SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Reportable Segments

During the third quarter of 2016, the Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), commenced managing the business differently through changes in and reorganizations to the Company’s business structure, including changes to its operating and reportable segments, which necessitated a realignment of the Company's historical segment structure. Pursuant to this change, which was effective in the third quarter of 2016, the Company now operates in three operating and reportable segments: (i) Bausch + Lomb/International, (ii) Branded Rx and (iii) U.S. Diversified Products. The following is a brief description of the Company’s segments:

• The Bausch + Lomb/International segment consists of (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products in the area of eye health, primarily comprised of Bausch + Lomb products, with a focus on four product offerings (Vision Care, Surgical, Consumer and Ophthalmology Rx) and (ii) branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical device products, and Bausch + Lomb products sold in Europe, Asia, Australia and New Zealand, Latin America, Africa and the Middle East.

• The Branded Rx segment consists of sales of pharmaceutical products related to (i) the Salix product portfolio in the U.S., (ii) the Dermatological product portfolio in the U.S., (iii) branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical device products, and Bausch + Lomb products sold in Canada and (iv) product portfolios in the U.S. in the areas of oncology, dentistry and women’s health.

• The U.S. Diversified Products segment consists of (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products in the areas of neurology and certain other therapeutic classes, including aesthetics (which includes the Solta and Obagi businesses) and (ii) sales of generic products in the U.S.

Segment profit is based on operating income after the elimination of intercompany transactions. Certain costs, such as amortization of intangible assets, goodwill impairment, asset impairments, in-process research and development costs, restructuring and integration costs, acquisition-related contingent consideration costs and other (income) expense are not included in the measure of segment profit, as management excludes these items in assessing financial performance.

Corporate includes the finance, treasury, certain research and development programs, tax and legal operations of the Company’s businesses and maintains and/or incurs certain assets, liabilities, expenses, gains and losses related to the overall management of the Company, which are not allocated to the other business segments. In addition, a portion of share-based compensation is considered a corporate cost, since the amount of such expense depends on Company-wide performance rather than the operating performance of any single segment.

Prior period segment financial information has been recast to conform to current segment presentation.

Segment Revenues and Profit

Segment revenues and profits for the years ended December 31, 2016, 2015 and 2014 were as follows:

(in millions)	2016			2015			2014
Revenues:
Bausch + Lomb/International	$	4,607		$	4,603		$	4,860
Branded Rx	3,148			3,582			1,592
U.S. Diversified Products	1,919			2,262			1,754
Total revenues	$	9,674		$	10,447		$	8,206
Segment profit:
Bausch + Lomb/International	$	1,356		$	1,553		$	1,695
Branded Rx	1,644			2,008			1,061
U.S. Diversified Products	1,522			1,785			1,283
Total segment profit	4,522			5,346			4,039
Corporate	(690		)	(518		)	(341		)
Amortization of intangible assets	(2,673		)	(2,257		)	(1,427		)
Goodwill impairments	(1,077		)	—			—
Asset impairments	(422		)	(304		)	(145		)
Restructuring and integration costs	(132		)	(362		)	(382		)
Acquired in-process research and development costs	(34		)	(106		)	(20		)
Acquisition-related contingent consideration	13			23			14
Other income (expense)	(73		)	(295		)	263
Operating (loss) income	(566		)	1,527			2,001
Interest income	8			4			5
Interest expense	(1,836		)	(1,563		)	(971		)
Loss on extinguishment of debt	—			(20		)	(130		)
Foreign exchange loss and other	(41		)	(103		)	(144		)
Gain on investments, net	—			—			293
(Loss) income before (recovery of) provision for income taxes	$	(2,435	)	$	(155	)	$	1,054

Segment Assets

Total assets by segment as of December 31, 2016 and 2015 were as follows:

(in millions)	2016		2015
Bausch + Lomb/International	$	15,540	$	16,887
Branded Rx	21,804		24,901
U.S. Diversified Products	5,820		6,758
	43,164		48,546
Corporate	365		419
Total assets	$	43,529	$	48,965

Capital Expenditures, Depreciation and Amortization of intangible assets, and Asset Impairments

Capital expenditures, depreciation and amortization of intangible assets, and asset impairments by segment for the years ended December 31, 2016, 2015 and 2014 were as follows:

(in millions)	2016		2015		2014
Capital expenditures:
Bausch + Lomb/International	$	208	$	180	$	171
Branded Rx	19		32		10
U.S. Diversified Products	2		5		3
	229		217		184
Corporate	6		18		108
Total capital expenditures	$	235	$	235	$	292
Depreciation and amortization of intangible assets:
Bausch + Lomb/International	$	768	$	762	$	799
Branded Rx	1,655		1,282		443
U.S. Diversified Products	408		387		341
	2,831		2,431		1,583
Corporate	35		36		31
Total depreciation and amortization of intangible assets	$	2,866	$	2,467	$	1,614
Asset impairments:
Bausch + Lomb/International	$	141	$	58	$	65
Branded Rx	227		192		51
U.S. Diversified Products	48		54		29
	416		304		145
Corporate	6		—		—
Total Asset impairments	$	422	$	304	$	145

Revenues by Product Category

Revenues by product category for the years ended December 31, 2016, 2015 and 2014 were as follows:

(in millions)	2016		2015		2014
Pharmaceuticals	$	5,167	$	6,058	$	3,413
Devices	1,518		1,495		1,629
OTC	1,581		1,583		1,711
Branded and Other Generics	1,270		1,156		1,293
Other revenues	138		155		160
	$	9,674	$	10,447	$	8,206

Geographic Information

Revenues are attributed to a geographic region based on the location of the customer for the years ended December 31, 2016, 2015 and 2014 were as follows:

(in millions)	2016		2015		2014
U.S. and Puerto Rico	$	6,247	$	7,063	$	4,415
Canada	320		334		375
China	300		272		232
Japan	232		206		249
Egypt	196		51		5
Mexico	189		204		222
France	186		178		205
Australia	176		182		196
Russia	165		169		275
Germany	157		159		204
Poland	140		214		276
Brazil	105		110		161
U.K.	104		105		114
Other Europe, Asia, the Middle East, Latin America, Africa and other	1,157		1,200		1,277
	$	9,674	$	10,447	$	8,206

Long-lived assets consisting of property, plant and equipment, net of accumulated depreciation, are attributed to geographic regions based on their physical location as of December 31, 2016 and 2015 were as follows:

(in millions)	2016		2015(1)
U.S. and Puerto Rico	$	614	$	691
Ireland	198		133
Canada	83		76
Poland	81		89
Germany	60		63
Mexico	50		62
Egypt	41		97
France	29		30
China	26		33
Serbia	25		27
Italy	19		21
South Korea	14		14
Other Europe, Latin America, Asia, and the Middle East and other	72		106
	$	1,312	$	1,442

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(1) In 2015, Long-lived assets associated with the Company's Ireland manufacturing facility were incorrectly included within the U.S. and Puerto Rico balances, have been revised to properly reflect those assets as Ireland assets.

Major Customers

Customers that accounted for 10% or more of total revenues for the years ended December 31, 2016, 2015 and 2014 were as follows:

(in millions)	2016	2015	2014
McKesson Corporation	21%	20%	17%
Cardinal Health, Inc.	15%	12%	9%
AmerisourceBergen Corporation	13%	14%	10%