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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Fiscal Year Ended
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December 31, 2019
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OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________ to ____________
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British Columbia
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,
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Canada
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98-0448205
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Shares, No Par Value
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BHC
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New York Stock Exchange
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,
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Toronto Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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Non-accelerated filer
(Do not check if a smaller reporting company) |
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Smaller reporting company
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Emerging growth company
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Page
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Item 16.
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Form 10-K Summary
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SIGNATURES
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the expense, timing and outcome of legal and governmental proceedings, investigations and information requests relating to, among other matters, our past distribution, marketing, pricing, disclosure and accounting practices (including with respect to our former relationship with Philidor Rx Services, LLC ("Philidor")), including pending investigations by the U.S. Attorney's Office for the District of Massachusetts and the U.S. Attorney's Office for the Southern District of New York, the pending investigations by the U.S. Securities and Exchange Commission (the “SEC”) of the Company, the investigation order issued by the Company from the Autorité des marchés financiers (the “AMF”) (the Company’s principal securities regulator in Canada), a number of pending securities litigations (including certain pending opt-out actions in the U.S. (related to the recently settled securities class action, (which is subject to final court approval, and remains subject to the risk and uncertainty that the U.S. District Court for the District of New Jersey may not approve the $1,210 million settlement agreement)) and the pending class action litigation in Canada and related opt-out actions) and purported class actions under the federal RICO statute and other claims, investigations or proceedings that may be initiated or that may be asserted;
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potential additional litigation and regulatory investigations (and any costs, expenses, use of resources, diversion of management time and efforts, liability and damages that may result therefrom), negative publicity and reputational harm on our Company, products and business that may result from the past and ongoing public scrutiny of our past distribution, marketing, pricing, disclosure and accounting practices and from our former relationship with Philidor;
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the past and ongoing scrutiny of our legacy business practices, including with respect to pricing (including the investigations by the U.S. Attorney's Offices for the District of Massachusetts and the Southern District of New York), and any pricing controls or price adjustments that may be sought or imposed on our products as a result thereof;
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pricing decisions that we have implemented, or may in the future elect to implement, such as the Patient Access and Pricing Committee’s commitment that the average annual price increase for our branded prescription pharmaceutical products will be set at no greater than single digits, or any future pricing actions we may take following review by our Patient Access and Pricing Committee (which is responsible for the pricing of our drugs);
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legislative or policy efforts, including those that may be introduced and passed by the U.S. Congress, designed to reduce patient out-of-pocket costs for medicines, which could result in new mandatory rebates and discounts or other pricing restrictions, controls or regulations (including mandatory price reductions);
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ongoing oversight and review of our products and facilities by regulatory and governmental agencies, including periodic audits by the U.S. Food and Drug Administration (the “FDA”) and the results thereof;
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actions by the FDA or other regulatory authorities with respect to our products or facilities;
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our substantial debt (and potential additional future indebtedness) and current and future debt service obligations, our ability to reduce our outstanding debt levels and the resulting impact on our financial condition, cash flows and results of operations;
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our ability to meet the financial and other covenants contained in our Restated Credit Agreement, senior notes indentures and other current or future debt agreements and the limitations, restrictions and prohibitions such covenants impose or may impose on the way we conduct our business, including prohibitions on incurring additional debt if certain financial covenants are not met, limitations on the amount of additional obligations we are able to incur pursuant to other covenants, and restrictions on our ability to make certain investments and other restricted payments;
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any default under the terms of our senior notes indentures or Restated Credit Agreement and our ability, if any, to cure or obtain waivers of such default;
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any delay in the filing of any future financial statements or other filings and any default under the terms of our senior notes indentures or Restated Credit Agreement as a result of such delays;
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any downgrade by rating agencies in our credit ratings, which may impact, among other things, our ability to raise debt and the cost of capital for additional debt issuances;
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any reductions in, or changes in the assumptions used in, our forecasts for fiscal year 2020 or beyond, which could lead to, among other things: (i) a failure to meet the financial and/or other covenants contained in our Restated Credit Agreement and/or senior notes indentures and/or (ii) impairment in the goodwill associated with certain of our reporting units or impairment charges related to certain of our products or other intangible assets, which impairments could be material;
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changes in the assumptions used in connection with our impairment analyses or assessments, which would lead to a change in such impairment analyses and assessments and which could result in an impairment in the goodwill associated with any of our reporting units or impairment charges related to certain of our products or other intangible assets;
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the uncertainties associated with the acquisition and launch of new products (such as our recently launched Bryhali®, Duobrii® and Ocuvite® Eye Performance products), including, but not limited to, our ability to provide the time, resources, expertise and costs required for the commercial launch of new products, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing, which could lead to material impairment charges;
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our ability or inability to extend the profitable life of our products, including through line extensions and other life-cycle programs;
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our ability to retain, motivate and recruit executives and other key employees;
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our ability to implement effective succession planning for our executives and key employees;
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factors impacting our ability to achieve anticipated growth in our Ortho Dermatologics business, including the success of recently launched products (such as Bryhali® and Duobrii®), the ability to successfully implement and operate Dermatology.com, our new cash-pay prescription program for certain of our Ortho Dermatologics branded products, and the ability of such program to achieve the anticipated goals respecting patient access and fulfillment, the approval of pending and pipeline products (and the timing of such approvals), expected geographic expansion, changes in estimates on market potential for dermatology products and continued investment in and success of our sales force;
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factors impacting our ability to achieve anticipated revenues for our products, including changes in anticipated marketing spend on such products and launch of competing products;
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the challenges and difficulties associated with managing a large complex business, which has, in the past, grown rapidly;
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our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;
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our ability to effectively operate and grow our businesses in light of the challenges that the Company has faced and market conditions, including with respect to its substantial debt, pending investigations and legal proceedings, scrutiny of our past pricing and other practices, and limitations on the way we conduct business imposed by the covenants contained in our Restated Credit Agreement, senior notes indentures and the agreements governing our other indebtedness;
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the extent to which our products are reimbursed by government authorities, pharmacy benefit managers ("PBMs") and other third-party payors; the impact our distribution, pricing and other practices (including as it relates to our current relationship with Walgreen Co. ("Walgreens")) may have on the decisions of such government authorities, PBMs and other third-party payors to reimburse our products; and the impact of obtaining or maintaining such reimbursement on the price and sales of our products;
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the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price and sales of our products in connection therewith;
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the consolidation of wholesalers, retail drug chains and other customer groups and the impact of such industry consolidation on our business;
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our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries;
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the actions of our third-party partners or service providers of research, development, manufacturing, marketing, distribution or other services, including their compliance with applicable laws and contracts, which actions may be beyond our control or influence, and the impact of such actions on our Company, including the impact to the Company of our former relationship with Philidor and any alleged legal or contractual non-compliance by Philidor;
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the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering and operating in new and different geographic markets (including the challenges created by new and different regulatory regimes in such countries and the need to comply with applicable anti-bribery and economic sanctions laws and regulations);
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adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in certain of the countries in which we do business;
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the impact of the United States-Mexico-Canada Agreement (“USMCA”) and any potential changes to other trade agreements;
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the final outcome and impact of Brexit negotiations;
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the trade conflict between the United States and China;
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the extent and impact of the coronavirus reported to have surfaced in China;
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our ability to obtain, maintain and license sufficient intellectual property rights over our products and enforce and defend against challenges to such intellectual property (such as in connection with the recent filing by Sandoz Inc. (“Sandoz”) and Norwich Pharmaceuticals Inc. (“Norwich”) of their respective Abbreviated New Drug Application (“ANDA”) for Xifaxan® (rifaximin) 550 mg tablets and the Company’s related lawsuit filed against Sandoz in connection therewith. The Company intends to file suit against Norwich within the regulated timeframe);
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the introduction of generic, biosimilar or other competitors of our branded products and other products, including the introduction of products that compete against our products that do not have patent or data exclusivity rights;
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our ability to identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis and the difficulties, challenges, time and resources associated with the integration of acquired companies, businesses and products;
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any additional divestitures of our assets or businesses and our ability to successfully complete any such divestitures on commercially reasonable terms and on a timely basis, or at all, and the impact of any such divestitures on our Company, including the reduction in the size or scope of our business or market share, loss of revenue, any loss on sale, including any resultant impairments of goodwill or other assets, or any adverse tax consequences suffered as a result of any such divestitures;
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the expense, timing and outcome of pending or future legal and governmental proceedings, arbitrations, investigations, subpoenas, tax and other regulatory audits, examinations, reviews and regulatory proceedings against us or relating to us and settlements thereof;
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our ability to negotiate the terms of or obtain court approval for the settlement of certain legal and regulatory proceedings;
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our ability to obtain components, raw materials or finished products supplied by third parties (some of which may be single-sourced) and other manufacturing and related supply difficulties, interruptions and delays;
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the disruption of delivery of our products and the routine flow of manufactured goods;
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economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;
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interest rate risks associated with our floating rate debt borrowings;
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our ability to effectively distribute our products and the effectiveness and success of our distribution arrangements, including the impact of our arrangements with Walgreens;
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our ability to effectively promote our own products and those of our co-promotion partners;
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the success of our fulfillment arrangements with Walgreens, including market acceptance of, or market reaction to, such arrangements (including by customers, doctors, patients, PBMs, third-party payors and governmental agencies), and the continued compliance of such arrangements with applicable laws;
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our ability to secure and maintain third-party research, development, manufacturing, licensing, marketing or distribution arrangements;
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the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or recalls or withdrawals of products from the market;
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the mandatory or voluntary recall or withdrawal of our products from the market and the costs associated therewith;
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the availability of, and our ability to obtain and maintain, adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third-party insurance or self-insurance;
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the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to approvals by the FDA, Health Canada and similar agencies in other countries, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;
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the results of continuing safety and efficacy studies by industry and government agencies;
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the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as other factors impacting the commercial success of our products, which could lead to material impairment charges;
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the results of management reviews of our research and development portfolio (including following the receipt of clinical results or feedback from the FDA or other regulatory authorities), which could result in terminations of specific projects which, in turn, could lead to material impairment charges;
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the seasonality of sales of certain of our products;
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declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control;
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compliance by the Company or our third-party partners and service providers (over whom we may have limited influence), or the failure of our Company or these third parties to comply, with health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and business practices (including with respect to pricing), worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act and the Canadian Corruption of Foreign Public Officials Act), worldwide economic sanctions and/or export laws, worldwide environmental laws and regulation and privacy and security regulations;
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the impacts of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Health Care Reform Act”) and potential amendment thereof and other legislative and regulatory health care reforms in the countries in which we operate, including with respect to recent government inquiries on pricing;
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the impact of any changes in or reforms to the legislation, laws, rules, regulation and guidance that apply to the Company and its business and products or the enactment of any new or proposed legislation, laws, rules, regulations or guidance that will impact or apply to the Company or its businesses or products;
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the impact of changes in federal laws and policy under consideration by the Trump administration and Congress, including the effect that such changes will have on fiscal and tax policies, the potential revision of all or portions of the Health Care Reform Act, international trade agreements and policies and policy efforts designed to reduce patient out-of-pocket costs for medicines (which could result in new mandatory rebates and discounts or other pricing restrictions);
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illegal distribution or sale of counterfeit versions of our products; and
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interruptions, breakdowns or breaches in our information technology systems.
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The Bausch + Lomb/International segment consists of: (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products, primarily comprised of Bausch + Lomb products, with a focus on the Vision Care, Surgical, Consumer and Ophthalmology Rx products and (ii) with the exception of sales of Solta products, sales in Canada, Europe, Asia, Australia, Latin America, Africa and the Middle East of branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical device products and Bausch + Lomb products.
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The Salix segment consists of sales in the U.S. of GI products.
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The Ortho Dermatologics segment consists of: (i) sales in the U.S. of Ortho Dermatologics (dermatological) products and (ii) global sales of Solta medical aesthetic devices.
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The Diversified Products segment consists of sales: (i) in the U.S. of pharmaceutical products in the areas of neurology and certain other therapeutic classes, (ii) in the U.S. of generic products, (iii) in the U.S. of dentistry products and (iv) of certain other businesses divested during 2017 that were not core to the Company's operations, including the Company's equity interests in Dendreon Pharmaceuticals LLC (“Dendreon”) (June 28, 2017) and Sprout Pharmaceuticals, Inc. (“Sprout”) (December 20, 2017). As a result of the divestitures of Dendreon and Sprout, the Company exited the oncology and women's health businesses, respectively.
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2019
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2018
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2017
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(in millions)
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Amount
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Pct.
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Amount
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Pct.
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Amount
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Pct.
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Bausch + Lomb/International
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$
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4,739
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55
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%
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$
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4,664
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56
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%
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$
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4,795
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55
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%
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Salix
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2,022
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23
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%
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1,749
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21
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%
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1,566
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18
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%
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Ortho Dermatologics
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565
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7
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%
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617
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7
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%
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721
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8
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%
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Diversified Products
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1,275
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15
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%
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1,350
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16
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%
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1,642
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19
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%
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Total revenues
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$
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8,601
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100
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%
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$
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8,380
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100
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%
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$
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8,724
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100
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%
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SofLens® Daily Disposable Contact Lenses, which use ComfortMoist® Technology (a combination of thin lens design and moisture-rich packaging solution) and High Definition Optics™ which is an aspheric design that reduces spherical aberration over a range of powers, especially in low light.
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PureVision® is a silicone hydrogel frequent replacement contact lens using AerGel® technology lens material to allow natural levels of oxygen to reach the eye as well as resist protein buildup. The lens also incorporates an aspheric optical design that reduces spherical aberration.
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Biotrue® ONEday daily disposable contact lenses, which are made of a unique material that works like the eye to form a dehydration barrier. The lens maintains over 98% of its moisture for up to 16 hours, it matches the water content of the cornea at 78% and allows for the oxygen a healthy eye needs.
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Biotrue® ONEday for Astigmatism is a daily disposable contact lens for astigmatic patients. The Biotrue® ONEday lenses incorporates Surface Active Technology™ to provide a dehydration barrier. The Biotrue® ONEday for Astigmatism also includes evolved peri-ballast geometry to deliver stability and comfort for the astigmatic patient.
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Bausch + Lomb ULTRA® is a silicone hydrogel frequent replacement contact lens that uses the proprietary MoistureSeal® technology which allows the contact lens to retain 95% of moisture after 16 hours of wear, limiting lens dryness and resulting symptoms.
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Bausch + Lomb ULTRA® for Astigmatism is a monthly planned replacement contact lens for astigmatic patients. The Bausch + Lomb ULTRA® for Astigmatism lens was developed using the proprietary MoistureSeal® technology. In addition, the Bausch + Lomb ULTRA® for Astigmatism lens integrates an OpticAlign® design engineered for lens stability and to promote a successful wearing experience for the astigmatic patient.
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Bausch + Lomb ULTRA® for Presbyopia is a monthly planned replacement contact lens for presbyopic patients. The Bausch + Lomb ULTRA® for Presbyopia lens was developed using the proprietary MoistureSeal® technology. In addition, the Bausch + Lomb ULTRA® for Presbyopia lens integrates a 3-zone progressive design for near, intermediate and distance vision. We launched expanded parameters of this product throughout 2017.
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Bausch + Lomb - SiHy Daily AQUALOX™ is a silicone hydrogel daily disposable contact lens designed to provide clear vision throughout the day. Product validation was completed in June 2018 and SiHy Daily AQUALOX™ was launched in Japan in September 2018. We expect to launch our SiHy Daily disposable contact lens in the U.S. in the second half of 2020.
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The Stellaris Elite® Vision Enhancement System is our next generation phacoemulsification cataract platform, which offers new innovations, as well as the opportunity to add upgrades and enhancements every one to two years. Stellaris Elite® is the first phacoemulsification platform on the market to offer Adaptive Fluidics™, which combines aspiration control with predictive infusion management to create a responsive and controlled surgical environment for efficient cataract lens removal. Our Stellaris Elite® Vision Enhancement System was launched in April 2017.
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A portfolio of ophthalmic surgical products, including: (i) intraocular lenses such as Akreos®, enVista®, Crystalens® and Trulign®, (ii) a suite of surgical instruments including Synergetics® and (iii) surgical equipment for cataract, refractive and vitreoretinal surgery, such as Stellaris® PC, a vitreoretinal and cataract surgery system and the VICTUS® femtosecond laser for cataract surgery.
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PreserVision® AREDS 2 is an eye vitamin formula for those with moderate-to-advanced age-related macular degeneration.
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Ocuvite® is a vitamin and mineral supplement for the eye that contains lutein (an antioxidant carotenoid), a nutrient that supports macular health by helping filter harmful blue light.
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Biotrue® multi-purpose solution helps prevent certain tear proteins from denaturing and fights germs for healthy contact lens wear. Biotrue® multi-purpose solution uses a lubricant found in eyes and is pH balanced to match healthy tears.
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Lumify® (brimonidine tartrate ophthalmic solution, 0.025%) is an OTC eye drop developed as an ocular redness reliever. Lumify® was launched in May 2018.
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Bausch + Lomb Renu® Advanced Formula multi-purpose solution was launched in 2017 and is a novel soft and silicone hydrogel contact lenses solution that makes use of three disinfectants and two moisture agents.
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Boston® solution is a specialty cleansing solution design for gas permeable contact lenses.
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Lotemax® Gel is a topical corticosteroid indicated for the treatment of inflammation and pain following ocular surgery. This formulation is a technology that allows the drug to adhere to the ocular surface and offers dose uniformity, which eliminates the need to shake the product in order to ensure the drug is in suspension. The product contains a low concentration of preservative and two known moisturizers.
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Vyzulta® (latanoprostene bunod ophthalmic solution, 0.024%) is an intraocular pressure lowering single-agent eye drop dosed once daily for patients with open angle glaucoma or ocular hypertension and was launched in December 2017.
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Prolensa® (bromfenac ophthalmic solution) 0.07% is a nonsteroidal anti-inflammatory drug (NSAID) indicated to treat inflammation and reduce eye pain in patients after cataract surgery.
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Xifaxan® which includes: (i) tablets indicated for the treatment of IBS-D in adults and for the reduction in risk of overt hepatic encephalopathy recurrence in adults and (ii) tablets indicated for the treatment of travelers’ diarrhea caused by noninvasive strains of Escherichia coli in patients 12 years of age and older.
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Glumetza® (metformin hydrochloride) extended release tablets are indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus.
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Relistor® (methylnaltrexone) is given to adults who use narcotic medicine to treat severe chronic pain that is not caused by cancer to prevent constipation without reducing the pain-relieving effects of the narcotic.
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Trulance® (plecanatide) is a once-daily tablet for adults with chronic idiopathic constipation, or CIC, and irritable bowel syndrome with constipation, or IBS-C.
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Plenvu® is a novel, lower-volume polyethylene glycol-based bowel preparation developed to help provide complete bowel cleansing, with an additional focus on the ascending colon. Plenvu® was launched in September 2018.
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Jublia® (efinaconazole 10% topical solution) is a topical azole approved for the treatment of onychomycosis of the toenails (toenail fungus).
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Targretin® (bexarotene) capsules and gel are prescription medicines used to treat the skin problems arising from the disease cutaneous T-cell lymphoma, or CTCL, in patients who have not responded well to other treatments.
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Bryhali® was launched in November 2018 and is a novel product that contains a unique, lower concentration of halobetasol propionate for the treatment of moderate-to-severe psoriasis.
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Siliq® was launched in the U.S. in 2017 and is an IL-17 receptor blocker monoclonal antibody for patients with moderate-to-severe plaque psoriasis.
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Altreno® (tretinoin 0.05%) was launched in the U.S. in October 2018 and is a lotion approved for the topical treatment of acne vulgaris in patients 9 years of age and older.
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Duobrii® was launched in June 2019 and is the first and only topical lotion that contains a unique combination of halobetasol propionate and tazarotene for the treatment of moderate-to-severe plaque psoriasis in adults.
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Arazlo™ (tazarotene) Lotion, 0.045% is an acne product containing lower concentration of tazarotene in a lotion form to help reduce irritation while maintaining efficacy. The FDA approved the New Drug Application (“NDA”) for Arazlo™ on December 18, 2019, which we expect to launch in the first half of 2020.
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An Acne franchise, which includes Solodyn®, a prescription oral antibiotic approved to treat only the red, pus-filled pimples of moderate to severe acne in patients 12 years of age and older, as well as Retin-A®, Clindagel® and Onexton® Gel, a fixed combination 1.2% clindamycin phosphate and 3.75% benzoyl peroxide medication for the once-daily treatment of comedonal (non-inflammatory) and inflammatory acne in patients 12 years of age and older.
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•
|
Thermage®, a non-invasive radiofrequency (RF) treatment that can smooth, tighten and contour skin for an overall younger-looking appearance. In 2018, we began launching Next Generation Thermage FLX® as previously discussed.
|
•
|
Fraxel®, a treatment that improves tone, texture and radiance for aging, sun damaged or scarred skin.
|
•
|
Clear + Brilliant®, a laser treatment that can help prevent the visible signs of aging and address the overall effects time and the environment can have on skin.
|
•
|
VASERlipo® for minimally-invasive aesthetic body contouring that yields dramatic results with less pain and downtime of traditional liposuction.
|
•
|
Wellbutrin XL® is an extended release formulation of bupropion indicated for the treatment of major depressive disorder in adults.
|
•
|
Cuprimine® is a treatment for Wilson's disease (a condition in which high levels of copper in the body cause damage to the liver, brain, and other organs), cystinuria (a condition which leads to cystine stones in the kidneys) and for patients with severe rheumatoid arthritis who have failed to respond to an adequate trial of conventional therapy.
|
•
|
Migranal® (dihydroergotamine mesylate) Nasal Spray is used to treat an active migraine headache with or without aura.
|
•
|
Ativan® (lorazepam) is indicated for the management of anxiety disorders or for the short-term relief of the symptoms of anxiety or anxiety associated with depressive symptoms.
|
•
|
Xenazine® is indicated for the treatment of chorea associated with Huntington’s disease. In the U.S., Xenazine® is distributed for us by Lundbeck LLC under an exclusive marketing, distribution and supply agreement.
|
•
|
Syprine® is a treatment for Wilson's disease in patients who cannot take the medication known as penicillamine.
|
•
|
Aplenzin® (bupropion hydrobromide extended release tablets) is indicated for the treatment of major depressive disorder, and for the prevention of seasonal major depressive episodes in patients with a diagnosis of seasonal affective disorder.
|
•
|
Librax® (chlordiazepoxide and clidinium) is indicated to control emotional and somatic factors in gastrointestinal disorders. Librax® may also be used as adjunctive therapy in the treatment of peptic ulcer and in the treatment of the irritable bowel syndrome (irritable colon, spastic colon, mucous colitis) and acute enterocolitis.
|
•
|
Diastat® AG (diazepam rectal gel) is a gel formulation of diazepam intended for rectal administration for certain patients with epilepsy who are already taking antiepileptic medications, and who require occasional use of diazepam to control bouts of increased seizure activity.
|
•
|
Uceris® AG (budesonide) extended release tablets are a prescription corticosteroid medicine used to help get mild to moderate ulcerative colitis under control (induce remission).
|
•
|
Elidel® AG (pimecrolimus) is a second-line therapy for short term and intermittent long-term therapy of mild to moderate atopic dermatitis.
|
•
|
Apriso® AG is an aminosalicylate anti-inflammatory drug used to treat ulcerative colitis, proctitis and proctosigmoiditis. Apriso is also used to prevent the symptoms of ulcerative colitis from recurring. Apriso® AG was launched in December 2019.
|
•
|
Tobramycin and Dexamethasone Ophthalmic Suspension is indicated for steroid-responsive inflammatory ocular conditions for which a corticosteroid is indicated and where superficial bacterial ocular infection or a risk of bacterial ocular infection exists.
|
•
|
Latanoprost Ophthalmic Solution is indicated for the reduction of elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension.
|
•
|
Arestin® (minocycline hydrochloride) is a subgingival sustained-release antibiotic. Arestin® is indicated as an adjunct to scaling and root planing ("SRP") procedures for reduction of pocket depth in patients with adult periodontitis. Arestin® may be used as part of a periodontal maintenance program, which includes good oral hygiene and SRP.
|
•
|
NeutraSal® is indicated for dryness of the mouth (hyposalivation, xerostomia) and dryness of the oral mucosa due to drugs that suppress salivary secretion.
|
|
|
2019
|
|
2018
|
|
2017
|
McKesson Corporation
|
|
17%
|
|
18%
|
|
19%
|
AmerisourceBergen Corporation
|
|
16%
|
|
18%
|
|
15%
|
Cardinal Health, Inc.
|
|
14%
|
|
13%
|
|
13%
|
•
|
our flexibility to plan for, or react to, competitive challenges in our business and the pharmaceutical and medical device industries may be compromised;
|
•
|
we may be put at a competitive disadvantage relative to competitors that do not have as much debt as we have, and competitors that may be in a more favorable position to access additional capital resources;
|
•
|
our ability to make acquisitions and execute business development activities through acquisitions will be limited and may, in future years, continue to be limited; and
|
•
|
our ability to resolve regulatory and litigation matters may be limited.
|
•
|
safety, efficacy, convenience and cost-effectiveness of our products compared to products of our competitors;
|
•
|
scope of approved uses and marketing approval;
|
•
|
availability of patent or regulatory exclusivity;
|
•
|
timing of market approvals and market entry;
|
•
|
ongoing regulatory obligations following approval, such as the requirement to conduct a Risk Evaluation and Mitigation Strategy ("REMS") programs;
|
•
|
any restrictions or “black box” warnings required on the labeling of such products;
|
•
|
availability of alternative products from our competitors;
|
•
|
acceptance of the price of our products;
|
•
|
effectiveness of our sales forces and promotional efforts;
|
•
|
the level of reimbursement of our products;
|
•
|
acceptance of our products on government and private formularies;
|
•
|
ability to market our products effectively at the retail level or in the appropriate setting of care; and
|
•
|
the reputation of our products.
|
•
|
difficulties in coordinating and managing foreign operations, including ensuring that foreign operations comply with foreign laws as well as Canadian and U.S. laws applicable to Canadian companies with U.S. and foreign operations, such as export and sanctions laws and the U.S. Foreign Corrupt Practices Act (“FCPA”), the Canadian Corruption of Foreign Public Officials Act, and other applicable worldwide anti-bribery laws;
|
•
|
price and currency exchange controls;
|
•
|
restrictions on the repatriation of funds;
|
•
|
scarcity of hard currency, including the U.S. dollar, which may require a transfer or loan of funds to the operations in such countries, which they may not be able to repay on a timely basis;
|
•
|
political and economic instability;
|
•
|
compliance with multiple regulatory regimes;
|
•
|
compliance with economic sanctions laws and other laws that apply to our activities in the countries where we operate;
|
•
|
less established legal and regulatory regimes in certain jurisdictions, including as relates to enforcement of anti-bribery and anti-corruption laws and the reliability of the judicial systems;
|
•
|
differing degrees of protection for intellectual property;
|
•
|
unexpected changes in foreign regulatory requirements, including quality standards and other certification requirements;
|
•
|
new export license requirements;
|
•
|
adverse changes in tariff and trade protection measures;
|
•
|
differing labor regulations;
|
•
|
potentially negative consequences from changes in or interpretations of tax laws;
|
•
|
restrictive governmental actions;
|
•
|
possible nationalization or expropriation;
|
•
|
credit market uncertainty;
|
•
|
differing local practices, customs and cultures, some of which may not align or comply with our Company practices and policies or U.S. laws and regulations;
|
•
|
difficulties with licensees, contract counterparties, or other commercial partners; and
|
•
|
differing local product preferences and product requirements.
|
•
|
development and launch of new competitive products;
|
•
|
the timing and receipt of FDA approvals or lack of approvals;
|
•
|
costs related to business development transactions;
|
•
|
changes in the amount we spend to promote our products;
|
•
|
delays between our expenditures to acquire new products, technologies or businesses and the generation of revenues from those acquired products, technologies or businesses;
|
•
|
changes in treatment practices of physicians that currently prescribe certain of our products;
|
•
|
increases in the cost of raw materials used to manufacture our products;
|
•
|
FDA regulatory actions relating to our manufacturers;
|
•
|
manufacturing and supply interruptions;
|
•
|
our responses to price competition;
|
•
|
new legislation that would control or regulate the prices of drugs;
|
•
|
a protracted and wide-ranging trade conflict between the United States and China;
|
•
|
expenditures as a result of legal actions (and settlements thereof), including the defense of our patents and other intellectual property;
|
•
|
market acceptance of our products;
|
•
|
the timing of wholesaler and distributor purchases and success of our wholesaler and distributor arrangements;
|
•
|
general economic and industry conditions, including potential fluctuations in interest rates;
|
•
|
changes in seasonality of demand for certain of our products;
|
•
|
foreign currency exchange rate fluctuations;
|
•
|
changes to, or the confidence in, our business strategy;
|
•
|
changes to, or the confidence in, our management; and
|
•
|
expectations for future growth.
|
Location
|
|
Purpose
|
|
Owned
or
Leased
|
|
Approximate
Square
Footage
|
|
Corporate & Administration
|
|
|
|
|
|
|
|
Laval, Quebec, Canada
|
|
Corporate headquarters, R&D, manufacturing and warehouse facility
|
|
Owned
|
|
338,000
|
|
Bridgewater, New Jersey(1)
|
|
Administration
|
|
Leased
|
|
310,000
|
|
Bausch + Lomb/International
|
|
|
|
|
|
|
|
Jelenia Gora, Poland
|
|
Offices, R&D, manufacturing and warehouse facility
|
|
Owned
|
|
1,567,000
|
|
Rochester, New York
|
|
Offices, R&D and manufacturing facility
|
|
Owned
|
|
953,000
|
|
San Juan del Rio, Mexico
|
|
Offices and manufacturing facility
|
|
Owned
|
|
853,000
|
|
El Obour City, Egypt
|
|
Offices, R&D, manufacturing and warehouse facility
|
|
Owned
|
|
630,000
|
|
Waterford, Ireland
|
|
R&D and manufacturing facility
|
|
Owned
|
|
500,000
|
|
Woodruff, South Carolina
|
|
Distribution facility
|
|
Leased
|
|
432,000
|
|
Jinan, China
|
|
Offices and manufacturing facility
|
|
Owned
|
|
418,000
|
|
Rzeszow, Poland
|
|
Offices, R&D, manufacturing and warehouse facility
|
|
Owned
|
|
380,000
|
|
Berlin, Germany
|
|
Manufacturing, distribution and office facility
|
|
Owned
|
|
339,000
|
|
Greenville, South Carolina
|
|
Manufacturing and distribution facility
|
|
Owned
|
|
314,000
|
|
Chattanooga, Tennessee
|
|
Distribution facility
|
|
Leased
|
|
240,000
|
|
Tampa, Florida
|
|
R&D and manufacturing facility
|
|
Owned
|
|
176,000
|
|
Aubenas, France
|
|
Offices, manufacturing and warehouse facility
|
|
Owned
|
|
148,000
|
|
Macherio, Italy
|
|
Offices, R&D, manufacturing and warehouse facility
|
|
Owned
|
|
119,000
|
|
Beijing, China
|
|
Warehouse facility and distribution
|
|
Owned
|
|
102,000
|
|
Salix
|
|
|
|
|
|
|
|
Steinbach, Manitoba, Canada
|
|
Offices, manufacturing and warehouse facility
|
|
Owned
|
|
241,000
|
|
|
|
As of December 31,
|
||||||||||
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
Bausch Health Companies Inc.
|
|
$100
|
|
$71
|
|
$10
|
|
$15
|
|
$13
|
|
$21
|
S&P 500
|
|
$100
|
|
$101
|
|
$114
|
|
$138
|
|
$132
|
|
$174
|
S&P/TSX Composite
|
|
$100
|
|
$92
|
|
$111
|
|
$121
|
|
$110
|
|
$136
|
Peer Group
|
|
$100
|
|
$108
|
|
$88
|
|
$96
|
|
$99
|
|
$121
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
Bausch Health Companies Inc.
|
|
$100
|
|
$143
|
|
$127
|
|
$206
|
S&P 500
|
|
$100
|
|
$122
|
|
$116
|
|
$153
|
S&P/TSX Composite
|
|
$100
|
|
$109
|
|
$99
|
|
$122
|
Peer Group
|
|
$100
|
|
$110
|
|
$113
|
|
$138
|
|
|
Years Ended December 31,
|
||||||||||||||||||
(in millions, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Consolidated operating data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
8,601
|
|
|
$
|
8,380
|
|
|
$
|
8,724
|
|
|
$
|
9,674
|
|
|
$
|
10,447
|
|
Operating (loss) income
|
|
$
|
(203
|
)
|
|
$
|
(2,384
|
)
|
|
$
|
102
|
|
|
$
|
(566
|
)
|
|
$
|
1,527
|
|
Net (loss) income attributable to Bausch Health Companies Inc.
|
|
$
|
(1,788
|
)
|
|
$
|
(4,148
|
)
|
|
$
|
2,404
|
|
|
$
|
(2,409
|
)
|
|
$
|
(292
|
)
|
(Loss) earnings per share attributable to Bausch Health Companies Inc.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(5.08
|
)
|
|
$
|
(11.81
|
)
|
|
$
|
6.86
|
|
|
$
|
(6.94
|
)
|
|
$
|
(0.85
|
)
|
Diluted
|
|
$
|
(5.08
|
)
|
|
$
|
(11.81
|
)
|
|
$
|
6.83
|
|
|
$
|
(6.94
|
)
|
|
$
|
(0.85
|
)
|
Cash dividends declared per share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
At December 31,
|
||||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Consolidated balance sheet information:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
3,243
|
|
|
$
|
721
|
|
|
$
|
720
|
|
|
$
|
542
|
|
|
$
|
597
|
|
Working capital
|
|
$
|
721
|
|
|
$
|
375
|
|
|
$
|
478
|
|
|
$
|
1,468
|
|
|
$
|
194
|
|
Total assets
|
|
$
|
33,863
|
|
|
$
|
32,492
|
|
|
$
|
37,497
|
|
|
$
|
43,529
|
|
|
$
|
48,965
|
|
Long-term debt, including current portion
|
|
$
|
25,895
|
|
|
$
|
24,305
|
|
|
$
|
25,444
|
|
|
$
|
29,846
|
|
|
$
|
31,088
|
|
Common shares
|
|
$
|
10,172
|
|
|
$
|
10,121
|
|
|
$
|
10,090
|
|
|
$
|
10,038
|
|
|
$
|
9,897
|
|
Bausch Health Companies Inc. shareholders’ equity
|
|
$
|
1,063
|
|
|
$
|
2,733
|
|
|
$
|
5,849
|
|
|
$
|
3,152
|
|
|
$
|
5,910
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of common shares issued and outstanding
|
|
352.6
|
|
|
349.9
|
|
|
348.7
|
|
|
347.8
|
|
|
342.9
|
|
•
|
Financing of Litigation Settlement - At December 31, 2019, Cash and cash equivalents and Long-term debt includes $2,472 million in net proceeds from the December 2019 Financing and Refinancing Transactions (defined below).
|
•
|
Interest Expense in 2019, 2018, 2017, 2016 and 2015 was $1,612 million, $1,685 million, $1,840 million, $1,836 million and $1,563 million, respectively. The increase in interest expense during the years 2015 through 2017 is reflective of the additional debt obtained to finance the acquisitions previously discussed and, to a lesser extent, increases in the stated rates of interest for our debt obligations. The decrease in interest expense in the years 2018 and 2019 as compared to 2017 reflects: (i) lower principal amounts of outstanding debt throughout 2018 and for most of 2019, as during 2016 through 2019 the Company repaid (net of additional borrowings and excluding the impact from the December 2019 Financing and Refinancing Transactions (defined below)) over $7,700 million of debt and (ii) lower amortization and write-offs of debt discounts and deferred financing costs.
|
•
|
Loss on extinguishment of debt in 2019, 2018, 2017, 2016 and 2015 was $42 million, $119 million, $122 million, $0 and $20 million, respectively, and was incurred in connection with the repayments and refinancing of our debt obligations.
|
•
|
Weighted average stated rate of interest as of December 31, 2019, 2018, 2017, 2016 and 2015 was 6.21%, 6.23%, 6.07%, 5.75% and 5.10%, respectively.
|
•
|
The Bausch + Lomb/International segment consists of: (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products, primarily comprised of Bausch + Lomb products, with a focus on the Vision Care, Surgical, Consumer and Ophthalmology Rx products and (ii) with the exception of sales of Solta products, sales in Canada, Europe, Asia, Australia, Latin America, Africa and the Middle East of branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical device products and Bausch + Lomb products.
|
•
|
The Salix segment consists of sales in the U.S. of GI products.
|
•
|
The Ortho Dermatologics segment consists of: (i) sales in the U.S. of Ortho Dermatologics (dermatological) products and (ii) global sales of Solta medical aesthetic devices.
|
•
|
The Diversified Products segment consists of sales: (i) in the U.S. of pharmaceutical products in the areas of neurology and certain other therapeutic classes, (ii) in the U.S. of generic products, (iii) in the U.S. of dentistry products and (iv) of certain other businesses divested during 2017 that were not core to the Company's operations, including the Company's equity interests in Dendreon Pharmaceuticals LLC (“Dendreon”) (June 28, 2017) and Sprout Pharmaceuticals, Inc. (“Sprout”) (December 20, 2017). As a result of the divestitures of Dendreon and Sprout, the Company exited the oncology and women's health businesses, respectively.
|
•
|
Dermatology - In June 2019, we launched Duobrii®, the first and only topical lotion that contains a unique combination of halobetasol propionate and tazarotene for the treatment of moderate-to-severe plaque psoriasis in adults. Halobetasol propionate and tazarotene are each approved to treat plaque psoriasis when used separately, but the duration of halobetasol propionate is limited by Food and Drug Administration ("FDA") labeling constraints and the use of tazarotene can be limited due to tolerability concerns. However, the combination of these ingredients in Duobrii®, with a dual mechanism of action, allows for expanded duration of use, with reduced adverse events.
|
•
|
Dermatology - In November 2018, we launched Bryhali®, a novel product that contains a unique, lower concentration of halobetasol propionate for the treatment of moderate-to-severe psoriasis which is FDA approved for 8 weeks of use. The FDA has previously approved halobetasol propionate to treat plaque psoriasis, but limited duration of use to two weeks.
|
•
|
Bausch + Lomb - Bausch + Lomb ULTRA® for Astigmatism is a monthly planned replacement contact lens for astigmatic patients. The Bausch + Lomb ULTRA® for Astigmatism lens was developed using the proprietary MoistureSeal® technology. In addition, the Bausch + Lomb ULTRA® for Astigmatism lens integrates an OpticAlign® design engineered for lens stability and to promote a successful wearing experience for the astigmatic patient. In 2017, we launched this product and the extended power range for this product. In 2018, we launched the Bausch + Lomb ULTRA® for Astigmatism -2.75 cylinder expanded SKU range.
|
•
|
Bausch + Lomb - SiHy Daily AQUALOX™ is a silicone hydrogel daily disposable contact lens designed to provide clear vision throughout the day. Product validation was completed in June 2018 and SiHy Daily AQUALOX™ was launched in Japan in September 2018. We expect to launch our SiHy Daily disposable contact lens in the U.S. in the second half of 2020.
|
•
|
Dermatology - Internal Development Project ("IDP") 126 is an acne product with a fixed combination of benzoyl peroxide, clindamycin phosphate and adapalene. Phase 3 studies were initiated in December 2019.
|
•
|
Bausch + Lomb - Lumify® (brimonidine tartrate ophthalmic solution, 0.025%) is an OTC eye drop developed as an ocular redness reliever. We have several line extensions currently under development and further clinical studies are planned to start in 2020.
|
•
|
Gastrointestinal - We have initiated a Phase 2 study for the treatment of overt hepatic encephalopathy with a new formulation of rifaximin, which we acquired as part of the Salix Acquisition. We expect to complete an interim analysis in the first quarter of 2020.
|
•
|
Gastrointestinal - Following the read out of the overt hepatic encephalopathy study, we are planning to initiate a study potentially evaluating the new formulation of rifaximin in potential hepatic encephalopathy and gastrointestinal conditions. The study is expected to start in the second half of 2020. This study replaces the planned Xifaxan® 550mg tablets Phase 2 study evaluating the prevention of complications of decompensation cirrhosis referenced in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019.
|
•
|
Gastrointestinal - We are initiating a Phase 2 study to evaluate rifaximin for the treatment of small intestinal bacterial overgrowth or SIBO. Patient enrollment is expected to begin in the first half of 2020.
|
•
|
Dermatology - IDP-120 is an acne product with a fixed combination of mutually incompatible ingredients: benzoyl peroxide and tretinoin. Phase 3 clinical studies are ongoing.
|
•
|
Dermatology - Arazlo™ (tazarotene) Lotion, 0.045% (formerly IDP-123) is an acne product containing lower concentration of tazarotene in a lotion form to help reduce irritation while maintaining efficacy. The FDA approved the New Drug Application ("NDA") for Arazlo™ on December 18, 2019, which we expect to launch in the first half of 2020.
|
•
|
Gastrointestinal - Our partner Alfasigma S.p.A. ("Alfasigma") is initiating a Phase 2/3 study for the treatment of postoperative Crohns disease using a novel rifaximin extended release formulation. The study is expected to start in the first half of 2020.
|
•
|
Gastrointestinal - We are developing a probiotic supplement to address gastrointestinal disturbances. Patient enrollment for clinical trial has been completed and we expect to launch this product in 2020.
|
•
|
Dermatology - IDP-124 is a topical lotion product designed to treat moderate to severe atopic dermatitis, with pimecrolimus, currently in Phase 3 testing.
|
•
|
Bausch + Lomb - Biotrue® ONEday for Astigmatism is a daily disposable contact lens for astigmatic patients. The Biotrue® ONEday contact lens incorporates Surface Active Technology™ to provide a dehydration barrier. The Biotrue® ONEday for Astigmatism also includes evolved peri-ballast geometry to deliver stability and comfort for the astigmatic patient. We launched this product in December 2016 and launched an extended power range and further extended power ranges in 2017, 2018 and November 2019.
|
•
|
Bausch + Lomb - We are developing a new Ophthalmic Viscosurgical Device product, with a formulation to protect corneal endothelium during phacoemulsification process during a cataract surgery and to help chamber maintenance and lubrication during interocular lens delivery. We anticipate filing a Premarket Approval application for the dispersive Ophthalmic Viscosurgical Device with the FDA in the first quarter of 2020.
|
•
|
Bausch + Lomb - In April 2019, we launched Lotemax® SM (loteprednol etabonate ophthalmic gel) 0.38%, a new formulation for the treatment of post-operative inflammation and pain following ocular surgery. Lotemax® SM is the
|
•
|
Bausch + Lomb - enVista® Trifocal intraocular lens is an innovative lens design. We initiated an investigative device exemption study for this product in May 2018 and initiated a Phase 2 study in October of 2019.
|
•
|
Bausch + Lomb - Enhanced enVista® Toric intraocular lens was launched in July 2018.
|
•
|
Bausch + Lomb - We are developing a preloaded intraocular lens injector platform for enVista interocular lens. We have received approvals from the European Union and Canada and received FDA clearance for the injector. We anticipate launching this platform in the second quarter of 2020.
|
•
|
Bausch + Lomb - We are developing an extended depth of focus intraocular lens which we anticipate launching in 2020, excluding the U.S., starting with Europe.
|
•
|
Bausch + Lomb ULTRA® Multifocal for Astigmatism contact lens is the first and only multifocal toric lens available as a standard offering in the eye care professional's fit set. The new monthly silicone hydrogel lens, which was specifically designed to address the lifestyle and vision needs of patients with both astigmatism and presbyopia, combines the Company's unique 3-Zone Progressive™ multifocal design with the stability of its OpticAlign® toric with MoistureSeal® technology to provide eye care professionals and their patients an advanced contact lens technology that offers the convenience of same-day fitting during the initial lens exam. Bausch + Lomb ULTRA® Multifocal for Astigmatism was launched in June 2019.
|
•
|
Bausch + Lomb - Renu® Advanced Multi-Purpose Solution (“MPS”) contains a triple disinfectant system that kills 99.9% of germs, and has a dual surfactant system that provides up to 20 hours of moisture. Renu® Advanced MPS is FDA cleared with indications for use to condition, clean, remove protein, disinfectant, rinse and store soft contact lenses including those composed of silicone hydrogels. Renu® Advanced MPS has gained regulatory approvals in Korea, India, Mexico, Indonesia, Malaysia and Singapore.
|
•
|
Bausch + Lomb - Custom soft contact lens (Ultra buttons) is a latheable silicone hydrogel button for custom soft specialty lenses including; Sphere, Toric, Multifocal, Toric Multifocal and irregular corneas. If approved by the FDA, we expect to launch in the first quarter of 2021.
|
•
|
Bausch + Lomb - In January 2019, we launched Zen™ Multifocal Scleral Lens for presbyopia exclusively available with Zenlens™ and Zen™ RC scleral lenses and will allow eye care professionals to fit presbyopic patients with irregular and regular corneas and those with ocular surface disease, such as dry eye. The Zen™ Multifocal Scleral Lens incorporates decentered optics, enabling the near power to be positioned over the visual axis.
|
•
|
Bausch + Lomb - In March 2019, we launched Tangible® Hydra-PEG®, a high-water polymer coating that is bonded to the surface of a contact lens and designed to address contact lens discomfort and dry eye. Tangible® Hydra-PEG® coating technology in combination with our Boston® materials and Zenlens™ family of scleral lenses will help eye care professionals provide a better lens wearing experience for their patients with challenging vision needs.
|
(in millions)
|
|
2020 - 2021
|
|
2022 - 2023
|
|
2024 - 2025
|
|
2026 - 2027
|
|
2028 - 2029
|
|
2030
|
|
Total
|
||||||||||||||
As of December 31, 2019
|
|
$
|
1,343
|
|
|
$
|
4,148
|
|
|
$
|
12,935
|
|
|
$
|
3,750
|
|
|
$
|
2,762
|
|
|
$
|
1,250
|
|
|
$
|
26,188
|
|
As of February 19, 2020
|
|
103
|
|
|
4,148
|
|
|
12,935
|
|
|
3,750
|
|
|
2,762
|
|
|
1,250
|
|
|
24,948
|
|
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||||
(in millions, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||
Revenues
|
|
$
|
8,601
|
|
|
$
|
8,380
|
|
|
$
|
8,724
|
|
|
$
|
221
|
|
|
$
|
(344
|
)
|
Operating (loss) income
|
|
$
|
(203
|
)
|
|
$
|
(2,384
|
)
|
|
$
|
102
|
|
|
$
|
2,181
|
|
|
$
|
(2,486
|
)
|
Loss before benefit from income taxes
|
|
$
|
(1,837
|
)
|
|
$
|
(4,154
|
)
|
|
$
|
(1,741
|
)
|
|
$
|
2,317
|
|
|
$
|
(2,413
|
)
|
Net (loss) income
|
|
$
|
(1,783
|
)
|
|
$
|
(4,144
|
)
|
|
$
|
2,404
|
|
|
$
|
2,361
|
|
|
$
|
(6,548
|
)
|
Net (loss) income attributable to Bausch Health Companies Inc.
|
|
$
|
(1,788
|
)
|
|
$
|
(4,148
|
)
|
|
$
|
2,404
|
|
|
$
|
2,360
|
|
|
$
|
(6,552
|
)
|
(Loss) earnings per share attributable to Bausch Health Companies Inc.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(5.08
|
)
|
|
$
|
(11.81
|
)
|
|
$
|
6.86
|
|
|
$
|
6.73
|
|
|
$
|
(18.67
|
)
|
Diluted
|
|
$
|
(5.08
|
)
|
|
$
|
(11.81
|
)
|
|
$
|
6.83
|
|
|
$
|
6.73
|
|
|
$
|
(18.64
|
)
|
•
|
an increase in contribution (product sales revenue less cost of goods sold, exclusive of amortization and impairments of intangible assets) of $230 million. The increase was primarily driven by: (i) higher gross selling prices, (ii) higher volumes, (iii) the incremental contribution of the sales of our Trulance® product, which we added to our portfolio in March 2019 as part of the acquisition of certain assets of Synergy and (iv) better inventory management, partially offset by: (i) the unfavorable effect of foreign currencies, (ii) the impact of divestitures and discontinuations, (iii) higher sales deductions and (iv) the amortization of the inventory fair value step-up recorded in acquisition accounting related to the inventories we acquired as part of the acquisition of certain assets of Synergy;
|
•
|
an increase in Selling, general, and administrative expenses (“SG&A”) of $81 million, primarily attributable to: (i) higher selling, advertising and promotion expenses, (ii) the impact of the acquisition of certain assets of Synergy, (iii) costs in 2019 attributable to our IT infrastructure improvement projects and (iv) the charge associated with the termination of a co-promotional agreement with US WorldMeds, LLC. The increase was partially offset by: (i) the favorable effect of foreign currencies, (ii) lower costs related to professional services and (iii) the impact of divestitures and discontinuations;
|
•
|
an increase in R&D of $58 million primarily attributable to a number of projects within our Bausch + Lomb and GI businesses;
|
•
|
a decrease in Amortization of intangible assets of $747 million, primarily due to: (i) the impact of the change in the estimated useful life of the Xifaxan® related intangible assets made in September 2018 to reflect management's changes in assumptions, (ii) fully amortized intangible assets no longer being amortized in 2019 and (iii) lower amortization as a result of impairments to intangible assets in prior periods;
|
•
|
a decrease in Goodwill impairments of $2,322 million, as a result of impairments in 2018 to the goodwill of our: (i) Salix reporting unit upon adopting the new guidance for goodwill impairment accounting at January 1, 2018, (ii) Ortho Dermatologics reporting unit due to unforeseen changes in business dynamics during the three months ended March 31, 2018 and (iii) Dentistry reporting unit as a result of revised forecasts due to changing market conditions during the three months ended December 31, 2018;
|
•
|
a decrease in Asset impairments of $493 million, primarily related to specific impairments in 2018 as a result of: (i) decreases in forecasted sales for the Uceris® Tablet product due to generic competition and (ii) decreases in forecasted sales for the Arestin® product due to changing market conditions;
|
•
|
an increase in Other expense (income), net of $1,434 million, primarily attributable to: (i) an increase in net charges to Litigation and other matters primarily related to the settlement of a legacy U.S. securities class action matter (which is subject to final court approval) in 2019, to which the Company and the other settling defendants admitted no liability as to the claims against it and deny all allegations of wrongdoing and (ii) Acquired in-process research and development costs (“IPR&D”) incurred during 2019 associated with the upfront payments to enter into certain exclusive licensing agreements. These increases in other expenses were partially offset by the expected receipt for the achievement of a milestone related to a certain product.
|
•
|
a decrease in contribution (product sales revenue less cost of goods sold, exclusive of amortization and impairments of intangible assets) of $127 million. The decrease was primarily driven by the impact of 2017 divestitures and discontinuations, partially offset by: (i) higher gross selling prices, (ii) lower sales deductions, (iii) lower third-party royalty costs and (iv) the favorable effect of foreign currencies;
|
•
|
a decrease in SG&A of $109 million, primarily attributable to: (i) the impact of 2017 divestitures and discontinuations, (ii) a decrease in legal expenses as we resolved certain legacy legal issues and (iii) a decrease in bad debt expense. The decrease was partially offset by: (i) higher advertising and promotion expenses, (ii) higher compensation costs and (iii) the unfavorable impact of the effect of foreign currencies;
|
•
|
an increase in R&D of $52 million;
|
•
|
a decrease in Amortization of intangible assets of $46 million, primarily attributable to: (i) the impact of the change in the estimated useful life of the Xifaxan®-related intangible assets made in September 2018 to reflect management's changes in assumptions, (ii) lower amortization as a result of impairments to intangible assets and divestitures and (iii) discontinuances of product lines during 2017 as the Company focuses on its core assets. These decreases were partially offset by the impact of changes in estimates made in 2017 to reduce the remaining useful lives of certain products and the Salix brand name to reflect management's changes in assumptions;
|
•
|
an increase in Goodwill impairments of $2,010 million. In 2018, we recognized Goodwill impairments of $2,322 million in connection with: (i) impairment to the goodwill of our Salix reporting unit recognized upon adopting new accounting guidance at January 1, 2018, (ii) impairment to the goodwill of the Ortho Dermatologics reporting unit due to unforeseen
|
•
|
a decrease in Asset impairments of $146 million, as a result of Asset impairments of $714 million, recognized in 2017, primarily related to the Sprout and Obagi businesses being classified as held for sale, compared to Asset impairments of $568 million, in 2018, that were primarily due to decreases in forecasted sales for the Uceris® Tablet product and other product lines due to generic competition;
|
•
|
an increase in Acquisition-related contingent consideration of $280 million as a result of a fair value adjustments in 2017 which reflected a decrease in forecasted sales for specific products, including Addyi®;
|
•
|
a decrease in the net charges to Litigation and other matters of $253 million. Litigation and other matters are included in Other expense (income), net, and are primarily associated with estimated settlements of certain legacy matters; and
|
•
|
a decrease in net gains on sales of businesses and other assets of $586 million. In order to improve our capital structure and simplify our operations, during 2017, we divested certain businesses and assets not aligned with our core business objectives. Included in Other expense (income), net is the net loss on sales of businesses and other assets of $6 million for 2018 as compared to the net gain on sales of businesses and other assets $580 million in 2017.
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
$
|
8,489
|
|
|
$
|
8,271
|
|
|
$
|
8,595
|
|
|
$
|
218
|
|
|
$
|
(324
|
)
|
Other revenues
|
112
|
|
|
109
|
|
|
129
|
|
|
3
|
|
|
(20
|
)
|
|||||
|
8,601
|
|
|
8,380
|
|
|
8,724
|
|
|
221
|
|
|
(344
|
)
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold (excluding amortization and impairments of intangible assets)
|
2,297
|
|
|
2,309
|
|
|
2,506
|
|
|
(12
|
)
|
|
(197
|
)
|
|||||
Cost of other revenues
|
53
|
|
|
42
|
|
|
42
|
|
|
11
|
|
|
—
|
|
|||||
Selling, general and administrative
|
2,554
|
|
|
2,473
|
|
|
2,582
|
|
|
81
|
|
|
(109
|
)
|
|||||
Research and development
|
471
|
|
|
413
|
|
|
361
|
|
|
58
|
|
|
52
|
|
|||||
Amortization of intangible assets
|
1,897
|
|
|
2,644
|
|
|
2,690
|
|
|
(747
|
)
|
|
(46
|
)
|
|||||
Goodwill impairments
|
—
|
|
|
2,322
|
|
|
312
|
|
|
(2,322
|
)
|
|
2,010
|
|
|||||
Asset impairments
|
75
|
|
|
568
|
|
|
714
|
|
|
(493
|
)
|
|
(146
|
)
|
|||||
Restructuring and integration costs
|
31
|
|
|
22
|
|
|
52
|
|
|
9
|
|
|
(30
|
)
|
|||||
Acquisition-related contingent consideration
|
12
|
|
|
(9
|
)
|
|
(289
|
)
|
|
21
|
|
|
280
|
|
|||||
Other expense (income), net
|
1,414
|
|
|
(20
|
)
|
|
(348
|
)
|
|
1,434
|
|
|
328
|
|
|||||
|
8,804
|
|
|
10,764
|
|
|
8,622
|
|
|
(1,960
|
)
|
|
2,142
|
|
|||||
Operating (loss) income
|
(203
|
)
|
|
(2,384
|
)
|
|
102
|
|
|
2,181
|
|
|
(2,486
|
)
|
|||||
Interest income
|
12
|
|
|
11
|
|
|
12
|
|
|
1
|
|
|
(1
|
)
|
|||||
Interest expense
|
(1,612
|
)
|
|
(1,685
|
)
|
|
(1,840
|
)
|
|
73
|
|
|
155
|
|
|||||
Loss on extinguishment of debt
|
(42
|
)
|
|
(119
|
)
|
|
(122
|
)
|
|
77
|
|
|
3
|
|
|||||
Foreign exchange and other
|
8
|
|
|
23
|
|
|
107
|
|
|
(15
|
)
|
|
(84
|
)
|
|||||
Loss before benefit from income taxes
|
(1,837
|
)
|
|
(4,154
|
)
|
|
(1,741
|
)
|
|
2,317
|
|
|
(2,413
|
)
|
|||||
Benefit from income taxes
|
54
|
|
|
10
|
|
|
4,145
|
|
|
44
|
|
|
(4,135
|
)
|
|||||
Net (loss) income
|
(1,783
|
)
|
|
(4,144
|
)
|
|
2,404
|
|
|
2,361
|
|
|
(6,548
|
)
|
|||||
Net income attributable to noncontrolling interest
|
(5
|
)
|
|
(4
|
)
|
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|||||
Net (loss) income attributable to Bausch Health Companies Inc.
|
$
|
(1,788
|
)
|
|
$
|
(4,148
|
)
|
|
$
|
2,404
|
|
|
$
|
2,360
|
|
|
$
|
(6,552
|
)
|
|
|
Years Ended December 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
(in millions)
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
||||||
Gross product sales
|
|
$
|
13,776
|
|
|
100.0
|
%
|
|
$
|
14,158
|
|
|
100.0
|
%
|
Provisions to reduce gross product sales to net product sales
|
|
|
|
|
|
|
|
|
||||||
Discounts and allowances
|
|
776
|
|
|
5.6
|
%
|
|
865
|
|
|
6.1
|
%
|
||
Returns
|
|
113
|
|
|
0.8
|
%
|
|
293
|
|
|
2.1
|
%
|
||
Rebates
|
|
2,265
|
|
|
16.4
|
%
|
|
2,551
|
|
|
18.0
|
%
|
||
Chargebacks
|
|
1,938
|
|
|
14.1
|
%
|
|
1,966
|
|
|
13.9
|
%
|
||
Distribution service fees
|
|
195
|
|
|
1.5
|
%
|
|
212
|
|
|
1.5
|
%
|
||
|
|
5,287
|
|
|
38.4
|
%
|
|
5,887
|
|
|
41.6
|
%
|
||
Net product sales
|
|
$
|
8,489
|
|
|
61.6
|
%
|
|
$
|
8,271
|
|
|
58.4
|
%
|
•
|
discounts and allowances as a percentage of gross product sales was lower primarily due to lower gross product sales of higher discounted generics, such as Glumetza® authorized generic ("AG"), Xenazine® AG, Targretin® AG and Benzamycin® AG. The lower discounts and allowances as a percentage of gross product sales was partially offset by the impact of: (i) the release of certain generics such as Elidel® AG (December 2018), Uceris® AG (July 2018) and Apriso® AG (December 2019) and (ii) higher sales of Xifaxan®;
|
•
|
returns as a percentage of gross product sales was lower primarily due to: (i) better inventory practices and disciplines and (ii) lower gross product sales of Isuprel® and Mephyton® as a result of generic competition. Additionally, over the last several years the Company increased its focus on maximizing operational efficiencies and reducing product returns. The Company continually takes actions to address product returns including but not limited to: (i) monitoring and reducing customer inventory levels, (ii) instituting disciplined pricing policies and (iii) improving contracting. These actions resulted in improved sales return experience related to current branded products and previously genericized products. As a result, for the year 2019 as compared to 2018, the provision for sales returns improved by a net of $180 million. During the three months ended September 30, 2019 and 2018 we recorded a reduction in variable consideration for sales returns of approximately $80 million and $30 million, respectively, related to past sales. The Company's actual return rate experience in the current period was lower than its historical rate experience primarily in its: (i) GI business primarily related to Glumetza® SLX and Xifaxan®, (ii) neurology business, primarily related to Wellbutrin® and Nitropress® and (iii) generics business, primarily related to Zegerid® AG and Glumetza® AG. The lower returns as a percentage of gross product sales was partially offset by the impact of higher return experience for a limited number of products, primarily Mysoline® and Solodyn® AG. See Note 2, "SIGNIFICANT ACCOUNTING POLICIES" to our audited Consolidated Financial Statements regarding further details related to product sales provisions;
|
•
|
rebates as a percentage of gross product sales were lower primarily due to decreases in gross product sales of certain products which carry higher rebate rates, such as Solodyn®, Elidel®, Jublia® and Retin-A Micro® 0.06%. The decreases in gross product sales for these products were due in part to generic competition and the release of certain branded generics. The lower rebates as a percentage of gross product sales were partially offset by the impact of: (i) increased gross product sales of products that carry higher contractual rebates and co-pay assistance programs, including the impact of incremental rebates from contractual price increase limitations for promoted products, such as Xifaxan® and Apriso®, (ii) sales of our Trulance® product, which we added to our portfolio in March 2019 as part of the acquisition of certain assets of Synergy and (iii) rebates associated with our Duobrii® product which we launched in June 2019;
|
•
|
chargebacks as a percentage of gross product sales were higher primarily due to the impact of: (i) higher gross product sales of Xifaxan®, Glumetza® SLX and Syprine® AG, (ii) higher chargeback rates in 2019 as compared to 2018 for certain products such as Glumetza® AG and (iii) the release of certain authorized generics, such as Elidel® AG (December 2018) and Uceris® AG (July 2018). The higher chargebacks as a percentage of gross product sales were partially offset by the impact of lower gross product sales of certain generic products, such as Zegerid® AG and Xenazine® AG and certain branded products, such as Isuprel® and Nifediac; and
|
•
|
distribution service fees as a percentage of gross product sales were unchanged as the impact of lower gross product sales of Solodyn®, Elidel®, Targretin® and Cuprimine® were offset by the impact of: (i) higher sales of Xifaxan® and Apriso® and other branded products, (ii) sales of our Trulance® product, which we added to our portfolio in March 2019 as part of the acquisition of certain assets of Synergy and (iii) distribution service fees associated with our Duobrii® product launched in June 2019. Price appreciation credits are offset against the distribution service fees we pay wholesalers and were $11 million and $31 million for 2019 and 2018, respectively.
|
(in millions)
|
|
2019
|
|
2018
|
||||
Litigation and other matters
|
|
$
|
1,401
|
|
|
$
|
(27
|
)
|
Net (gain) loss on sales of assets
|
|
(31
|
)
|
|
6
|
|
||
Acquired in-process research and development costs
|
|
41
|
|
|
1
|
|
||
Acquisition-related costs
|
|
8
|
|
|
1
|
|
||
Other, net
|
|
(5
|
)
|
|
(1
|
)
|
||
Other expense (income), net
|
|
$
|
1,414
|
|
|
$
|
(20
|
)
|
•
|
The Bausch + Lomb/International segment consists of: (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products, primarily comprised of Bausch + Lomb products, with a focus on the Vision Care, Surgical, Consumer and Ophthalmology Rx products and (ii) with the exception of sales of Solta products, sales in Canada, Europe, Asia, Australia, Latin America, Africa and the Middle East of branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical device products and Bausch + Lomb products.
|
•
|
The Salix segment consists of sales in the U.S. of GI products.
|
•
|
The Ortho Dermatologics segment consists of: (i) sales in the U.S. of Ortho Dermatologics (dermatological) products and (ii) global sales of Solta medical aesthetic devices.
|
•
|
The Diversified Products segment consists of sales in the U.S. of: (i) pharmaceutical products in the areas of neurology and certain other therapeutic classes, (ii) generic products and (iii) dentistry products.
|
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||||||||
|
|
2019
|
|
2018
|
|
2018 to 2019
|
|||||||||||||||
(in millions)
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
|||||||||
Segment Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Bausch + Lomb/International
|
|
$
|
4,739
|
|
|
55
|
%
|
|
$
|
4,664
|
|
|
56
|
%
|
|
$
|
75
|
|
|
2
|
%
|
Salix
|
|
2,022
|
|
|
23
|
%
|
|
1,749
|
|
|
21
|
%
|
|
273
|
|
|
16
|
%
|
|||
Ortho Dermatologics
|
|
565
|
|
|
7
|
%
|
|
617
|
|
|
7
|
%
|
|
(52
|
)
|
|
(8
|
)%
|
|||
Diversified Products
|
|
1,275
|
|
|
15
|
%
|
|
1,350
|
|
|
16
|
%
|
|
(75
|
)
|
|
(6
|
)%
|
|||
Total revenues
|
|
$
|
8,601
|
|
|
100
|
%
|
|
$
|
8,380
|
|
|
100
|
%
|
|
$
|
221
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Segment Profits / Segment Profit Margins
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Bausch + Lomb/International
|
|
$
|
1,332
|
|
|
28
|
%
|
|
$
|
1,330
|
|
|
29
|
%
|
|
$
|
2
|
|
|
—
|
%
|
Salix
|
|
1,349
|
|
|
67
|
%
|
|
1,149
|
|
|
66
|
%
|
|
200
|
|
|
17
|
%
|
|||
Ortho Dermatologics
|
|
222
|
|
|
39
|
%
|
|
257
|
|
|
42
|
%
|
|
(35
|
)
|
|
(14
|
)%
|
|||
Diversified Products
|
|
932
|
|
|
73
|
%
|
|
1,012
|
|
|
75
|
%
|
|
(80
|
)
|
|
(8
|
)%
|
|||
Total segment profit
|
|
$
|
3,835
|
|
|
45
|
%
|
|
$
|
3,748
|
|
|
45
|
%
|
|
$
|
87
|
|
|
2
|
%
|
|
Year Ended December 31, 2019
|
|
Year ended December 31, 2018
|
|
Change in
Organic Revenue
|
|||||||||||||||||||||||||||||
|
Revenue
as
Reported
|
|
Changes in Exchange Rates
|
|
Acquisition
|
|
Organic Revenue (Non-GAAP)
|
|
Revenue
as
Reported
|
|
Divestitures and Discontinuations
|
|
Organic Revenue (Non-GAAP)
|
|
||||||||||||||||||||
(in millions)
|
Amount
|
|
Pct.
|
|||||||||||||||||||||||||||||||
Bausch + Lomb/International
|
$
|
4,739
|
|
|
$
|
110
|
|
|
$
|
—
|
|
|
$
|
4,849
|
|
|
$
|
4,664
|
|
|
$
|
(41
|
)
|
|
$
|
4,623
|
|
|
$
|
226
|
|
|
5
|
%
|
Salix
|
2,022
|
|
|
—
|
|
|
(55
|
)
|
|
1,967
|
|
|
1,749
|
|
|
(9
|
)
|
|
1,740
|
|
|
227
|
|
|
13
|
%
|
||||||||
Ortho Dermatologics
|
565
|
|
|
2
|
|
|
—
|
|
|
567
|
|
|
617
|
|
|
—
|
|
|
617
|
|
|
(50
|
)
|
|
(8
|
)%
|
||||||||
Diversified Products
|
1,275
|
|
|
—
|
|
|
—
|
|
|
1,275
|
|
|
1,350
|
|
|
(4
|
)
|
|
1,346
|
|
|
(71
|
)
|
|
(5
|
)%
|
||||||||
Total
|
$
|
8,601
|
|
|
$
|
112
|
|
|
$
|
(55
|
)
|
|
$
|
8,658
|
|
|
$
|
8,380
|
|
|
$
|
(54
|
)
|
|
$
|
8,326
|
|
|
$
|
332
|
|
|
4
|
%
|
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||
|
|
2019
|
|
2018
|
|
2018 to 2019
|
||||||||||||
(in millions)
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
|
Amount
|
|
Pct.
|
||||||
Wellbutrin® Franchise
|
|
$
|
244
|
|
|
19%
|
|
$
|
252
|
|
|
19%
|
|
$
|
(8
|
)
|
|
(3)%
|
Arestin®
|
|
87
|
|
|
7%
|
|
96
|
|
|
7%
|
|
(9
|
)
|
|
(9)%
|
|||
Aplenzin®
|
|
83
|
|
|
6%
|
|
54
|
|
|
4%
|
|
29
|
|
|
54%
|
|||
Migranal® Franchise
|
|
55
|
|
|
4%
|
|
62
|
|
|
5%
|
|
(7
|
)
|
|
(11)%
|
|||
Cuprimine®
|
|
49
|
|
|
4%
|
|
88
|
|
|
6%
|
|
(39
|
)
|
|
(44)%
|
|||
Uceris® AG
|
|
46
|
|
|
4%
|
|
13
|
|
|
1%
|
|
33
|
|
|
254%
|
|||
Ativan®
|
|
43
|
|
|
3%
|
|
54
|
|
|
4%
|
|
(11
|
)
|
|
(20)%
|
|||
Xenazine® Franchise
|
|
38
|
|
|
3%
|
|
52
|
|
|
4%
|
|
(14
|
)
|
|
(27)%
|
|||
Diastat® Franchise
|
|
35
|
|
|
3%
|
|
36
|
|
|
3%
|
|
(1
|
)
|
|
(3)%
|
|||
Elidel® AG
|
|
34
|
|
|
3%
|
|
4
|
|
|
—%
|
|
30
|
|
|
750%
|
|||
Other
|
|
561
|
|
|
44%
|
|
639
|
|
|
47%
|
|
(78
|
)
|
|
(12)%
|
|||
Total Diversified Products revenues
|
|
$
|
1,275
|
|
|
100%
|
|
$
|
1,350
|
|
|
100%
|
|
$
|
(75
|
)
|
|
(6)%
|
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||
Net (loss) income
|
|
$
|
(1,783
|
)
|
|
$
|
(4,144
|
)
|
|
$
|
2,404
|
|
|
$
|
2,361
|
|
|
$
|
(6,548
|
)
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities
|
|
3,602
|
|
|
5,627
|
|
|
(958
|
)
|
|
(2,025
|
)
|
|
6,585
|
|
|||||
Cash provided by operating activities before changes in operating assets and liabilities
|
|
1,819
|
|
|
1,483
|
|
|
1,446
|
|
|
336
|
|
|
37
|
|
|||||
Changes in operating assets and liabilities
|
|
(318
|
)
|
|
18
|
|
|
844
|
|
|
(336
|
)
|
|
(826
|
)
|
|||||
Net cash provided by operating activities
|
|
1,501
|
|
|
1,501
|
|
|
2,290
|
|
|
—
|
|
|
(789
|
)
|
|||||
Net cash (used in) provided by investing activities
|
|
(419
|
)
|
|
(196
|
)
|
|
2,887
|
|
|
(223
|
)
|
|
(3,083
|
)
|
|||||
Net cash provided by (used in) financing activities
|
|
1,443
|
|
|
(1,353
|
)
|
|
(4,963
|
)
|
|
2,796
|
|
|
3,610
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(4
|
)
|
|
(26
|
)
|
|
41
|
|
|
22
|
|
|
(67
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
|
2,521
|
|
|
(74
|
)
|
|
255
|
|
|
2,595
|
|
|
(329
|
)
|
|||||
Cash and cash equivalents and restricted cash, beginning of year
|
|
723
|
|
|
797
|
|
|
542
|
|
|
(74
|
)
|
|
255
|
|
|||||
Cash and cash equivalents and restricted cash, end of year
|
|
$
|
3,244
|
|
|
$
|
723
|
|
|
$
|
797
|
|
|
$
|
2,521
|
|
|
$
|
(74
|
)
|
(in millions)
|
|
2020 - 2021
|
|
2022 - 2023
|
|
2024 - 2025
|
|
2026 - 2027
|
|
2028 - 2029
|
|
2030
|
|
Total
|
||||||||||||||
As of December 31, 2019
|
|
$
|
1,343
|
|
|
$
|
4,148
|
|
|
$
|
12,935
|
|
|
$
|
3,750
|
|
|
$
|
2,762
|
|
|
$
|
1,250
|
|
|
$
|
26,188
|
|
As of February 19, 2020
|
|
103
|
|
|
4,148
|
|
|
12,935
|
|
|
3,750
|
|
|
2,762
|
|
|
1,250
|
|
|
24,948
|
|
Rating Agency
|
|
Corporate Rating
|
|
Senior Secured Rating
|
|
Senior Unsecured Rating
|
|
Outlook
|
Moody’s
|
|
B2
|
|
Ba2
|
|
B3
|
|
Stable
|
Standard & Poor’s
|
|
B+
|
|
BB
|
|
B
|
|
Stable
|
Fitch
|
|
B
|
|
BB
|
|
B
|
|
Stable
|
(in millions)
|
Total
|
|
2020
|
|
2021 and 2022
|
|
2023 and 2024
|
|
Thereafter
|
||||||||||
Long-term debt obligations, including interest
|
$
|
35,548
|
|
|
$
|
2,758
|
|
|
$
|
4,708
|
|
|
$
|
7,568
|
|
|
$
|
20,514
|
|
Operating lease obligations
|
383
|
|
|
70
|
|
|
97
|
|
|
67
|
|
|
149
|
|
|||||
Purchase obligations
|
888
|
|
|
557
|
|
|
201
|
|
|
104
|
|
|
26
|
|
|||||
Total contractual obligations
|
$
|
36,819
|
|
|
$
|
3,385
|
|
|
$
|
5,006
|
|
|
$
|
7,739
|
|
|
$
|
20,689
|
|
•
|
Debt repayments—As a result of prepayments and a series of refinancing transactions we have reduced and extended the maturities of a substantial portion of our long-term debt. Payments of Long-term debt obligations, including interest as presented in the contractual obligations table above for the year 2020 of $2,758 million, is inclusive of the payment for the redemption of $1,240 million in aggregate principal amount of May 2023 Unsecured Notes made on January 16, 2020. As of the date of this filing, scheduled principal repayments of our debt obligations through 2021 are $103 million. We may elect to make additional principal payments under certain circumstances. Further, in the ordinary course of business, we may borrow and repay amounts under our 2023 Revolving Credit Facility to meet business needs;
|
•
|
IT Infrastructure Investment—We expect to make payments of approximately $80 million, net of the amounts included in Purchase obligations in the table above, for licensing, maintenance and capitalizable costs associated with our IT infrastructure improvement projects during 2020;
|
•
|
Capital expenditures—We expect to make payments of approximately $300 million for property, plant and equipment during 2020, of which there were $115 million in committed amounts as of December 31, 2019;
|
•
|
Contingent consideration payments—We expect to make contingent consideration and other development/approval/sales-based milestone payments of $64 million during 2020;
|
•
|
Restructuring and integration payments—We expect to make payments of $5 million during 2020 for employee separation costs and lease termination obligations associated with restructuring and integration actions we have taken through December 31, 2019;
|
•
|
Benefit obligations—We expect to make payments under our pension and postretirement obligations of $3 million, $9 million and $5 million to the U.S. pension benefit plan, the non-U.S. pension benefit plans and the U.S. postretirement benefit plan, respectively during 2020. See Note 12, "PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS" to our audited Consolidated Financial Statements for further details of our benefit obligations; and
|
•
|
U.S. Securities Litigation Settlement—As more fully discussed in Note 21, "LEGAL PROCEEDINGS" to our audited Consolidated Financial Statements, we expect to make payments of $1,210 million to resolve the U.S. Securities Litigation during 2020, of which we paid $200 million during January 2020. In December 2019, we announced that we had agreed to resolve the U.S. Securities Litigation for $1,210 million, subject to final court approval. Once approved by the court, the settlement will resolve and discharge all claims against the Company in the class action. As part of the settlement, the Company and the other settling defendants admitted no liability as to the claims against it and deny all allegations of wrongdoing. This settlement, once approved by the court, will resolve the most significant of the Company's remaining legacy legal matters and eliminate a material uncertainty regarding our Company.
|
(in millions)
|
|
Discounts
and
Allowances
|
|
Returns
|
|
Rebates
|
|
Chargebacks
|
|
Distribution
Fees
|
|
Total
|
||||||||||||
Reserve balance, January 1, 2017
|
|
$
|
124
|
|
|
$
|
708
|
|
|
$
|
897
|
|
|
$
|
273
|
|
|
$
|
197
|
|
|
$
|
2,199
|
|
Provision
|
|
829
|
|
|
423
|
|
|
2,545
|
|
|
2,145
|
|
|
288
|
|
|
6,230
|
|
||||||
Payments or credits
|
|
(786
|
)
|
|
(268
|
)
|
|
(2,348
|
)
|
|
(2,144
|
)
|
|
(337
|
)
|
|
(5,883
|
)
|
||||||
Reserve balance, December 31, 2017
|
|
167
|
|
|
863
|
|
|
1,094
|
|
|
274
|
|
|
148
|
|
|
2,546
|
|
||||||
Provision
|
|
865
|
|
|
293
|
|
|
2,551
|
|
|
1,966
|
|
|
212
|
|
|
5,887
|
|
||||||
Payments or credits
|
|
(857
|
)
|
|
(343
|
)
|
|
(2,621
|
)
|
|
(2,031
|
)
|
|
(197
|
)
|
|
(6,049
|
)
|
||||||
Reserve balance, December 31, 2018
|
|
175
|
|
|
813
|
|
|
1,024
|
|
|
209
|
|
|
163
|
|
|
2,384
|
|
||||||
Acquisition of Synergy
|
|
—
|
|
|
3
|
|
|
12
|
|
|
—
|
|
|
1
|
|
|
16
|
|
||||||
Provision
|
|
776
|
|
|
113
|
|
|
2,265
|
|
|
1,938
|
|
|
195
|
|
|
5,287
|
|
||||||
Payments or credits
|
|
(769
|
)
|
|
(238
|
)
|
|
(2,374
|
)
|
|
(1,979
|
)
|
|
(277
|
)
|
|
(5,637
|
)
|
||||||
Reserve balance, December 31, 2019
|
|
$
|
182
|
|
|
$
|
691
|
|
|
$
|
927
|
|
|
$
|
168
|
|
|
$
|
82
|
|
|
$
|
2,050
|
|
•
|
an adverse change in legal factors or in the business climate that could affect the value of an asset. For example, a successful challenge of our patent rights resulting in earlier than expected generic competition;
|
•
|
an adverse change in the extent or manner in which an asset is used or is expected to be used. For example, a decision not to pursue a product line-extension strategy to enhance an existing product due to changes in market conditions and/or technological advances; or
|
•
|
current or forecasted reductions in revenue, operating income, or cash flows associated with the use of an asset. For example, the introduction of a competing product that results in a significant loss of market share.
|
•
|
the expense, timing and outcome of legal and governmental proceedings, investigations and information requests relating to, among other matters, our past distribution, marketing, pricing, disclosure and accounting practices (including with respect to our former relationship with Philidor Rx Services, LLC ("Philidor")), including pending investigations by the U.S. Attorney's Office for the District of Massachusetts and the U.S. Attorney's Office for the Southern District of New York, the pending investigations by the U.S. Securities and Exchange Commission (the “SEC”) of the Company, the investigation order issued by the Company from the Autorité des marchés financiers (the “AMF”) (the Company’s principal securities regulator in Canada), a number of pending securities litigations (including certain pending opt-out actions in the U.S. (related to the recently settled securities class action, (which is subject to final court approval, and remains subject to the risk and uncertainty that the U.S. District Court for the District of New Jersey may not approve the $1,210 million settlement agreement)) and the pending class action litigation in Canada and related opt-out actions) and purported class actions under the federal RICO statute and other claims, investigations or proceedings that may be initiated or that may be asserted;
|
•
|
potential additional litigation and regulatory investigations (and any costs, expenses, use of resources, diversion of management time and efforts, liability and damages that may result therefrom), negative publicity and reputational harm on our Company, products and business that may result from the past and ongoing public scrutiny of our past distribution, marketing, pricing, disclosure and accounting practices and from our former relationship with Philidor;
|
•
|
the past and ongoing scrutiny of our legacy business practices, including with respect to pricing (including the investigations by the U.S. Attorney's Offices for the District of Massachusetts and the Southern District of New York), and any pricing controls or price adjustments that may be sought or imposed on our products as a result thereof;
|
•
|
pricing decisions that we have implemented, or may in the future elect to implement, such as the Patient Access and Pricing Committee’s commitment that the average annual price increase for our branded prescription pharmaceutical products will be set at no greater than single digits, or any future pricing actions we may take following review by our Patient Access and Pricing Committee (which is responsible for the pricing of our drugs);
|
•
|
legislative or policy efforts, including those that may be introduced and passed by the U.S. Congress, designed to reduce patient out-of-pocket costs for medicines, which could result in new mandatory rebates and discounts or other pricing restrictions, controls or regulations (including mandatory price reductions);
|
•
|
ongoing oversight and review of our products and facilities by regulatory and governmental agencies, including periodic audits by the U.S. Food and Drug Administration (the “FDA”) and the results thereof;
|
•
|
actions by the FDA or other regulatory authorities with respect to our products or facilities;
|
•
|
our substantial debt (and potential additional future indebtedness) and current and future debt service obligations, our ability to reduce our outstanding debt levels and the resulting impact on our financial condition, cash flows and results of operations;
|
•
|
our ability to meet the financial and other covenants contained in our Restated Credit Agreement, senior notes indentures and other current or future debt agreements and the limitations, restrictions and prohibitions such covenants impose or may impose on the way we conduct our business, including prohibitions on incurring additional debt if certain financial covenants are not met, limitations on the amount of additional obligations we are able to incur pursuant to other covenants, and restrictions on our ability to make certain investments and other restricted payments;
|
•
|
any default under the terms of our senior notes indentures or Restated Credit Agreement and our ability, if any, to cure or obtain waivers of such default;
|
•
|
any delay in the filing of any future financial statements or other filings and any default under the terms of our senior notes indentures or Restated Credit Agreement as a result of such delays;
|
•
|
any downgrade by rating agencies in our credit ratings, which may impact, among other things, our ability to raise debt and the cost of capital for additional debt issuances;
|
•
|
any reductions in, or changes in the assumptions used in, our forecasts for fiscal year 2020 or beyond, which could lead to, among other things: (i) a failure to meet the financial and/or other covenants contained in our Restated Credit Agreement and/or senior notes indentures and/or (ii) impairment in the goodwill associated with certain of our reporting units or impairment charges related to certain of our products or other intangible assets, which impairments could be material;
|
•
|
changes in the assumptions used in connection with our impairment analyses or assessments, which would lead to a change in such impairment analyses and assessments and which could result in an impairment in the goodwill associated with any of our reporting units or impairment charges related to certain of our products or other intangible assets;
|
•
|
the uncertainties associated with the acquisition and launch of new products (such as our recently launched Bryhali®, Duobrii® and Ocuvite® Eye Performance products), including, but not limited to, our ability to provide the time, resources, expertise and costs required for the commercial launch of new products, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing, which could lead to material impairment charges;
|
•
|
our ability or inability to extend the profitable life of our products, including through line extensions and other life-cycle programs;
|
•
|
our ability to retain, motivate and recruit executives and other key employees;
|
•
|
our ability to implement effective succession planning for our executives and key employees;
|
•
|
factors impacting our ability to achieve anticipated growth in our Ortho Dermatologics business, including the success of recently launched products (such as Bryhali® and Duobrii®), the ability to successfully implement and operate Dermatology.com, our new cash-pay prescription program for certain of our Ortho Dermatologics branded products, and the ability of such program to achieve the anticipated goals respecting patient access and fulfillment, the approval of pending and pipeline products (and the timing of such approvals), expected geographic expansion, changes in estimates on market potential for dermatology products and continued investment in and success of our sales force;
|
•
|
factors impacting our ability to achieve anticipated revenues for our products, including changes in anticipated marketing spend on such products and launch of competing products;
|
•
|
the challenges and difficulties associated with managing a large complex business, which has, in the past, grown rapidly;
|
•
|
our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;
|
•
|
our ability to effectively operate and grow our businesses in light of the challenges that the Company has faced and market conditions, including with respect to its substantial debt, pending investigations and legal proceedings, scrutiny of our past pricing and other practices, and limitations on the way we conduct business imposed by the covenants contained in our Restated Credit Agreement, senior notes indentures and the agreements governing our other indebtedness;
|
•
|
the extent to which our products are reimbursed by government authorities, pharmacy benefit managers ("PBMs") and other third-party payors; the impact our distribution, pricing and other practices (including as it relates to our current relationship with Walgreen Co. ("Walgreens")) may have on the decisions of such government authorities, PBMs and other third-party payors to reimburse our products; and the impact of obtaining or maintaining such reimbursement on the price and sales of our products;
|
•
|
the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price and sales of our products in connection therewith;
|
•
|
the consolidation of wholesalers, retail drug chains and other customer groups and the impact of such industry consolidation on our business;
|
•
|
our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries;
|
•
|
the actions of our third-party partners or service providers of research, development, manufacturing, marketing, distribution or other services, including their compliance with applicable laws and contracts, which actions may be beyond our control or influence, and the impact of such actions on our Company, including the impact to the Company of our former relationship with Philidor and any alleged legal or contractual non-compliance by Philidor;
|
•
|
the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering and operating in new and different geographic markets (including the challenges created by new and different regulatory regimes in such countries and the need to comply with applicable anti-bribery and economic sanctions laws and regulations);
|
•
|
adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in certain of the countries in which we do business;
|
•
|
the impact of the United States-Mexico-Canada Agreement (“USMCA”) and any potential changes to other trade agreements;
|
•
|
the final outcome and impact of Brexit negotiations;
|
•
|
the trade conflict between the United States and China;
|
•
|
the extent and impact of the coronavirus reported to have surfaced in China;
|
•
|
our ability to obtain, maintain and license sufficient intellectual property rights over our products and enforce and defend against challenges to such intellectual property (such as in connection with the recent filing by Sandoz Inc. (“Sandoz”) and Norwich Pharmaceuticals Inc. (“Norwich”) of their respective Abbreviated New Drug Application (“ANDA”) for Xifaxan® (rifaximin) 550 mg tablets and the Company’s related lawsuit filed against Sandoz in connection therewith. The Company intends to file suit against Norwich within the regulated timeframe);
|
•
|
the introduction of generic, biosimilar or other competitors of our branded products and other products, including the introduction of products that compete against our products that do not have patent or data exclusivity rights;
|
•
|
our ability to identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis and the difficulties, challenges, time and resources associated with the integration of acquired companies, businesses and products;
|
•
|
any additional divestitures of our assets or businesses and our ability to successfully complete any such divestitures on commercially reasonable terms and on a timely basis, or at all, and the impact of any such divestitures on our Company, including the reduction in the size or scope of our business or market share, loss of revenue, any loss on sale, including any resultant impairments of goodwill or other assets, or any adverse tax consequences suffered as a result of any such divestitures;
|
•
|
the expense, timing and outcome of pending or future legal and governmental proceedings, arbitrations, investigations, subpoenas, tax and other regulatory audits, examinations, reviews and regulatory proceedings against us or relating to us and settlements thereof;
|
•
|
our ability to negotiate the terms of or obtain court approval for the settlement of certain legal and regulatory proceedings;
|
•
|
our ability to obtain components, raw materials or finished products supplied by third parties (some of which may be single-sourced) and other manufacturing and related supply difficulties, interruptions and delays;
|
•
|
the disruption of delivery of our products and the routine flow of manufactured goods;
|
•
|
economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;
|
•
|
interest rate risks associated with our floating rate debt borrowings;
|
•
|
our ability to effectively distribute our products and the effectiveness and success of our distribution arrangements, including the impact of our arrangements with Walgreens;
|
•
|
our ability to effectively promote our own products and those of our co-promotion partners;
|
•
|
the success of our fulfillment arrangements with Walgreens, including market acceptance of, or market reaction to, such arrangements (including by customers, doctors, patients, PBMs, third-party payors and governmental agencies), and the continued compliance of such arrangements with applicable laws;
|
•
|
our ability to secure and maintain third-party research, development, manufacturing, licensing, marketing or distribution arrangements;
|
•
|
the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or recalls or withdrawals of products from the market;
|
•
|
the mandatory or voluntary recall or withdrawal of our products from the market and the costs associated therewith;
|
•
|
the availability of, and our ability to obtain and maintain, adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third-party insurance or self-insurance;
|
•
|
the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to approvals by the FDA, Health Canada and similar agencies in other countries, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;
|
•
|
the results of continuing safety and efficacy studies by industry and government agencies;
|
•
|
the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as other factors impacting the commercial success of our products, which could lead to material impairment charges;
|
•
|
the results of management reviews of our research and development portfolio (including following the receipt of clinical results or feedback from the FDA or other regulatory authorities), which could result in terminations of specific projects which, in turn, could lead to material impairment charges;
|
•
|
the seasonality of sales of certain of our products;
|
•
|
declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control;
|
•
|
compliance by the Company or our third-party partners and service providers (over whom we may have limited influence), or the failure of our Company or these third parties to comply, with health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and business practices (including with respect to pricing), worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act and the Canadian Corruption of Foreign Public Officials Act), worldwide economic sanctions and/or export laws, worldwide environmental laws and regulation and privacy and security regulations;
|
•
|
the impacts of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Health Care Reform Act”) and potential amendment thereof and other legislative and regulatory health care reforms in the countries in which we operate, including with respect to recent government inquiries on pricing;
|
•
|
the impact of any changes in or reforms to the legislation, laws, rules, regulation and guidance that apply to the Company and its business and products or the enactment of any new or proposed legislation, laws, rules, regulations or guidance that will impact or apply to the Company or its businesses or products;
|
•
|
the impact of changes in federal laws and policy under consideration by the Trump administration and Congress, including the effect that such changes will have on fiscal and tax policies, the potential revision of all or portions of the Health Care Reform Act, international trade agreements and policies and policy efforts designed to reduce patient out-of-pocket costs for medicines (which could result in new mandatory rebates and discounts or other pricing restrictions);
|
•
|
illegal distribution or sale of counterfeit versions of our products; and
|
•
|
interruptions, breakdowns or breaches in our information technology systems.
|
(a)
|
Documents filed as a part of the report:
|
(1)
|
The consolidated financial statements required to be filed in the Annual Report on Form 10-K are listed on page F-1 hereof.
|
(2)
|
Schedule II — Valuation and Qualifying Accounts.
|
(in millions)
|
|
Balance at
Beginning
of Year
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Deductions
|
|
Balance at
End of
Year
|
||||||||||
Year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
47
|
|
|
$
|
10
|
|
|
$
|
(1
|
)
|
|
$
|
(8
|
)
|
|
$
|
48
|
|
Deferred tax asset valuation allowance
|
|
$
|
2,913
|
|
|
$
|
13
|
|
|
$
|
(95
|
)
|
|
$
|
—
|
|
|
$
|
2,831
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
97
|
|
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
$
|
(50
|
)
|
|
$
|
47
|
|
Deferred tax asset valuation allowance
|
|
$
|
2,001
|
|
|
$
|
870
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
2,913
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
80
|
|
|
$
|
33
|
|
|
$
|
4
|
|
|
$
|
(20
|
)
|
|
$
|
97
|
|
Deferred tax asset valuation allowance
|
|
$
|
1,857
|
|
|
$
|
221
|
|
|
$
|
(77
|
)
|
|
$
|
—
|
|
|
$
|
2,001
|
|
(3)
|
Exhibits
|
Exhibit
Number
|
|
Exhibit Description
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
3.5
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
|
4.9
|
|
|
4.10
|
|
4.11
|
|
|
4.12*
|
|
|
10.1*
|
|
|
10.2
|
|
|
10.3
|
||
10.4
|
||
10.5
|
||
10.6
|
||
10.7
|
||
10.8
|
||
10.9
|
||
10.10
|
||
10.11
|
||
10.12
|
||
10.13
|
||
10.14
|
||
10.15
|
||
10.16
|
10.17
|
||
10.18
|
||
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
|
10.28
|
|
|
10.29
|
|
|
10.30*
|
|
|
21.1*
|
||
23.1*
|
||
31.1*
|
||
31.2*
|
||
32.1*
|
||
32.2*
|
||
101.INS*
|
Inline XBRL Instance Document
|
|
101.SCH*
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.LAB*
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
101.DEF*
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
104*
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
†
|
Management contract or compensatory plan or arrangement.
|
††
|
One or more exhibits or schedules to this exhibit have been omitted pursuant to Item 601(a)(5) or Item 601(b)(2) of Regulation S-K. We undertake to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.
|
|
|
|
BAUSCH HEALTH COMPANIES INC.
(Registrant)
|
||
|
|
|
|
|
|
Date:
|
February 19, 2020
|
|
By:
|
/s/ JOSEPH C. PAPA
|
|
|
|
|
|
|
|
|
|
|
|
Joseph C. Papa
Chief Executive Officer
(Principal Executive Officer and Chairman of the Board)
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ JOSEPH C. PAPA
Joseph C. Papa
|
|
Chief Executive Officer and Chairman of the Board
|
|
February 19, 2020
|
|
/s/ PAUL S. HERENDEEN
Paul S. Herendeen
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
February 19, 2020
|
|
/s/ SAM ELDESSOUKY
Sam Eldessouky
|
|
Senior Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)
|
|
February 19, 2020
|
|
/s/ RICHARD U. DESCHUTTER
Richard U. DeSchutter
|
|
Director
|
|
February 19, 2020
|
|
/s/ D. ROBERT HALE
D. Robert Hale
|
|
Director
|
|
February 19, 2020
|
|
/s/ ARGERIS N. KARABELAS
Argeris N. Karabelas
|
|
Director
|
|
February 19, 2020
|
|
/s/ SARAH B. KAVANAGH
Sarah B. Kavanagh
|
|
Director
|
|
February 19, 2020
|
|
/s/ JOHN A. PAULSON
John A. Paulson
|
|
Director
|
|
February 19, 2020
|
|
/s/ ROBERT N. POWER
Robert N. Power
|
|
Director
|
|
February 19, 2020
|
|
/s/ RUSSEL C. ROBERTSON
Russel C. Robertson
|
|
Director
|
|
February 19, 2020
|
|
/s/ THOMAS W. ROSS, SR.
Thomas W. Ross, Sr.
|
|
Director
|
|
February 19, 2020
|
|
/s/ ANDREW C. VON ESCHENBACH
Andrew C. von Eschenbach
|
|
Director
|
|
February 19, 2020
|
|
/s/ AMY B. WECHSLER
Amy B. Wechsler
|
|
Director
|
|
February 19, 2020
|
|
|
Page
|
Report of Management on Financial Statements
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017
|
|
|
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2019, 2018 and 2017
|
|
|
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2019, 2018 and 2017
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
|
Notes to Consolidated Financial Statements
|
|
/s/ JOSEPH C. PAPA
|
|
/s/ PAUL S. HERENDEEN
|
Joseph C. Papa
Chief Executive Officer
|
|
Paul S. Herendeen
Executive Vice President and
Chief Financial Officer
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
3,243
|
|
|
$
|
721
|
|
Restricted cash
|
|
1
|
|
|
2
|
|
||
Trade receivables, net
|
|
1,839
|
|
|
1,865
|
|
||
Inventories, net
|
|
1,107
|
|
|
934
|
|
||
Prepaid expenses and other current assets
|
|
779
|
|
|
689
|
|
||
Total current assets
|
|
6,969
|
|
|
4,211
|
|
||
Property, plant and equipment, net
|
|
1,466
|
|
|
1,353
|
|
||
Intangible assets, net
|
|
10,201
|
|
|
12,001
|
|
||
Goodwill
|
|
13,126
|
|
|
13,142
|
|
||
Deferred tax assets, net
|
|
1,690
|
|
|
1,676
|
|
||
Other non-current assets
|
|
411
|
|
|
109
|
|
||
Total assets
|
|
$
|
33,863
|
|
|
$
|
32,492
|
|
Liabilities
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
503
|
|
|
$
|
411
|
|
Accrued and other current liabilities
|
|
4,511
|
|
|
3,197
|
|
||
Current portion of long-term debt and other
|
|
1,234
|
|
|
228
|
|
||
Total current liabilities
|
|
6,248
|
|
|
3,836
|
|
||
Acquisition-related contingent consideration
|
|
262
|
|
|
298
|
|
||
Non-current portion of long-term debt
|
|
24,661
|
|
|
24,077
|
|
||
Deferred tax liabilities, net
|
|
705
|
|
|
885
|
|
||
Other non-current liabilities
|
|
851
|
|
|
581
|
|
||
Total liabilities
|
|
32,727
|
|
|
29,677
|
|
||
Commitments and contingencies (Notes 21 and 22)
|
|
|
|
|
||||
Equity
|
|
|
|
|
||||
Common shares, no par value, unlimited shares authorized, 352,562,636 and 349,871,102 issued and outstanding at December 31, 2019 and 2018, respectively
|
|
10,172
|
|
|
10,121
|
|
||
Additional paid-in capital
|
|
429
|
|
|
413
|
|
||
Accumulated deficit
|
|
(7,452
|
)
|
|
(5,664
|
)
|
||
Accumulated other comprehensive loss
|
|
(2,086
|
)
|
|
(2,137
|
)
|
||
Total Bausch Health Companies Inc. shareholders’ equity
|
|
1,063
|
|
|
2,733
|
|
||
Noncontrolling interest
|
|
73
|
|
|
82
|
|
||
Total equity
|
|
1,136
|
|
|
2,815
|
|
||
Total liabilities and equity
|
|
$
|
33,863
|
|
|
$
|
32,492
|
|
/s/ JOSEPH C. PAPA
|
|
/s/ RUSSEL C. ROBERTSON
|
Joseph C. Papa
|
|
Russel C. Robertson
|
Chief Executive Officer
|
|
Chairperson, Audit and Risk Committee
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Product sales
|
$
|
8,489
|
|
|
$
|
8,271
|
|
|
$
|
8,595
|
|
Other revenues
|
112
|
|
|
109
|
|
|
129
|
|
|||
|
8,601
|
|
|
8,380
|
|
|
8,724
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Cost of goods sold (excluding amortization and impairments of intangible assets)
|
2,297
|
|
|
2,309
|
|
|
2,506
|
|
|||
Cost of other revenues
|
53
|
|
|
42
|
|
|
42
|
|
|||
Selling, general and administrative
|
2,554
|
|
|
2,473
|
|
|
2,582
|
|
|||
Research and development
|
471
|
|
|
413
|
|
|
361
|
|
|||
Amortization of intangible assets
|
1,897
|
|
|
2,644
|
|
|
2,690
|
|
|||
Goodwill impairments
|
—
|
|
|
2,322
|
|
|
312
|
|
|||
Asset impairments
|
75
|
|
|
568
|
|
|
714
|
|
|||
Restructuring and integration costs
|
31
|
|
|
22
|
|
|
52
|
|
|||
Acquisition-related contingent consideration
|
12
|
|
|
(9
|
)
|
|
(289
|
)
|
|||
Other expense (income), net
|
1,414
|
|
|
(20
|
)
|
|
(348
|
)
|
|||
|
8,804
|
|
|
10,764
|
|
|
8,622
|
|
|||
Operating (loss) income
|
(203
|
)
|
|
(2,384
|
)
|
|
102
|
|
|||
Interest income
|
12
|
|
|
11
|
|
|
12
|
|
|||
Interest expense
|
(1,612
|
)
|
|
(1,685
|
)
|
|
(1,840
|
)
|
|||
Loss on extinguishment of debt
|
(42
|
)
|
|
(119
|
)
|
|
(122
|
)
|
|||
Foreign exchange and other
|
8
|
|
|
23
|
|
|
107
|
|
|||
Loss before benefit from income taxes
|
(1,837
|
)
|
|
(4,154
|
)
|
|
(1,741
|
)
|
|||
Benefit from income taxes
|
54
|
|
|
10
|
|
|
4,145
|
|
|||
Net (loss) income
|
(1,783
|
)
|
|
(4,144
|
)
|
|
2,404
|
|
|||
Net income attributable to noncontrolling interest
|
(5
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Net (loss) income attributable to Bausch Health Companies Inc.
|
$
|
(1,788
|
)
|
|
$
|
(4,148
|
)
|
|
$
|
2,404
|
|
|
|
|
|
|
|
||||||
(Loss) earnings per share attributable to Bausch Health Companies Inc.
|
|
|
|
|
|
||||||
Basic
|
$
|
(5.08
|
)
|
|
$
|
(11.81
|
)
|
|
$
|
6.86
|
|
Diluted
|
$
|
(5.08
|
)
|
|
$
|
(11.81
|
)
|
|
$
|
6.83
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares
|
|
|
|
|
|
||||||
Basic
|
352.1
|
|
|
351.3
|
|
|
350.2
|
|
|||
Diluted
|
352.1
|
|
|
351.3
|
|
|
351.8
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net (loss) income
|
$
|
(1,783
|
)
|
|
$
|
(4,144
|
)
|
|
$
|
2,404
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Pension and postretirement benefit plan adjustments:
|
|
|
|
|
|
||||||
Net actuarial (loss) gain arising during the year
|
(8
|
)
|
|
(7
|
)
|
|
20
|
|
|||
Amortization of prior service credit
|
(4
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|||
Amortization or settlement recognition of net loss
|
2
|
|
|
1
|
|
|
2
|
|
|||
Income tax (expense) benefit
|
(2
|
)
|
|
3
|
|
|
(4
|
)
|
|||
Foreign currency impact
|
(2
|
)
|
|
—
|
|
|
1
|
|
|||
Net pension and postretirement benefit plan adjustments
|
(14
|
)
|
|
(7
|
)
|
|
15
|
|
|||
Foreign currency translation adjustment
|
64
|
|
|
(237
|
)
|
|
202
|
|
|||
Net unrealized holding loss on sale of assets and businesses:
|
|
|
|
|
|
||||||
Arising in period
|
—
|
|
|
—
|
|
|
(26
|
)
|
|||
Reclassification to net (loss) income
|
—
|
|
|
—
|
|
|
26
|
|
|||
Other comprehensive income (loss)
|
50
|
|
|
(244
|
)
|
|
217
|
|
|||
Comprehensive (loss) income
|
(1,733
|
)
|
|
(4,388
|
)
|
|
2,621
|
|
|||
Comprehensive income attributable to noncontrolling interest
|
(4
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|||
Comprehensive (loss) income attributable to Bausch Health Companies Inc.
|
$
|
(1,737
|
)
|
|
$
|
(4,389
|
)
|
|
$
|
2,617
|
|
|
|
Bausch Health Companies Inc. Shareholders' Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
|
Common Shares
|
|
|
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Bausch Health
Companies Inc.
Shareholders'
Equity
|
|
|
|
|
|||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
|||||||||||||||||||
Balance, January 1, 2017
|
|
347.8
|
|
|
$
|
10,038
|
|
|
$
|
351
|
|
|
$
|
(5,129
|
)
|
|
$
|
(2,108
|
)
|
|
$
|
3,152
|
|
|
$
|
106
|
|
|
$
|
3,258
|
|
Common shares issued under share-based compensation plans
|
|
0.9
|
|
|
52
|
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|||||||
Share-based awards tax withholding
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||||
Acquisition of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
(9
|
)
|
|||||||
Noncontrolling interest distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,404
|
|
|
—
|
|
|
2,404
|
|
|
—
|
|
|
2,404
|
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
213
|
|
|
213
|
|
|
4
|
|
|
217
|
|
|||||||
Balance, December 31, 2017
|
|
348.7
|
|
|
10,090
|
|
|
380
|
|
|
(2,725
|
)
|
|
(1,896
|
)
|
|
5,849
|
|
|
95
|
|
|
5,944
|
|
|||||||
Effect of application of new accounting standard: Income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,209
|
|
|
—
|
|
|
1,209
|
|
|
—
|
|
|
1,209
|
|
|||||||
Common shares issued under share-based compensation plans
|
|
1.2
|
|
|
31
|
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|||||||
Share-based awards tax withholding
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||||
Acquisition of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(3
|
)
|
|
(18
|
)
|
|||||||
Noncontrolling interest distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||||||
Net (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,148
|
)
|
|
—
|
|
|
(4,148
|
)
|
|
4
|
|
|
(4,144
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(241
|
)
|
|
(241
|
)
|
|
(3
|
)
|
|
(244
|
)
|
|||||||
Balance, December 31, 2018
|
|
349.9
|
|
|
10,121
|
|
|
413
|
|
|
(5,664
|
)
|
|
(2,137
|
)
|
|
2,733
|
|
|
82
|
|
|
2,815
|
|
|||||||
Common shares issued under share-based compensation plans
|
|
2.7
|
|
|
51
|
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
102
|
|
|||||||
Share-based awards tax withholding
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
|||||||
Noncontrolling interest distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
|||||||
Net (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,788
|
)
|
|
—
|
|
|
(1,788
|
)
|
|
5
|
|
|
(1,783
|
)
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
51
|
|
|
(1
|
)
|
|
50
|
|
|||||||
Balance, December 31, 2019
|
|
352.6
|
|
|
$
|
10,172
|
|
|
$
|
429
|
|
|
$
|
(7,452
|
)
|
|
$
|
(2,086
|
)
|
|
$
|
1,063
|
|
|
$
|
73
|
|
|
$
|
1,136
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows From Operating Activities
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(1,783
|
)
|
|
$
|
(4,144
|
)
|
|
$
|
2,404
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization of intangible assets
|
|
2,075
|
|
|
2,819
|
|
|
2,858
|
|
|||
Amortization and write-off of debt discounts and debt issuance costs
|
|
63
|
|
|
79
|
|
|
151
|
|
|||
Asset impairments
|
|
75
|
|
|
568
|
|
|
714
|
|
|||
Goodwill impairment
|
|
—
|
|
|
2,322
|
|
|
312
|
|
|||
Acquisition-related contingent consideration
|
|
12
|
|
|
(9
|
)
|
|
(289
|
)
|
|||
Allowances for losses on trade receivables and inventories
|
|
75
|
|
|
69
|
|
|
119
|
|
|||
Deferred income taxes
|
|
(230
|
)
|
|
(144
|
)
|
|
(4,386
|
)
|
|||
(Gain) loss on disposal of assets and businesses
|
|
(31
|
)
|
|
6
|
|
|
(579
|
)
|
|||
Additions (reductions) to accrued legal settlements
|
|
1,401
|
|
|
(27
|
)
|
|
226
|
|
|||
Insurance proceeds for legal settlement
|
|
—
|
|
|
—
|
|
|
60
|
|
|||
Payments of accrued legal settlements
|
|
(15
|
)
|
|
(224
|
)
|
|
(221
|
)
|
|||
Share-based compensation
|
|
102
|
|
|
87
|
|
|
87
|
|
|||
Foreign exchange loss (gain)
|
|
7
|
|
|
(19
|
)
|
|
(106
|
)
|
|||
Interest expense on cross-currency swaps
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
|
42
|
|
|
119
|
|
|
122
|
|
|||
Payments of contingent consideration adjustments, including accretion
|
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|||
Other
|
|
36
|
|
|
(17
|
)
|
|
(22
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Trade receivables
|
|
39
|
|
|
216
|
|
|
417
|
|
|||
Inventories
|
|
(209
|
)
|
|
(5
|
)
|
|
7
|
|
|||
Prepaid expenses and other current assets
|
|
1
|
|
|
(72
|
)
|
|
33
|
|
|||
Accounts payable, accrued and other liabilities
|
|
(149
|
)
|
|
(121
|
)
|
|
387
|
|
|||
Net cash provided by operating activities
|
|
1,501
|
|
|
1,501
|
|
|
2,290
|
|
|||
Cash Flows From Investing Activities
|
|
|
|
|
|
|
||||||
Acquisition of businesses, net of cash acquired
|
|
(180
|
)
|
|
5
|
|
|
—
|
|
|||
Acquisition of intangible assets and other assets
|
|
(8
|
)
|
|
(78
|
)
|
|
(165
|
)
|
|||
Purchases of property, plant and equipment
|
|
(270
|
)
|
|
(157
|
)
|
|
(171
|
)
|
|||
Purchases of marketable securities
|
|
(16
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|||
Proceeds from sale of marketable securities
|
|
10
|
|
|
7
|
|
|
2
|
|
|||
Proceeds from sale of assets and businesses, net of costs to sell
|
|
45
|
|
|
34
|
|
|
3,253
|
|
|||
Other
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|||
Net cash (used in) provided by investing activities
|
|
(419
|
)
|
|
(196
|
)
|
|
2,887
|
|
|||
Cash Flows From Financing Activities
|
|
|
|
|
|
|
||||||
Issuance of long-term debt, net of discounts
|
|
5,960
|
|
|
8,944
|
|
|
9,424
|
|
|||
Repayments of long-term debt
|
|
(4,406
|
)
|
|
(10,101
|
)
|
|
(14,203
|
)
|
|||
Borrowings of short-term debt
|
|
12
|
|
|
—
|
|
|
1
|
|
|||
Repayments of short-term debt
|
|
(12
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|||
Payment of share-based awards tax withholding
|
|
(40
|
)
|
|
(10
|
)
|
|
(4
|
)
|
|||
Payments of contingent consideration
|
|
(35
|
)
|
|
(37
|
)
|
|
(45
|
)
|
|||
Payments of deferred consideration
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|||
Payments of financing costs
|
|
(28
|
)
|
|
(102
|
)
|
|
(110
|
)
|
|||
Other
|
|
(8
|
)
|
|
(26
|
)
|
|
(18
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
1,443
|
|
|
(1,353
|
)
|
|
(4,963
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(4
|
)
|
|
(26
|
)
|
|
41
|
|
|||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
|
2,521
|
|
|
(74
|
)
|
|
255
|
|
|||
Cash and cash equivalents and restricted cash, beginning of year
|
|
723
|
|
|
797
|
|
|
542
|
|
|||
Cash and cash equivalents and restricted cash, end of year
|
|
$
|
3,244
|
|
|
$
|
723
|
|
|
$
|
797
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents, end of year
|
|
$
|
3,243
|
|
|
$
|
721
|
|
|
$
|
720
|
|
Restricted cash, end of year
|
|
1
|
|
|
2
|
|
|
77
|
|
|||
Cash and cash equivalents and restricted cash, end of year
|
|
$
|
3,244
|
|
|
$
|
723
|
|
|
$
|
797
|
|
1.
|
DESCRIPTION OF BUSINESS
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
Land improvements
|
|
15 - 30 years
|
Buildings and improvements
|
|
Up to 40 years
|
Machinery and equipment
|
|
3 - 20 years
|
Other equipment
|
|
3 - 10 years
|
Equipment on operating lease
|
|
Up to 5 years
|
Leasehold improvements
|
|
Lesser of term of lease or 10 years
|
Product brands
|
|
2 - 20 years
|
Corporate brands
|
|
7 - 20 years
|
Product rights
|
|
3 - 15 years
|
Partner relationships
|
|
7 - 9 years
|
Out-licensed technology and other
|
|
8 - 10 years
|
(in millions)
|
|
Discounts
and
Allowances
|
|
Returns
|
|
Rebates
|
|
Chargebacks
|
|
Distribution
Fees
|
|
Total
|
||||||||||||
Reserve balance, January 1, 2018
|
|
$
|
167
|
|
|
$
|
863
|
|
|
$
|
1,094
|
|
|
$
|
274
|
|
|
$
|
148
|
|
|
$
|
2,546
|
|
Current period provision
|
|
865
|
|
|
293
|
|
|
2,551
|
|
|
1,966
|
|
|
212
|
|
|
5,887
|
|
||||||
Payments and credits
|
|
(857
|
)
|
|
(343
|
)
|
|
(2,621
|
)
|
|
(2,031
|
)
|
|
(197
|
)
|
|
(6,049
|
)
|
||||||
Reserve balance, December 31, 2018
|
|
175
|
|
|
813
|
|
|
1,024
|
|
|
209
|
|
|
163
|
|
|
2,384
|
|
||||||
Acquisition of Synergy
|
|
—
|
|
|
3
|
|
|
12
|
|
|
—
|
|
|
1
|
|
|
16
|
|
||||||
Current period provision
|
|
776
|
|
|
113
|
|
|
2,265
|
|
|
1,938
|
|
|
195
|
|
|
5,287
|
|
||||||
Payments and credits
|
|
(769
|
)
|
|
(238
|
)
|
|
(2,374
|
)
|
|
(1,979
|
)
|
|
(277
|
)
|
|
(5,637
|
)
|
||||||
Reserve balance, December 31, 2019
|
|
$
|
182
|
|
|
$
|
691
|
|
|
$
|
927
|
|
|
$
|
168
|
|
|
$
|
82
|
|
|
$
|
2,050
|
|
3.
|
ACQUISITIONS AND LICENSING AGREEMENTS
|
4.
|
DIVESTITURES
|
5.
|
RESTRUCTURING AND INTEGRATION COSTS
|
6.
|
FAIR VALUE MEASUREMENTS
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
|
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
(in millions)
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
|
$
|
2,696
|
|
|
$
|
2,646
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
197
|
|
|
$
|
166
|
|
|
$
|
31
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Acquisition-related contingent consideration
|
|
$
|
316
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
316
|
|
|
$
|
339
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
339
|
|
Cross-currency swaps
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(in millions)
|
|
Loss recognized in
Other comprehensive loss |
|
Gain excluded from assessment of hedge effectiveness
|
|
Location of gain in income of excluded component
|
||||
Cross-currency swaps
|
|
$
|
22
|
|
|
$
|
9
|
|
|
Interest expense
|
(in millions)
|
|
2019
|
|
2018
|
||||||||||||
Beginning balance, January 1,
|
|
|
|
$
|
339
|
|
|
|
|
$
|
387
|
|
||||
Adjustments to Acquisition-related contingent consideration:
|
|
|
|
|
|
|
|
|
||||||||
Accretion for the time value of money
|
|
$
|
22
|
|
|
|
|
$
|
24
|
|
|
|
||||
Fair value adjustments due to changes in estimates of future payments
|
|
(10
|
)
|
|
|
|
(33
|
)
|
|
|
||||||
Acquisition-related contingent consideration adjustments
|
|
|
|
12
|
|
|
|
|
(9
|
)
|
||||||
Payments / Settlements
|
|
|
|
(36
|
)
|
|
|
|
(39
|
)
|
||||||
Foreign currency translation adjustment included in other comprehensive loss
|
|
|
|
1
|
|
|
|
|
—
|
|
||||||
Ending balance, December 31,
|
|
|
|
316
|
|
|
|
|
339
|
|
||||||
Current portion
|
|
|
|
54
|
|
|
|
|
41
|
|
||||||
Non-current portion
|
|
|
|
$
|
262
|
|
|
|
|
$
|
298
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
(in millions)
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||||
Other non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-current assets held for sale
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
7.
|
INVENTORIES
|
(in millions)
|
|
2019
|
|
2018
|
||||
Raw materials
|
|
$
|
319
|
|
|
$
|
275
|
|
Work in process
|
|
149
|
|
|
95
|
|
||
Finished goods
|
|
639
|
|
|
564
|
|
||
|
|
$
|
1,107
|
|
|
$
|
934
|
|
8.
|
PROPERTY, PLANT AND EQUIPMENT
|
(in millions)
|
|
2019
|
|
2018
|
||||
Land
|
|
$
|
79
|
|
|
$
|
81
|
|
Buildings
|
|
696
|
|
|
693
|
|
||
Machinery and equipment
|
|
1,606
|
|
|
1,527
|
|
||
Other equipment and leasehold improvements
|
|
369
|
|
|
366
|
|
||
Equipment on operating lease
|
|
56
|
|
|
46
|
|
||
Construction in progress
|
|
301
|
|
|
162
|
|
||
|
|
3,107
|
|
|
2,875
|
|
||
Less accumulated depreciation
|
|
(1,641
|
)
|
|
(1,522
|
)
|
||
|
|
$
|
1,466
|
|
|
$
|
1,353
|
|
9.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
Weighted-
Average
Remaining
Useful
Lives
(Years)
|
|
2019
|
|
2018
|
||||||||||||||||||||
(in millions)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization and Impairments
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization and Impairments |
|
Net
Carrying
Amount
|
||||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product brands
|
7
|
|
$
|
21,011
|
|
|
$
|
(13,544
|
)
|
|
$
|
7,467
|
|
|
$
|
20,891
|
|
|
$
|
(11,958
|
)
|
|
$
|
8,933
|
|
Corporate brands
|
8
|
|
930
|
|
|
(338
|
)
|
|
592
|
|
|
926
|
|
|
(263
|
)
|
|
663
|
|
||||||
Product rights/patents
|
4
|
|
3,297
|
|
|
(2,887
|
)
|
|
410
|
|
|
3,292
|
|
|
(2,658
|
)
|
|
634
|
|
||||||
Partner relationships
|
2
|
|
166
|
|
|
(165
|
)
|
|
1
|
|
|
168
|
|
|
(166
|
)
|
|
2
|
|
||||||
Technology and other
|
3
|
|
209
|
|
|
(189
|
)
|
|
20
|
|
|
208
|
|
|
(173
|
)
|
|
35
|
|
||||||
Total finite-lived intangible assets
|
|
|
25,613
|
|
|
(17,123
|
)
|
|
8,490
|
|
|
25,485
|
|
|
(15,218
|
)
|
|
10,267
|
|
||||||
Acquired IPR&D not in service
|
NA
|
|
13
|
|
|
—
|
|
|
13
|
|
|
36
|
|
|
—
|
|
|
36
|
|
||||||
B&L Trademark
|
NA
|
|
1,698
|
|
|
—
|
|
|
1,698
|
|
|
1,698
|
|
|
—
|
|
|
1,698
|
|
||||||
|
|
|
$
|
27,324
|
|
|
$
|
(17,123
|
)
|
|
$
|
10,201
|
|
|
$
|
27,219
|
|
|
$
|
(15,218
|
)
|
|
$
|
12,001
|
|
(in millions)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Amortization
|
|
$
|
1,624
|
|
|
$
|
1,375
|
|
|
$
|
1,224
|
|
|
$
|
1,079
|
|
|
$
|
950
|
|
|
$
|
2,238
|
|
|
$
|
8,490
|
|
(in millions)
|
|
Bausch +
Lomb/
International
|
|
Branded Rx
|
|
U.S. Diversified Products
|
|
Salix
|
|
Ortho Dermatologics
|
|
Diversified Products
|
|
Total
|
||||||||||||||
Balance, January 1, 2017
|
|
$
|
5,499
|
|
|
$
|
7,265
|
|
|
$
|
3,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,794
|
|
Realignment of segment goodwill
|
|
264
|
|
|
(264
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Goodwill reclassified to assets held for sale and subsequently disposed
|
|
(30
|
)
|
|
(61
|
)
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(175
|
)
|
|||||||
Impairment of the former Branded Rx reporting unit
|
|
—
|
|
|
(312
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(312
|
)
|
|||||||
Foreign exchange and other
|
|
283
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
286
|
|
|||||||
Balance, December 31, 2017
|
|
6,016
|
|
|
6,631
|
|
|
2,946
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,593
|
|
|||||||
Impairment of the Salix and Ortho Dermatologics reporting units
|
|
—
|
|
|
(2,213
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,213
|
)
|
|||||||
Realignment of Global Solta reporting unit goodwill
|
|
(82
|
)
|
|
115
|
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Goodwill reclassified to assets held for sale and subsequently disposed
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Realignment of segment goodwill
|
|
—
|
|
|
(4,533
|
)
|
|
(2,913
|
)
|
|
3,156
|
|
|
1,267
|
|
|
3,023
|
|
|
—
|
|
|||||||
Impairment of the Dentistry reporting unit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109
|
)
|
|
(109
|
)
|
|||||||
Foreign exchange and other
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(127
|
)
|
|||||||
Balance, December 31, 2018
|
|
5,805
|
|
|
—
|
|
|
—
|
|
|
3,156
|
|
|
1,267
|
|
|
2,914
|
|
|
13,142
|
|
|||||||
Acquisition of certain assets of Synergy
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||||
Goodwill reclassified to assets held for sale (Note 4)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||||
Foreign exchange and other
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Balance, December 31, 2019
|
|
$
|
5,786
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,159
|
|
|
$
|
1,267
|
|
|
$
|
2,914
|
|
|
$
|
13,126
|
|
10.
|
ACCRUED AND OTHER CURRENT LIABILITIES
|
(in millions)
|
|
2019
|
|
2018
|
||||
Legal matters and related fees
|
|
$
|
1,397
|
|
|
$
|
11
|
|
Product rebates
|
|
898
|
|
|
998
|
|
||
Product returns
|
|
691
|
|
|
813
|
|
||
Interest
|
|
305
|
|
|
273
|
|
||
Employee compensation and benefit costs
|
|
304
|
|
|
301
|
|
||
Income taxes payable
|
|
196
|
|
|
167
|
|
||
Other
|
|
720
|
|
|
634
|
|
||
|
|
$
|
4,511
|
|
|
$
|
3,197
|
|
11.
|
FINANCING ARRANGEMENTS
|
|
|
|
|
2019
|
|
2018
|
||||||||||||
(in millions)
|
|
Maturity
|
|
Principal Amount
|
|
Net of Premiums, Discounts and Issuance Costs
|
|
Principal Amount
|
|
Net of Premiums, Discounts and Issuance Costs
|
||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
2023 Revolving Credit Facility
|
|
June 2023
|
|
—
|
|
|
—
|
|
|
75
|
|
|
75
|
|
||||
June 2025 Term Loan B Facility
|
|
June 2025
|
|
3,869
|
|
|
3,768
|
|
|
4,394
|
|
|
4,269
|
|
||||
November 2025 Term Loan B Facility
|
|
November 2025
|
|
1,275
|
|
|
1,257
|
|
|
1,481
|
|
|
1,456
|
|
||||
Senior Secured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
6.50% Secured Notes
|
|
March 2022
|
|
1,250
|
|
|
1,242
|
|
|
1,250
|
|
|
1,239
|
|
||||
7.00% Secured Notes
|
|
March 2024
|
|
2,000
|
|
|
1,983
|
|
|
2,000
|
|
|
1,979
|
|
||||
5.50% Secured Notes
|
|
November 2025
|
|
1,750
|
|
|
1,733
|
|
|
1,750
|
|
|
1,730
|
|
||||
5.75% Secured Notes
|
|
August 2027
|
|
500
|
|
|
493
|
|
|
—
|
|
|
—
|
|
||||
Senior Unsecured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
5.625%
|
|
December 2021
|
|
—
|
|
|
—
|
|
|
700
|
|
|
697
|
|
||||
5.50%
|
|
March 2023
|
|
402
|
|
|
400
|
|
|
1,000
|
|
|
995
|
|
||||
5.875%
|
|
May 2023
|
|
1,448
|
|
|
1,441
|
|
|
3,250
|
|
|
3,229
|
|
||||
4.50% euro-denominated debt
|
|
May 2023
|
|
1,682
|
|
|
1,674
|
|
|
1,720
|
|
|
1,709
|
|
||||
6.125%
|
|
April 2025
|
|
3,250
|
|
|
3,230
|
|
|
3,250
|
|
|
3,226
|
|
||||
9.00%
|
|
December 2025
|
|
1,500
|
|
|
1,473
|
|
|
1,500
|
|
|
1,469
|
|
||||
9.25%
|
|
April 2026
|
|
1,500
|
|
|
1,484
|
|
|
1,500
|
|
|
1,482
|
|
||||
8.50%
|
|
January 2027
|
|
1,750
|
|
|
1,756
|
|
|
750
|
|
|
738
|
|
||||
7.00%
|
|
January 2028
|
|
750
|
|
|
741
|
|
|
—
|
|
|
—
|
|
||||
5.00%
|
|
January 2028
|
|
1,250
|
|
|
1,234
|
|
|
—
|
|
|
—
|
|
||||
7.25%
|
|
May 2029
|
|
750
|
|
|
740
|
|
|
—
|
|
|
—
|
|
||||
5.25%
|
|
January 2030
|
|
1,250
|
|
|
1,234
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
Various
|
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
|
||||
Total long-term debt and other
|
|
|
|
$
|
26,188
|
|
|
25,895
|
|
|
$
|
24,632
|
|
|
24,305
|
|
||
Less: Current portion of long-term debt and other
|
|
|
|
1,234
|
|
|
|
|
228
|
|
||||||||
Non-current portion of long-term debt
|
|
|
|
|
|
$
|
24,661
|
|
|
|
|
$
|
24,077
|
|
(in millions)
|
|
||
2020
|
$
|
1,240
|
|
2021
|
103
|
|
|
2022
|
1,553
|
|
|
2023
|
2,595
|
|
|
2024
|
2,303
|
|
|
Thereafter
|
18,394
|
|
|
Total gross maturities
|
26,188
|
|
|
Unamortized discounts
|
(293
|
)
|
|
Total long-term debt and other
|
$
|
25,895
|
|
12.
|
PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS
|
|
|
Pension Benefit Plans
|
|
U.S. Postretirement
Benefit Plan
|
||||||||||||||||||||
|
U.S. Plan
|
|
Non-U.S. Plans
|
|
||||||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Unrecognized actuarial losses
|
|
$
|
(20
|
)
|
|
$
|
(31
|
)
|
|
$
|
(65
|
)
|
|
$
|
(50
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
Unrecognized prior service credits
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
27
|
|
|
$
|
14
|
|
|
$
|
17
|
|
|
|
Pension Benefit Plans
|
|
U.S. Postretirement
Benefit Plan
|
||||||||||||||||||||||||||||||||
|
U.S. Plan
|
|
Non-U.S. Plans
|
|
||||||||||||||||||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
Service cost
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
8
|
|
|
7
|
|
|
8
|
|
|
5
|
|
|
5
|
|
|
5
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|||||||||
Expected return on plan assets
|
|
(13
|
)
|
|
(15
|
)
|
|
(13
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of prior service credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net periodic (benefit) cost
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
(3
|
)
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
|
Pension Benefit Plans
|
|
U.S. Postretirement
Benefit Plan
|
||||||||||||||||||||
|
U.S. Plan
|
|
Non-U.S. Plans
|
|
||||||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Change in Projected Benefit Obligation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Projected benefit obligation, beginning of year
|
|
$
|
214
|
|
|
$
|
234
|
|
|
$
|
235
|
|
|
$
|
254
|
|
|
$
|
41
|
|
|
$
|
48
|
|
Service cost
|
|
2
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||
Interest cost
|
|
8
|
|
|
7
|
|
|
5
|
|
|
5
|
|
|
1
|
|
|
1
|
|
||||||
Employee contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Settlements
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
|
(15
|
)
|
|
(16
|
)
|
|
(8
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(5
|
)
|
||||||
Actuarial losses (gains)
|
|
18
|
|
|
(13
|
)
|
|
30
|
|
|
(10
|
)
|
|
2
|
|
|
(4
|
)
|
||||||
Currency translation adjustments
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
||||||
Projected benefit obligation, end of year
|
|
227
|
|
|
214
|
|
|
259
|
|
|
235
|
|
|
41
|
|
|
41
|
|
||||||
Change in Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets, beginning of year
|
|
187
|
|
|
206
|
|
|
147
|
|
|
155
|
|
|
—
|
|
|
—
|
|
||||||
Actual return on plan assets
|
|
42
|
|
|
(11
|
)
|
|
17
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Employee contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Company contributions
|
|
2
|
|
|
8
|
|
|
10
|
|
|
7
|
|
|
3
|
|
|
4
|
|
||||||
Settlements
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
|
(15
|
)
|
|
(16
|
)
|
|
(8
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(5
|
)
|
||||||
Currency translation adjustments
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets, end of year
|
|
216
|
|
|
187
|
|
|
161
|
|
|
147
|
|
|
—
|
|
|
—
|
|
||||||
Funded Status at end of year
|
|
$
|
(11
|
)
|
|
$
|
(27
|
)
|
|
$
|
(98
|
)
|
|
$
|
(88
|
)
|
|
$
|
(41
|
)
|
|
$
|
(41
|
)
|
Recognized as:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrued and other current liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(5
|
)
|
|
$
|
(5
|
)
|
Other non-current liabilities
|
|
$
|
(11
|
)
|
|
$
|
(27
|
)
|
|
$
|
(96
|
)
|
|
$
|
(86
|
)
|
|
$
|
(36
|
)
|
|
$
|
(36
|
)
|
|
|
U.S. Plan
|
|
Non-U.S. Plans
|
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Projected benefit obligation
|
|
$
|
227
|
|
|
$
|
214
|
|
|
$
|
259
|
|
|
$
|
235
|
|
Accumulated benefit obligation
|
|
227
|
|
|
214
|
|
|
251
|
|
|
225
|
|
||||
Fair value of plan assets
|
|
216
|
|
|
187
|
|
|
161
|
|
|
147
|
|
(in millions)
|
|
Pension Benefit Plans
|
|
U.S. Postretirement
Benefit
Plan
|
||||||||
|
U.S. Plan
|
|
Non-U.S. Plans
|
|
||||||||
2020
|
|
$
|
14
|
|
|
$
|
5
|
|
|
$
|
5
|
|
2021
|
|
18
|
|
|
6
|
|
|
4
|
|
|||
2022
|
|
18
|
|
|
6
|
|
|
4
|
|
|||
2023
|
|
17
|
|
|
6
|
|
|
4
|
|
|||
2024
|
|
16
|
|
|
6
|
|
|
3
|
|
|||
2025-2029
|
|
77
|
|
|
33
|
|
|
13
|
|
|
|
Pension Benefit Plans
|
|
U.S. Postretirement Benefit Plan
|
||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
For Determining Net Periodic (Benefit) Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
4.25
|
%
|
|
3.56
|
%
|
|
4.04
|
%
|
|
4.16
|
%
|
|
3.47
|
%
|
|
3.85
|
%
|
Expected rate of return on plan assets
|
|
7.25
|
%
|
|
7.50
|
%
|
|
7.50
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
Rate of compensation increase
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-U.S. Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
2.39
|
%
|
|
2.29
|
%
|
|
2.08
|
%
|
|
|
|
|
|
|
|||
Expected rate of return on plan assets
|
|
3.46
|
%
|
|
3.66
|
%
|
|
3.84
|
%
|
|
|
|
|
|
|
|||
Rate of compensation increase
|
|
2.89
|
%
|
|
2.87
|
%
|
|
2.64
|
%
|
|
|
|
|
|
|
|
|
Pension Benefit Plans
|
|
U.S. Postretirement Benefit Plan
|
||||||||
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
For Determining Benefit Obligation
|
|
|
|
|
|
|
|
|
||||
U.S. Plans:
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
3.16
|
%
|
|
4.25
|
%
|
|
3.04
|
%
|
|
4.16
|
%
|
Rate of compensation increase
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-U.S. Plans:
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
1.68
|
%
|
|
2.39
|
%
|
|
|
|
|
||
Rate of compensation increase
|
|
3.05
|
%
|
|
2.89
|
%
|
|
|
|
|
|
|
2019
|
|
2018
|
||
U.S. Plan
|
|
|
|
|
||
Equity securities
|
|
55
|
%
|
|
52
|
%
|
Fixed income securities
|
|
44
|
%
|
|
47
|
%
|
Other
|
|
1
|
%
|
|
1
|
%
|
Non-U.S. Plans
|
|
|
|
|
||
Cash and cash equivalents
|
|
6
|
%
|
|
5
|
%
|
Equity securities
|
|
25
|
%
|
|
20
|
%
|
Fixed income securities
|
|
64
|
%
|
|
69
|
%
|
Other
|
|
6
|
%
|
|
6
|
%
|
|
|
Pension Benefit Plans - U.S. Plans
|
||||||||||||||||||||||||||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
(in millions)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||
Cash and cash equivalents
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Commingled funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. broad market
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
||||||||
Emerging markets
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||||||
Worldwide developed markets
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||||||
Other assets
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Investment grade
|
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
||||||||
|
|
$
|
1
|
|
|
$
|
215
|
|
|
$
|
—
|
|
|
$
|
216
|
|
|
$
|
2
|
|
|
$
|
185
|
|
|
$
|
—
|
|
|
$
|
187
|
|
|
|
Pension Benefit Plans - Non-U.S. Plans
|
||||||||||||||||||||||||||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
(in millions)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||
Cash equivalents
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Commingled funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Emerging markets
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Worldwide developed markets
|
|
—
|
|
|
38
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Investment grade
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||||
Global high yield
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Government bond funds
|
|
1
|
|
|
90
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||||||
Other assets
|
|
—
|
|
|
8
|
|
|
1
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||||
|
|
$
|
1
|
|
|
$
|
159
|
|
|
$
|
1
|
|
|
$
|
161
|
|
|
$
|
—
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
147
|
|
13.
|
LEASES
|
(in millions)
|
|
||
Operating lease costs
|
$
|
62
|
|
Variable operating lease costs
|
$
|
16
|
|
(in millions)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Future payments
|
|
$
|
78
|
|
|
$
|
60
|
|
|
$
|
44
|
|
|
$
|
39
|
|
|
$
|
32
|
|
|
$
|
166
|
|
|
$
|
419
|
|
14.
|
SHARE-BASED COMPENSATION
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Stock options
|
|
$
|
21
|
|
|
$
|
23
|
|
|
$
|
18
|
|
RSUs
|
|
81
|
|
|
64
|
|
|
69
|
|
|||
Share-based compensation expense
|
|
$
|
102
|
|
|
$
|
87
|
|
|
$
|
87
|
|
|
|
|
|
|
|
|
||||||
Research and development expenses
|
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
8
|
|
Selling, general and administrative expenses
|
|
93
|
|
|
78
|
|
|
79
|
|
|||
Share-based compensation expense
|
|
$
|
102
|
|
|
$
|
87
|
|
|
$
|
87
|
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Expected stock option life (years)
|
|
3.0
|
|
|
3.0
|
|
|
3.0
|
|
Expected volatility
|
|
46.5
|
%
|
|
54.0
|
%
|
|
67.3
|
%
|
Risk-free interest rate
|
|
2.5
|
%
|
|
2.7
|
%
|
|
1.8
|
%
|
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
(in millions, except per share amounts)
|
|
Options
|
|
Weighted-
Average
Exercise
Price Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding, January 1, 2019
|
|
5.9
|
|
|
$
|
27.88
|
|
|
|
|
|
|
|
Granted
|
|
1.7
|
|
|
$
|
23.19
|
|
|
|
|
|
|
|
Exercised
|
|
(0.3
|
)
|
|
$
|
16.03
|
|
|
|
|
|
|
|
Expired or forfeited
|
|
(0.2
|
)
|
|
$
|
37.27
|
|
|
|
|
|
|
|
Outstanding, December 31, 2019
|
|
7.1
|
|
|
$
|
26.99
|
|
|
7.5
|
|
$
|
61
|
|
Vested and expected to vest, December 31, 2019
|
|
6.7
|
|
|
$
|
27.43
|
|
|
7.4
|
|
$
|
57
|
|
Vested and exercisable, December 31, 2019
|
|
3.6
|
|
|
$
|
34.27
|
|
|
6.5
|
|
$
|
24
|
|
(in millions, except per share amounts)
|
|
Time-Based
RSUs
|
|
Weighted-
Average
Grant-Date
Fair Value Per Share
|
|||
Non-vested, January 1, 2019
|
|
5.8
|
|
|
$
|
18.29
|
|
Granted
|
|
3.1
|
|
|
$
|
24.13
|
|
Vested
|
|
(1.9
|
)
|
|
$
|
17.88
|
|
Forfeited
|
|
(0.9
|
)
|
|
$
|
23.77
|
|
Non-vested, December 31, 2019
|
|
6.1
|
|
|
$
|
20.54
|
|
|
|
2019
|
|
2018
|
|
2017
|
Contractual term (years)
|
|
3.0
|
|
3.0
|
|
3.0
|
Expected Company share volatility
|
|
46.5%
|
|
54.2%
|
|
67.2% - 77.2%
|
Risk-free interest rate
|
|
2.5%
|
|
2.7%
|
|
1.7% - 1.8%
|
(in millions, except per share amounts)
|
|
Performance-based
RSUs
|
|
Weighted-
Average
Grant-Date
Fair Value Per Share
|
|||
Non-vested, January 1, 2019
|
|
1.5
|
|
|
$
|
34.06
|
|
Granted
|
|
1.0
|
|
|
$
|
29.52
|
|
Vested
|
|
(0.3
|
)
|
|
$
|
48.42
|
|
Forfeited
|
|
(0.2
|
)
|
|
$
|
91.76
|
|
Non-vested, December 31, 2019
|
|
2.0
|
|
|
$
|
25.80
|
|
15.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
(in millions)
|
|
2019
|
|
2018
|
||||
Foreign currency translation adjustment
|
|
$
|
(2,046
|
)
|
|
$
|
(2,111
|
)
|
Pension adjustment, net of tax
|
|
(40
|
)
|
|
(26
|
)
|
||
|
|
$
|
(2,086
|
)
|
|
$
|
(2,137
|
)
|
16.
|
RESEARCH AND DEVELOPMENT
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Product related research and development
|
|
$
|
434
|
|
|
$
|
376
|
|
|
$
|
328
|
|
Quality assurance
|
|
37
|
|
|
37
|
|
|
33
|
|
|||
Research and development
|
|
$
|
471
|
|
|
$
|
413
|
|
|
$
|
361
|
|
17.
|
OTHER EXPENSE (INCOME), NET
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Gain on the Skincare Sale
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(309
|
)
|
Gain on the iNova Sale
|
|
—
|
|
|
—
|
|
|
(309
|
)
|
|||
Gain on the Dendreon Sale
|
|
—
|
|
|
—
|
|
|
(97
|
)
|
|||
Loss on the Sprout Sale
|
|
—
|
|
|
—
|
|
|
98
|
|
|||
Net (gain) loss on other sales of assets
|
|
(31
|
)
|
|
6
|
|
|
37
|
|
|||
Litigation and other matters
|
|
1,401
|
|
|
(27
|
)
|
|
226
|
|
|||
Acquired in-process research and development costs
|
|
41
|
|
|
1
|
|
|
5
|
|
|||
Acquisition-related costs
|
|
8
|
|
|
1
|
|
|
—
|
|
|||
Other, net
|
|
(5
|
)
|
|
(1
|
)
|
|
1
|
|
|||
Other expense (income), net
|
|
$
|
1,414
|
|
|
$
|
(20
|
)
|
|
$
|
(348
|
)
|
18.
|
INCOME TAXES
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
|
$
|
(2,396
|
)
|
|
$
|
(1,475
|
)
|
|
$
|
(2,032
|
)
|
Foreign
|
|
559
|
|
|
(2,679
|
)
|
|
291
|
|
|||
|
|
$
|
(1,837
|
)
|
|
$
|
(4,154
|
)
|
|
$
|
(1,741
|
)
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
Foreign
|
|
(116
|
)
|
|
(327
|
)
|
|
(146
|
)
|
|||
|
|
(128
|
)
|
|
(327
|
)
|
|
(166
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Domestic
|
|
(5
|
)
|
|
17
|
|
|
(2
|
)
|
|||
Foreign
|
|
187
|
|
|
320
|
|
|
4,313
|
|
|||
|
|
182
|
|
|
337
|
|
|
4,311
|
|
|||
|
|
$
|
54
|
|
|
$
|
10
|
|
|
$
|
4,145
|
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Loss before benefit from income taxes
|
|
$
|
(1,837
|
)
|
|
$
|
(4,154
|
)
|
|
$
|
(1,741
|
)
|
Benefit from income taxes
|
|
|
|
|
|
|
||||||
Expected benefit from income taxes at Canadian statutory rate
|
|
$
|
494
|
|
|
$
|
1,117
|
|
|
$
|
468
|
|
Non-deductible amount of share-based compensation
|
|
(7
|
)
|
|
(10
|
)
|
|
(37
|
)
|
|||
Adjustments to tax attributes
|
|
(99
|
)
|
|
(4
|
)
|
|
(242
|
)
|
|||
Impact of changes in enacted income tax rates
|
|
—
|
|
|
—
|
|
|
747
|
|
|||
Change in valuation allowance related to foreign tax credits and NOLs
|
|
21
|
|
|
(3
|
)
|
|
139
|
|
|||
Change in valuation allowance on Canadian deferred tax assets and tax rate changes
|
|
(142
|
)
|
|
(875
|
)
|
|
(360
|
)
|
|||
Change in uncertain tax positions
|
|
(350
|
)
|
|
(47
|
)
|
|
(65
|
)
|
|||
Foreign tax rate differences
|
|
186
|
|
|
(3
|
)
|
|
933
|
|
|||
Non-deductible portion of Goodwill impairments
|
|
—
|
|
|
(488
|
)
|
|
(139
|
)
|
|||
Tax differences on divestitures of businesses
|
|
—
|
|
|
—
|
|
|
203
|
|
|||
Tax benefit on intra-entity transfers
|
|
—
|
|
|
356
|
|
|
2,480
|
|
|||
Other
|
|
(49
|
)
|
|
(33
|
)
|
|
18
|
|
|||
|
|
$
|
54
|
|
|
$
|
10
|
|
|
$
|
4,145
|
|
(in millions)
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Tax loss carryforwards
|
|
$
|
2,911
|
|
|
$
|
2,886
|
|
Provisions
|
|
641
|
|
|
519
|
|
||
Research and development tax credits
|
|
155
|
|
|
143
|
|
||
Scientific Research and Experimental Development pool
|
|
52
|
|
|
52
|
|
||
Tax credit carryforwards
|
|
25
|
|
|
46
|
|
||
Deferred revenue
|
|
5
|
|
|
4
|
|
||
Unrealized FX on U.S. dollar debt and other financing cost
|
|
94
|
|
|
262
|
|
||
Prepaid expenses
|
|
41
|
|
|
44
|
|
||
Share-based compensation
|
|
19
|
|
|
24
|
|
||
Other
|
|
23
|
|
|
—
|
|
||
Total deferred tax assets
|
|
3,966
|
|
|
3,980
|
|
||
Less valuation allowance
|
|
(2,831
|
)
|
|
(2,913
|
)
|
||
Net deferred tax assets
|
|
1,135
|
|
|
1,067
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Intangible assets
|
|
53
|
|
|
163
|
|
||
Plant, equipment and technology
|
|
56
|
|
|
55
|
|
||
Outside basis differences
|
|
41
|
|
|
29
|
|
||
Other
|
|
—
|
|
|
29
|
|
||
Total deferred tax liabilities
|
|
150
|
|
|
276
|
|
||
Net deferred tax asset (liability)
|
|
$
|
985
|
|
|
$
|
791
|
|
Jurisdiction:
|
|
Open Years
|
United States - Federal
|
|
2014 - 2018
|
Canada
|
|
2005 - 2018
|
Germany
|
|
2013 - 2018
|
France
|
|
2013 - 2018
|
China
|
|
2015 - 2018
|
Ireland
|
|
2015 - 2018
|
Netherlands
|
|
2018
|
Australia
|
|
2011 - 2018
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance, beginning of year
|
|
$
|
654
|
|
|
$
|
598
|
|
|
$
|
423
|
|
Additions based on tax positions related to the current year
|
|
361
|
|
|
18
|
|
|
145
|
|
|||
Additions for tax positions of prior years
|
|
63
|
|
|
55
|
|
|
57
|
|
|||
Reductions for tax positions of prior years
|
|
(58
|
)
|
|
(11
|
)
|
|
(18
|
)
|
|||
Lapse of statute of limitations
|
|
(18
|
)
|
|
(6
|
)
|
|
(9
|
)
|
|||
Balance, end of year
|
|
$
|
1,002
|
|
|
$
|
654
|
|
|
$
|
598
|
|
19.
|
(LOSS) EARNINGS PER SHARE
|
(in millions, except per share amounts)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net (loss) income attributable to Bausch Health Companies Inc.
|
|
$
|
(1,788
|
)
|
|
$
|
(4,148
|
)
|
|
$
|
2,404
|
|
|
|
|
|
|
|
|
||||||
Basic weighted-average number of common shares outstanding
|
|
352.1
|
|
|
351.3
|
|
|
350.2
|
|
|||
Dilutive effect of stock options, RSUs and other
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|||
Diluted weighted-average number of common shares outstanding
|
|
352.1
|
|
|
351.3
|
|
|
351.8
|
|
|||
|
|
|
|
|
|
|
||||||
(Loss) earnings per share attributable to Bausch Health Companies Inc.
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(5.08
|
)
|
|
$
|
(11.81
|
)
|
|
$
|
6.86
|
|
Diluted
|
|
$
|
(5.08
|
)
|
|
$
|
(11.81
|
)
|
|
$
|
6.83
|
|
20.
|
SUPPLEMENTAL CASH FLOW DISCLOSURES
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Other Payments
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
1,537
|
|
|
$
|
1,665
|
|
|
$
|
1,708
|
|
Income taxes paid
|
|
$
|
172
|
|
|
$
|
138
|
|
|
$
|
179
|
|
21.
|
LEGAL PROCEEDINGS
|
22.
|
COMMITMENTS AND CONTINGENCIES
|
•
|
Under the terms of a June 2013 distribution and supply agreement with Spear Pharmaceuticals, Inc and Spear Dermatology Products Inc., the Company may be required to make sales-based milestone payments. The Company believes it is reasonably possible that these payments over time may approximate $70 million, in the aggregate.
|
•
|
Under the terms of an April 2019 agreement with Mitsubishi Tanabe Pharma Corporation, the Company has acquired an exclusive license to develop and commercialize MT-1303 (amiselimod), a late-stage oral compound that targets the sphingosine 1-phosphate (S1P) receptor that plays a role in autoimmune diseases, such as Inflammatory Bowel Disease (IBD) and ulcerative colitis. The Company may be required to make development and sales-based milestone payments over time of up to $60 million, in the aggregate, as well as royalties on future sales.
|
•
|
Under the terms of a December 2019 agreement with Novaliq GmbH, the Company has acquired an exclusive license for the commercialization and development in the U.S. and Canada of NOV03 (perfluorohexyloctane), an investigational drug to treat Dry Eye Disease associated with Meibomian gland dysfunction and may be required to make sales-based milestone payments. The Company believes it is reasonably possible that these payments over time may approximate $45 million, in the aggregate, as well as royalties on future sales.
|
•
|
Under the terms of a February 2018 agreement with Kaken Pharmaceutical Co., Ltd., the Company has acquired an exclusive license to develop and commercialize products containing an investigational compound, KP-470, a new chemical entity, which is being studied for the topical treatment of psoriasis and may be required to make potential development and sales-based milestone payments. The Company believes it is reasonably possible that these payments over time may approximate $43 million, in the aggregate, as well as royalties on future sales.
|
23.
|
SEGMENT INFORMATION
|
•
|
The Bausch + Lomb/International segment consists of: (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products, primarily comprised of Bausch + Lomb products, with a focus on the Vision Care, Surgical, Consumer and Ophthalmology Rx products and (ii) with the exception of sales of Solta products, sales in Canada, Europe, Asia, Australia, Latin America, Africa and the Middle East of branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical device products and Bausch + Lomb products.
|
•
|
The Salix segment consists of sales in the U.S. of GI products.
|
•
|
The Ortho Dermatologics segment consists of: (i) sales in the U.S. of Ortho Dermatologics (dermatological) products and (ii) global sales of Solta medical aesthetic devices.
|
•
|
The Diversified Products segment consists of sales: (i) in the U.S. of pharmaceutical products in the areas of neurology and certain other therapeutic classes, (ii) in the U.S. of generic products, (iii) in the U.S. of dentistry products and (iv) of certain other businesses divested during 2017 that were not core to the Company's operations, including the Company's equity interests in Dendreon (June 28, 2017) and Sprout (December 20, 2017). As a result of the divestitures of Dendreon and Sprout, the Company exited the oncology and women's health businesses, respectively.
|
(in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Bausch + Lomb/International
|
$
|
4,739
|
|
|
$
|
4,664
|
|
|
$
|
4,795
|
|
Salix
|
2,022
|
|
|
1,749
|
|
|
1,566
|
|
|||
Ortho Dermatologics
|
565
|
|
|
617
|
|
|
721
|
|
|||
Diversified Products
|
1,275
|
|
|
1,350
|
|
|
1,642
|
|
|||
Total revenues
|
$
|
8,601
|
|
|
$
|
8,380
|
|
|
$
|
8,724
|
|
Segment profit:
|
|
|
|
|
|
||||||
Bausch + Lomb/International
|
$
|
1,332
|
|
|
$
|
1,330
|
|
|
$
|
1,412
|
|
Salix
|
1,349
|
|
|
1,149
|
|
|
935
|
|
|||
Ortho Dermatologics
|
222
|
|
|
257
|
|
|
333
|
|
|||
Diversified Products
|
932
|
|
|
1,012
|
|
|
1,115
|
|
|||
Total segment profit
|
3,835
|
|
|
3,748
|
|
|
3,795
|
|
|||
Corporate
|
(609
|
)
|
|
(605
|
)
|
|
(562
|
)
|
|||
Amortization of intangible assets
|
(1,897
|
)
|
|
(2,644
|
)
|
|
(2,690
|
)
|
|||
Goodwill impairments
|
—
|
|
|
(2,322
|
)
|
|
(312
|
)
|
|||
Asset impairments
|
(75
|
)
|
|
(568
|
)
|
|
(714
|
)
|
|||
Restructuring and integration costs
|
(31
|
)
|
|
(22
|
)
|
|
(52
|
)
|
|||
Acquisition-related contingent consideration
|
(12
|
)
|
|
9
|
|
|
289
|
|
|||
Other expense (income), net
|
(1,414
|
)
|
|
20
|
|
|
348
|
|
|||
Operating (loss) income
|
(203
|
)
|
|
(2,384
|
)
|
|
102
|
|
|||
Interest income
|
12
|
|
|
11
|
|
|
12
|
|
|||
Interest expense
|
(1,612
|
)
|
|
(1,685
|
)
|
|
(1,840
|
)
|
|||
Loss on extinguishment of debt
|
(42
|
)
|
|
(119
|
)
|
|
(122
|
)
|
|||
Foreign exchange and other
|
8
|
|
|
23
|
|
|
107
|
|
|||
Loss before benefit from income taxes
|
$
|
(1,837
|
)
|
|
$
|
(4,154
|
)
|
|
$
|
(1,741
|
)
|
(in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Bausch + Lomb/International
|
$
|
225
|
|
|
$
|
139
|
|
|
$
|
159
|
|
Salix
|
2
|
|
|
2
|
|
|
3
|
|
|||
Ortho Dermatologics
|
1
|
|
|
1
|
|
|
2
|
|
|||
Diversified Products
|
2
|
|
|
2
|
|
|
4
|
|
|||
|
230
|
|
|
144
|
|
|
168
|
|
|||
Corporate
|
40
|
|
|
13
|
|
|
3
|
|
|||
Total capital expenditures
|
$
|
270
|
|
|
$
|
157
|
|
|
$
|
171
|
|
(in millions)
|
Bausch + Lomb/ International
|
|
Salix
|
|
Ortho Dermatologics
|
|
Diversified Products
|
|
Total
|
||||||||||||||||||||||||||||||||||||||||
|
2019
|
2018
|
2017
|
|
2019
|
2018
|
2017
|
|
2019
|
2018
|
2017
|
|
2019
|
2018
|
2017
|
|
2019
|
2018
|
2017
|
||||||||||||||||||||||||||||||
Pharmaceuticals
|
$
|
885
|
|
$
|
892
|
|
$
|
956
|
|
|
$
|
2,022
|
|
$
|
1,752
|
|
$
|
1,564
|
|
|
$
|
355
|
|
$
|
457
|
|
$
|
567
|
|
|
$
|
810
|
|
$
|
927
|
|
$
|
1,290
|
|
|
$
|
4,072
|
|
$
|
4,028
|
|
$
|
4,377
|
|
Devices
|
1,524
|
|
1,505
|
|
1,421
|
|
|
—
|
|
—
|
|
—
|
|
|
193
|
|
135
|
|
111
|
|
|
—
|
|
—
|
|
—
|
|
|
1,717
|
|
1,640
|
|
1,532
|
|
|||||||||||||||
OTC
|
1,452
|
|
1,412
|
|
1,529
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
1,452
|
|
1,412
|
|
1,529
|
|
|||||||||||||||
Branded and Other Generics
|
801
|
|
784
|
|
819
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
447
|
|
407
|
|
338
|
|
|
1,248
|
|
1,191
|
|
1,157
|
|
|||||||||||||||
Other revenues
|
77
|
|
71
|
|
70
|
|
|
—
|
|
(3
|
)
|
2
|
|
|
17
|
|
25
|
|
43
|
|
|
18
|
|
16
|
|
14
|
|
|
112
|
|
109
|
|
129
|
|
|||||||||||||||
|
$
|
4,739
|
|
$
|
4,664
|
|
$
|
4,795
|
|
|
$
|
2,022
|
|
$
|
1,749
|
|
$
|
1,566
|
|
|
$
|
565
|
|
$
|
617
|
|
$
|
721
|
|
|
$
|
1,275
|
|
$
|
1,350
|
|
$
|
1,642
|
|
|
$
|
8,601
|
|
$
|
8,380
|
|
$
|
8,724
|
|
(in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
U.S. and Puerto Rico
|
$
|
5,164
|
|
|
$
|
5,011
|
|
|
$
|
5,225
|
|
China
|
368
|
|
|
361
|
|
|
331
|
|
|||
Canada
|
339
|
|
|
319
|
|
|
326
|
|
|||
Japan
|
241
|
|
|
226
|
|
|
223
|
|
|||
Poland
|
231
|
|
|
218
|
|
|
201
|
|
|||
Mexico
|
228
|
|
|
211
|
|
|
201
|
|
|||
Egypt
|
218
|
|
|
178
|
|
|
152
|
|
|||
France
|
201
|
|
|
205
|
|
|
188
|
|
|||
Russia
|
180
|
|
|
154
|
|
|
200
|
|
|||
Germany
|
150
|
|
|
170
|
|
|
157
|
|
|||
United Kingdom
|
115
|
|
|
117
|
|
|
108
|
|
|||
Spain
|
86
|
|
|
83
|
|
|
77
|
|
|||
Italy
|
85
|
|
|
85
|
|
|
78
|
|
|||
Other
|
995
|
|
|
1,042
|
|
|
1,257
|
|
|||
|
$
|
8,601
|
|
|
$
|
8,380
|
|
|
$
|
8,724
|
|
(in millions)
|
2019
|
|
2018
|
||||
U.S. and Puerto Rico
|
$
|
656
|
|
|
$
|
593
|
|
Ireland
|
255
|
|
|
217
|
|
||
Canada
|
103
|
|
|
99
|
|
||
Poland
|
90
|
|
|
94
|
|
||
Germany
|
68
|
|
|
66
|
|
||
Egypt
|
62
|
|
|
50
|
|
||
Mexico
|
50
|
|
|
48
|
|
||
France
|
30
|
|
|
31
|
|
||
China
|
27
|
|
|
25
|
|
||
Serbia
|
27
|
|
|
28
|
|
||
Italy
|
22
|
|
|
23
|
|
||
Other
|
76
|
|
|
79
|
|
||
|
$
|
1,466
|
|
|
$
|
1,353
|
|
|
2019
|
|
2018
|
|
2017
|
McKesson Corporation
|
17%
|
|
18%
|
|
19%
|
AmerisourceBergen Corporation
|
16%
|
|
18%
|
|
15%
|
Cardinal Health, Inc.
|
14%
|
|
13%
|
|
13%
|
|
|
2019
|
||||||||||||||
(in millions, except per share amounts)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Revenue
|
|
$
|
2,016
|
|
|
$
|
2,152
|
|
|
$
|
2,209
|
|
|
$
|
2,224
|
|
Expenses
|
|
1,729
|
|
|
1,895
|
|
|
1,880
|
|
|
3,300
|
|
||||
Operating income (loss)
|
|
$
|
287
|
|
|
$
|
257
|
|
|
$
|
329
|
|
|
$
|
(1,076
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to Bausch Health Companies Inc.
|
|
$
|
(52
|
)
|
|
$
|
(171
|
)
|
|
$
|
(49
|
)
|
|
$
|
(1,516
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted loss per share attributable to Bausch Health Companies Inc.:
|
|
$
|
(0.15
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(4.30
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
|
$
|
413
|
|
|
$
|
339
|
|
|
$
|
515
|
|
|
$
|
234
|
|
|
|
2018
|
||||||||||||||
(in millions, except per share amounts)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Revenue
|
|
$
|
1,995
|
|
|
$
|
2,128
|
|
|
$
|
2,136
|
|
|
$
|
2,121
|
|
Expenses
|
|
4,276
|
|
|
2,373
|
|
|
2,019
|
|
|
2,096
|
|
||||
Operating (loss) income
|
|
$
|
(2,281
|
)
|
|
$
|
(245
|
)
|
|
$
|
117
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to Bausch Health Companies Inc.
|
|
$
|
(2,581
|
)
|
|
$
|
(873
|
)
|
|
$
|
(350
|
)
|
|
$
|
(344
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted loss per share attributable to Bausch Health Companies Inc.:
|
|
$
|
(7.36
|
)
|
|
$
|
(2.49
|
)
|
|
$
|
(1.00
|
)
|
|
$
|
(0.98
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
|
$
|
438
|
|
|
$
|
222
|
|
|
$
|
522
|
|
|
$
|
319
|
|
1.
|
Purpose and Background
|
2.
|
Term
|
3.
|
Definitions
|
(i)
|
revenues, income before taxes and extraordinary items, net income, operating income, earnings before income tax, earnings before interest, taxes, depreciation and amortization, cash flow or a combination of any or all of the foregoing;
|
(ii)
|
after-tax or pre-tax profits including, without limitation, that attributable to continuing and/or other operations;
|
(iii)
|
the level of the Company’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of the Company either in absolute terms or as it relates to a profitability ratio including operating income or EBITA;
|
(iv)
|
return on capital employed, return on assets, or return on invested capital;
|
(v)
|
after-tax or pre-tax return on stockholders’ equity;
|
(vi)
|
economic value added targets based on a cash flow return on investment formula;
|
(vii)
|
the Market Price of the Common Shares;
|
(viii)
|
the market capitalization or enterprise value of the Company, either in amount or relative to industry peers;
|
(ix)
|
the value of an investment in the Common Shares assuming the reinvestment of dividends;
|
(x)
|
the achievement of operating margin targets or other measures of improving profitability;
|
(xi)
|
the filing of one or more new drug application(s) (“NDA”) or one or more new drug submission(s) (“NDS”) or the approval of one or more NDA(s) or one or more NDS(s) by the U.S. Food and Drug Administration or the Canadian Therapeutic Products Directorate, as applicable;
|
(xii)
|
the achievement of, or progress toward, a launch of one or more new drug(s);
|
(xiii)
|
the achievement of research and development milestones;
|
(xiv)
|
the achievement of other strategic milestones including, without limitation, the achievement of specific synergy capture and cost savings realization relating to integrations and the successful creation or execution of a restructuring plan for a specific business or function;
|
(xv)
|
the successful completion of clinical trial phases;
|
(xvi)
|
licensing or acquiring new products or product platforms;
|
(xvii)
|
acquisition or divestiture of products or business;
|
(xviii)
|
the entering into new, or exiting from existing, geographic markets or industry segments; or
|
(xix)
|
the attainment of a certain level of, reduction of, or other specified objectives with regard to limiting the level in or increase in, all or a portion of controllable expenses or costs or other expenses or costs.
|
4.
|
Administration
|
(a)
|
Committee Authority. Subject to applicable law, the Committee shall have full and exclusive power to administer and interpret the Plan, to grant Awards and to adopt such administrative rules, regulations, procedures and guidelines governing the Plan and the Awards as it deems appropriate, in its sole discretion, from time to time. The Committee’s authority shall include, but not be limited to, the authority to (i) determine the type of Awards to be granted under the Plan; (ii) select Award recipients and determine the extent of their participation; (iii) determine Performance Criteria; and (iv) establish all other terms, conditions, and limitations applicable to Awards, Award programs and, if applicable, the Common Shares issued pursuant thereto. The Committee may accelerate or defer the vesting or payment of Awards, cancel or modify outstanding Awards, waive any conditions or restrictions imposed with respect to Awards or the Common Shares issued pursuant to Awards and make any and all other determinations that it deems appropriate with respect to the administration of the Plan, subject to the limitations contained in Sections 6(d) and 18 of the Plan and applicable law and listing rules with respect to all Participants.
|
(b)
|
Administration of the Plan. The administration of the Plan shall be managed by the Committee. All determinations of the Committee shall be made by a majority of its members either present in person or participating by conference telephone at a meeting or by written consent. The Committee shall have the power to prescribe and modify the forms of Award Agreement, correct any defect, supply any omission or clarify any inconsistency in the Plan and/or in any Award Agreement and take such actions and make such administrative determinations that the Committee deems appropriate in its sole discretion. Any decision of the Committee in the administration of the Plan, as described herein, shall be final, binding and conclusive on all parties concerned, including the Company, its shareholders and Subsidiaries and all Participants.
|
(c)
|
Delegation of Authority. To the extent permitted by applicable law, the Committee may at any time delegate to one or more officers or directors of the Company some or all of its authority over the administration of the Plan, with respect to individuals who are not Section 16(a) Officers.
|
(d)
|
Indemnification. No member of the Committee or any other Person to whom any duty or power relating to the administration or interpretation of the Plan has been delegated shall be personally liable for any action or determination made with respect to the Plan, except for his or her own willful misconduct or as expressly provided by statute. The members of the Committee and its delegates, including any employee with responsibilities relating to the administration of the Plan, shall be entitled to indemnification and reimbursement from the Company, to the extent permitted by applicable law and the by-laws and policies of the Company. To the fullest extent permitted by the law, in the performance of its functions under the Plan, the Committee (and each member of the Committee and its delegates) shall be entitled to rely upon information and advice furnished by the Company’s officers, accountants, counsel and any other party they deem appropriate, and neither the Committee nor any such Person shall be liable for any action taken or not taken in reliance upon any such advice.
|
5.
|
Participation
|
(a)
|
Eligible Recipients. Subject to applicable law and Section 7 hereof, the Committee shall determine, in its sole discretion, which Eligible Recipients shall be granted Awards under the Plan. Unless otherwise determined by the Committee, members of the Board shall generally not be eligible to receive SARs or Options.
|
(b)
|
Participation outside of the United States. In order to facilitate the granting of Awards to Employees who are foreign nationals or who are employed outside of the U.S., the Committee may provide for such special terms and conditions, including, without limitation, substitutes for Awards, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. The Committee may approve any supplements to, or amendments, restatements or alternative versions of, this Plan as it may consider necessary or appropriate for the purposes of this Section 5(b) without thereby affecting the terms of this Plan as in effect for any other purpose, and the appropriate officer of the Company may certify any such documents
|
6.
|
Available Shares of Common Shares
|
(a)
|
Shares Subject to the Plan. Subject to the following provisions of this Section 6, the maximum number of Common Shares that may be issued to Participants pursuant to Awards (all of which may be granted as ISOs) shall be equal to the sum of (i) 18,368,825 Common Shares, (ii) 11,900,000 Common Shares and (iii) the number of Common Shares becoming available for reuse after awards are terminated, forfeited, cancelled, exchanged or surrendered following the Effective Date under the Company’s 2011 Omnibus Incentive Plan and the 2007 Equity Compensation Plan (the “Transferred Shares”). For the avoidance of doubt, the Transferred Shares shall no longer be available under the Company’s 2011 Omnibus Incentive Plan and the 2007 Equity Compensation Plan. Common Shares issued pursuant to Awards granted under the Plan may be shares that have been authorized but unissued, or have been purchased in open market transactions or otherwise.
|
(b)
|
Forfeited and Expired Awards. If any shares subject to an Award are forfeited, canceled, exchanged or surrendered, or if an Award terminates or expires without a distribution of Common Shares to the Participant, the shares with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for Awards under the Plan. Notwithstanding the foregoing, the shares surrendered or withheld as payment of either the exercise price of an Option (including shares otherwise underlying an Award of a SAR that are retained by the Company to account for the exercise price of such SAR) and/or withholding taxes in respect of an Award shall no longer be available for Awards under the Plan.
|
(c)
|
Other Items Not Included in Allocation. The maximum number of Common Shares that may be issued under the Plan as set forth in Section 6(a) shall not be affected by (i) the payment in cash of dividends or dividend equivalents in connection with outstanding Awards; (ii) the granting or payment of share-denominated Awards that by their terms may be settled only in cash, (iii) the granting of Cash Awards; or (iv) Awards that are granted in connection with a transaction between the Company or a Subsidiary and another entity or business in substitution or exchange for, or conversion adjustment, assumption or replacement of, awards previously granted by such other entity to any individuals who have become Eligible Recipients as a result of such transaction.
|
(d)
|
Other Limitations on Shares that May be Granted under the Plan. Subject to Section 6(e), (i) the number of Common Shares issuable to Insiders, at any time, under all security-based compensation arrangements of the Company, cannot exceed 10% of issued and outstanding Common Shares of the Company; (ii) the number of Common Shares issued to Insiders, within any one year period, under all security-based compensation arrangements of the Company, cannot exceed 10% of issued and outstanding securities; (iii) the number of Common Shares issuable to non-employee members of the Board, at any time, under all security-based compensation arrangements of the Company, cannot exceed 1% of issued and outstanding Common Shares of the Company; and (iv) the aggregate number of Common Shares that may be granted prior to November 2, 2017 to any “covered employee” under Section 162(m) of the Code during a calendar year in the form of Options, Share Appreciation Rights, and/or Share Awards and intended to qualify as “performance-based compensation” under Section 162(m) of the Code was not permitted to exceed the number of Common Shares initially authorized for grant.
|
(e)
|
Adjustments. In the event of any change in the Company’s capital structure, including, but not limited to, a change in the number of Common Shares outstanding, on account of (i) any stock dividend, stock split, reverse stock split or any similar equity restructuring or (ii) any combination or exchange of equity securities, merger, consolidation, recapitalization, reorganization, or divesture or any other similar event affecting the Company’s capital structure, to reflect such change in the Company’s capital structure, the Committee shall make appropriate equitable adjustments to the maximum number of Common Shares that may be issued under the Plan as set forth in Section 6(a) and to the maximum number of shares that may be granted to any single
|
7.
|
Awards Under The Plan
|
(a)
|
Options. Options granted under the Plan shall be designated as Nonqualified Stock Options or ISOs. Options shall expire after such period, not to exceed a maximum of ten years, as may be determined by the Committee (the “Original Term”). If an Option is exercisable in installments, such installments or portions thereof that become exercisable shall remain exercisable until the Option expires or is otherwise canceled pursuant to its terms. Notwithstanding anything to the contrary in this Section 7(a), if the Original Term of an Option held by a Participant expires during a Blackout Period, the term of such Option shall be extended until the tenth Business Day following the end of the Blackout Period, at which time any unexercised portion of the Option shall expire. Except as otherwise provided in this Section 7(a), Options shall be subject to the terms, conditions, restrictions, and limitations determined by the Committee, in its sole discretion, from time to time.
|
(i)
|
Exercise Price. The Committee shall determine the exercise price per share for each Option, which shall not be less than 100% of the Market Price (as of the date of grant) of the Common Shares subject to the Option.
|
(ii)
|
Exercise of Options. Upon satisfaction of the applicable conditions relating to vesting and exercisability, as determined by the Committee, and upon provision for the payment in full of the exercise price and applicable taxes due, the Participant shall be entitled to exercise the Option and receive the number of Common Shares issuable in connection with the Option exercise. The Common Shares issued in connection with the Option exercise may be subject to such conditions and restrictions as the Committee may determine, from time to time. The exercise price of an Option and applicable withholding taxes relating to an Option exercise may be paid by methods permitted by the Committee from time to time including, but not limited to, (1) a cash payment; (2) tendering (either actually or by attestation) Common Shares owned by the Participant (for any minimum period of time that the Committee, in its discretion, may specify), valued at the Market Price at the time of exercise; (3) arranging to have the appropriate number of Common Shares issuable upon the exercise of an Option withheld or sold; or (4) any combination of the above. Additionally, the Committee may provide that an Option may be “net exercised,” meaning that upon the exercise of an Option or any portion thereof, the Company shall deliver the number of whole Common Shares equal to (A) the difference between (x) the aggregate Market Price of the Common Shares subject to the Option (or the portion of such Option then being exercised) and (y) the aggregate exercise price for all such Common Shares under the Option (or the portion thereof then being exercised) plus (to the extent it would not give rise to adverse accounting consequences pursuant to applicable accounting principles or to adverse tax consequences to the Participants under Canadian federal, provincial or territorial tax laws) the amount of withholding tax due upon exercise divided by (B) the Market Price
|
(iii)
|
ISOs. The terms and conditions of ISOs granted hereunder shall be subject to the provisions of Section 422 of the Code and the terms, conditions, limitations and administrative procedures established by the Committee from time to time in accordance with the Plan. At the discretion of the Committee, ISOs may be granted only to an employee of the Company, its “parent corporation” (as such term is defined in Section 424(e) of the Code) or a Subsidiary.
|
(1)
|
ISO Grants to 10% Shareholders. Notwithstanding anything to the contrary in this Section 7(a), if an ISO is granted to a Participant who owns shares representing more than ten percent of the voting power of all classes of shares of the Company, its “parent corporation” (as such term is defined in Section 424 (e) of the Code) or a Subsidiary, the term of the Option shall not exceed five years from the time of grant of such Option and the exercise price shall be at least 110 percent of the Market Price (as of the date of grant) of the Common Shares subject to the Option.
|
(2)
|
$100,000 Per Year Limitation for ISOs. To the extent the aggregate Market Price (determined as of the date of grant) of the Common Shares for which ISOs are exercisable for the first time by any Participant during any calendar year (under all plans of the Company) exceeds $100,000, such excess ISOs shall be treated as Nonqualified Stock Options.
|
(3)
|
Disqualifying Dispositions. Each Participant awarded an ISO under the Plan shall notify the Company in writing immediately after the date he or she makes a “disqualifying disposition” of any Common Shares acquired pursuant to the exercise of such ISO. A “disqualifying disposition” is any disposition (including any sale) of such Common Shares before the later of (i) two years after the date of grant of the ISO and (ii) one year after the date the Participant acquired the Common Shares by exercising the ISO. The Company may, if determined by the Committee and in accordance with procedures established by it, retain possession of any Common Shares acquired pursuant to the exercise of an ISO as agent for the applicable Participant until the end of the period described in the preceding sentence, subject to complying with any instructions from such Participant as to the sale of such shares.
|
(b)
|
Share Appreciation Rights. A SAR represents the right to receive a payment in cash, Common Shares, or a combination thereof, in an amount equal to the product of (1) the excess of the Market Price per Common Share on the date the SAR is exercised over the exercise price per Common Share of such SAR (which exercise price shall be no less than 100% of the Market Price of the Common Shares subject to the SAR as of the date the SAR was granted) and (2) the number of Common Shares subject to the portion of the SAR being exercised. If a SAR is paid in Common Shares, the number of Common Shares to be delivered will equal the amount determined to be payable in accordance with the prior sentence divided by the Market Price of a Common Share at the time of payment. The Committee shall establish the Original Term of a SAR, which shall not exceed a maximum of ten years. Notwithstanding anything to the contrary in this Section 7(b), if the Original Term of a SAR held by the Participant expires during a Blackout Period, the term of such SAR shall be extended until the tenth Business Day following the end of the Blackout Period, at which time any unexercised portion of the SAR shall expire. Except as otherwise provided in this Section 7(b), SARs shall be subject to the terms, conditions, restrictions and limitations determined by the Committee, in its sole discretion, from time to time. A SAR may only be granted to an Eligible Recipient to whom an Option could be granted under the Plan.
|
(c)
|
Share Awards.
|
(i)
|
Form of Awards. The Committee may grant Awards that are payable in Common Shares or denominated in units equivalent in value to Common Shares or are otherwise based on or related to Common Shares (“Share Awards”), including, but not limited to, Share Payments, Restricted Shares, Deferred Shares, and Share Units. Share Awards shall be subject to such terms, conditions (including, without limitation, service-based and performance-based vesting conditions), restrictions and limitations as the Committee may determine to be applicable to such Share Awards, in its sole discretion, from time to time.
|
(ii)
|
Share Payment. If not prohibited by applicable law, the Committee may issue unrestricted Common Shares in such amounts and subject to such terms and conditions as the Committee shall from time to time in its sole discretion determine. A Share Payment may be granted as, or in payment of, a bonus, or to provide incentives or recognize special achievements or contributions.
|
(iii)
|
Restricted Shares. Restricted Shares shall be subject to the terms, conditions, restrictions, and limitations determined by the Committee, in its sole discretion, from time to time. The number of Restricted Shares allocable to an Award under the Plan shall be determined by the Committee in its sole discretion.
|
(iv)
|
Deferred Shares. Subject to Code Section 409A to the extent applicable, Deferred Shares shall be subject to the terms, conditions, restrictions and limitations determined by the Committee, in its sole discretion, from time to time. A Participant who receives an Award of Deferred Shares shall be entitled to receive the number of Common Shares allocable to his or her Award, as determined by the Committee in its sole discretion, from time to time, at the end of a specified deferral period determined by the Committee. Awards of Deferred Shares represent only an unfunded, unsecured promise to deliver shares in the future and shall not give Participants any greater rights than those of an unsecured general creditor of the Company.
|
(v)
|
Share Units. A Share Unit is an Award denominated in Common Shares that may be settled either in Common Shares or in cash, in the discretion of the Committee, and, subject to Code Section 409A to the extent applicable, shall be subject to such other terms, conditions, restrictions and limitations determined by the Committee from time to time in its sole discretion.
|
(vi)
|
Blackout Period. In the event that any Share Unit is scheduled by its terms to be delivered (the “Original Distribution Date”) during a Blackout Period, then, if the Participant is restricted from selling Shares during the Blackout Period, such shares subject to the Share Unit shall not be delivered on such Original Distribution Date and shall instead be delivered as soon as practicable following the expiration of the Blackout Period; provided, however, that in no event shall the delivery of the shares be delayed pursuant to this provision beyond the latest date on which such delivery could be made without violating Code Section 409A.
|
(d)
|
Cash Awards. The Committee may grant Awards that are payable to Participants solely in cash, as deemed by the Committee to be consistent with the purposes of the Plan, and, except as otherwise provided in this Section 7(d), such Cash Awards shall be subject to the terms, conditions, restrictions, and limitations determined by the Committee, in its sole discretion, from time to time. Awards granted pursuant to this Section 7(d) may be granted with value and payment contingent upon the achievement of Performance Criteria. The maximum amount that any Participant (other than a non-employee director of the Company) may receive with respect to a Cash Award granted pursuant to this Section 7(d) in respect of any annual performance period is $10,000,000 and for any other performance period, such amount multiplied by a fraction, the numerator of which is the number of months in the performance period and the denominator of which is twelve. Payments earned hereunder may be decreased or increased in the sole discretion of the Committee based on such factors as it deems appropriate.
|
(e)
|
Unless the applicable Award Agreement provides otherwise or the Committee determines otherwise, vesting with respect to an Award will cease upon termination of a Participant’s employment or service with the Company, and unvested Awards shall be forfeited upon such termination. In the case of termination for Cause, vested Awards shall also be forfeited.
|
(f)
|
Non-Employee Director Limitations. Subject to adjustment in accordance with Section 6(e), in any calendar year, no Participant who is a non-employee director of the Company shall be granted Options, Share Appreciation Rights, Share Awards, Cash Awards or any other compensation with an aggregate fair market value as of the grant date (as determined in accordance with applicable accounting standards) or payment date, as applicable, in excess of $750,000.
|
8.
|
Dividends and Dividend Equivalents
|
9.
|
Nontransferability
|
10.
|
Change of Control
|
(a)
|
Unless otherwise determined in an Award Agreement, in the event of a Change of Control:
|
(i)
|
With respect to each outstanding Award that is assumed or substituted in connection with a Change of Control, in the event of a termination of a Participant’s employment or service without Cause or by the Participant for Good Reason during the 12-month period following such Change of Control, (i) such Award shall become fully vested and exercisable, (ii) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse, and (iii) any performance conditions imposed with respect to Awards shall be deemed to be achieved at target performance levels.
|
(ii)
|
With respect to each outstanding Award that is not assumed or substituted in connection with a Change of Control immediately upon the occurrence of the Change of Control, (x) such Award (including performance-based Awards) shall become fully vested and exercisable based on a fraction, the numerator of which is the number of days between the grant date and the date of the Change of Control and the denominator of which is the number of days during the period beginning on the grant date of the Award and ending on the date of vesting of the Award, (y) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse, and (z) any performance conditions imposed with respect to Awards shall be deemed to be achieved at target performance levels (for the avoidance of doubt, prorated in accordance with clause (x)).
|
(iii)
|
For purposes of this Section 10, an Award shall be considered assumed or substituted for if, following the Change of Control, the Award remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change of Control except that, if the Award related to Common Shares, the Award instead confers the right to receive common shares of the acquiring entity.
|
(iv)
|
Notwithstanding any other provision of the Plan, in the event of a Change of Control, the Committee (a) may, in its discretion provide that each Option and each SAR which may, by its terms, only be settled in shares shall, immediately prior to the occurrence of a Change of Control, be deemed to have been exercised on a “net exercise” basis; and (b) may, in its discretion, except as would otherwise result in adverse tax consequences under Code Section 409A, provide that each Award, other than Options and SARs which may, by their terms, only be settled in shares, shall, immediately upon the occurrence of a Change of Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (i) the excess of the consideration paid per Common Share in the Change of Control over the purchase price (if any) per Common Share subject to the Award multiplied by (ii) the number of Common Shares then outstanding under the Award.
|
(b)
|
For purposes of this Agreement and, except to the extent as would result in a violation of Code Section 409A, a “Change of Control” shall be deemed to occur if and when the first of the following occurs:
|
(i)
|
the acquisition (other than from the Company), by any person (as such term is defined in Section 13(c) or 14(d) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding voting securities;
|
(ii)
|
the individuals who, as of the date hereof, are members of the Board (the “Incumbent Board”), cease for any reason to constitute at least a majority of the Board, unless the election, or nomination for election by the Company’s shareholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, and such new director shall be considered as a member of the Incumbent Board;
|
(iii)
|
the closing of an amalgamation or similar business combination (each, an “Amalgamation”) involving the Company if (i) the shareholders of the Company, immediately before such Amalgamation, do not, as a result of such Amalgamation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the entity resulting from such Amalgamation in substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such Amalgamation or (ii) immediately following the Amalgamation, the individuals who comprised the Board immediately prior thereto do not constitute at least a majority of the board of directors of the entity resulting from such Amalgamation (or, if the entity resulting from such Amalgamation is then a subsidiary, the ultimate parent thereof);
|
(iv)
|
a complete liquidation or dissolution of the Company or the closing of an agreement for the sale or other disposition of all or substantially all of the assets of the Company.
|
(c)
|
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the shareholders of the Company in the same proportion as their ownership of shares in the Company immediately prior to such acquisition. In addition, notwithstanding the foregoing, solely to the extent required by Section 409A, a Change of Control shall be deemed to have occurred only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A.
|
11.
|
Clawback
|
12.
|
Award Agreements
|
13.
|
Tax Withholding
|
14.
|
Other Benefit and Compensation Programs
|
15.
|
Unfunded Plan
|
16.
|
Rights as a Shareholder
|
17.
|
Future Rights
|
18.
|
Amendment and Termination
|
(a)
|
The Plan and any Award may be amended, suspended or terminated at any time by the Board, provided that no amendment shall be made without shareholder approval if such shareholder approval is required in order to comply with applicable law or the rules of the New York Stock Exchange, the rules of the Toronto Stock Exchange, or any other securities exchange on which the Common Shares are traded or quoted. Except as otherwise provided in Section 10(a), no termination, suspension or amendment of the Plan or any Award shall adversely affect the right of any Participant with respect to any Award theretofore granted, as determined by the Committee, without such Participant’s written consent.
|
(b)
|
Notwithstanding Section 18(a), the Company shall obtain shareholder approval for: (i) subject to Section 6(e), a reduction in the exercise price or purchase price of an Award (or the cancellation and re-grant of an Award resulting in a lower exercise price or purchase price); (ii) the extension of the Original Term of an Option; (iii) any amendment to remove or to exceed the participation limits described in Section 6(d), including but not limited to those applicable to Insiders; (iv) an increase to the maximum number of Common Shares issuable under the Plan pursuant to Section 6(a) (other than adjustments in accordance with Section 6(e)); (v) amendments to this Section 18 other than amendments of a clerical nature; and (vi) any amendment that permits Awards to be transferable or assignable other than for normal estate settlement purposes or for other purposes not involving the receipt of monetary consideration.
|
19.
|
Successors and Assigns
|
20.
|
Governing Law
|
21.
|
Interpretation
|
In re VALEANT PHARMACEUTICALS INTERNATIONAL, INC. SECURITIES LITIGATION
This Document Relates To:
Case No. 3:15-cv-07658-MAS-LHG.
|
)
)
)
)
)
)
)
)
)
)
|
Master No. 3:15-cv-07658-MAS-LHG
CLASS ACTION
Judge Michael A. Shipp
Magistrate Judge Lois H. Goodman
Special Master Hon. Dennis M. Cavanaugh, U.S.D.J. (Ret.)
STIPULATION OF SETTLEMENT
|
I.
|
THE LITIGATION
|
II.
|
LEAD PLAINTIFF’S CLAIMS AND THE BENEFITS OF SETTLEMENT
|
III.
|
DEFENDANTS’ DENIALS OF WRONGDOING AND LIABILITY
|
IV.
|
TERMS OF THE STIPULATION AND AGREEMENT OF SETTLEMENT
|
1.
|
Definitions
|
2.
|
The Settlement
|
a.
|
Condition Precedent
|
b.
|
The Escrow Agent
|
c.
|
Taxes
|
d.
|
Termination of Settlement
|
3.
|
Preliminary Approval Order and Settlement Hearing
|
4.
|
Releases
|
5.
|
Administration and Calculation of Claims, Final Awards, and Supervision and Distribution of the Settlement Fund
|
6.
|
Plaintiffs’ Counsel’s Attorneys’ Fees and Expenses
|
7.
|
Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination
|
8.
|
No Admissions
|
9.
|
Miscellaneous Provisions
|
ROBBINS GELLER RUDMAN
& DOWD LLP
THEODORE J. PINTAR
655 West Broadway, Suite 1900
San Diego, CA 92101
|
SIMPSON THACHER & BARTLETT LLP
CRAIG S. WALDMAN
425 Lexington Avenue
New York, NY 10017
|
PAUL, WEISS, RIFKIND,
WHARTON & GARRISON LLP
RICHARD A. ROSEN
1285 Avenue of the Americas
New York, NY 10019
|
O’MELVENY MYERS LLP
JONATHAN ROSENBERG
7 Times Square
New York, NY 10036
|
|
ROBBINS GELLER RUDMAN
& DOWD LLP DARREN J. ROBBINS THEODORE J. PINTAR ROBERT R. HENSSLER JR. 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) |
|
ROBBINS GELLER RUDMAN
& DOWD LLP JAMES E. BARZ FRANK A. RICHTER |
|
/s/ James E. Barz
|
|
JAMES E. BARZ
|
|
200 South Wacker Drive, 31st Floor
Chicago, IL 60606 Telephone: 312/674-4674 312/674-4676 (fax) |
|
ROBBINS GELLER RUDMAN
& DOWD LLP ROBERT J. ROBBINS KATHLEEN B. DOUGLAS 120 East Palmetto Park Road, Suite 500 Boca Raton, FL 33432 Telephone: 561/750-3000 561/750-3364 (fax) |
|
Lead Counsel for Plaintiffs
|
|
SEEGER WEISS LLP
CHRISTOPHER A. SEEGER DAVID R. BUCHANAN 55 Challenger Road, 6th Floor Ridgefield Park, NJ 07660 Telephone: 212/584-0700 212/584-0799 (fax) cseeger@seegerweiss.com dbuchanan@seegerweiss.com |
|
Local Counsel for Plaintiffs
|
|
SIMPSON THACHER & BARTLETT LLP
PAUL C. CURNIN
CRAIG S. WALDMAN
|
|
|
/s/ Paul C. Curnin
|
|
|
PAUL C. CURNIN
|
|
|
425 Lexington Avenue
New York, NY 10017 Telephone: 212/455-2000 212/455-2502 (fax) |
|
|
Counsel for Defendants Valeant Pharmaceuticals International, Inc., Robert L. Rosiello, Ari S. Kellen, Robert A. Ingram, Ronald H. Farmer, Colleen Goggins, Anders Lönner, Theo Melas-Kyriazi, Robert N. Power, Norma Provencio, and Katharine B. Stevenson
|
|
|
McCARTER & ENGLISH LLP
RICHARD HERNANDEZ
|
|
|
/s/ Richard Hernandez
|
|
|
RICHARD HERNANDEZ
|
|
|
100 Mulberry Street
Newark, NJ 07102 Telephone: 973/848-8615 973/297-6615 (fax) |
|
|
Counsel for Defendants Valeant Pharmaceuticals International, Inc., Robert L. Rosiello, Ari S. Kellen, Robert A. Ingram, Ronald H. Farmer, Colleen Goggins, Anders Lönner, Theo Melas-Kyriazi, Robert N. Power, Norma Provencio, Katharine B. Stevenson, and Tanya Carro
|
|
|
PAUL, WEISS, RIFKIND, WHARTON
& GARRISON LLP
RICHARD A. ROSEN
|
|
/s/ Richard A. Rosen
|
|
RICHARD A. ROSEN
|
|
1285 Avenue of the Americas
New York, NY 10019 Telephone: 212/373-3000 212/757-3990 (fax) |
|
HARTMANN DOHERTY ROSA
BERMAN & BULBULIA, LLC
MARK A. BERMAN
ROBIN D. FINEMAN
|
|
/s/ Mark A. Berman
|
|
MARK A. BERMAN
|
|
433 Hackensack Avenue, Suite 1002
Hackensack, NJ 07601 Telephone: 201/441-9056 201/441-9435 (fax) |
|
Counsel for the Stock Underwriter Defendants and Former Defendants
|
|
O’MELVENY MYERS LLP
JONATHAN ROSENBERG |
|
/s/ Jonathan Rosenberg
|
|
JONATHAN ROSENBERG
|
|
7 Times Square
New York, NY 10036 Telephone: 212/326-2000 212/326-2061 (fax) |
|
GIBBONS P.C.
KATE E. JANUKOWICZ |
|
/s/ Kate E. Janukowicz
|
|
KATE E. JANUKOWICZ
|
|
One Gateway Center
Newark, New Jersey 07102 Telephone: 973/596-4913 |
|
Counsel for the ValueAct Defendants and Defendant Jeffrey W. Ubben
|
|
DEBEVOISE & PLIMPTON LLP
BRUCE E. YANNETT
|
|
/s/ Bruce E. Yannett
|
|
BRUCE E. YANNETT
|
|
919 Third Avenue
New York, NY 10022 Telephone: 212/909-6000 212/909-6836 (fax) |
|
Counsel for Defendant J. Michael Pearson
|
|
COOLEY LLP
WILLIAM J SCHWARTZ
SARAH LIGHTDALE
|
|
/s/ William J. Schwartz
|
|
WILLIAM J. SCHWARTZ
|
|
55 Hudson Yards
New York, NY 10001 Telephone: 212/479-6000 212/479-6275 |
|
Counsel for Defendant Tanya Carro
|
|
SCHULTE ROTH & ZABEL LLP
BARRY A. BOHRER
|
|
/s/ Barry A. Bohrer
|
|
BARRY A. BOHRER
|
|
919 Third Avenue
New York, NY 10022 Telephone: 212/756-2000 212/593-5955 (fax) |
|
Counsel for Defendant Deborah Jorn
|
|
WINSTON & STRAWN LLP
JOSEPH L. MOTTO |
|
/s/ Joseph L. Motto
|
|
JOSEPH L. MOTTO
|
|
35 W. Wacker Drive
Chicago, IL 60601 Telephone: 312/558-5600 312/558-5700 (fax) |
|
Counsel for Defendant Howard B. Schiller
|
Company
|
|
Jurisdiction of
Incorporation
|
|
Doing Business As
|
|||
|
Bausch & Lomb Argentina S.R.L.
|
Argentina
|
Bausch & Lomb Argentina S.R.L.
|
||||
|
Waicon Vision S.A.
|
Argentina
|
Waicon Vision S.A.
|
||||
|
Bausch & Lomb (Australia) Pty Limited
|
Australia
|
Bausch & Lomb (Australia) Pty Limited
|
||||
|
Bausch Health Australia Pty Limited
(f/k/a Valeant Holdco 2 Pty Ltd)
|
Australia
|
Bausch Health Australia Pty Limited (f/k/a Valeant Holdco 2 Pty Ltd)
|
||||
|
Wirra Holdings Pty Limited
|
Australia
|
Wirra Holdings Pty Limited
|
||||
|
Bausch & Lomb Gesellschaft m.b.H.
|
Austria
|
Bausch & Lomb GmbH
|
||||
|
Closed Joint-Stock Company Bausch Health (f/k/a Closed Joint-Stock Company Valeant Pharma)
|
Belarus
|
CJSC Bausch Health (f/k/a CJSC Valeant Pharma)
|
||||
|
Bausch & Lomb Pharma S.A.
|
Belgium
|
Bausch & Lomb Pharma S.A.
|
||||
|
PharmaSwiss BH Društvo za trgovinu na veliko d.o.o. Sarajevo
|
Bosnia
|
PharmaSwiss BH d.o.o. Sarajevo
|
||||
|
BL Importações Ltda.
|
Brazil
|
BL Importações Ltda.
|
||||
|
BL Indústria Ótica Ltda.
|
Brazil
|
BL Indústria Ótica Ltda.
|
||||
|
0909657 B.C. Ltd.
|
British Columbia (Canada)
|
0909657 B.C. Ltd.
|
||||
|
PharmaSwiss EOOD
|
Bulgaria
|
PharmaSwiss EOOD
|
||||
|
Bausch Health, Canada Inc.
|
Canada
|
Bausch Health, Canada Inc.
|
||||
|
Valeant Canada GP Limited/ Commandité Valeant Canada Limitée
|
Canada
|
Valeant Canada GP Limited/ Commandité Valeant Canada Limitée
|
||||
|
Valeant Canada Limited / Valeant Canada Limitée
|
Canada
|
Valeant Canada Limited / Valeant Canada Limitée
|
||||
|
Valeant Canada S.E.C./Valeant Canada LP
|
Canada
|
Valeant Canada S.E.C./Valeant Canada LP
|
||||
|
V-BAC Holding Corp.
|
Canada
|
V-BAC Holding Corp.
|
||||
|
9079-8851 Quebec Inc.
|
Quebec (Canada)
|
9079-8851 Quebec Inc.
|
||||
|
Mercury (Cayman) Holdings
|
Cayman Islands
|
Mercury (Cayman) Holdings
|
||||
|
Bausch & Lomb (Shanghai) Trading Co., Ltd.
|
China
|
Bausch & Lomb (Shanghai) Trading Co., Ltd.
|
||||
|
Beijing Bausch & Lomb Eyecare Co., Ltd.
|
China
|
Beijing Bausch & Lomb Eyecare Co., Ltd.
|
||||
|
Shandong Bausch & Lomb Freda New Packing Materials Co., Ltd.
|
China
|
Shandong Bausch & Lomb Freda New Packing Materials Co., Ltd.
|
||||
|
Shandong Bausch & Lomb Freda Pharmaceutical Co., Ltd.
|
China
|
Shandong Bausch & Lomb Freda Pharmaceutical Co., Ltd.
|
||||
|
Cambridge Pharmaceutical S.A.S.
|
Colombia
|
Cambridge Pharmaceutical S.A.S.
|
||||
|
Farmatech S.A.
|
Colombia
|
Farmatech S.A.
|
||||
|
Humax Pharmaceutical S.A.
|
Colombia
|
Humax Pharmaceutical S.A.
|
|
PharmaSwiss društvo s ograničenom odgovornošću za trgovinu i usluge
|
Croatia
|
PharmaSwiss društvo s ograničenom odgovornošću za trgovinu i usluge
|
||||
|
PharmaSwiss Ceská republika s.r.o.
|
Czech Republic
|
PharmaSwiss Ceská republika s.r.o.
|
||||
|
Amoun Distribution LLC
|
Egypt
|
Amoun Distribution LLC
|
||||
|
Amoun Pharmaceutical Company S.A.E.
|
Egypt
|
Amoun Pharmaceutical Company S.A.E.
|
||||
|
ICN Egypt LLC
|
Egypt
|
ICN Egypt LLC
|
||||
|
PharmaSwiss Eesti OÜ
|
Estonia
|
PharmaSwiss Eesti OÜ
|
||||
|
Bausch & Lomb France S.A.S.
|
France
|
Bausch & Lomb France S.A.S.
|
||||
|
Laboratoire Chauvin S.A.S.
|
France
|
Laboratoire Chauvin S.A.S.
|
||||
|
Bausch & Lomb GmbH
|
Germany
|
Bausch & Lomb GmbH
|
||||
|
B L E P Holding GmbH
|
Germany
|
B L E P Holding GmbH
|
||||
|
Dr. Gerhard Mann chem.-pharm. Fabrik Gesellschaft mit beschränkter Haftung
|
Germany
|
Dr. Gerhard Mann chem.-pharm. Fabrik GmbH
|
||||
|
Dr. Robert Winzer Pharma GmbH
|
Germany
|
Dr. Robert Winzer Pharma GmbH
|
||||
|
Grundstücksverwaltungsgesellschaft Dr.Gerhard Mann chem.- pharm. Fabrik GmbH
|
Germany
|
Grundstücksverwaltungsgesellschaft Dr.Gerhard Mann chem.- pharm. Fabrik GmbH
|
||||
|
Pharmaplast Vertriebsgesellschaft mbH
|
Germany
|
Pharmaplast Vertriebsgesellschaft mbH
|
||||
|
Technolas Perfect Vision GmbH
|
Germany
|
Technolas Perfect Vision GmbH
|
||||
|
Bausch Health Hellas Single-Member Pharmaceuticals Société Anonyme
(f/k/a PharmaSwiss Hellas Commercial Société Anonyme of Pharmaceuticals)
|
Greece
|
Bausch Health Hellas
(f/k/a PharmaSwiss Hellas S.A.)
|
||||
|
Bausch & Lomb (Hong Kong) Limited
|
Hong Kong
|
Bausch & Lomb (Hong Kong) Limited
|
||||
|
Sino Concept Technology Limited
|
Hong Kong
|
Sino Concept Technology Limited
|
||||
|
Bausch Health Magyarország Korlátolt Felelõsségû Társaság (f/k/a Valeant Pharma Magyarország Kereskedelmi Korlátolt Felelősségű Társaság)
|
Hungary
|
Bausch Health Magyarország Korlátolt Felelõsségû Társaság (f/k/a Valeant Pharma Magyarország Kereskedelmi Korlátolt Felelősségű Társaság)
|
||||
|
Bausch & Lomb India Private Limited
|
India
|
Bausch & Lomb India Private Limited
|
||||
|
PT Bausch Lomb Indonesia
|
Indonesia
|
PT Bausch Lomb Indonesia
|
||||
|
Bausch Health Ireland Limited
|
Ireland
|
Bausch Health Ireland Limited
|
||||
|
Oceana Therapeutics Limited
|
Ireland
|
Oceana Therapeutics Limited
|
||||
|
Valeant Holdings Ireland
|
Ireland
|
Valeant Holdings Ireland
|
||||
|
Bausch Health HoldCo Limited
|
Ireland
|
Bausch Health HoldCo Limited
|
||||
|
Bausch & Lomb-IOM S.p.A.
|
Italy
|
Bausch & Lomb-IOM S.p.A.
|
||||
|
B.L.J. Company Limited
|
Japan
|
B.L.J. Company Limited
|
||||
|
Bausch & Lomb (Jersey) Limited
|
Jersey
|
Bausch & Lomb (Jersey) Limited
|
||||
|
Bausch Health LLP (f/k/a Valeant LLP)
|
Kazakhstan
|
Bausch Health LLP (f/k/a Valeant LLP)
|
||||
|
Bausch & Lomb Korea Co., Ltd.
|
Korea
|
Bausch & Lomb Korea Co., Ltd.
|
||||
|
Bausch Health Korea Co., Limited
|
Korea
|
Bausch Health Korea Co., Limited
|
||||
|
Bescon Co., Ltd.
|
Korea
|
Bescon Co., Ltd.
|
||||
|
UAB PharmaSwiss
|
Lithuania
|
UAB PharmaSwiss
|
||||
|
Bausch & Lomb Luxembourg S.à r.l.
|
Luxembourg
|
Bausch & Lomb Luxembourg S.à r.l.
|
||||
|
Valeant Finance Luxembourg S.à r.l.
|
Luxembourg
|
Valeant Finance Luxembourg S.à r.l.
|
|
Valeant Pharmaceuticals Luxembourg S.à r.l.
|
Luxembourg
|
Valeant Pharmaceuticals Luxembourg S.à r.l.
|
||||
|
Bausch & Lomb (Malaysia) Sdn. Bhd.
|
Malaysia
|
Bausch & Lomb (Malaysia) Sdn. Bhd.
|
||||
|
Bausch & Lomb México, S.A. de C.V.
|
Mexico
|
Bausch & Lomb México, S.A. de C.V.
|
||||
|
Laboratorios Fedal, S.A.
|
Mexico
|
Laboratorios Fedal, S.A.
|
||||
|
Laboratorios Grossman, S.A.
|
Mexico
|
Laboratorios Grossman, S.A.
|
||||
|
Nysco de México, S.A. de C.V.
|
Mexico
|
Nysco de México, S.A. de C.V.
|
||||
|
Tecnofarma, S.A. de C.V.
|
Mexico
|
Tecnofarma, S.A. de C.V.
|
||||
|
Valeant Servicios y Administración, S. de R.L. de C.V.
|
Mexico
|
Valeant Servicios y Administración, S. de R.L. de C.V.
|
||||
|
Bausch+Lomb OPS B.V.
|
Netherlands
|
Bausch+Lomb OPS B.V.
|
||||
|
Natur Produkt Europe B.V.
|
Netherlands
|
Natur Produkt Europe B.V.
|
||||
|
Valeant Dutch Holdings B.V.
|
Netherlands
|
Valeant Dutch Holdings B.V.
|
||||
|
Bausch & Lomb (New Zealand) Limited
|
New Zealand
|
Bausch & Lomb (New Zealand) Limited
|
||||
|
Valeant Farmacéutica Panamá, S.A.
|
Panama
|
Valeant Farmacéutica Panamá, S.A.
|
||||
|
Bausch Health Perú S.R.L. (f/k/a Valeant Farmacéutica Perú S.R.L.)
|
Peru
|
Bausch Health Perú S.R.L. (f/k/a Valeant Farmacéutica Perú S.R.L.)
|
||||
|
Bausch & Lomb Philippines Inc.
|
Philippines
|
Bausch & Lomb Philippines Inc.
|
||||
|
Emo-Farm spółka z ograniczoną odpowiedzialnością
|
Poland
|
Emo-Farm sp. z o.o.
|
||||
|
ICN Polfa Rzeszow Spółka Akcyjna
|
Poland
|
ICN Polfa Rzeszow SA
|
||||
|
Przedsiebiorstwo Farmaceutyczne Jelfa Spółka Akcyjna
|
Poland
|
Przedsiebiorstwo Farmaceutyczne Jelfa SA
|
||||
|
Valeant Med spółka z ograniczoną odpowiedzialnością
|
Poland
|
Valeant Med sp. z o.o.
|
||||
|
Valeant spółka z ograniczoną odpowiedzialnością Europe spółka jawna
|
Poland
|
Valeant sp. z o.o. Europe sp. j.
|
||||
|
Bausch Health Poland spółka z ograniczoną (f/k/a Valeant Pharma Poland spółka z ograniczoną odpowiedzialnością)
|
Poland
|
Bausch Health Poland sp.z o.o. (f/k/a Valeant Pharma Poland sp. z o.o.)
|
||||
|
Amoun Pharmaceutical Romania SRL
|
Romania
|
Amoun Pharmaceutical Romania SRL
|
||||
|
S.C. Valeant Pharma SRL
|
Romania
|
Valeant Pharma SRL
|
||||
|
Bausch Health LLC (f/k/a VALEANT LLC)
|
Russia
|
Bausch Health LLC (f/k/a VALEANT LLC)
|
||||
|
PharmaSwiss doo preduzeće za proizvodnju, unutrašnju, spoljnu trgovinu i zastupanje Beograd
|
Serbia
|
PharmaSwiss doo, Beograd
|
||||
|
Bausch & Lomb (Singapore) Private Limited
|
Singapore
|
Bausch & Lomb (Singapore) Private Limited
|
||||
|
Technolas Singapore Pte. Ltd.
|
Singapore
|
Technolas Singapore Pte. Ltd.
|
||||
|
Bausch Health Slovakia s.r.o. (f/k/a Valeant Slovakia s.r.o.)
|
Slovakia
|
Bausch Health Slovakia s.r.o. (f/k/a Valeant Slovakia s.r.o.)
|
||||
|
PharmaSwiss, trgovsko in proizvodno podjetje, d.o.o.
|
Slovenia
|
PharmaSwiss d.o.o.
|
||||
|
Bausch & Lomb (South Africa) (Pty) Ltd
|
South Africa
|
Bausch & Lomb (South Africa) (Pty) Ltd
|
||||
|
Soflens (Pty) Ltd
|
South Africa
|
Soflens (Pty) Ltd
|
|
Bausch & Lomb S.A.
|
Spain
|
Bausch & Lomb S.A.
|
||||
|
Bausch & Lomb Nordic Aktiebolag
|
Sweden
|
Bausch & Lomb Nordic AB
|
||||
|
Bausch & Lomb Swiss AG
|
Switzerland
|
Bausch & Lomb Swiss AG
|
||||
|
PharmaSwiss SA
|
Switzerland
|
PharmaSwiss SA
|
||||
|
Bausch & Lomb Taiwan Limited
|
Taiwan
|
Bausch & Lomb Taiwan Limited
|
||||
|
Bausch & Lomb (Thailand) Limited
|
Thailand
|
Bausch & Lomb (Thailand) Limited
|
||||
|
Bausch & Lomb Sağlik ve Optik Ürünleri Ticaret Anonim Şirketi
|
Turkey
|
Bausch & Lomb Sağlik ve Optik Ürünleri Tic.Ş.Þ
|
||||
|
Bausch Health Limited Liability Company (f/k/a VALEANT PHARMACEUTICALS Limited Liability Company)
|
Ukraine
|
Bausch Health Limited Liability Company (f/k/a VALEANT PHARMACEUTICALS LLC)
|
||||
|
Medpharma Pharmaceutical & Chemical Industries LLC
|
UAE
|
Medpharma Pharma & Chem Ind LLC
|
||||
|
Bausch Health Trading DWC-LLC
|
UAE
|
Bausch Health Trading DWC-LLC
|
||||
|
Bausch & Lomb UK Holdings Limited
|
United Kingdom
|
Bausch & Lomb UK Holdings Limited
|
||||
|
Bausch & Lomb U.K. Limited
|
United Kingdom
|
Bausch & Lomb U.K. Limited
|
||||
|
Sterimedix Limited
|
United Kingdom
|
Sterimedix Limited
|
||||
|
Synergetics Surgical EU Limited
|
United Kingdom
|
Synergetics Surgical EU Limited
|
||||
|
Salix Pharmaceuticals, Inc.
|
California (US)
|
Salix Pharmaceuticals, Inc.
|
||||
|
Visioncare Devices, Inc.
|
California (US)
|
Visioncare Devices, Inc.
|
||||
|
Audrey Enterprise, LLC
|
Delaware (US)
|
Audrey Enterprise, LLC
|
||||
|
Bausch & Lomb South Asia, Inc.
|
Delaware (US)
|
Bausch & Lomb South Asia, Inc.
|
||||
|
Bausch Foundation, LLC
|
Delaware (US)
|
Bausch Foundation, LLC
|
||||
|
Bausch Health Americas, Inc.
|
Delaware (US)
|
Bausch Health Americas, Inc.
|
||||
|
Bausch Health US, LLC
|
Delaware (US)
|
Bausch Health US, LLC
|
||||
|
Eye Essentials LLC
|
Delaware (US)
|
Eye Essentials LLC
|
||||
|
Medicis Pharmaceutical Corporation
|
Delaware (US)
|
Medicis Pharmaceutical Corporation
|
||||
|
Oceanside Pharmaceuticals, Inc.
|
Delaware (US)
|
Oceanside Pharmaceuticals, Inc.
|
||||
|
OraPharma, Inc.
|
Delaware (US)
|
OraPharma, Inc.
|
||||
|
PreCision Dermatology, Inc.
|
Delaware (US)
|
PreCision Dermatology, Inc.
|
||||
|
Salix Pharmaceuticals, Ltd.
|
Delaware (US)
|
Salix Pharmaceuticals, Ltd.
|
||||
|
Santarus, Inc.
|
Delaware (US)
|
Santarus, Inc.
|
||||
|
Solta Medical, Inc.
|
Delaware (US)
|
Solta Medical, Inc.
|
||||
|
Synergetics IP, Inc.
|
Delaware (US)
|
Synergetics IP, Inc.
|
||||
|
Unilens Corp. USA
|
Delaware (US)
|
Unilens Corp. USA
|
||||
|
Unilens Vision Sciences Inc.
|
Delaware (US)
|
Unilens Vision Sciences Inc.
|
||||
|
VRX Holdco LLC
|
Delaware (US)
|
VRX Holdco LLC
|
||||
|
Synergetics, Inc.
|
Missouri (US)
|
Synergetics, Inc.
|
||||
|
Alden Optical Laboratories, Inc.
|
New York (US)
|
Alden Optical Laboratories, Inc.
|
||||
|
Bausch & Lomb Incorporated
|
New York (US)
|
Bausch & Lomb Incorporated
|
1.
|
I have reviewed this annual report on Form 10-K of Bausch Health Companies Inc. (the “Company”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
4.
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
5.
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
Date: February 19, 2020
|
|
|
/s/ JOSEPH C. PAPA
|
|
|
Joseph C. Papa
|
|
|
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Bausch Health Companies Inc. (the “Company”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
4.
|
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
|
5.
|
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
|
Date: February 19, 2020
|
|
|
|
/s/ PAUL S. HERENDEEN
|
|
|
|
Paul S. Herendeen
|
|
||
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
1.
|
The Annual Report of the Company on Form 10-K for the fiscal year ended December 31, 2019 (the “Annual Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 19, 2020
|
|
|
/s/ JOSEPH C. PAPA
|
|
|
Joseph C. Papa
|
|
|
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer) |
|
|
1.
|
The Annual Report of the Company on Form 10-K for the fiscal year ended December 31, 2019 (the “Annual Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 19, 2020
|
|
|
|
/s/ PAUL S. HERENDEEN
|
|
|
|
Paul S. Herendeen
|
|
||
Executive Vice President and Chief Financial Officer
|
|
|
|