10-Q 1 bhc-20240331.htm 10-Q bhc-20240331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from    to   
Commission File Number: 001-14956
Bausch Health Companies Inc.
(Exact name of registrant as specified in its charter)
British Columbia,
Canada
98-0448205
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2150 St. Elzéar Blvd. West, Laval, Québec, Canada H7L 4A8
(Address of Principal Executive Offices) (Zip Code)

(514744-6792
(Registrant’s telephone number, including area code)
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, No Par ValueBHCNew York Stock Exchange,Toronto Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer Non-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common shares, no par value — 366,796,721 shares outstanding as of April 26, 2024.



BAUSCH HEALTH COMPANIES INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024
INDEX
Part I.Financial Information
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Other Information
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
i


BAUSCH HEALTH COMPANIES INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024
Introductory Note
Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 (this “Form 10-Q”) to the “Company”, “we”, “us”, “our” or similar words or phrases are to Bausch Health Companies Inc. and its subsidiaries, taken together. In this Form 10-Q, references to “$” are to United States (“U.S.”) dollars, references to “€” are to Euros and references to “CAD” are to Canadian dollars. Unless otherwise indicated, the statistical and financial data contained in this Form 10-Q are presented as of March 31, 2024.
Forward-Looking Statements
This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and may be forward-looking information within the meaning of applicable Canadian securities laws (collectively, “forward-looking statements”), as described in more detail under the heading “Forward-Looking Statements” in Item 2 of Part I of this Form 10-Q. Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found (i) in our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 22, 2024, under Item 1A. “Risk Factors”; (ii) under Item 1A. “Risk Factors” of Part II of this Form 10-Q; and (iii) in the Company’s other filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”). When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider such factors and other uncertainties and potential events. These forward-looking statements speak only as of the date made. We undertake no obligation to update or revise any of these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect actual outcomes, except as required by law. We caution that, as it is not possible to predict or identify all relevant factors that may impact forward-looking statements, the list of important factors, as described in more detail under the heading “Forward-Looking Statements” in Item 2 of Part I of this Form 10-Q, that may affect future results is not exhaustive and should not be considered a complete statement of all potential risks and uncertainties.
ii


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BAUSCH HEALTH COMPANIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share amounts)
(Unaudited)

March 31,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents$733 $947 
Restricted cash
22 15 
Trade receivables, net2,048 1,998 
Inventories, net1,636 1,544 
Prepaid expenses and other current assets957 1,092 
Total current assets5,396 5,596 
Property, plant and equipment, net1,713 1,707 
Intangible assets, net6,183 6,456 
Goodwill11,160 11,183 
Deferred tax assets, net2,149 2,101 
Other non-current assets312 307 
Total assets$26,913 $27,350 
Liabilities
Current liabilities:
Accounts payable$642 $719 
Accrued and other current liabilities3,225 3,133 
Current portion of long-term debt538 450 
Total current liabilities4,405 4,302 
Acquisition-related contingent consideration225 253 
Non-current portion of long-term debt21,536 21,938 
Deferred tax liabilities, net170 163 
Other non-current liabilities751 776 
Total liabilities27,087 27,432 
Commitments and contingencies (Note 17)
Deficit
Common shares, no par value, unlimited shares authorized, 366,674,264 and 365,238,917 issued and outstanding at March 31, 2024 and December 31, 2023, respectively
10,480 10,423 
Additional paid-in capital164 214 
Accumulated deficit(9,842)(9,778)
Accumulated other comprehensive loss(1,917)(1,881)
Total Bausch Health Companies Inc. shareholders’ deficit(1,115)(1,022)
Noncontrolling interest941 940 
Total deficit(174)(82)
Total liabilities and deficit$26,913 $27,350 
The accompanying notes are an integral part of these condensed consolidated financial statements.

1


BAUSCH HEALTH COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
20242023
Revenues
Product sales$2,129 $1,922 
Other revenues24 22 
2,153 1,944 
Expenses
Cost of goods sold (excluding amortization and impairments of intangible assets)628 572 
Cost of other revenues12 10 
Selling, general and administrative794 725 
Research and development
151 143 
Amortization of intangible assets274 273 
Asset impairments1 13 
Restructuring, integration and separation costs12 10 
Other expense, net 23 
1,872 1,769 
Operating income281 175 
Interest income9 6 
Interest expense(355)(307)
Gain on extinguishment of debt11  
Foreign exchange and other(15)(10)
Loss before income taxes(69)(136)
Provision for income taxes(8)(73)
Net loss(77)(209)
Net loss attributable to noncontrolling interest13 8 
Net loss attributable to Bausch Health Companies Inc.$(64)$(201)
Basic and diluted loss per share attributable to Bausch Health Companies Inc.$(0.17)$(0.55)
Basic and diluted weighted-average common shares366.8 363.3 
The accompanying notes are an integral part of these condensed consolidated financial statements.

2


BAUSCH HEALTH COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in millions)
(Unaudited)
Three Months Ended
March 31,
20242023
Net loss$(77)$(209)
Other comprehensive (loss) income
Foreign currency translation adjustment(34)65 
Other comprehensive (loss) income(34)65 
Comprehensive loss(111)(144)
Comprehensive loss attributable to noncontrolling interest11 10 
Comprehensive loss attributable to Bausch Health Companies Inc.$(100)$(134)
The accompanying notes are an integral part of these condensed consolidated financial statements.

3


BAUSCH HEALTH COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) EQUITY
(in millions)
(Unaudited)
 Bausch Health Companies Inc. Shareholders’ (Deficit) Equity  
 Common SharesAdditional
Paid-In
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Bausch Health
Companies Inc.
Shareholders’
Deficit
Non-
controlling
Interest
Total (Deficit)
Equity
SharesAmount
Three Months Ended March 31, 2024
Balances, January 1, 2024365.2 $10,423 $214 $(9,778)$(1,881)$(1,022)$940 $(82)
Common shares issued under share-based compensation plans1.5 57 (57)— — — —  
Share-based compensation— — 33 — — 33 — 33 
Employee withholding taxes related to share-based awards— — (14)— — (14)— (14)
Vesting of B+L equity compensation— — (12)— — (12)12  
Net loss— — — (64)— (64)(13)(77)
Other comprehensive (loss) income— — — — (36)(36)2 (34)
Balances, March 31, 2024366.7 $10,480 $164 $(9,842)$(1,917)$(1,115)$941 $(174)
Three Months Ended March 31, 2023
Balances, January 1, 2023361.9 $10,391 $159 $(9,186)$(2,056)$(692)$952 $260 
Common shares issued under share-based compensation plans1.7 14 (14)— — — —  
Share-based compensation— — 41 — — 41 — 41 
Employee withholding taxes related to share-based awards— — (12)— — (12)— (12)
Vesting of B+L equity compensation— — (3)— — (3)3  
Net loss— — — (201)— (201)(8)(209)
Other comprehensive income (loss)— — — — 67 67 (2)65 
Balances, March 31, 2023363.6 $10,405 $171 $(9,387)$(1,989)$(800)$945 $145 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4


BAUSCH HEALTH COMPANIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Three Months Ended
March 31,
20242023
Cash Flows From Operating Activities
Net loss$(77)$(209)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization of intangible assets320 319 
Amortization and write-off of debt premiums, discounts and issuance costs14 11 
Asset impairments1 13 
Acquisition-related contingent consideration(2)31 
Allowances for losses on trade receivable and inventories15 10 
Deferred income taxes(57) 
Net gain on sale of assets(4) 
Adjustments to accrued legal settlements6 1 
Payments of accrued legal settlements(3)(1)
Share-based compensation33 41 
Gain excluded from hedge effectiveness(3)(3)
Gain on extinguishment of debt(11) 
Third party fees paid in connection with the Exchange Offer (2)
Payments of contingent consideration adjustments, including accretion(2)(1)
Amortization of interim contract and inventory step-up resulting from acquisitions20  
Foreign exchange and other(4)5 
Changes in operating assets and liabilities:
Trade receivables(63)108 
Inventories(144)(128)
Prepaid expenses and other current assets121 (33)
Accounts payable, accrued and other liabilities51 (8)
Net cash provided by operating activities211 154 
Cash Flows From Investing Activities
Acquisitions and other investments (31)
Purchases of property, plant and equipment(82)(47)
Acquisition of intangible assets and other assets(1)(4)
Purchases of marketable securities(3)(13)
Proceeds from sale of marketable securities6 11 
Proceeds from sale of assets and businesses, net of costs to sell1  
Interest settlements from cross-currency swaps6 6 
Net cash used in investing activities(73)(78)
Cash Flows From Financing Activities
Issuance of long-term debt, net of discounts75 155 
Repayments of long-term debt(390)(279)
Payments of employee withholding taxes related to share-based awards(14)(12)
Payments of acquisition-related contingent consideration(7)(7)
Payments of financing costs(4) 
Other 1 
Net cash used in financing activities(340)(142)
Effect of exchange rate changes on cash, cash equivalents and other(5)6 
Net decrease in cash, cash equivalents, restricted cash and other settlement deposits(207)(60)
Cash, cash equivalents, restricted cash and other settlement deposits, beginning of period962 591 
Cash, cash equivalents and restricted cash, end of period$755 $531 
Cash and cash equivalents$733 $518 
Restricted cash22 13 
Cash, cash equivalents and restricted cash, end of period$755 $531 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5

BAUSCH HEALTH COMPANIES INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.DESCRIPTION OF BUSINESS
Bausch Health Companies Inc. (the “Company” or “Bausch Health”) is a global, diversified specialty pharmaceutical and medical device company that develops, manufactures and markets, primarily in the therapeutic areas of gastroenterology (“GI”), hepatology, neurology and dermatology, a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products and aesthetic medical devices, and, through its approximately 88% ownership of Bausch + Lomb Corporation (“Bausch + Lomb” or “B+L”), branded, and branded generic pharmaceuticals, OTC products and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment) in the therapeutic areas of eye health. The Company’s products are marketed directly or indirectly in approximately 90 countries.
2.SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Use of Estimates
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by the Company in U.S. dollars and in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting, which do not conform in all respects to the requirements of U.S. GAAP for annual financial statements. Accordingly, these notes to the unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements prepared in accordance with U.S. GAAP that are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”) on February 22, 2024. The unaudited Condensed Consolidated Financial Statements have been prepared using accounting policies that are consistent with the policies used in preparing the Company’s audited Consolidated Financial Statements for the year ended December 31, 2023. The unaudited Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year.
Separation of the Bausch + Lomb Eye Health Business
On August 6, 2020, the Company announced its plan to separate its eye health business, consisting of its Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals businesses into an independent publicly traded entity, Bausch + Lomb, from the remainder of Bausch Health Companies Inc. (the “B+L Separation”). In May 2022, a wholly owned subsidiary of Bausch Health sold common shares of B+L pursuant to an initial public offering of Bausch + Lomb (the “B+L IPO”). Following the B+L IPO, Bausch Health indirectly holds 310,449,643 common shares of Bausch + Lomb, which represents approximately 88% of B+L’s outstanding common shares as of March 31, 2024.
The completion of the full B+L Separation, which includes the transfer of all or a portion of the Company’s remaining direct or indirect equity interest in Bausch + Lomb to its shareholders (the “Distribution”), is subject to the achievement of targeted debt leverage ratios and the receipt of applicable shareholder and other necessary approvals. The Company continues to evaluate all relevant factors and considerations related to completing the B+L Separation, including the effect of the Norwich Appeal Decision (see “Xifaxan® Paragraph IV Proceedings” of Note 17, “LEGAL PROCEEDINGS”) on the B+L Separation.
The B+L IPO established two separate companies that include: (i) a diversified pharmaceutical company comprised of the Salix, International, Diversified (dentistry, neurology, dermatology and generics pharmaceutical), and Solta Medical aesthetic medical device businesses and (ii) a fully integrated eye health company which consists of the Bausch + Lomb Vision Care, Surgical and Pharmaceuticals businesses. Other than the effects of the B+L IPO described above, these unaudited Condensed Consolidated Financial Statements do not include any adjustments to give effect to the B+L Separation.
Use of Estimates
In preparing the unaudited Condensed Consolidated Financial Statements, management is required to make estimates and assumptions. The estimates and assumptions used by the Company affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates and the differences could be material.
On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s results of operations and financial position could be materially impacted.

6

Principles of Consolidation
The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and those of its subsidiaries and any variable interest entities for which the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated.
New Accounting Standards
There were no new accounting standards adopted during the three months ended March 31, 2024.

Recently Issued Accounting Standards, Not Adopted as of March 31, 2024
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosures of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The enhanced income tax related disclosures required by ASU 2023-09 are effective for the Company beginning with its 2025 annual report. Early adoption is permitted. The Company is evaluating the impact of adoption of this guidance on its disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The amendments in ASU 2023-07 are effective for the Company beginning with its 2024 annual report, and its interim periods beginning in 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its disclosures.
3.REVENUE RECOGNITION
The Company’s revenues are primarily generated from product sales, primarily in the therapeutic areas of GI, hepatology, neurology, dermatology and eye health, that consist of: (i) branded pharmaceuticals, (ii) generic and branded generic pharmaceuticals, (iii) OTC products and (iv) medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment and aesthetic medical devices). Other revenues include alliance and service revenue from the licensing and co-promotion of products and contract service revenue which is derived primarily from contract manufacturing for third parties and which is not material. See Note 18, “SEGMENT INFORMATION” for the disaggregation of revenue which depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by the economic factors of each category of customer contracts.
Product Sales Provisions
As is customary in the pharmaceutical industry, gross product sales are subject to a variety of deductions in arriving at reported net product sales. The transaction price for product sales is typically adjusted for variable consideration, which may be in the form of cash discounts, allowances, returns, rebates, chargebacks and distribution fees paid to customers. Provisions for variable consideration are established to reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.
Provisions for these deductions are recorded concurrently with the recognition of gross product sales revenue and include cash discounts and allowances, chargebacks, and distribution fees, which are paid to direct customers, as well as rebates and returns, which can be paid to direct and indirect customers. Returns provision balances and volume discounts to direct customers are included in Accrued and other current liabilities. All other provisions related to direct customers are included in Trade receivables, net, while provision balances related to indirect customers are included in Accrued and other current liabilities.
The Company continually monitors its variable consideration provisions and evaluates the estimates used as additional information becomes available. Adjustments will be made to these provisions periodically to reflect new facts and circumstances that may indicate that historical experience may not be indicative of current and/or future results. The Company is required to make subjective judgments based primarily on its evaluation of current market conditions and trade inventory levels related to the Company’s products. This evaluation may result in an increase or decrease in the experience rate that is applied to current and future sales, or require an adjustment related to past sales, or both. If the trend in actual amounts of variable consideration varies from the Company’s prior estimates, the Company adjusts these estimates when such trend is believed to be sustainable. At that time, the Company would record the necessary adjustments which would

7

affect net product revenue and earnings reported in the current period. The Company applies this method consistently for contracts with similar characteristics.
The following tables present the activity and ending balances of the Company’s variable consideration provisions for the three months ended March 31, 2024 and 2023.
Three Months Ended March 31, 2024
(in millions)Discounts
and
Allowances
ReturnsRebatesChargebacksDistribution
Fees
Total
Reserve balances, January 1, 2024$191 $380 $1,108 $216 $44 $1,939 
Current period provisions155 42 902 523 72 1,694 
Payments and credits(175)(45)(806)(541)(22)(1,589)
Reserve balances, March 31, 2024
$171 $377 $1,204 $198 $94 $2,044 
Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $37 million and $39 million as of March 31, 2024 and January 1, 2024, respectively, which are reflected as a reduction of Trade receivables, net in the Condensed Consolidated Balance Sheets. There were no price appreciation credits during the three months ended March 31, 2024.
Three Months Ended March 31, 2023
(in millions)Discounts
and
Allowances
ReturnsRebatesChargebacksDistribution
Fees
Total
Reserve balances, January 1, 2023$188 $427 $1,023 $196 $76 $1,910 
Current period provisions139 42 664 465 61 1,371 
Payments and credits(148)(40)(729)(487)(49)(1,453)
Reserve balances, March 31, 2023
$179 $429 $958 $174 $88 $1,828 
Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $43 million and $40 million as of March 31, 2023 and January 1, 2023, respectively, which are reflected as a reduction of Trade receivables, net in the Condensed Consolidated Balance Sheets. There were no price appreciation credits during the three months ended March 31, 2023.
Contract Assets and Contract Liabilities
There are no contract assets for any period presented. Contract liabilities consist of deferred revenue, the balance of which is not material to any period presented.
Allowance for Credit Losses
An allowance is maintained for potential credit losses. The Company estimates the current expected credit loss on its receivables based on various factors, including historical credit loss experience, customer credit worthiness, value of collateral (if any), and any relevant current and reasonably supportable future economic factors. Additionally, the Company generally estimates the expected credit loss on a pool basis when customers are deemed to have similar risk characteristics. Trade receivable balances are written off against the allowance when it is deemed probable that the trade receivable will not be collected. Trade receivables, net are stated net of certain sales provisions and the allowance for credit losses. The activity in the allowance for credit losses for trade receivables for the three months ended March 31, 2024 and 2023 is as follows.
(in millions)20242023
Balance, beginning of period$34 $33 
Provision for expected credit losses 1 
Write-offs charged against the allowance (1)
Recoveries of amounts previously written off 3 
Foreign exchange and other (4)
Balance, end of period$34 $32 

8

4.LICENSING AGREEMENTS AND ACQUISITIONS
Licensing Agreements
In the normal course of business, the Company may enter into select licensing and collaborative agreements for the commercialization and/or development of unique products. These products are sometimes investigational treatments in early stage development that target unique conditions. The ultimate outcome, including whether the product will be: (i) fully developed, (ii) approved by regulatory agencies, (iii) covered by third-party payors or (iv) profitable for distribution, is highly uncertain. The commitment periods under these agreements vary and include customary termination provisions. Expenses arising from commitments, if any, to fund the development and testing of these products and their promotion are recognized as incurred. Royalties due are recognized when earned and milestone payments are accrued when each milestone has been achieved and payment is probable and can be reasonably estimated.
Bausch + Lomb Acquisition of XIIDRA®
On June 30, 2023, a wholly owned subsidiary of Bausch + Lomb, Bausch + Lomb Ireland Limited, entered into a Stock and Asset Purchase Agreement (the “Acquisition Agreement”) with Novartis Pharma AG and Novartis Finance Corporation (together with Novartis Pharma AG, “Novartis”) and, solely for purposes of guaranteeing certain obligations of the acquiring entity under the Acquisition Agreement, Bausch + Lomb, to acquire XIIDRA® (lifitegrast ophthalmic solution) and certain other ophthalmology assets (the “XIIDRA Acquisition”).
On September 29, 2023, under the terms of the Acquisition Agreement, Bausch + Lomb, through its affiliate, consummated the XIIDRA Acquisition for: (i) an upfront cash payment of $1,750 million, (ii) the assumption of certain pre-existing milestone payments and (iii) potential future milestone obligations. As of the acquisition date, Bausch + Lomb recognized contingent consideration liabilities of $34 million, in the aggregate, related to assumed pre-existing milestones and potential future milestones. The Company reassesses its acquisition-related contingent consideration liabilities each quarter for changes in fair value. See Note 6, “FAIR VALUE MEASUREMENTS” for additional information regarding the fair value assessment of the acquisition-related contingent consideration liabilities. The XIIDRA Acquisition complements Bausch + Lomb’s existing dry eye franchise that includes eye and contact lens drops from Bausch + Lomb’s consumer brand franchises and novel treatments within its pharmaceutical business such as MIEBO® (perfluorohexyloctane ophthalmic solution). The XIIDRA Acquisition has been accounted for as a business combination under the acquisition method of accounting. The assets acquired and liabilities assumed are included within Bausch + Lomb’s Pharmaceuticals business.
As of the acquisition date, Bausch + Lomb allocated the aggregate purchase consideration of $1,753 million based on estimated fair values, which included recording $1,600 million of identifiable intangible assets, $130 million of other net assets, and $23 million of goodwill. See Note 4, “LICENSING AGREEMENTS AND ACQUISITIONS” in the Annual Report for additional information regarding the XIIDRA Acquisition, including further details regarding the assets acquired and liabilities assumed. The valuation of the assets acquired and liabilities assumed as part of the XIIDRA Acquisition has not been finalized as of March 31, 2024. The areas that could be subject to change primarily related to income tax matters. Bausch + Lomb will finalize these amounts no later than one year from the acquisition date.
Acquisition of Blink® Product Line
On July 6, 2023, Bausch + Lomb announced that it had consummated a transaction with Johnson & Johnson Vision, pursuant to which Bausch + Lomb, through an affiliate, acquired the Blink® product line of eye and contact lens drops, which consists of Blink® Tears Lubricating Eye Drops, Blink® Tears Preservative Free Lubricating Eye Drops, Blink GelTears® Lubricating Eye Drops, Blink® Triple Care Lubricating Eye Drops, Blink Contacts® Lubricating Eye Drops and Blink-N-Clean® Lens Drops. This acquisition was made by Bausch + Lomb to continue to grow its global over-the-counter business. Under the terms of the purchase agreement, Bausch + Lomb, through an affiliate, acquired the Blink® product line of eye and contact lens drops for an upfront cash payment of $107 million, which was paid on the closing of the transaction. Bausch + Lomb accounted for the transaction as an asset acquisition. The acquired assets are included within Bausch + Lomb’s Vision Care business. See Note 4, “LICENSING AGREEMENTS AND ACQUISITIONS” in the Annual Report for additional information regarding the acquisition of the Blink® product line.
Acquisition of AcuFocus
On January 17, 2023, Bausch + Lomb acquired AcuFocus, Inc., an ophthalmic medical device company, for an upfront payment of $35 million, $31 million of which was paid in January 2023, with the remaining purchase price to be paid within 18 months following the date of the transaction, less any amounts that are the subject of any indemnification claims. The acquisition was made to acquire certain small aperture intraocular technology for the treatment of certain cataract conditions. Additional contingent payments may be payable upon achievement of future sales milestones. Bausch + Lomb recorded an initial acquisition-related contingent consideration liability of approximately $5 million.

9

5.RESTRUCTURING, INTEGRATION AND SEPARATION COSTS
Restructuring and Integration Costs
The Company evaluates opportunities to improve its operating results and implement cost savings programs to streamline its operations and eliminate redundant processes and expenses. Restructuring and integration costs are expenses associated with the implementation of these cost savings programs and include expenses associated with: (i) reducing headcount, (ii) eliminating real estate costs associated with unused or under-utilized facilities and (iii) implementing contribution margin improvement and other cost reduction initiatives.
The Company incurred $12 million and $9 million of restructuring and integration costs during the three months ended March 31, 2024 and 2023, respectively.
Separation Costs and Separation-related Costs
The Company has incurred, and will incur costs associated with activities relating to the B+L Separation. These B+L Separation activities include separating the Bausch + Lomb business from the remainder of the Company. Separation costs are incremental costs directly related to the B+L Separation and include, but are not limited to legal, audit and advisory fees. Separation costs included in Restructuring, integration and separation costs for the three months ended March 31, 2024 and 2023 are not material.
The Company has incurred, and expects to continue to incur, incremental costs with respect to the B+L Separation. These separation-related costs include, but are not limited to rebranding costs and costs associated with facility relocation and/or modification. Included in Selling, general and administrative expenses for the three months ended March 31, 2024 and 2023 are separation-related costs of $5 million and $6 million, respectively.
The extent and timing of future charges of these costs to complete the B+L Separation cannot be reasonably estimated at this time and could be material.
6.FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS
Fair value measurements are estimated based on valuation techniques and inputs categorized as follows:
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.
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following fair value hierarchy table presents the components and classification of the Company’s financial assets and liabilities measured at fair value on a recurring basis:
 March 31, 2024December 31, 2023
(in millions)TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Assets:        
Cash equivalents$293 $287 $6 $ $425 $417 $8 $ 
Restricted cash$22 $22 $ $ $15 $15 $ $ 
Foreign currency exchange contracts$2 $ $2 $ $3 $ $3 $ 
Liabilities:     
Acquisition-related contingent consideration$281 $ $ $281 $292 $ $ $292 
Cross-currency swaps$68 $ $68 $ $84 $ $84 $ 
Foreign currency exchange contracts$1 $ $1 $ $6 $ $6 $ 

10

Cash equivalents consist of highly liquid investments, primarily money market funds, with maturities of three months or less when purchased, and are reflected in the Condensed Consolidated Balance Sheets at carrying value, which approximates fair value due to their short-term nature. Cash, cash equivalents and restricted cash as presented in the Condensed Consolidated Balance Sheet as of March 31, 2024 includes $325 million of cash, cash equivalents and restricted cash held by legal entities of Bausch + Lomb. Cash held by Bausch + Lomb legal entities and any future cash from the operating, investing and financing activities of Bausch + Lomb is expected to be retained by Bausch + Lomb entities and is generally not available to support the operations, investing and financing activities of other legal entities, including Bausch Health unless paid as a dividend which would be determined by the Board of Directors of Bausch + Lomb and paid pro rata to Bausch + Lomb’s shareholders.
There were no transfers into or out of Level 3 assets or liabilities during the three months ended March 31, 2024.
Cross-currency Swaps
During the third quarter of 2022, Bausch + Lomb entered into cross-currency swaps, with aggregate notional amounts of $1,000 million, to mitigate fluctuation in the value of a portion of its euro-denominated net investment from fluctuation in exchange rates. The euro-denominated net investment being hedged is Bausch + Lomb’s investment in certain Bausch + Lomb euro-denominated subsidiaries. Bausch + Lomb’s cross-currency swaps qualify for and have been designated as a hedge of the foreign currency exposure of a net investment in a foreign operation and are remeasured at each reporting date to reflect changes in their fair values.
The assets and liabilities associated with Bausch + Lomb’s cross-currency swaps as included in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 are as follows:
(in millions)March 31,
2024
December 31,
2023
Other non-current liabilities$(70)$(90)
Prepaid expenses and other current assets$2 $6 
Net fair value$(68)$(84)
The following table presents the effect of hedging instruments on the Condensed Consolidated Statements of Comprehensive Loss and the Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023:
Three Months Ended
March 31,
(in millions)20242023
Gain (loss) recognized in Other comprehensive loss$20 $(6)
Gain excluded from assessment of hedge effectiveness$3 $3 
Location of gain of excluded componentInterest Expense
No portion of the cross-currency swaps were ineffective for the three months ended March 31, 2024. During each of the three months ended March 31, 2024 and 2023, the Company received $6 million in interest settlements, which are reported as investing activities in the Condensed Consolidated Statements of Cash Flows.
Foreign Currency Exchange Contracts
The Company’s foreign currency exchange contracts are remeasured at each reporting date to reflect changes in their fair values determined using forward rates, which are observable market inputs, multiplied by the notional amount. The Company’s foreign currency exchange contracts are economically hedging the foreign exchange exposure on certain of the Company’s intercompany balances. As of March 31, 2024, the Company’s outstanding foreign currency exchange contracts had an aggregate notional amount of $594 million.


11

The assets and liabilities associated with the Company’s foreign exchange contracts as included in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 are as follows:
(in millions)March 31,
2024
December 31,
2023
Accrued and other current liabilities$(1)$(6)
Prepaid expenses and other current assets$2 $3 
Net fair value$1 $(3)
The following table presents the effect of the Company’s foreign exchange contracts on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023:
Three Months Ended
March 31,
(in millions)20242023
Gain related to changes in fair value$4 $1 
Gain (loss) related to settlements$1 $(5)
Acquisition-related Contingent Consideration Obligations
The fair value measurement of contingent consideration obligations arising from business combinations is determined via a probability-weighted discounted cash flow analysis, using unobservable (Level 3) inputs. These inputs may include: (i) the estimated amount and timing of projected cash flows, (ii) the probability of the achievement of the factor(s) on which the contingency is based and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases or decreases in any of those inputs in isolation could result in a significantly higher or lower fair value measurement. At March 31, 2024, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 6% to 28%, and a weighted average risk-adjusted discount rate of 7%. The weighted average risk-adjusted discount rate was calculated by weighting each contract’s relative fair value at March 31, 2024.
The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2024 and 2023:
March 31,
(in millions)20242023
Balance, beginning of period$292 $241 
Adjustments to Acquisition-related contingent consideration:
Accretion for the time value of money$5 $4 
Fair value adjustments due to changes in estimates of other future payments(7)27 
Acquisition-related contingent consideration(2)31 
Additions 5 
Payments/Settlements(9)(8)
Balance, end of period281 269 
Current portion56 50 
Non-current portion$225 $219 
Fair Value of Long-term Debt
The fair value of long-term debt as of March 31, 2024 and December 31, 2023 was $15,706 million and $16,270 million, respectively, and was estimated using the quoted market prices for the same or similar debt issuances (Level 2).

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7.INVENTORIES
Inventories, net consist of:
(in millions)March 31,
2024
December 31,
2023
Raw materials$548 $509 
Work in process101 124 
Finished goods987 911 
$1,636 $1,544 
8.INTANGIBLE ASSETS AND GOODWILL
Intangible Assets
The major components of intangible assets consist of:
 March 31, 2024December 31, 2023
(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$22,570 $(18,480)$4,090 $22,579 $(18,243)$4,336 
Corporate brands986 (653)333 985 (633)352 
Product rights/patents3,319 (3,274)45 3,323 (3,270)53 
Partner relationships160 (160) 161 (161) 
Technology and other213 (201)12 214 (202)12 
Total finite-lived intangible assets27,248 (22,768)4,480 27,262 (22,509)4,753 
Acquired IPR&D5 — 5 5 — 5 
B&L Trademark1,698 — 1,698 1,698 — 1,698 
$28,951 $(22,768)$6,183 $28,965 $(22,509)$6,456 
Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment charges associated with these assets are included in Asset impairments in the Condensed Consolidated Statements of Operations. The Company continues to monitor the recoverability of its finite-lived intangible assets and tests the intangible assets for impairment if indicators of impairment are present. The Company estimates the fair values of long-lived assets with finite lives using an undiscounted cash flow model which utilizes Level 3 unobservable inputs. The undiscounted cash flow model relies on assumptions regarding revenue growth rates, gross profit, selling, general and administrative expenses and research and development expenses.
Asset impairments for the three months ended March 31, 2023, were $13 million and primarily related to: (i) $8 million in aggregate, attributable to certain trade names no longer in use and (ii) $5 million related to the discontinuance of a certain product line.
Xifaxan® intangible assets included in the unaudited Condensed Consolidated Balance Sheets had a carrying value of $2,020 million and an estimated remaining useful life of 45 months as of March 31, 2024. On August 10, 2022, the U.S. District Court for the District of Delaware held that the U.S. Patents protecting the use of Xifaxan® for the reduction in risk of hepatic encephalopathy (“HE”) recurrence were valid and infringed and certain U.S. Patents protecting the composition and use of Xifaxan® for treating inflammatory bowel syndrome with diarrhea (“IBS-D”) were invalid (the “Norwich Legal Decision”). The Norwich Legal Decision prohibited the U.S. Food and Drug Administration (“FDA”) from approving Norwich’s Abbreviated New Drug Application (“ANDA”) until October 2029. On April 11, 2024, the U.S. Court of Appeals for the Federal Circuit issued an opinion affirming the Norwich Legal Decision and the District Court’s denial of Norwich’s motion requesting modification of the Norwich Legal Decision (the “Norwich Appeal Decision”). Under the Norwich Appeal Decision, the FDA remains enjoined from approving Norwich’s ANDA until October 2029. See “Xifaxan® Paragraph IV Proceedings” of Note 17, “LEGAL PROCEEDINGS” for details of this litigation matter and the Company’s response.

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The Xifaxan® intangible assets were last assessed for potential impairment during the third quarter of 2022. This assessment resulted in no impairment of the carrying value of the Xifaxan® finite-lived intangible assets as of September 30, 2022. As part of that assessment, the Company also determined that no change to the remaining useful lives of its Xifaxan® finite-lived intangible assets was required. During the period September 30, 2022 through March 31, 2024 there were no material changes to the facts and circumstances of the Norwich Legal Decision or to actual or expected business performance for Xifaxan®. Based on these factors, no impairment to the carrying value of the Xifaxan® finite-lived intangible assets was identified as of March 31, 2024.
Although the FDA remains enjoined from approving Norwich’s ANDA until October 2029, it is possible that the Norwich Appeal Decision and other potential future developments: (i) may adversely impact the estimated future cash flows associated with these products, which could result in an impairment of the value of these intangible assets in one or more future periods and (ii) may result in shortened useful lives of the Xifaxan® intangible assets, which would increase amortization expense in future periods. Any such impairment or shortening of the useful lives of Xifaxan® could be material to the results of operations of the Company in the period or periods in which they were to occur.
Estimated amortization expense of finite-lived intangible assets for the remainder of 2024 and each of the five succeeding years ending December 31 and thereafter is as follows:
(in millions)Remainder of 202420252026202720282029ThereafterTotal
Amortization$801 $994 $870 $831 $234 $216 $534 $4,480 
Goodwill
The changes in the carrying amounts of goodwill during the three months ended March 31, 2024 and the year ended December 31, 2023 were as follows:
(in millions)Bausch + LombSalixInternationalSolta MedicalDiversifiedTotal
Balance, January 1, 2023$5,246 $3,159 $789 $115 $2,238 $11,547 
Additions31     31 
Impairment    (493)(493)
Foreign exchange and other37  73  (12)98 
Balance, December 31, 20235,314 3,159 862 115 1,733 11,183 
Foreign exchange and other(28) (4) 9 (23)
Balance, March 31, 2024$5,286 $3,159 $858 $115 $1,742 $11,160 
Goodwill is not amortized but is tested for impairment at least annually on October 1st at the reporting unit level. A reporting unit is the same as, or one level below, an operating segment. The Company performs its annual impairment test by first assessing qualitative factors. Where the qualitative assessment suggests that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value test is performed for that reporting unit (Step 1).
The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants. The Company estimates the fair value of a reporting unit using a discounted cash flow model which utilizes Level 3 unobservable inputs. The discounted cash flow model relies on assumptions regarding revenue growth rates, gross profit, projected working capital needs, selling, general and administrative expenses, research and development expenses, capital expenditures, income tax rates, discount rates and terminal growth rates. To estimate fair value, the Company discounts the forecasted cash flows of each reporting unit. The discount rate the Company uses represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in its reporting unit operations and the rate of return a market participant would expect to earn. The quantitative fair value test is performed utilizing long-term growth rates and discount rates applied to the estimated cash flows in estimation of fair value. To estimate cash flows beyond the final year of its model, the Company estimates a terminal value by applying an in-perpetuity growth assumption and discount factor to determine the reporting unit’s terminal value.
To forecast a reporting unit’s cash flows the Company takes into consideration economic conditions and trends, estimated future operating results, management’s and a market participant’s view of growth rates and product lives, and anticipates future economic conditions. Revenue growth rates inherent in these forecasts are based on input from internal and external market research that compare factors such as growth in global economies, recent industry trends and product life-cycles. Macroeconomic factors such as changes in economies, changes in the competitive landscape including the unexpected loss of exclusivity to the Company’s product portfolio, changes in government legislation, product life-cycles, industry

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consolidations and other changes beyond the Company’s control could have a positive or negative impact on achieving its targets. Accordingly, if market conditions deteriorate, or if the Company is unable to execute its strategies, it may be necessary to record impairment charges in the future and such charges could be material.
2023 Interim Assessment
Dermatology
Through the nine months ended September 30, 2023, the Dermatology reporting unit performed largely in line with the forecast used in its last quantitative fair value test (September 30, 2022). During the third quarter of 2023, as a result of lower realized pricing attributable to shifts in the coverage mix for certain products, discontinuation of certain products as a result of the impact of recent legislation, and revised expectations of future selling, advertising, and promotion costs required to mitigate further revenue erosion, the Company’s preliminary assessment of future business performance indicated that the reporting unit’s future financial results were expected to be below the assumptions used in the last quantitative fair value test. After considering the limited headroom as a result of the impairment to goodwill of the Dermatology reporting unit when last tested (September 30, 2022), the Company determined that these changes in facts and circumstances, as well as increases in market interest rates during the three months ended September 30, 2023, suggested that the fair value of the Dermatology reporting unit could be less than its carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.
The quantitative fair value test utilized the Company’s most recent cash flow projections for the Dermatology reporting unit as revised in the third quarter of 2023 which reflected current market conditions and current trends in business performance. The quantitative fair value test utilized a long-term growth rate of 0.0% and a discount rate of 10.75%. Based on the quantitative fair value test, the carrying value of the Dermatology reporting unit exceeded its fair value at September 30, 2023, and the Company recognized a goodwill impairment of $151 million for the three months ended September 30, 2023. As of September 30, 2023 and March 31, 2024, the Dermatology reporting unit had remaining goodwill of $329 million.
Neurology
Through the nine months ended September 30, 2023, the Neurology reporting unit performed largely in line with the forecast used in its last quantitative fair value test (October 1, 2022). During the third quarter of 2023, as a result of actions taken by management in response to changing market dynamics driven by recent legislation, changes to the future expected commercial insurance coverage for certain key products, and a projected shift in the channels of business, the Company’s preliminary assessment of future business performance indicated that the reporting unit’s future financial results were expected to be below the assumptions used in the last quantitative fair value test. After considering the limited headroom as a result of the impairment to goodwill of the Neurology reporting unit when last tested (October 1, 2022), the Company determined that these changes in facts and circumstances, as well as increases in market interest rates during the three months ended September 30, 2023, suggested that the fair value of the Neurology reporting unit could be less than its carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.
The quantitative fair value test for the Neurology reporting unit utilized the most recent cash flow projections for the Neurology reporting unit as revised in the third quarter of 2023 to reflect current market conditions and current trends in business performance. The quantitative assessment utilized a long-term growth rate of -2.5% and a discount rate of 10.50%. Based on the quantitative fair value test, the carrying value of the Neurology reporting unit exceeded its fair value at September 30, 2023, and the Company recognized a goodwill impairment of $251 million for the three months ended September 30, 2023. As of September 30, 2023 and March 31, 2024, the Neurology reporting unit had remaining goodwill of $1,192 million and $1,186 million, respectively.
2023 Annual Impairment Test
The Company’s annual goodwill impairment test as of October 1, 2023, included performing separate quantitative fair value tests for the International reporting unit, the Generics reporting unit of the Diversified segment and the Vision Care, Surgical and Pharmaceuticals reporting units of the Bausch + Lomb segment. For its remaining reporting units, the Company conducted its annual goodwill impairment test as of October 1, 2023, by first assessing qualitative factors. Based on its qualitative assessment as of October 1, 2023, management believed that, it was more likely than not that the carrying amounts of its remaining reporting units were less than their respective fair values and therefore concluded that a quantitative fair value test for those reporting units was not required.

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Generics
The Generics reporting unit operates in the United States, where shifting market dynamics have led to increased competition with respect to generic pharmaceuticals which impacts both pricing and potential market share. The Company expects these dynamics to intensify in the future, and as such has revised its long-term forecasts, including for the sale of Company branded products when they reach loss of exclusivity in the future to reflect these developments.
The quantitative fair value test for the Generics reporting unit utilized the most recent cash flow projections for the reporting unit as revised in the fourth quarter of 2023 to reflect current market conditions and current trends in business performance. The quantitative assessment utilized a long-term growth rate of 1.0% and a discount rate of 10.25% in the estimation of the reporting unit’s fair value. Based on the quantitative fair value test, the carrying value of the Generics reporting unit exceeded its fair value as of October 1, 2023, and the Company recognized a goodwill impairment of $91 million. As of December 31, 2023 and March 31, 2024, the Generics reporting unit had remaining goodwill of $227 million.
December 31, 2023
During the period October 1, 2023 through December 31, 2023, the Company continued to monitor the market conditions and trends in business performance for all its reporting units, particularly as they pertain to the Dermatology, Neurology and Generics reporting units, and determined that, no events occurred, or circumstances changed that would indicate that the fair value of any reporting unit might be below its carrying value. However, if market conditions deteriorate, or if the Company is unable to execute its strategies, it may be necessary to record impairment charges in the future and those charges could be material.
March 31, 2024 Interim Assessment
During the three months ended March 31, 2024, the Company continued to monitor the market conditions and trends in business performance for all its reporting units, particularly as they pertain to the Dermatology, Neurology and Generics reporting units, and determined that, no events occurred, or circumstances changed that would indicate that the fair value of any reporting unit might be below its carrying value. However, if market conditions deteriorate, or if the Company is unable to execute its strategies, it may be necessary to record impairment charges in the future and any such charges could be material.
Accumulated goodwill impairment charges through March 31, 2024 were $5,497 million.
9.ACCRUED AND OTHER CURRENT LIABILITIES
Accrued and other current liabilities consist of:
(in millions)March 31,
2024
December 31,
2023
Product rebates$1,167 $1,069 
Product returns377 380 
Legal matters and related fees347 344 
Employee compensation and benefit costs276 360 
Interest266 236 
Income taxes payable76 47 
Other716 697 
$3,225 $3,133 

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10.FINANCING ARRANGEMENTS
Principal amounts of debt obligations and principal amounts of debt obligations net of premiums, discounts and issuance costs consist of the following:
March 31, 2024December 31, 2023
(in millions)MaturityPrincipal AmountNet of Premiums, Discounts and Issuance CostsPrincipal AmountNet of Premiums, Discounts and Issuance Costs
Senior Secured Credit Facilities:
2022 Amended Credit Agreement
2027 Revolving Credit FacilityFebruary 2027$ $ $ $ 
February 2027 Term Loan B FacilityFebruary 20272,281 2,251 2,312 2,279 
AR Credit FacilityJanuary 2028325 325 350 350 
B+L Credit Facilities
B+L Revolving Credit FacilityMay 2027300 300 275 275 
B+L May 2027 Term Loan B FacilityMay 20272,456 2,422 2,462 2,426 
B+L September 2028 Term Loan B FacilitySeptember 2028498 486 499 487 
Senior Secured Notes:
5.50% Secured Notes
November 20251,680 1,676 1,680 1,675 
6.125% Secured Notes
February 20271,000 991 1,000 990 
5.75% Secured Notes
August 2027500 497 500 497 
4.875% Secured Notes
June 20281,600 1,587 1,600 1,586 
11.00% First Lien Secured Notes
September 20281,774 2,654 1,774 2,654 
14.00% Second Lien Secured Notes
October 2030352 666 352 666 
B+L Senior Secured Notes:
B+L 8.375% Secured Notes
October 2028