Bausch & Lomb 1999 Annual Report

For amounts pertaining to postretirement benefits, a 6.75% annual rate of increase in the per capita cost of covered health care
benefits was assumed for 1999. This rate is assumed to decrease to 5.5% in the year 2000 and remain constant thereafter. To demonstrate
the significance of this rate on the expense reported, a one percentage point change in the assumed health care cost trend rate would have
the following effect:
The costs associated with defined contribution plans totaled $11.9, $12.0 and $8.4 for 1999, 1998 and 1997, respectively.
13. Minority Interest
In 1993, four wholly-owned subsidiaries of the company contributed
operating and financial assets to a limited partnership for
an aggregate 72% in general and limited partnership interests.
The partnership is a separate legal entity from the company which
owns and manages a portfolio of assets. Those assets included portions
of the company’s former biomedical operations and certain
assets used for the manufacture and sale of RGP contact lenses
and RGP lens care products. During 1999, the partnership was
restructured and no longer includes assets of these businesses.
Partnership assets continue to include cash and cash equivalents,
a long-term note from a consolidated subsidiary of the company,
and floating-rate demand notes from another consolidated subsidiary
of the company. For the company’s consolidated financial
statements, the long-term note and the floating-rate demand
See the future 39 Bausch & Lomb
notes are eliminated while the outside investor’s interest in the
partnership is recorded as minority interest.
In 1999, the original outside investor sold its interest in the
partnership and was replaced by an investment banking firm.
The outside investors’ limited partnership interest in the partnership
has been recorded as minority interest totaling $200.0 at
December 25, 1999 and $403.2 at December 26, 1998.
14. Financial Instruments
1% Increase 1% Decrease
Effect on total service and interest cost components of net periodic
postretirement health care benefit cost $0.6 $(0.6)
Effect on the health care component of the accumulated postretirement
benefit obligation $6.1 $(5.1)
The carrying amount of cash, cash equivalents, current portion of
long-term investments and notes payable approximated fair value
because maturities are less than one year in duration. The company’s
remaining financial instruments consisted of the following:
December 25, 1999 December 26, 1998
Carrying Fair Carrying Fair
Value Value Value Value
Nonderivatives
Other investments $ 173.8 $ 173.8 $ 249.2 $ 249.2
Long-term debt, including current portion (978.0) (922.6) (1,312.4) (1,319.2)
Derivatives held for purposes
other than trading
Foreign exchange instruments
Other current assets $ 14.2 $ 7.6
Accrued liabilities (10.4) (15.7)
Net foreign exchange instruments
Interest rate instruments
$ 3.8 $ (7.3) $ (8.1) $ (8.3)
Other current assets $ 21.9 $ 22.1
Accrued liabilities (10.2) (15.2)
Net interest rate instruments $ 11.7 $ 40.7 $ 6.9 $ 14.9