SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2020

Reportable Segments

The Company’s Chief Executive Officer ("CEO"), who is the Company’s Chief Operating Decision Maker, manages the business through operating and reportable segments consistent with how the Company’s CEO: (i) assesses operating performance on a regular basis, (ii) makes resource allocation decisions and (iii) designates responsibilities of his direct reports. The Company operates in the following reportable segments: (i) Bausch + Lomb/International segment, (ii) Salix segment, (iii) Ortho Dermatologics segment and (iv) Diversified Products segment.

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, 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.

Segment profit is based on operating income after the elimination of intercompany transactions. Certain costs, such as Amortization of intangible assets, Asset impairments, In-process research and development costs, Restructuring and integration costs, Acquisition-related contingent consideration costs and Other expense (income), net, are not included in the measure of segment profit, as management excludes these items in assessing segment financial performance.

Corporate includes the finance, treasury, certain research and development programs, tax and legal operations of the Company’s businesses and incurs certain expenses, gains and losses related to the overall management of the Company, which are not allocated to the other business segments. In assessing segment performance and managing operations, management does not review segment assets. Furthermore, 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.

Segment Revenues and Profits

Segment revenues and profits were as follows:



	Three Months Ended March 31,
(in millions)	2020			2019
Revenues:
Bausch + Lomb/International	$	1,114		$	1,118
Salix	477			445
Ortho Dermatologics	133			138
Diversified Products	288			315
	$	2,012		$	2,016

Segment profits:
Bausch + Lomb/International	$	325		$	319
Salix	319			288
Ortho Dermatologics	48			57
Diversified Products	202			236
	894			900
Corporate	(156		)	(125		)
Amortization of intangible assets	(436		)	(489		)
Goodwill impairments	—			—
Asset impairments	(14		)	(3		)
Restructuring and integration costs	(4		)	(20		)
Acquisition-related contingent consideration	(13		)	21
Other (expense) income, net	(23		)	3
Operating income	248			287
Interest income	7			4
Interest expense	(396		)	(406		)
Loss on extinguishment of debt	(24		)	(7		)
Foreign exchange and other	(13		)	—
Loss before benefit from income taxes	$	(178	)	$	(122	)

Revenues by Segment and Product Category

Revenues by segment and product category were as follows:



	Three Months Ended March 31, 2020										Three Months Ended March 31, 2019
(in millions)	Bausch + Lomb/ International		Salix		Ortho Dermatologics		Diversified Products		Total		Bausch + Lomb/ International		Salix		Ortho Dermatologics		Diversified Products		Total
Pharmaceuticals	$	201	$	477	$	77	$	182	$	937	$	217	$	445	$	95	$	211	$	968
Devices	341		—		51		—		392		366		—		38		—		404
OTC	351		—		—		—		351		324		—		—		—		324
Branded and Other Generics	203		—		—		103		306		191		—		—		102		293
Other revenues	18		—		5		3		26		20		—		5		2		27
	$	1,114	$	477	$	133	$	288	$	2,012	$	1,118	$	445	$	138	$	315	$	2,016

The top ten products for the three months ended March 31, 2020 and 2019 represented 40% and 36% of total revenues for the three months ended March 31, 2020 and 2019, respectively.

Geographic Information

Revenues are attributed to a geographic region based on the location of the customer and were as follows:



	Three Months Ended March 31,
(in millions)	2020		2019
U.S. and Puerto Rico	$	1,211	$	1,200
Canada	90		79
Poland	73		62
Egypt	58		53
China	58		89
Japan	54		55
France	47		53
Germany	44		45
Mexico	41		46
Russia	34		36
United Kingdom	23		29
Spain	20		21
Italy	20		22
Other	239		226
	$	2,012	$	2,016

Major Customers

Customers that accounted for 10% or more of total revenues were as follows:



	Three Months Ended March 31,
	2020	2019
AmerisourceBergen Corporation	19%	16%
McKesson Corporation (including McKesson Specialty)	16%	17%
Cardinal Health, Inc.	13%	14%