Bausch Health Companies (BHC) risk factors, FY2024 10-K

Risks Relating to Economic and Market Conditions

1. 01Current market and economic conditions in one or more of our markets could impact our business, liquidity, financial condition, cash flows and results of operations
2. 02Inflation and other macroeconomic factors could materially adversely affect our financial results and operations

Risks Relating to the B+L Separation

1. 03The B+L Separation is subject to challenge and could be subject to further challenges in the future, any of which could delay or prevent the consummation of such transactions or cause them to occur on terms that are different or less favorable than we originally anticipated
2. 04proceedings, see Note 20, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements elsewhere in this Form 10-K
3. 05Even if the B+L Separation is completed, we may not realize all of the benefits that we originally anticipated
4. 06We have and will continue to expend significant resources in pursuing the B+L Separation, which could have a material adverse effect on our business, financial condition, cash flows and results of operations
5. 07Any of the above factors could cause the B+L Separation process (or the failure to consummate the B+L Separation) to have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline
6. 08Certain contracts used in our business may need to be replaced in connection with any B+L Separation and failure to obtain such replacement contracts could increase our expenses or otherwise adversely affect our business, results of operations and financial condition

Legal and Reputational Risks

1. 09pay substantial damages in personal injury cases or product liability cases, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline
2. 10Our marketing, promotional and business practices, as well as the manner in which sales forces interact with purchasers, prescribers and patients, are subject to extensive regulation and any material failure to comply could result in significant sanctions against us
3. 11Total debt obligations $ 2,380 $ 767 $ 6,963 $ 7,168 $ 1,609 $ 1,130 $ 463 $ 20,480
4. 12We have incurred significant indebtedness, which restricts the manner in which we conduct business
5. 13We are exposed to risks related to interest rates, which could have an adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline
6. 14Since the B+L IPO, we have experienced transition in key management positions, and the failure to successfully manage such transitions could adversely impact our business and could have a material adverse effect on our business, financial condition, cash flows and results of operations
7. 15The loss of the services of, or our inability to recruit, retain or motivate, our executives and other key employees could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline

Tax-related Risks

1. 16Our effective tax rates may increase, which could adversely affect our financial condition and results of operations

Risks Relating to Intellectual Property and Exclusivity

1. 17Intellectual property litigation could cause us to spend substantial resources, distract our personnel from their normal responsibilities and cause the market value of our common shares and/or debt securities to decline

Risks Relating to Our Business Strategy

1. 18We have formed a Patient Access and Pricing Team which is committed to maintaining patients’ ability to access our branded prescription pharmaceutical products. All future pricing actions will be subject to review by the Patient Access and Pricing Team
2. 19thereof) from certain asset sales to repay the term loans under the 2022 Amended Credit Agreement, subject to certain reinvestment rights
3. 20As a result of these factors, any divestiture (whether or not completed) could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline
4. 21Development and Regulatory Risks
5. 22Our marketed products will be subject to ongoing regulatory review, the results of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline
6. 23Complying with existing government regulation of dietary supplements, including our eye vitamins and mineral supplements, in the U.S., Canada and elsewhere could increase our costs significantly and adversely affect our financial results
7. 24Our revenues and profits from generic products may decline as a result of changes in regulatory policy
8. 25Manufacturing and Supply Risks
9. 26Our approved products may not achieve or maintain expected levels of market acceptance, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline
10. 27We have and may continue to experience pressure on the pricing of certain of our products due to pricing controls, social or government pressure to lower the cost of drugs, and consolidation across the supply chain, which may adversely affect our financial results
11. 28Catastrophic events may disrupt our business and could cause the market value of our common shares and/or debt securities to decline
12. 29Our revenues and profits could be reduced by imports from countries where our products are available at lower prices
13. 30Our policies regarding returns, allowances and chargebacks, and marketing programs adopted by wholesalers, may reduce our revenues in future fiscal periods

Risks Relating to the International Scope of our Business

1. 31As a result of changes to U.S. trade policy, especially in light of recent comments made by the new Trump administration, there may be changes to existing trade agreements, the imposition of new tariffs and greater restrictions on trade generally
2. 32Due to the large portion of our business conducted in currency other than U.S. dollars, we have significant foreign currency risk
3. 33Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict in the Middle East between Israel, Hamas and other countries and militant groups in the region

Risks Relating to Information Technology

1. 34business needs or adequately safeguard our operations. Furthermore, modification, upgrade or replacement of such systems and infrastructure may be costly or out of our control
2. 35contracts, including with vendors and service providers, for a security lapse or breach or other security incident would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim
3. 36We utilize artificial intelligence, which could expose us to liability or could have a material adverse effect on our business and financial condition

Risks Relating to Specific Legislation and Regulations

1. 37which could limit our ability to collect, use and share EU data, and could cause our compliance costs to increase, ultimately having an adverse impact on our business, and harm our business and financial condition
2. 38Legislative or regulatory reform of the health care system may affect our ability to sell our products profitably and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline
3. 39reasonableness of the logistics, and measure the public reaction of such a plan have not been performed. We cannot provide assurance as to the ultimate content, timing, effect or impact of such a plan
4. 40The consequences of climate change, such as extreme weather and water scarcity, could pose risks to our facilities and disruption of our activities

Other Risks

1. 41If we fail to maintain adequate internal controls, our business, financial condition, results of operations, cash flows and/or the market value of our common shares and/or debt securities may be adversely affected
2. 42Our business and operations could be negatively affected by shareholder activism, which could cause us to incur significant expenses, hinder execution of our business strategy and impact the market value of our common shares and/or debt securities
3. 43We have significant goodwill and other intangible assets and potential impairment of goodwill and other intangibles may have a significant adverse impact on our financial condition and results of operations
4. 44See Note 8, “INTANGIBLE ASSETS AND GOODWILL” to our audited Consolidated Financial Statements included elsewhere in this Form 10-K for further information on these impairment charges
5. 45We have various indemnity agreements and indemnity arrangements in place, which may result in an obligation to indemnify or reimburse the relevant counterparty, which amounts may be material
6. 46Our operating results and financial condition may fluctuate