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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTIES | RELATED PARTIES Historically, Bausch + Lomb has been managed and operated in the ordinary course of business with other affiliates of BHC. Accordingly, certain corporate and shared costs have been allocated to Bausch + Lomb and reflected as expenses in the Condensed Consolidated Financial Statements. There have been no sales made to related parties for all periods presented. Allocated Centralized Costs The unaudited Condensed Consolidated Financial Statements have been prepared on a standalone basis and are derived from the unaudited consolidated financial statements and accounting records of BHC. BHC incurs significant corporate costs for services provided to Bausch + Lomb as well as to other BHC businesses. The allocated corporate and shared costs to Bausch + Lomb for the three months ended March 31, 2022 and 2021 were $76 million and $95 million, respectively, and are included in Cost of goods sold (excluding amortization and impairments of intangible assets), Selling, general and administrative and Research and development in the Condensed Consolidated Statements of Operations. All such amounts have been deemed to have been incurred and settled by Bausch + Lomb in the period in which the costs were recorded and are included in Additional paid-in capital during the three months ended March 31, 2022 and in BHC investment during the three months ended March 31, 2021. In the opinion of management of BHC and Bausch + Lomb, the expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided or the benefit received by Bausch + Lomb during the three months ended March 31, 2022 and 2021. The amounts that would have been, or will be incurred, on a standalone basis could differ from the amounts allocated due to economies of scale, difference in management judgment, a requirement for more or fewer employees or other factors. In addition, the future results of operations, financial position and cash flows could differ materially from the historical results presented herein. Accounts Receivable and Payable Certain related party transactions between Bausch + Lomb and BHC have been included in Additional paid-in capital during the three months ended March 31, 2022 and in BHC investment during the three months ended March 31, 2021 when the related party transactions were not settled in cash. Certain transactions between Bausch + Lomb and BHC and affiliate businesses are cash-settled on a current basis and, therefore, are reflected in the Condensed Consolidated Balance Sheets. Accounts payable to BHC and its affiliates were $5 million and $6 million as of March 31, 2022 and December 31, 2021 respectively, and accounts receivables due from BHC and its affiliates were $81 million and $32 million as of March 31, 2022 and December 31, 2021, respectively. BHC Pooled Financing Arrangements Certain legal entities comprising Bausch + Lomb participate in BHC pooled financing arrangements, which allow for individual legal entities participating in the arrangements to borrow from the sponsoring bank. Total borrowings by the BHC pool participants is limited to the aggregate cash maintained in accounts held by the sponsoring bank. Net borrowings under BHC pooled financing arrangements under these arrangements from legal entities comprising Bausch + Lomb were $60 million and $28 million as of March 31, 2022 and December 31, 2021, respectively. BHC held a net positive cash balance in this pool, as these borrowings were more than offset by cash held by other BHC owned legal entities, including legal entities which have commingled B+L and non-B+L activities. Cash from these commingled legal entities has generally not been included in the Bausch + Lomb’s Condensed Consolidated Balance Sheets as such cash is not specifically identifiable to Bausch + Lomb. These borrowings are presented on the Condensed Consolidated Balance Sheets within Accrued and other current liabilities and in the Financing Activities section of the Condensed Consolidated Statements of Cash Flows as Net borrowings under BHC pooled financing arrangements. Interest incurred on such borrowings were not material for any period presented. Net Transfers to BHC The total effect of the settlement of related party transactions is reflected as a financing activity in the Condensed Consolidated Statements of Cash Flows. The components of the Net transfers to BHC for the three months ended March 31, 2022 and 2021 are as follows:
BHC Purchase Debt On January 1, 2022, in anticipation of the Separation, Bausch + Lomb issued a $2,200 million promissory note to BHC (the “BHC Purchase Debt”) in conjunction with a legal reorganization. The BHC Purchase Debt had an original maturity of two-years, interest at the rate of 3.625% per annum and was repaid in full on May 10, 2022. Included in Interest expense in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 was $20 million of interest attributed to the BHC Purchase Debt. See Note 19, “SUBSEQUENT EVENTS” for further details.
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