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Item 5. Market for Registrant’s Common Equity

2021-02-24 compared with 2020-02-19 · 16 added, 68 removed, 96 unchanged (47% of the section changed)

6 unchanged sentences

For example, during 2015 and 2016, we experienced significant fluctuations and decreases in the market price of our common shares as a result of, among other things, legal and governmental proceedings and investigations with respect to certain of our distribution, marketing, pricing, disclosure and accounting practices, rising interest rates and certain public allegations made by short sellers and other third parties relating to certain of these matters.

See Item 1A “Risk Factors” of this Form 10-K for additional information.

“Risk Factors” of this Form 10-K for additional information.

The approximate number of holders of record of our common shares as of February 18, 2021 was 1,834.

2 unchanged sentences

(i) our common shares, (ii) the S&P 500 Index, (iii) the S&P/TSX Composite Index and (iv) a composite peer group of 11 major U.S.

based pharmaceutical companies for the three and five years ended December 31, 2019 .

based pharmaceutical companies for the four and five years ended December 31, 2020.

The composite peer group of 11 major U.S.

based pharmaceutical companies consists of Alexion Pharmaceuticals Inc, Allergan Plc, Amgen Inc, Biogen Inc, Bristol-Myers Squibb Co, Eli Lilly And Co, Endo International Plc, Jazz Pharmaceuticals Plc, Mallinckrodt Plc, Mylan Nv, Perrigo Company Plc, United Therapeutics Corp and Zoetis Inc.

based pharmaceutical companies consists of Alexion Pharmaceuticals Inc, Amgen Inc, Biogen Inc, Bristol-Myers Squibb Co, Eli Lilly And Co, Endo International Plc, Jazz Pharmaceuticals Plc, Mallinckrodt Plc, Perrigo Company Plc, United Therapeutics Corp and Zoetis Inc.

Five Year Performance - Cumulative total return on a $100 investment on December 31, 2015

As of December 31,

2015 2016 2017 2018 2019 2020

Bausch Health Companies Inc.

$100 $14 $20 $18 $29 $20

S&P 500 $100 $112 $136 $130 $171 $203

S&P/TSX Composite $100 $121 $132 $120 $148 $156

Peer Group $100 $85 $98 $105 $128 $140

Prior to 2016, the Company completed a series of mergers and acquisitions, which, at the time, were in-line with the Company's strategy for growth.

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To do so, in 2016, we retained a new executive team, which, in 2017, implemented a multi-year plan to stabilize, turnaround and transform our Company.

The performance graph below of cumulative total return as of December 31, 2016 is provided to coincide with the implementation of the Company's turnaround strategies in 2017 to focus on our core businesses, eye-health, GI and dermatology, and emphasize organic long-term growth.

Three Year Performance - Cumulative total return on a $100 investment on December 31, 2016

Four Year Performance - Cumulative total return on a $100 investment on December 31, 2016

As of December 31,

2016 2017 2018 2019 2020

Bausch Health Companies Inc.

$100 $143 $127 $206 $143

S&P 500 $100 $122 $116 $153 $181

S&P/TSX Composite $100 $109 $99 $122 $129

Peer Group $100 $115 $123 $149 $164

No dividends were declared or paid in 2020, 2019 or 2018.

22 unchanged sentences

Canadian Federal Income Taxation

The following discussion is a summary of the principal Canadian federal income tax considerations generally applicable to a holder of our common shares who, at all relevant times, for purposes of the Income Tax Act (Canada) and the Income Tax Regulations (collectively, the “Canadian Tax Act”) deals at arm’s-length with, and is not affiliated with, our Company, beneficially owns its common shares as capital property, does not use or hold and is not deemed to use or hold such common shares in carrying on a business in Canada, does not with respect to common shares enter into a “derivative forward agreement” as defined in the Income Tax Act, and who, at all relevant times, for purposes of the application of the Canadian Tax Act and the Canada-U.S.

The following discussion is a summary of the principal Canadian federal income tax considerations generally applicable to a holder of our common shares who, at all relevant times, for purposes of the Income Tax Act (Canada) and the Income Tax Regulations (collectively, the “Canadian Tax Act”) deals at arm’s-length with, and is not affiliated with, our Company, beneficially owns its common shares as capital property, does not use or hold and is not deemed to use or hold such common shares in carrying on a business in Canada, does not with respect to common shares enter into a “derivative forward agreement” as defined in the Canadian Tax Act, and who, at all relevant times, for purposes of the application of the Canadian Tax Act and the Canada-U.S.

Income Tax Convention (1980, as amended) (the “U.S.

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who is a member of such an LLC and is otherwise eligible for benefits under the U.S.

Treaty may generally be entitled to claim benefits under the U.S.

Treaty may generally be entitled to claim benefits under the

Treaty in respect of income, profits or gains derived through the LLC.

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Selected Financial Data

The following tables of selected consolidated financial data of our Company have been prepared in accordance with U.S.

generally accepted accounting principles (“U.S.

The data is qualified by reference to, and should be read in conjunction with our audited Consolidated Financial Statements and related notes thereto prepared in accordance with U.S.

See Item 15 “Exhibits and Financial Statement Schedules” and the discussion in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to this Form 10-K.

Years Ended December 31,

(in millions, except per share data)

Consolidated operating data:

Operating (loss) income

Net (loss) income attributable to Bausch Health Companies Inc.

(Loss) earnings per share attributable to Bausch Health Companies Inc.

Cash dividends declared per share

At December 31,

(in millions)

Consolidated balance sheet information:

Cash and cash equivalents

Working capital

Long-term debt, including current portion

Common shares

Bausch Health Companies Inc.

shareholders’ equity

Number of common shares issued and outstanding

The following are the significant items affecting the comparability of the selected financial information for the periods presented:

Acquisitions - We completed a series of mergers and acquisitions, the most significant, of which, were the acquisition of Amoun Pharmaceutical Company S.A.E.

(October 19, 2015), the acquisition of Salix Pharmaceuticals, Ltd.

(the "Salix Acquisition") (April 1, 2015) and the acquisition of certain assets of Synergy Pharmaceuticals Inc.

(“Synergy”) (March 6, 2019).

The assets, liabilities and results of operations of these and other acquisitions are included in the reported amounts effective upon the respective acquisition dates.

Divestitures - We have divested businesses that were not considered core to our ongoing operations or the needs of our primary-customer base.

The most significant of these divestitures included the divestitures of the Obagi Medical Products, Inc.

business (November 9, 2017), the iNova Pharmaceuticals business (September 29, 2017), the Company's equity interest in Dendreon Pharmaceuticals LLC (June 28, 2017), the Company's equity interests in Sprout Pharmaceuticals, Inc.

("Sprout") (December 20, 2017) and the Company's interests in the CeraVe ® , AcneFree ™ and AMBI ® skincare brands (March 3, 2017).

The assets, liabilities and results of operations of these and other divestitures and discontinuances are included in the reported amounts through the date of the respective divestiture and discontinuance dates.

See Note 4, "DIVESTITURES" to our audited Consolidated Financial Statements for additional information.

The proceeds of these divestitures, to the extent applicable, were used to repay long-term debt.

Restructuring and Integration Costs - We incurred cost-rationalization and integration initiatives in order to capture operating synergies, which generated cost savings across the Company.

In 2019, 2018, 2017, 2016 and 2015, Operating (loss) income included Restructuring and integration costs of $31 million , $22 million , $52 million , $132 million and $362 million, respectively.

See Note 5, "RESTRUCTURING AND INTEGRATION COSTS" to our audited Consolidated Financial Statements for additional information.

Goodwill Impairments - In 2019 , 2018 , 2017, 2016 and 2015, Operating (loss) income included Goodwill impairments of $0 , $2,322 million , $312 million, $1,077 million and $0, respectively.

These impairments to goodwill were primarily the result

(i) the adoption of new accounting guidance in 2018, (ii) revisions to forecasts to certain reporting units, as a result of changing business dynamics and market conditions and (iii) realignments to our reporting units.

See Note 9, "INTANGIBLE ASSETS AND GOODWILL" to our audited Consolidated Financial Statements for additional information.

Asset Impairments - In 2019 , 2018 , 2017, 2016 and 2015, Operating (loss) income included Asset impairments of $75 million , $568 million , $714 million , $422 million and $304 million, respectively.

These asset impairments were primarily attributable to:

(i) assets being classified as held for sale and (ii) revisions in sales forecasts associated with discontinuances, generic competition and other market forces.

Litigation and other matters - In 2019, Operating (loss) income included litigation charges of $1,401 million primarily related to the settlement of a legacy U.S.

securities class action matter (which is subject to final court approval) , to which the Company and the other settling defendants admitted no liability as to the claims against it and deny all allegations of wrongdoing .

Net Gains on Sales of Assets - In 2017, Operating (loss) income included the net gains on sales of assets of $580 million related to the 2017 divestitures previously discussed.

Benefit from Income Taxes - In 2017, Net (loss) income attributable to Bausch Health Companies Inc.

included non-cash deferred income tax benefits of approximately $4,145 million related to:

(i) adjustments to previously recorded outside basis differences as a result of the Company’s internal corporate restructuring and (ii) the accounting for the U.S.

Tax Cuts and Jobs Act of 2017.

Debt Issuance, Refinancing, Interest Expense, and Loss on Extinguishment of Debt - We completed a series of transactions which allowed us to obtain the necessary financing to fund the acquisitions previously discussed and refinance certain of our debt arrangements under our Senior Secured Credit Facilities and our Senior Unsecured Notes to extend the maturities of our debt.

See Note 11, "FINANCING ARRANGEMENTS" to our audited Consolidated Financial Statements for additional information.

These transactions impacted the selected financial information for the periods presented as follows:

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.

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity