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 ...

3Q 21 Financial Results BAUSCH- Health Forward-Looking Statements 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 2021 full-year guidance, expectations for adjusted cash generated from operations and ...

Financial Data and Key Metrics Changes - Total company revenue for Q3 2021 was $2.1 billion, down 1% on a reported basis and flat on an organic basis, with year-to-date revenue up 7% reported and 6% organically [16][11][10] - Adjusted EBITDA for the quarter was $885 million, down 9% on a constant currency basis from Q3 2020, with an adjusted EBITDA margin of 41.9% compared to 44.3% in Q3 2020 [34][32] - Cash generated from operations was $564 million on a GAAP basis, with adjusted cash generated from operations at $382 million for the quarter [36][11] Business Line Data and Key Metrics Changes - Bausch & Lomb segment revenue for Q3 was $949 million, up 3% organically, with Global Vision Care revenue at $226 million, up 6% organically [18][19] - Global Surgical business revenue was $173 million, up 13% organically, reflecting recovery in cataract and retina procedures [20] - Salix revenue was $527 million, up 6% from Q3 2020, driven by XIFAXAN, RELISTOR, and TRULANCE [23][26] - Global Consumer business revenue was $379 million, up 7% organically, with strong performance from LUMIFY and eye vitamins [21][46] - International Rx segment revenue was $271 million, down 1% organically, while Ortho Derm segment revenue was $140 million, down 3% organically [27][28] Market Data and Key Metrics Changes - International Vision Care growth was driven by key brands, with U.S. retail and e-commerce consumption up 4% from a year ago [19] - The U.S. experienced a 6% organic growth in the Global Surgical business, with international growth at 16% [20] - The long-term care market for XIFAXAN is recovering, with year-over-year growth now at 3% [80] Company Strategy and Development Direction - The company is pursuing strategic alternatives, including the proposed IPOs for Solta and Bausch & Lomb, aimed at unlocking shareholder value [8][60] - The company is focused on reducing debt, having repaid $1.1 billion in Q3 2021, with a net leverage of 6.4 times as of September 30, 2021 [38][39] - The company plans to launch XIPERE in Q1 2022 and anticipates filing an NDA for NOV03 in the first half of 2022 [54][53] Management's Comments on Operating Environment and Future Outlook - Management noted that recovery from COVID-19 is ongoing, with expectations for continued growth in Q4 and into 2022 [42][63] - The company is facing inflation and supply chain pressures, which may impact margins moving forward [43] - Management expressed confidence in the recovery trajectory and the potential for future growth driven by R&D advancements [55][90] Other Important Information - The company completed the sale of Amoun, its Egyptian pharma business, during the third quarter [15] - The company is contesting an IRS challenge related to a capital loss from a prior tax restructuring, with no tax liability expected [41] Q&A Session Summary Question: Can you provide insights on Solta's Q3 results and recovery in Southeast Asia and Europe? - Management indicated that Solta had a strong Q3 despite seasonal slowdowns, with year-to-date growth rates of 32% reported or 27% organic growth [67][68] Question: What is the timeline for the full separation of B&L post-IPO? - Management expects the full separation to occur within three to seven months after the IPO, subject to customary lockups and regulatory approvals [71][72] Question: How does the long-term care market impact XIFAXAN growth? - Management noted that the long-term care population is starting to regain, with XIFAXAN growth tracking at 3% year-over-year [80] Question: What are the growth drivers for Solta? - Management identified geographic expansion, portfolio expansion, and pipeline growth as key drivers for Solta's future growth [100] Question: How is the company managing R&D spend for Bausch Pharma? - Management emphasized a focus on profitable growth and ongoing investments in R&D for novel formulations and new indications [108][109]