are
guaranteed on a senior unsecured basis by certain domestic subsidiaries. The
2029 Senior Notes mature on February 15, 2029 and bear interest at the rate of
3.250% per year, payable semi-annually on February 15 and August 15 of each
year. We may redeem the 2029 Senior Notes at any time prior to September 28,
2023 at a price equal to 100% of the aggregate principal amount so redeemed,
plus accrued and unpaid interest, if any, to the redemption date and a
make-whole premium set forth in the indenture. We may also redeem up to 40% of
the aggregate principal amount of the 2029 Senior Notes with the net cash
proceeds of certain equity offerings at any time and from time to time before
September 28, 2023, at a redemption price equal to 103.250% of the aggregate
principal amount so redeemed, plus accrued and unpaid interest, if any, to the
redemption date. We have the option to redeem the 2029 Senior Notes on or after:
September 28, 2023 through September 27, 2024 at 101.625% of par; September 28,
2024 through September 27, 2025 at 100.813% of par; and September 28, 2025 and
thereafter at 100% of par. In addition, if there is a change of control coupled
with a decline in ratings, as provided in the indenture, we will be required to
make an offer to purchase each holder's 2029 Senior Notes at a price equal to
101% of their principal amount, plus accrued and unpaid interest, if any, to the
repurchase date.

Accounts Receivable Securitization Program



On April 25, 2016, we entered into a one-year accounts receivable securitization
program (the "Securitization Program") with several of our wholly-owned
subsidiaries and certain financial institutions. The Securitization Program
provides for annual renewals. Under the terms of the Securitization Program, we
and certain of our wholly-owned subsidiaries sell our customer receivables to a
bankruptcy remote special purpose entity, which is wholly-owned by us. The
special purpose entity, as borrower, and we, as servicer, have entered into a
credit and security agreement with several lenders (the "Credit and Security
Agreement") pursuant to which the special purpose entity may borrow from the
lenders up to the maximum borrowing amount allowed, with the loans secured by
the receivables. The amount that the special purpose entity may borrow at a
given point in time is determined based on the amount of qualifying receivables
that are present in the special purpose entity at such point in time. The assets
of the special purpose entity secure the amounts borrowed and cannot be used to
pay our other debts or liabilities.

On April 13, 2020, we amended the Credit and Security Agreement with the
lenders, temporarily suspending the ability to borrow and the need to comply
with covenants for up to a year. On June 11, 2021, we amended and restated the
Credit and Security Agreement to restart the Securitization Program and increase
the maximum borrowing amount to $320.0 million. Loans outstanding under the
Securitization Program bear interest at LIBOR plus an applicable margin for
defined tranches. As of March 26, 2022, there was $248.5 million outstanding
under this program, and the interest rate under the Securitization Program was
0.81%. Subsequent to March 26, 2022, we repaid the outstanding balance of $248.5
million.

Contingent Consideration Earn-Out Payments



In connection with certain of our acquisitions, we have incurred the obligation
to make contingent earn-out payments tied to performance criteria, principally
revenue growth of the acquired business over a specified period. In addition,
contractual provisions relating to these contingent earn-out obligations may
result in the risk of litigation relating to the calculation of the amount due
or our operation of the acquired business. Such litigation could be expensive
and divert management attention and resources. Our obligation to make contingent
payments may also result in significant operating expenses.

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

Currently, our only contingent consideration liability is from our Acessa
acquisition. We have an obligation to the former Acessa shareholders to make
contingent payments based on a multiple of annual incremental revenue growth
over a three-year period ending annually in December. There is no maximum
earnout. Pursuant to ASC 805, the contingent consideration was deemed to be part
of the purchase price, and we recorded our estimate of the fair value of the
contingent consideration liability utilizing the Monte Carlo simulation based on
future revenue projections of the business, comparable companies revenue growth
rates, implied volatility and applying a risk adjusted discount rate. The first
earn-out period was completed in December
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2021 and we paid $12.2 million to the former shareholders in the second quarter
of fiscal 2022. As of March 26, 2022, this liability was recorded at its fair
value of $58.8 million.

Stock Repurchase Program

On December 9, 2020, our Board of Directors authorized a new five-year share
repurchase plan, to repurchase up to $1.0 billion of our outstanding common
stock. The prior plan was terminated in connection with this new authorization.
During the three and six months ended March 26, 2022, we repurchased 2.9 million
and 5.2 million shares, respectively, of our common stock for a total
consideration of $200.0 million and $367.0 million, respectively. As of March
26, 2022, $324.7 million remained available under this authorization. The timing
of the share repurchases will be based upon our continuing analysis of market,
financial, and other factors. Repurchases under the authorized share repurchase
plan may be made using a variety of methods, which may include, but are not
limited to, open market purchases, privately negotiated transactions,
accelerated share repurchase agreements, or purchases pursuant to a Rule 10b5-1
plan under the Exchange Act. The authorized share repurchase plan may be
suspended, delayed or discontinued at any time.

Legal Contingencies



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

Future Liquidity Considerations



We expect to continue to review and evaluate potential strategic transactions
that we believe will complement our current or future business. Subject to the
"Risk Factors" set forth in Part II, Item 1A of this Quarterly Report on Form
10-Q, if any, as well as those described in Part I, Item 1A of our Annual Report
on Form 10-K for the fiscal year ended September 25, 2021 or any other of our
subsequently filed reports, and the general disclaimers set forth in our
"Cautionary Statement" regarding forward-looking statements at the outset of
this Item 2, we believe that our cash and cash equivalents, cash flows from
operations, and the cash available under our 2021 Revolver will provide us with
sufficient funds in order to fund our expected normal operations and debt
payments over the next twelve months. Our longer-term liquidity is contingent
upon future operating performance. We may also require additional capital in the
future to fund capital expenditures, repayment of debt, acquisitions, strategic
transactions or other investments. As described above, we have significant
indebtedness outstanding under our 2021 Credit Agreement, 2028 Senior Notes,
2029 Senior Notes and Securitization Program. These capital requirements could
be substantial. For a description of risks to our operating performance and our
indebtedness, see "Risk Factors" in Part I, Item 1A of our Annual Report on Form
10-K for the fiscal year ended September 25, 2021.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES



The discussion and analysis of our financial condition and results of operations
are based upon our interim consolidated financial statements, which have been
prepared in accordance with U.S. generally accepted accounting principles. The
preparation of these consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates, including those
related to revenue recognition for multiple element arrangements, allowance for
doubtful accounts, reserves for excess and obsolete inventories, valuations,
purchase price allocations and contingent consideration related to business
combinations, expected future cash flows including growth rates, discount rates,
terminal values and other assumptions used to evaluate the recoverability of
long-lived assets and goodwill, estimated fair values of intangible assets and
goodwill, amortization methods and periods, warranty reserves, certain accrued
expenses, restructuring and other related charges, stock-based compensation,
contingent liabilities, tax reserves and recoverability of our net deferred tax
assets and related valuation allowances. We base our estimates on historical
experience and various other assumptions that are believed to be reasonable
under the circumstances. Actual results could differ from these estimates if
past experience or other assumptions do not turn out to be substantially
accurate. Any differences may have a material impact on our financial condition
and results of operations. For a discussion of how these and other factors may
affect our business, see the "Cautionary
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  Table of Contents
Statement" regarding forward-looking statements set forth at the outset of this
Item 2 and the "Risk Factors" set forth in Part II, Item 1A of this Quarterly
Report on Form 10-Q as well as those described in Part I, Item 1A of our Annual
Report on Form 10-K for the fiscal year ended September 25, 2021 or any other of
our subsequently filed reports.

The critical accounting estimates that we believe affect our more significant
judgments and estimates used in the preparation of our consolidated financial
statements presented in this report are described in Management's Discussion and
Analysis of Financial Condition and Results of Operations and in the Notes to
the Consolidated Financial Statements included in our Annual Report on Form 10-K
for the fiscal year ended September 25, 2021. There have been no material
changes to our critical accounting policies or estimates from those set forth in
our Annual Report on Form 10-K for the fiscal year ended September 25, 2021.

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