Product Revenue and Performance - Xifaxan product line represented 81% and 80% of the Salix segment's revenues for the three and six months ended June 30, 2022, respectively[301] - Xifaxan product revenues increased by $7 million or 1% to $775 million for the six months ended June 30, 2022 compared to $768 million in 2021[377] - Approximately 80% of the Salix segment revenues is derived from the Xifaxan product line[468] - Sales of the Xifaxan product line represented 81% and 80% of the Salix segment's revenues for the three and six months ended June 30, 2022, respectively[489] - Trulance revenues were $47 million and $49 million for the six months ended June 30, 2022 and 2021, respectively[374] - Next generation Thermage FLX revenues were $154 million and $142 million for the years 2021 and 2020, respectively[377] - Revenues attributable to Russia for the six months ended June 30, 2022 and 2021 were $63 million and $64 million, respectively[384] - Revenues attributable to Ukraine for the six months ended June 30, 2022 and 2021 were $3 million and $5 million, respectively[384] - Revenues attributable to Belarus for the six months ended June 30, 2022 and 2021 were $4 million in each period[384] - Uceris Tablet revenues for the six months ended June 30, 2022 were approximately $7 million, compared to $5 million in the same period in 2021[419] - Jublia revenues for the six months ended June 30, 2022 were approximately $54 million, compared to $50 million in the same period in 2021[419] - The company's Uceris Tablet revenues for the years 2021, 2020, and 2019 were approximately $10 million, $15 million, and $20 million, respectively[419] - Jublia revenues for the years 2021, 2020, and 2019 were approximately $100 million, $111 million, and $110 million, respectively[419] - Revenue in China for the six months ended June 30, 2022 decreased by $52 million to $177 million compared to $229 million in 2021, reflecting the impact of the omicron variant and government lockdowns[390] - Total revenues decreased by $133 million (6%) to $1,967 million in 2022 compared to $2,100 million in 2021[494] - Bausch + Lomb segment revenues increased by $7 million (1%) to $941 million in 2022, representing 48% of total revenues[494] - Salix segment revenues decreased by $15 million (3%) to $501 million in 2022, with a segment profit margin of 71%[494] - International segment revenues declined by $80 million (26%) to $233 million in 2022, with a segment profit margin of 28%[494] - Diversified Products segment revenues decreased by $29 million (11%) to $235 million in 2022, with a segment profit margin of 60%[494] - Solta Medical segment revenues dropped by $16 million (22%) to $57 million in 2022, with a segment profit margin of 35%[494] - Total segment profits decreased by $98 million (11%) to $789 million in 2022, with a total segment profit margin of 40%[494] Financial Transactions and Debt Management - The Bausch + Lomb IPO resulted in the sale of 35,000,000 common shares at $18.00 per share, generating approximately $675 million in net proceeds[308] - The Company holds 310,449,643 Bausch + Lomb common shares, representing approximately 88.7% of Bausch + Lomb's outstanding common shares after the IPO[309] - The Company completed a series of transactions including a new credit facility for Bausch + Lomb and refinancing of existing credit facilities[318] - The company received approximately $4,100 million in net proceeds from divestitures, including the sale of Amoun for $740 million[322] - The company repaid approximately $10,600 million in long-term debt obligations from January 1, 2016, through June 30, 2022[320] - Debt reduced by approximately $800 million in H1 2022, including $1,000 million issuance of 6.125% Senior Secured Notes due February 2027[352] - B+L IPO completed on May 10, 2022, with net proceeds of approximately $675 million[353] - $2,500 million term loan facility and $500 million revolving credit facility established under B+L Credit Agreement[356] - $10,600 million of long-term debt repaid (net of borrowings) from January 2016 to June 2022[360] - The company recognized a gain on extinguishment of debt of $113 million for the three months ended June 30, 2022, compared to a loss of $45 million in the same period in 2021[481] Research and Development - The company has approximately 160 projects in its global R&D pipeline as of June 30, 2022[327] - A Phase 3 study for Rifaximin (RED-C) has commenced for the prevention of the first episode of Overt Hepatic Encephalopathy[328] - The company plans to file a New Drug Application (NDA) for IDP-126 in the fourth quarter of 2022[333] - The company entered into two exclusive license agreements in October 2020 for the development of treatments for pediatric myopia, with a Phase 3 study expected to complete enrollment by Q1 2023[341] - NOV03 achieved enrollment target in Open Label Safety study and showed statistically significant topline data in two Phase 3 studies, with NDA filed in June 2022 and anticipated U.S. launch in 2023[342] - R&D expenses increased by $12 million in Q2 2022, driven by the resumption of activities and clinical trials previously suspended due to COVID-19[428] - R&D expenses increased by $12 million (10%) to $127 million in Q2 2022, primarily due to higher spend on Solta and Salix projects[458] Product Launches and Approvals - Bausch + Lomb expects to launch Monofocal Plus, Trifocal, and EDOF optical designs for presbyopia in 2023, 2024, and 2025/2026, respectively[336] - Renu Advanced Multi-Purpose Solution (MPS) was launched in Taiwan, Czech Republic, Israel, Poland, and Slovakia in 2022, with further launches anticipated in China, Taiwan, Argentina, and Latin America[336] - Bausch + Lomb ULTRA Multifocal for Astigmatism contact lens was launched in June 2019 and received European Union regulatory approval in Q2 2020[336] - Xipere was approved by the FDA in October 2021 for macular edema associated with uveitis and launched in the U.S. in Q1 2022[343] - The company launched Duobrii in June 2019 and Bryhali in November 2018 as part of its psoriasis treatment portfolio[378] - The company launched Arazlo Lotion in June 2020, Altreno in October 2018, and Retin-A Micro 0.06% in January 2018 as part of its acne treatment portfolio[378] - The company acquired a global exclusive license for a myopia control contact lens design developed by BHVI[381] Litigation and Intellectual Property - The company reached a settlement agreement with Actavis in March 2021, dismissing the appeal related to the Relistor tablets patent litigation[416] - The company filed patent infringement suits against MSN and Mylan in April 2021 regarding Trulance 3mg tablets[416] - The company filed suit against Slayback Pharma LLC in September 2021, triggering a 30-month stay of the approval of the Slayback ANDA for Lumify[416] - The company filed suit against Lupin Ltd. in February 2022, triggering a 30-month stay of the approval of the Lupin ANDA for Lumify[417] - The company's PreserVision U.S. formulation patent expired in March 2021, but a patent covering methods of using the formulation remains in force into 2026[419] - Xifaxan 550mg patent litigation with Actavis resolved in 2018, with Actavis granted a non-exclusive license starting January 1, 2028[413] - Xifaxan 550mg patent litigation with Sandoz resolved in 2020, with Sandoz granted a non-exclusive license starting January 1, 2028[413] - Xifaxan 550mg patent litigation with Norwich resulted in a court ruling in July 2022, with certain patents found valid and others invalid, and the company plans to appeal[413] - Xifaxan 200mg and 550mg patent litigation with Sun ongoing, with Notices of Paragraph IV Certification received in 2019 and 2020[414] - Duobrii Lotion (Padagis) litigation is ongoing, with a trial scheduled for October 4, 2022, and the company remains confident in the strength of its patents[410][411] - Duobrii Lotion (Taro) litigation initiated in July 2022, with a 30-month stay on Taro's ANDA approval, and the company remains confident in its patents[413] - Bryhali Lotion, 0.01% (Glenmark) agreement allows Glenmark to market a generic version starting in 2026, with all intellectual property remaining intact[410] Financial Performance and Metrics - Operating income for Q2 2022 was $161 million, compared to an operating loss of $270 million in Q2 2021, reflecting a $431 million improvement[428] - Net loss attributable to Bausch Health Companies Inc. for Q2 2022 was $145 million, an improvement of $450 million compared to Q2 2021[433] - Revenues for the first six months of 2022 decreased by $242 million (6%) to $3,885 million, driven by divestitures, foreign currency impact, and lower volumes[433] - Operating income for the first six months of 2022 was $446 million, compared to an operating loss of $491 million in the same period of 2021, reflecting a $937 million improvement[434] - Goodwill impairments for the first six months of 2022 decreased by $386 million to $83 million, compared to $469 million in the same period of 2021[434] - Net loss attributable to Bausch Health Companies Inc. for the first six months of 2022 was $214 million, an improvement of $991 million compared to the same period in 2021[438] - Gross product sales for Q2 2022 were $3.401 billion, a decrease from $3.489 billion in Q2 2021[446] - Total provisions to reduce gross product sales to net product sales were $1.454 billion (42.8% of gross sales) in Q2 2022, up from $1.413 billion (40.5%) in Q2 2021[446] - Net product sales for Q2 2022 were $1.947 billion (57.2% of gross sales), down from $2.076 billion (59.5%) in Q2 2021[446] - Cost of goods sold decreased by $34 million (6%) to $570 million in Q2 2022, primarily due to divestiture of Amoun and favorable foreign currency impact[450] - SG&A expenses decreased by $9 million (1%) to $676 million in Q2 2022, driven by divestiture of Amoun and lower compensation expenses[455] - Amortization of intangible assets decreased by $58 million to $302 million in Q2 2022, due to fully amortized assets[461] - Goodwill impairments increased by $83 million to $83 million in Q2 2022, primarily due to macroeconomic factors impacting the Ortho Dermatologics reporting unit[464] - Xifaxan intangible assets have a carrying value of $2.963 billion as of June 30, 2022, with remaining useful lives of 66 months[462] - The company incurred $7 million in manufacturing variances and $6 million in returns due to a quality issue at a third-party supplier in Q2 2021[451] - The company recognized a goodwill impairment of $83 million for the Ortho Dermatologics reporting unit due to the carrying value exceeding its fair value at June 30, 2022[467] - Asset impairments, including loss on assets held for sale, decreased by $41 million to $6 million for the three months ended June 30, 2022 compared to $47 million in the same period in 2021[470] - Restructuring, integration, separation and IPO costs increased by $26 million to $35 million for the three months ended June 30, 2022 compared to $9 million in the same period in 2021[472] - Separation and IPO costs were $13 million for the three months ended June 30, 2022, compared to $6 million in the same period in 2021[475] - Interest expense increased by $46 million, or 13%, to $410 million for the three months ended June 30, 2022 compared to $364 million in the same period in 2021[479] - The provision for income taxes was $10 million for the three months ended June 30, 2022, compared to a benefit of $77 million in the same period in 2021, an unfavorable change of $87 million[486] Market and Regulatory Environment - The company anticipates generic competition for certain products due to patent or regulatory exclusivity expirations in 2022 and later years[407] - The company may launch authorized generics to mitigate sales declines following loss of exclusivity, but revenue impacts are still expected to be significant[409] - Several products faced generic competition in 2021, including Lotemax Gel and Bepreve, which accounted for less than 1% of total revenues in 2020[410] - Branded products expected to face generic competition from 2022 to 2026, such as Noritate and Targretin Gel, accounted for 2% of total revenues in 2021[410] - The OECD/G20 Inclusive Framework agreed on a global minimum corporate tax rate of 15% for companies with revenue above €750 million, effective in 2024[394] - The U.S. government proposed changes to the corporate tax system, including potential increases in corporate tax rates and modifications to the Base Erosion and Anti-Abuse Tax[393] - The American Rescue Plan Act of 2021 eliminated the Maximum Rebate Amount for certain drugs in the Medicaid Drug Rebate Program, with uncertain impact on the company[405] - The company continues to monitor potential legislative and administrative changes in health care reform, including drug pricing transparency and importation programs[406] - The company incurred costs of $13 million in 2021 and $21 million in 2020 related to the annual fee assessed on branded prescription drug sales to U.S. government programs[397] - Medicare Part D utilization costs were $94 million in 2021 and $131 million in 2020 for beneficiaries subject to the coverage gap[397] Operational and Strategic Initiatives - The Solta Medical IPO plans were suspended to focus on driving revenue, profitability, and cash flow, with future alternative paths to be revisited[316] - $175 million expansion of Waterford facility completed in July 2017 to meet demand for Biotrue ONEday contact lenses[345] - $220 million upgrade to Rochester facility completed in December 2017 to support Bausch + Lomb ULTRA and SiHy Daily AQUALOX product lines[345] - $300 million expansion projects initiated in November 2018 for SiHy Daily disposable contact lenses, with commercial production starting in H1 2022[347] - $90 million investment announced in July 2021 to increase capacity at Waterford facility for Biotrue ONEday lenses, expected completion in 2023[349] - The company faced distribution and logistic issues in China due to lockdowns, but manufacturing and distribution processes were minimally impacted[390] - Organic revenue (non-GAAP) is used to assess performance by adjusting for foreign currency exchange rates and excluding impacts of acquisitions, divestitures, and discontinuations[495] - Changes in foreign currency exchange rates can mask underlying business performance trends and are adjusted in organic revenue calculations[496] Acquisitions and Divestitures - Amoun generated revenues of $137 million for the six months ended June 30, 2021, and $157 million for the period from January 1, 2021, through July 26, 2021[322] - The company received approximately $4,100 million in net proceeds from divestitures, including the sale of Amoun for $740 million[322]

1Q 22 Financial Results BAUSCH-Health Forward-Looking Statements 1 This presentation contains forward-looking information and statements, within the meaning of applicable securities laws (collectively, "forward-looking statements"), including, but not limited to, statements regarding future prospects and performance of Bausch Health Companies Inc. ("Bausch Health", the "Company", "we", "us", "BHC"), including: the Company's 2022 full-year guidance; expectations for adjusted cash flows from operations and th ...

Bausch Health Companies Inc. (NYSE:BHC) Q1 2022 Earnings Conference Call May 10, 2022 8:00 AM ET Company Participants Joe Papa - Chairman and Chief Executive Officer Thomas Appio - Chief Executive Officer, Bausch Health Tom Vadaketh - Chief Financial Officer, Bausch Health Conference Call Participants Ken Cacciatore - Cowen & Company Chris Schott - JPMorgan Doug Miehm - RBC Capital Markets Greg Fraser - Truist Securities Gary Nachman - BMO Capital Markets Operator Good day, and welcome to the Bausch Healt ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-14956 Bausch Health Companies Inc. (Exact name of registrant as specified in its charter) British Columbia , Canada 98-0448205 (State or o ...

Summary of Bausch Health Companies Inc. Conference Call Company Overview - **Company**: Bausch Health Companies Inc. (NYSE: BHC) - **Date**: March 15, 2022 - **Event**: 2022 Barclays Global Healthcare Conference Industry Insights - **Industry**: Global Ophthalmology Market - **Market Size**: The total addressable market for Bausch + Lomb is approximately $50 billion, segmented as follows: - Vision Care: $16 billion - Surgical: $8 billion - Pharma Prescription Ophthalmology: $26 billion [2][3] Market Positioning - **Geographical Breakdown**: - U.S.: 50% - Europe, Middle East, Africa: 30% - Asia Pacific: 20% [3] - **Competitive Position**: Bausch + Lomb is currently the third-largest player in the diversified health companies sector, behind Johnson & Johnson [3]. Growth Projections - **Overall Eye Health Business Growth**: Expected to grow at a mid-single-digit rate of 4% to 5% driven by demographic trends and increased prevalence of eye conditions [5][6]. - **Key Demographics**: - Individuals over 65 consume 10 times more eye health products than those under 65. - Myopia rates among children have increased from 20% to 40% in the U.S. [6][7]. Surgical Business Insights - **Cataract Surgery Backlog**: A backlog of cataract surgeries exists due to a 15% to 20% decrease in procedures during COVID-19, creating a tailwind for future growth [14][15]. - **Investment in R&D**: Approximately $1 billion invested in R&D since 2018, with a focus on surgical innovations [9][10]. Product Development and Innovations - **Surgical Innovations**: Investments in digital platforms and new surgical products, including premium intraocular lenses (IOLs) [12][18]. - **XIFAXAN Developments**: New indications being explored for XIFAXAN, including treatment for small intestinal bacterial overgrowth (SIBO) and cirrhosis symptoms [32][33]. Competitive Advantages - **Brand Recognition**: Bausch + Lomb is the most recognized brand in eye health, surpassing competitors like Alcon and Johnson & Johnson [20][21]. - **Integrated Product Platform**: Offers a comprehensive range of products across surgical, consumer, and pharmaceutical segments, enhancing competitive positioning [20][24]. Financial Considerations - **Pricing Strategies**: Adjustments in pricing across pharmaceutical and consumer segments to counter inflationary pressures [44]. - **Market Potential for Silicone Hydrogel Lenses**: The U.S. market for silicone hydrogel lenses is projected to grow from $1 billion to $3 billion, with Bausch + Lomb capturing a 14% share in initial markets [26][29]. Macro and Geopolitical Factors - **Impact of Inflation and Supply Chain Issues**: Inflationary pressures are being addressed through efficiency projects and pricing adjustments [44]. - **Russia-Ukraine Situation**: The business in Russia constitutes less than 2% of overall revenue, with a focus on employee safety and product access in Ukraine [45][46]. Future Outlook - **IPO Plans**: Preparations for the Bausch + Lomb IPO are underway, with expectations for significant growth in the surgical and pharmaceutical segments [9][50]. - **Regulatory Approvals**: Ongoing work with regulatory authorities in China for product approvals, which is crucial for future growth [49][50]. This summary encapsulates the key points discussed during the conference call, highlighting the company's market positioning, growth strategies, product innovations, and responses to macroeconomic challenges.

Financial Data and Key Metrics Changes - The company achieved total organic revenue growth of 6% and reported revenue growth of 5% compared to 2020, with strong adjusted cash flows from operations exceeding $1.6 billion [11][30] - Adjusted EBITDA for the full year was $3.472 billion, up 3% on a constant currency basis from 2020, which was at the high end of the final guidance range for 2021 [30][41] - The company repaid $1.3 billion of debt in 2021, resulting in a net leverage of 6.5x as of the end of Q4 2021 [34][36] Business Line Data and Key Metrics Changes - Bausch & Lomb (B&L) segment reported Q4 revenue of $1 billion, up 7% organically, with Global Vision Care business growing 9% [15][16] - Salix segment revenue for Q4 was $559 million, up 6% from Q4 2020, driven by XIFAXAN, which grew 9% [23][24] - International Rx segment revenue was up 7% organically, with strong performance in Canada and Poland [25] Market Data and Key Metrics Changes - The International Rx segment reported Q4 revenue of $276 million, with Canada up 13% and Poland up 16% organically [25] - The Global Surgical business grew 22% organically for the full year compared to 2020, reflecting recovery in surgical procedures across major markets [18] - The Global Consumer business grew 6% organically for the full year, with LUMIFY achieving over $100 million in annual revenue [20][42] Company Strategy and Development Direction - The company is targeting net leverage for Bausch & Lomb of less than 2.5x and 6.5% to 6.7% for Bausch Pharma at the time of the spin-off [9][10] - Plans to launch IPOs for Bausch & Lomb and Solta Medical are substantially complete, with preparations ongoing subject to market conditions [8][57] - The company aims to separate into three publicly traded entities, focusing on unlocking shareholder value and driving growth in distinct markets [64][65] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong underlying momentum of the business, expecting solid organic revenue growth and adjusted EBITDA growth in 2022 [41][87] - The company is taking proactive steps to mitigate gross margin pressure driven by inflation and supply chain issues [38] - Management highlighted the importance of maximizing shareholder value while being cautious about market conditions for the upcoming IPOs [100] Other Important Information - The company will report financial results in three segments starting Q1 2022: Bausch Pharma, Bausch & Lomb, and Solta Medical [10] - Adjusted gross margin for the full year was 71.6%, slightly above guidance, with expectations for a gross margin of roughly 72% in 2022 [28][38] - The company plans to continue leveraging its integrated eye care platform to drive product performance and market share [42][48] Q&A Session Summary Question: Timing of IPOs and operational priorities post-separation - Management indicated that they are ready for IPOs by mid to end of March, depending on market conditions, and emphasized the importance of maximizing shareholder value [69][71] - Post-separation, the focus will be on executing the business strategy, launching new products, and exploring inorganic growth opportunities [73][74] Question: Solta dynamics and growth expectations - Management noted that Solta achieved 22% reported growth in 2021, with strong demand and a focus on maintaining premium pricing [78][82] - The company expects to achieve 15% to 18% growth in 2022, supported by strong demand and a robust product pipeline [80][83] Question: Impact of IPO capital raising on separation plans - Management stated that if IPOs do not raise expected capital, they will continue to focus on organic deleveraging while remaining flexible with leverage targets [99][100] - The company is confident in its ability to generate cash flow to support debt reduction and future growth initiatives [86][87]

Part I [Business](index=17&type=section&id=Item%201.%20Business) Bausch Health is a global healthcare company focused on eye-health, GI, and dermatology, pursuing strategic separations of Bausch + Lomb and Solta Medical to unlock value - The company plans to separate its **Bausch + Lomb** eye-health business and conduct an **IPO for Solta Medical** to create three distinct public entities, aiming to unlock value by H1 2022[33](index=33&type=chunk)[64](index=64&type=chunk)[425](index=425&type=chunk) Revenues by Segment (2019-2021) | Segment | 2021 Revenue (in millions) | 2021 Pct. | 2020 Revenue (in millions) | 2020 Pct. | 2019 Revenue (in millions) | 2019 Pct. | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Bausch + Lomb | $3,765 | 45% | $3,415 | 42% | $3,778 | 44% | | Salix | $2,074 | 24% | $1,904 | 24% | $2,022 | 23% | | International Rx | $1,166 | 14% | $1,181 | 15% | $1,154 | 13% | | Ortho Dermatologics | $564 | 7% | $548 | 7% | $560 | 7% | | Diversified Products | $865 | 10% | $979 | 12% | $1,087 | 13% | | **Total Revenues** | **$8,434** | **100%** | **$8,027** | **100%** | **$8,601** | **100%** | - The business strategy focuses on durable products in core therapeutic areas, expanding geographic reach, and refreshing its pipeline through R&D and strategic acquisitions[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - The three largest customers, AmerisourceBergen, McKesson, and Cardinal Health, accounted for **18%**, **16%**, and **12%** of total revenue in 2021, respectively, indicating significant customer concentration[111](index=111&type=chunk) [Segment Information](index=19&type=section&id=Segment%20Information) The company operates five reportable segments, with Bausch + Lomb and Salix being the largest, and plans a segment structure change for the Solta IPO - The **Bausch + Lomb** segment, a fully integrated eye-health business, accounted for **45% of total company revenues in 2021**[46](index=46&type=chunk)[48](index=48&type=chunk) - The **Salix** segment, focused on U.S. GI products, saw its key product **Xifaxan® generate $1.644 billion in 2021**, an **11% increase** from 2020[56](index=56&type=chunk)[59](index=59&type=chunk) - The **Ortho Dermatologics** segment includes the **Solta medical aesthetics business**, planned for an IPO, with global Solta revenues growing to **$308 million in 2021** from $253 million in 2020[61](index=61&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - The company plans to change its segment structure in Q1 2022, moving the medical dermatology unit to Diversified Products and making Solta a standalone segment, to align with the proposed Solta IPO[74](index=74&type=chunk) [Research and Development](index=33&type=section&id=Research%20and%20Development) The company's R&D efforts focus on advancing core business programs, with approximately 200 projects in its pipeline and stable R&D expenses at 6% of revenue R&D Expenses (2019-2021) | Year | R&D Expense (in millions) | R&D as % of Revenue | | :--- | :--- | :--- | | 2021 | $465 | ~6% | | 2020 | $452 | ~6% | | 2019 | $471 | ~5% | [Intellectual Property and Government Regulations](index=33&type=section&id=Intellectual%20Property%20and%20Government%20Regulations) The company protects its products through patents, trademarks, and regulatory exclusivity, operating under extensive global government regulations covering R&D, manufacturing, marketing, and data privacy - The company relies on patents, trademarks, and regulatory data exclusivity, including **five years** under Hatch-Waxman and **12 years** under BPCIA for biologics, to protect its products[79](index=79&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) - Products and facilities are extensively regulated by global authorities like the FDA, Health Canada, and EMA, with non-compliance potentially leading to significant penalties, product recalls, or approval withdrawals[89](index=89&type=chunk)[90](index=90&type=chunk)[93](index=93&type=chunk) - The company is subject to complex global data privacy laws, including **HIPAA**, **GDPR**, and **PIPEDA**, governing sensitive health information and imposing strict non-compliance penalties[98](index=98&type=chunk)[101](index=101&type=chunk) [Competition and Manufacturing](index=45&type=section&id=Competition%20and%20Manufacturing) Operating in a highly competitive industry, the company faces generic competition, manages 36 manufacturing sites, relies on third-party production, and navigates single-source supply chain risks - The company faces intense competition from generic manufacturers upon patent or regulatory exclusivity expiry, leading to significant price reductions and market share loss for branded products[115](index=115&type=chunk) - The company operates approximately **36 manufacturing sites** globally and subcontracts about **20% of its product sales** to third-party manufacturers[118](index=118&type=chunk)[120](index=120&type=chunk) - Several significant products, including Siliq®, Duobrii®, Trulance®, Vyzulta®, and Xenazine®, rely on a single source for finished product or active pharmaceutical ingredients, posing a supply chain risk[121](index=121&type=chunk) [Human Capital Resources](index=47&type=section&id=Human%20Capital%20Resources) As of year-end 2021, Bausch Health employed approximately 19,600 people globally, prioritizing employee health, safety, diversity, inclusion, and talent development - As of year-end 2021, the company employed approximately **19,600 people globally**, with **7,380 in the U.S. and Canada**[123](index=123&type=chunk) - The company prioritizes employee health and safety, reporting a Days Away Rate (DAR) of **6 days per 100 employees in 2021**, significantly better than the industry average of 24[128](index=128&type=chunk) - Bausch Health has a formal **Diversity, Equity & Inclusion (DE&I) strategy** overseen by an executive council, supporting Employee Resource Groups (ERGs) to foster an inclusive environment[130](index=130&type=chunk)[132](index=132&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from planned business separations, ongoing legal proceedings, substantial debt, potential tax reforms, generic competition, supply chain issues, and IT system breaches - The planned separation of **Bausch + Lomb** and the **Solta IPO** are subject to significant risks, including transaction failure, unachieved benefits, business disruption, and adverse tax consequences[165](index=165&type=chunk)[178](index=178&type=chunk) - The company is subject to ongoing legal proceedings and investigations regarding historical practices, potentially resulting in material liabilities and reputational harm[190](index=190&type=chunk)[191](index=191&type=chunk) - Substantial debt with restrictive covenants poses a risk; non-compliance or insufficient cash flow could trigger defaults and debt acceleration, materially harming the business[209](index=209&type=chunk)[215](index=215&type=chunk) - Expiration or loss of patent protection for key revenue-generating products could lead to intense generic competition and materially adverse effects on sales and financial results[240](index=240&type=chunk)[241](index=241&type=chunk) [Properties](index=123&type=section&id=Item%202.%20Properties) Bausch Health owns and leases numerous global properties, including its Quebec headquarters and approximately 36 manufacturing sites, totaling about 10 million square feet Principal Properties | Location | Purpose | Owned/Leased | Approx. Square Footage | | :--- | :--- | :--- | :--- | | Laval, Quebec, Canada | Corporate HQ, R&D, manufacturing | Owned | 338,000 | | Bridgewater, New Jersey | Administration | Leased | 310,000 | | Rochester, New York | Offices, R&D, manufacturing | Owned | 953,000 | | San Juan del Rio, Mexico | Offices, manufacturing | Owned | 853,000 | | Waterford, Ireland | R&D, manufacturing | Owned | 500,000 | Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=126&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Bausch Health's common shares trade on the NYSE and TSX, with no dividends paid or planned due to debt restrictions, and the stock has underperformed benchmarks over five years - The company's common shares are traded on the **NYSE** and **TSX** under the symbol 'BHC'[387](index=387&type=chunk) - No dividends were paid from 2019-2021, and the company does not intend to pay cash dividends, partly due to debt covenant restrictions[394](index=394&type=chunk) Five-Year Cumulative Total Return on $100 Investment | Group | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Bausch Health Companies Inc. | $100 | $143 | $127 | $206 | $143 | $190 | | S&P 500 | $100 | $122 | $116 | $153 | $181 | $233 | | S&P/TSX Composite | $100 | $109 | $99 | $122 | $129 | $161 | | 2022 Peer Group | $100 | $114 | $116 | $144 | $165 | $200 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=133&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue increased 5% to $8.43 billion in 2021, but operating income decreased due to goodwill impairment and higher SG&A, as the company pursues strategic separations and debt reduction Financial Performance Highlights (2019-2021) | Metric (in millions, except per share) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Revenues | $8,434 | $8,027 | $8,601 | | Operating income (loss) | $450 | $676 | $(203) | | Net loss attributable to BHC | $(948) | $(560) | $(1,788) | | Diluted Loss per share | $(2.64) | $(1.58) | $(5.08) | - Revenue for 2021 increased by **5% to $8.434 billion** from $8.027 billion in 2020, driven by volume recovery from the COVID-19 pandemic, partially offset by divestitures and lower net pricing[536](index=536&type=chunk) - Operating income decreased by **$226 million to $450 million in 2021**, largely due to a **$469 million goodwill impairment** in Ortho Dermatologics and a **$257 million increase in SG&A expenses**[537](index=537&type=chunk) - The company has repaid approximately **$10 billion in net debt** from January 1, 2016, through December 31, 2021, utilizing divestiture proceeds and cash from operations[435](index=435&type=chunk)[477](index=477&type=chunk) [Overview of Strategy and Business Trends](index=133&type=section&id=Overview%20of%20Strategy%20and%20Business%20Trends) The core strategy focuses on unlocking value through Bausch + Lomb and Solta separations, supported by divestitures, core business investments, capital structure improvement, and legacy litigation resolution - The primary strategic focus is the separation of **Bausch + Lomb** and the **IPO of Solta Medical** to create three separate, well-capitalized companies, with proceeds intended for debt repayment[423](index=423&type=chunk)[426](index=426&type=chunk) - In 2021, the company sold **Amoun Pharmaceutical for approximately $740 million**, using net proceeds to repay **$600 million of Term Loan B facilities**[436](index=436&type=chunk)[437](index=437&type=chunk) - The company is managing upcoming loss of exclusivity (LOE) for several products between 2022-2026 and is actively engaged in patent litigation to defend key products like Xifaxan®, Bryhali®, and Duobrii®[524](index=524&type=chunk) - The company is monitoring potential tax law changes, including proposed U.S. tax reforms and the **OECD's global minimum corporate tax rate of 15%**, which could materially affect its effective tax rate[505](index=505&type=chunk)[508](index=508&type=chunk) [Results of Operations](index=175&type=section&id=Results%20of%20Operations) In 2021, total revenues increased 5% to $8.43 billion, but operating income decreased to $450 million due to a $469 million goodwill impairment and higher SG&A expenses - Provisions to reduce gross product sales increased to **39.4% of gross sales in 2021** from 38.9% in 2020, primarily due to higher rebate rates on key branded products like Xifaxan®[556](index=556&type=chunk)[557](index=557&type=chunk) - SG&A expenses increased by **$257 million (11%) in 2021**, driven by the absence of 2020's cost controls and **$111 million in separation-related costs**[565](index=565&type=chunk) - A **$469 million goodwill impairment** was recognized in Q1 2021 for the Ortho Dermatologics reporting unit due to revised long-term forecasts reflecting slower product launches and insurance coverage pressures[574](index=574&type=chunk)[575](index=575&type=chunk) - The benefit from income taxes decreased to **$87 million in 2021** from $375 million in 2020, primarily due to a smaller release of the valuation allowance against deferred tax assets in 2021[596](index=596&type=chunk) [Reportable Segment Revenues and Profits](index=188&type=section&id=Reportable%20Segment%20Revenues%20and%20Profits) In 2021, most segments saw revenue growth, with Bausch + Lomb up 10% to $3.77 billion and Salix up 9% to $2.07 billion, while Diversified Products declined due to generic competition Segment Performance (2021 vs. 2020) | Segment | 2021 Revenue (in millions) | YoY Change | 2021 Segment Profit (in millions) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Bausch + Lomb | $3,765 | +10% | $958 | +5% | | Salix | $2,074 | +9% | $1,493 | +12% | | International Rx | $1,166 | -1% | $403 | +4% | | Ortho Dermatologics | $564 | +3% | $265 | +16% | | Diversified Products | $865 | -12% | $624 | -13% | | **Total** | **$8,434** | **+5%** | **$3,743** | **+5%** | - On an organic (non-GAAP) basis, total company revenue grew **6% in 2021**, with the International Rx segment showing **7% organic growth** despite a 1% reported decline[614](index=614&type=chunk) - The **Salix segment's profit margin improved to 72% in 2021** from 70% in 2020, driven by higher revenue and lower third-party royalties[607](index=607&type=chunk)[620](index=620&type=chunk) - The **Diversified Products segment's revenue declined 12%**, primarily due to a **$72 million decrease in volume** from generic competition for products like Migranal® and Xenazine®[628](index=628&type=chunk) [Liquidity and Capital Resources](index=197&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is driven by cash, operating cash flow, and credit facilities; net cash from operations increased to $1.43 billion in 2021, while total debt decreased to $22.9 billion, with further financing actions taken in early 2022 Summarized Cash Flow (2020-2021) | (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,426 | $1,111 | | Net cash provided by (used in) investing activities | $409 | $(261) | | Net cash used in financing activities | $(1,513) | $(2,294) | | Net increase (decrease) in Cash | $303 | $(1,428) | - As of December 31, 2021, total contractual debt principal was **$22.9 billion**, a decrease from $24.2 billion at year-end 2020[643](index=643&type=chunk) - In early 2022, the company initiated financing transactions to facilitate the **B+L Separation**, including issuing **$1 billion of 6.125% Senior Secured Notes due 2027** and announcing a credit agreement refinancing[671](index=671&type=chunk)[672](index=672&type=chunk)[674](index=674&type=chunk) [Critical Accounting Policies and Estimates](index=213&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statements rely on critical accounting policies and estimates, including revenue recognition, goodwill impairment, loss contingencies from legal proceedings, and income tax provisions - Revenue recognition requires significant estimates for variable consideration, such as returns, rebates, and chargebacks, based on historical data, inventory levels, and contractual terms[705](index=705&type=chunk)[873](index=873&type=chunk) - Goodwill is tested for impairment annually or upon triggering events, with fair value estimated using a discounted cash flow model based on assumptions about growth rates, profits, and discount rates[715](index=715&type=chunk)[716](index=716&type=chunk) - The company accrues for loss contingencies from legal matters when a loss is probable and reasonably estimable, involving significant judgment about future events and outcomes[731](index=731&type=chunk) - Income tax provisions are based on estimates of taxable income and the realizability of deferred tax assets, with a valuation allowance established if realization is not more likely than not[733](index=733&type=chunk)[735](index=735&type=chunk) [Financial Statements and Supplementary Data](index=233&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2021, including balance sheets, income statements, cash flows, and detailed accompanying notes [Notes to Consolidated Financial Statements](index=260&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide critical details supporting financial statements, including planned B+L and Solta separations, acquisitions, divestitures, $22.9 billion debt, legal proceedings, and segment performance - Note 2 outlines the planned separation of the **Bausch + Lomb** business and the **Solta Medical IPO**, confirming these transactions are not yet reflected in the financial statements[825](index=825&type=chunk) - Note 8 details the **$469 million goodwill impairment charge** for the Ortho Dermatologics reporting unit in Q1 2021, resulting from revised long-term forecasts due to slower product launches and market pressures[980](index=980&type=chunk) - Note 10 provides a detailed breakdown of the company's **$22.9 billion in long-term debt obligations** as of December 31, 2021, including credit facilities and various senior notes[993](index=993&type=chunk) - Note 20 describes significant legal proceedings, including the **$1.21 billion settlement of the U.S. Securities Litigation** (subject to appeal), ongoing opt-out lawsuits, and various antitrust litigations[1133](index=1133&type=chunk)[1138](index=1138&type=chunk) [Controls and Procedures](index=233&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective as of December 31, 2021**[754](index=754&type=chunk) - Management concluded that the company maintained **effective internal control over financial reporting** as of December 31, 2021, based on the COSO framework[759](index=759&type=chunk) - The independent auditor, PricewaterhouseCoopers LLP, issued an **unqualified opinion on the effectiveness of internal control over financial reporting** as of December 31, 2021[760](index=760&type=chunk)[795](index=795&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Executive Compensation, and Other Matters](index=236&type=section&id=Items%2010-14) Information for Items 10-14, covering directors, executive officers, corporate governance, executive compensation, and related matters, is incorporated by reference from the 2022 proxy statement - Information regarding directors, executive officers, corporate governance, executive compensation, security ownership, and principal accounting fees is incorporated by reference from the registrant's **2022 proxy statement**[766](index=766&type=chunk)[768](index=768&type=chunk)[769](index=769&type=chunk)[770](index=770&type=chunk)[771](index=771&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=237&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including consolidated financial statements, a comprehensive index of exhibits, and CEO/CFO certifications - This section contains the index to the consolidated financial statements and a list of all exhibits filed with the **Form 10-K**[776](index=776&type=chunk)[777](index=777&type=chunk)

J.P. Morgan Healthcare Conference January 11, 2022 BAUSCH- Health Forward-Looking Statements 2 This presentation contains forward-looking information and statements, within the meaning of applicable securities laws (collectively, "forward-looking statements"), including, but not limited to, statements related to expected 2022 catalysts (including debt paydown and future innovation), and statements relating to the Company's plan to spin off or separate its eye health business from the remainder of Bausch Hea ...

Summary of Bausch Health Companies, Inc. Conference Call Company Overview - **Company**: Bausch Health Companies, Inc. (NYSE: BHC) - **Event**: 40th Annual J.P. Morgan Healthcare Conference - **Date**: January 12, 2022 Key Points Company Separation and IPO Plans - Bausch Health is progressing towards separating into three public companies: Bausch + Lomb, Solta, and Bausch Pharma [4][6] - The company is substantially complete in planning for the IPOs of Bausch + Lomb and Solta, with readiness to launch when market conditions are favorable [4][5] - The next step involves announcing the public filing of the S-1 for Bausch + Lomb [5] Market Conditions and IPO Order - The order of the IPOs (Solta first or Bausch + Lomb) is flexible and will depend on market conditions [7] - Both businesses operate in different markets: medical aesthetics for Solta and eye health for Bausch + Lomb [7] Leverage Targets - Bausch Pharma aims for leverage targets of 6.5x to 6.75x, while Bausch + Lomb targets approximately 2.5x [9] - Proceeds from the IPOs will be used to pay down Bausch Pharma's debt [9] Divestments and Shareholder Value - Since 2016, Bausch Health has executed about $4 billion in divestments and reduced debt by approximately $10 billion [13] - The company remains open to divestitures that can enhance shareholder value [13][15] Guidance and Transparency - Guidance for 2022 will be reviewed at the end of February, with transparency provided for each of the three businesses [18] Bausch Pharma Business Insights - XIFAXAN is a key product for Bausch Pharma, showing a 6% prescription growth and approximately 12% revenue growth in Q3 [20] - The international business contributes nearly one-third of Bausch Pharma's revenue [20] - Bausch Pharma has a 57% profit margin and can deleverage approximately 0.75 turns per year [21] Intellectual Property and Legal Matters - Bausch Health is confident in the intellectual property surrounding XIFAXAN, with 26 patents and settlements with major generic companies [25] - Ongoing litigation with Alvogen is not expected to impact the IPO process [27] R&D Pipeline - Bausch Pharma is focusing on new formulations of rifaximin, with several clinical trials underway, including for sickle cell anemia and cirrhosis complications [29][30] - Amiselimod is another promising product in development for inflammatory bowel disease [32] Solta Business Performance - Solta reported a 27% organic revenue growth year-to-date, despite challenges in Q3 2020 [36] - The company is focused on expanding its product offerings, particularly with Thermage FLX and Clear + Brilliant Touch [40] Bausch + Lomb Business Insights - Bausch + Lomb is preparing for its IPO, with a strong product pipeline including INFUSE, which has seen significant growth [51][54] - The company is also launching XIPERE for treating macular edema, targeting a $600 million market opportunity [61] Future Investments and Growth - Each division will need to make capital allocation decisions to support growth, with a focus on new product launches [65][66] - The expectation is that new products will drive margin expansion over the long term [68] Timeline for Separation and Shareholder Distribution - The IPO for Bausch + Lomb is expected to involve 20% to 30% of the business, with a lockup period of three to six months post-IPO [70] - The remaining shares will be unlocked for distribution to shareholders after reducing Bausch Pharma's debt to the targeted leverage ratio [70] Additional Insights - The company is optimistic about recovering from COVID-19 impacts, with pent-up demand expected to drive future growth [58] - Bausch Health is committed to creating three strong companies, each with its own growth strategy and market focus [65]

Credit Suisse Healthcare Conference November 10, 2021 BAUSCH- Health Forward-Looking Statements 1 This presentation contains forward-looking information and statements, within the meaning of applicable securities laws (collectively, "forward-looking statements"), including, but not limited to, the Company's plan to spin off or separate its eye health business from the remainder of Bausch Health, including the timing of the initial public offering and spinoff (including the Company's expectation that an IPO ...