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Bausch Health(BHC) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (unaudited) Presents Bausch Health's unaudited condensed consolidated financial statements for Q2 2025, including core financial statements and detailed notes Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (in millions) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,727 | $1,181 | | Trade receivables, net | $2,210 | $2,140 | | Inventories, net | $1,655 | $1,595 | | Total current assets | $6,514 | $5,774 | | Property, plant and equipment, net | $1,994 | $1,780 | | Intangible assets, net | $5,047 | $5,551 | | Goodwill | $11,298 | $11,087 | | Total assets | $27,266 | $26,523 | | Liabilities | | | | Current portion of long-term debt | $879 | $2,674 | | Total current liabilities | $4,975 | $6,752 | | Non-current portion of long-term debt | $20,859 | $18,942 | | Total liabilities | $27,119 | $26,845 | | Equity (Deficit) | | | | Total equity (deficit) | $147 | $(322) | - Total assets increased by $743 million (2.8%) from $26,523 million at December 31, 2024, to $27,266 million at June 30, 202515 - Total equity (deficit) improved significantly from a deficit of $322 million at December 31, 2024, to a positive $147 million at June 30, 202515 Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations (in millions, except per share amounts) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $2,530 | $2,403 | $4,789 | $4,556 | | Operating income | $444 | $389 | $720 | $670 | | Income (loss) before income taxes | $140 | $48 | $93 | $(21) | | Net income (loss) attributable to Bausch Health Companies Inc. | $148 | $10 | $90 | $(54) | | Basic EPS | $0.40 | $0.03 | $0.24 | $(0.15) | | Diluted EPS | $0.40 | $0.03 | $0.24 | $(0.15) | - Revenues for the three months ended June 30, 2025, increased by $127 million (5%) to $2,530 million compared to $2,403 million in the prior year17 - Net income attributable to Bausch Health Companies Inc. for the three months ended June 30, 2025, was $148 million, a significant increase from $10 million in the prior year period17 Condensed Consolidated Statements of Comprehensive Income (Loss) Condensed Consolidated Statements of Comprehensive Income (Loss) (in millions) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $128 | $(1) | $42 | $(78) | | Other comprehensive income (loss) | $225 | $(84) | $366 | $(118) | | Comprehensive income (loss) | $353 | $(85) | $408 | $(196) | | Comprehensive income (loss) attributable to Bausch Health Companies Inc. | $387 | $(80) | $479 | $(180) | - Comprehensive income attributable to Bausch Health Companies Inc. for the three months ended June 30, 2025, was $387 million, a significant improvement from a loss of $80 million in the prior year18 - The positive change in comprehensive income was largely driven by a foreign currency translation adjustment of $225 million for the three months ended June 30, 2025, compared to a loss of $84 million in the prior year18 Condensed Consolidated Statements of Shareholders' Equity (Deficit) Condensed Consolidated Statements of Shareholders' Equity (Deficit) (in millions) | | Balances, January 1, 2025 | Balances, June 30, 2025 | | :--- | :--- | :--- | | Common Shares | $10,490 | $10,510 | | Additional Paid-In Capital | $234 | $250 | | Accumulated Deficit | $(9,824) | $(9,734) | | Accumulated Other Comprehensive Loss | $(2,179) | $(1,790) | | Total Bausch Health Companies Inc. Shareholders' Deficit | $(1,279) | $(764) | | Noncontrolling Interest | $957 | $911 | | Total Equity (Deficit) | $(322) | $147 | - Total Bausch Health Companies Inc. shareholders' deficit improved from $(1,279) million at January 1, 2025, to $(764) million at June 30, 202521 - The improvement was primarily driven by net income of $90 million and other comprehensive income of $389 million for the six months ended June 30, 202521 Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (in millions) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $500 | $591 | | Net cash used in investing activities | $(230) | $(152) | | Net cash provided by (used in) financing activities | $212 | $(764) | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | $60 | $(14) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $542 | $(339) | | Cash, cash equivalents and restricted cash, end of period | $1,743 | $623 | - Net cash provided by operating activities decreased by $91 million to $500 million for the six months ended June 30, 2025, from $591 million in the prior year24 - Net cash provided by financing activities was $212 million for the six months ended June 30, 2025, a significant turnaround from $764 million used in the prior year, primarily due to debt issuance and repayments24 Notes to the Condensed Consolidated Financial Statements Description of Business - Bausch Health is a global, diversified specialty pharmaceutical and medical device company with therapeutic areas including GI, hepatology, neurology, dermatology, and eye health (via 88% ownership of Bausch + Lomb)25 Significant Accounting Policies - Financial statements are prepared in U.S. dollars under U.S. GAAP for interim reporting, consistent with annual policies26 - The company is evaluating the impact of ASU 2024-03 (Expense Disaggregation, effective 2027/2028) and ASU 2023-09 (Income Tax Disclosures, effective 2025) on its financial statements3536 Revenue Recognition - Revenues are primarily from product sales (branded, generic, OTC, medical devices) in GI, hepatology, neurology, dermatology, and eye health37 - Gross product sales are adjusted for variable consideration (discounts, allowances, returns, rebates, chargebacks, distribution fees), with provisions established based on best estimates and continually monitored383940 Variable Consideration Provisions Activity (Six Months Ended June 30, 2025 vs. 2024) | (in millions) | Discounts and Allowances 2025 | Discounts and Allowances 2024 | Returns 2025 | Returns 2024 | Rebates 2025 | Rebates 2024 | Chargebacks 2025 | Chargebacks 2024 | Distribution Fees 2025 | Distribution Fees 2024 | Total 2025 | Total 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Reserve balances, January 1 | $170 | $191 | $372 | $380 | $1,421 | $1,108 | $189 | $216 | $85 | $44 | $2,237 | $1,939 | | Current period provisions | 348 | 325 | 68 | 89 | 2,072 | 1,802 | 887 | 1,002 | 160 | 147 | 3,535 | 3,365 | | Payments and credits | (356) | (339) | (74) | (79) | (2,087) | (1,607) | (912) | (1,039) | (160) | (108) | (3,589) | (3,172) | | Reserve balances, June 30 | $162 | $177 | $366 | $390 | $1,406 | $1,303 | $164 | $179 | $85 | $83 | $2,183 | $2,132 | Licensing Agreements and Acquisitions - Company agreed to acquire DURECT Corporation for approximately $63 million upfront plus potential milestones up to $350 million, targeting Larsucosterol for alcohol-associated hepatitis48 - Bausch + Lomb acquired Whitecap Biosciences for $28 million to expand its clinical-stage pipeline in glaucoma and geographic atrophy49 - Bausch + Lomb acquired Elios Vision for $99 million cash and potential milestones, adding the ELIOS procedure for glaucoma treatment50 Restructuring, Integration and Separation Costs - Restructuring and integration costs increased to $32 million for the six months ended June 30, 2025, from $23 million in 202453 - Separation-related costs for the B+L Separation, including rebranding and facility relocation, were $7 million for the six months ended June 30, 2025, included in SG&A55 Fair Value Measurements Assets and Liabilities Measured at Fair Value (June 30, 2025 vs. December 31, 2024) | (in millions) | June 30, 2025 Total | June 30, 2025 Level 1 | June 30, 2025 Level 2 | June 30, 2025 Level 3 | December 31, 2024 Total | December 31, 2024 Level 1 | December 31, 2024 Level 2 | December 31, 2024 Level 3 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Assets: | | | | | | | | | | Cash equivalents | $984 | $980 | $4 | $— | $567 | $557 | $10 | $— | | Restricted cash | $16 | $16 | $— | $— | $20 | $20 | $— | $— | | Cross-currency swaps | $6 | $— | $6 | $— | $6 | $— | $6 | $— | | Foreign currency exchange contracts | $4 | $— | $4 | $— | $10 | $— | $10 | $— | | Liabilities: | | | | | | | | | | Acquisition-related contingent consideration | $303 | $— | $— | $303 | $359 | $— | $— | $359 | | Cross-currency swaps | $168 | $— | $168 | $— | $40 | $— | $40 | $— | | Foreign currency exchange contracts | $8 | $— | $8 | $— | $5 | $— | $5 | $— | - Fair value of long-term debt was $19,738 million as of June 30, 2025, estimated using Level 2 quoted market prices68 Inventories Inventories, Net (June 30, 2025 vs. December 31, 2024) | (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $538 | $540 | | Work in process | $96 | $108 | | Finished goods | $1,021 | $947 | | Total | $1,655 | $1,595 | Intangible Assets and Goodwill Intangible Assets, Net (June 30, 2025 vs. December 31, 2024) | (in millions) | June 30, 2025 Net | December 31, 2024 Net | | :--- | :--- | :--- | | Product brands | $2,962 | $3,420 | | Corporate brands | $252 | $287 | | Product rights/patents | $21 | $31 | | Partner relationships, technology and other | $14 | $15 | | Acquired in-process research and development | $100 | $100 | | B&L Trademark | $1,698 | $1,698 | | Total Intangible Assets, Net | $5,047 | $5,551 | Goodwill by Segment (June 30, 2025 vs. December 31, 2024) | (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Salix | $3,159 | $3,159 | | International | $892 | $792 | | Solta Medical | $115 | $115 | | Diversified | $1,726 | $1,759 | | Bausch + Lomb | $5,406 | $5,262 | | Total Goodwill | $11,298 | $11,087 | - No goodwill impairment was recorded for the six months ended June 30, 2025, as the fair value of Bausch + Lomb reporting units exceeded carrying value by over 25% after quantitative testing75 Accrued and Other Current Liabilities Accrued and Other Current Liabilities (June 30, 2025 vs. December 31, 2024) | (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Product rebates | $1,362 | $1,385 | | Product returns | $366 | $372 | | Legal matters and related fees | $232 | $332 | | Employee compensation and benefit costs | $331 | $348 | | Interest | $279 | $217 | | Income taxes payable | $104 | $63 | | Other | $795 | $772 | | Total | $3,469 | $3,489 | Financing Arrangements Principal Amounts of Debt Obligations (June 30, 2025 vs. December 31, 2024) | (in millions) | June 30, 2025 Principal Amount | December 31, 2024 Principal Amount | | :--- | :--- | :--- | | Senior Secured Credit Facilities | $5,816 | $5,521 | | Senior Secured Notes | $8,126 | $5,606 | | B+L Senior Secured Notes | $2,196 | $1,400 | | Senior Unsecured Notes | $4,266 | $4,279 | | Other | $12 | $12 | | Total long-term debt and other | $21,150 | $20,480 | | Less: Current portion of long-term debt | $879 | $2,674 | | Non-current portion of long-term debt and other | $20,859 | $18,942 | - April 2025 Refinancing Transactions extended approximately $6,870 million in aggregate debt maturities from 2025-2028 to 2030-2032277 - Company recognized a net gain of $191 million on extinguishment of debt from April 2025 Refinancing Transactions and a loss of $13 million from B+L June 2025 Refinancing Activity149 Share-Based Compensation Share-Based Compensation Expenses (Six Months Ended June 30, 2025 vs. 2024) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Stock options | $8 | $6 | | RSUs | $81 | $63 | | Total | $89 | $69 | | Research and development expenses | $7 | $5 | | Selling, general and administrative expenses | $82 | $64 | | Total | $89 | $69 | - Approximately 24,832,000 common shares were available for future grants under Bausch Health's 2014 Plan as of June 30, 2025157 - Approximately 12,900,000 Bausch + Lomb common shares were available for future grants under the B+L Plan as of June 30, 2025162 Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss (June 30, 2025 vs. December 31, 2024) | (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Foreign currency translation adjustment | $(1,773) | $(2,162) | | Pension adjustment, net of tax | $(17) | $(17) | | Total | $(1,790) | $(2,179) | Research and Development Research and Development Costs (Six Months Ended June 30, 2025 vs. 2024) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Product related research and development | $293 | $299 | | Quality assurance | $9 | $8 | | Total | $302 | $307 | Other (Income) Expense, Net Other (Income) Expense, Net (Six Months Ended June 30, 2025 vs. 2024) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Acquired in-process research and development costs | $29 | $3 | | Acquisition-related transaction costs | $3 | $1 | | Litigation and other matters, net of insurance recoveries and restitutions | $5 | $27 | | Acquisition-related contingent consideration | $(40) | $(6) | | Gain on sale of assets, net | $— | $(5) | | Total | $(3) | $20 | - Acquired in-process R&D costs for H1 2025 primarily relate to Bausch + Lomb's acquisition of Whitecap Biosciences168 - Litigation and other matters for H1 2025 include restitution received, while H1 2024 primarily related to provisions for legal matters170 Income Taxes - Provision for income taxes for H1 2025 was $51 million, including a $51 million net income tax benefit for discrete items (e.g., $36 million from IRS settlement for 2017 capital loss, $19 million from uncertain tax positions)172 - Valuation allowance against deferred tax assets was approximately $2,368 million as of June 30, 2025, up from $2,284 million at December 31, 2024174 - Unrecognized tax benefits totaled $951 million as of June 30, 2025, with $401 million potentially reducing the effective tax rate if recognized175 Earnings (Loss) Per Share Earnings (Loss) Per Share (Three and Six Months Ended June 30, 2025 vs. 2024) | (in millions, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Bausch Health Companies Inc. | $148 | $10 | $90 | $(54) | | Basic weighted-average common shares outstanding | 370.9 | 367.9 | 370.3 | 367.4 | | Diluted effect of stock options and RSUs | 2.2 | 2.3 | 3.2 | — | | Diluted weighted-average common shares outstanding | $373.1 | $370.2 | $373.5 | $367.4 | | Earnings (loss) per share attributable to Bausch Health Companies Inc. | | | | | | Basic | $0.40 | $0.03 | $0.24 | $(0.15) | | Diluted | $0.40 | $0.03 | $0.24 | $(0.15) | Shareholder Rights Plan - A Shareholder Rights Plan (SRP) was adopted on April 14, 2025, to ensure fair treatment in acquisition offers, triggered at 20% ownership188 - The SRP is subject to shareholder ratification by October 7, 2025; otherwise, it will terminate188 Legal Proceedings - Accrued current loss contingencies related to legal matters totaled $232 million as of June 30, 2025190 - Ongoing Xifaxan Generics Litigation involves multiple generic manufacturers (Norwich, Amneal, Zydus, Cipla, Mylan, SABA, Alkem) challenging Xifaxan 550 mg patents, with the Norwich First ANDA enjoined until October 2029217219220 - Settlements were reached in the Carnegie Xifaxan Litigation and Mylan Trulance Paragraph IV Proceedings, leading to dismissals in June and May 2025, respectively249250 Segment Information - Company's reportable segments are Salix, International, Solta Medical, Diversified, and Bausch + Lomb258 Segment Revenues (Three Months Ended June 30, 2025 vs. 2024) | (in millions) | 2025 Amount | 2025 Pct. | 2024 Amount | 2024 Pct. | Change Amount | Change Pct. | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Salix | $627 | 25 % | $558 | 23 % | $69 | 12 % | | International | $278 | 11 % | $276 | 11 % | $2 | 1 % | | Solta Medical | $128 | 5 % | $102 | 4 % | $26 | 25 % | | Diversified | $219 | 9 % | $251 | 10 % | $(32) | (13)% | | Bausch + Lomb | $1,278 | 50 % | $1,216 | 52 % | $62 | 5 % | | Total revenues | $2,530 | 100 % | $2,403 | 100 % | $127 | 5 % | Segment Profits (Three Months Ended June 30, 2025 vs. 2024) | (in millions) | 2025 Amount | 2025 Pct. | 2024 Amount | 2024 Pct. | Change Amount | Change Pct. | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Salix | $455 | 73 % | $377 | 68 % | $78 | 21 % | | International | $78 | 28 % | $86 | 31 % | $(8) | (9)% | | Solta Medical | $54 | 42 % | $47 | 46 % | $7 | 15 % | | Diversified | $139 | 63 % | $166 | 66 % | $(27) | (16)% | | Bausch + Lomb | $248 | 19 % | $274 | 23 % | $(26) | (9)% | | Total segment profits | $974 | 38 % | $950 | 40 % | $24 | 3 % | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes Bausch Health's financial performance, liquidity, capital resources, business trends, and strategic initiatives Introduction - The discussion covers financial condition and results of operations for the three and six months ended June 30, 2025 and 2024, prepared under U.S. GAAP and SEC rules261262 Overview - Bausch Health is a global, diversified specialty pharmaceutical and medical device company with five reportable segments: Salix, International, Solta Medical, Diversified, and Bausch + Lomb263264 - The company is pursuing the Bausch + Lomb separation to create two independent entities, aiming to maximize value and improve capital allocation, with Bausch Health retaining approximately 88% ownership of Bausch + Lomb as of July 23, 2025265266267 - Key strategic focuses include managing capital structure (e.g., April 2025 Refinancing Transactions extending $6.87 billion in debt maturities), directing capital to core business growth (R&D, strategic acquisitions like DURECT, Whitecap Biosciences, Elios Vision), improving patient access, and divesting non-core assets269277286 - Anticipates generic competition and loss of exclusivity (LOE) for branded products like Aplenzin (2026), Bryhali (2026), Relistor Subcutaneous (2028), Xifaxan (2028) in the U.S., and Jublia (2028) in Canada, actively managing risks through patent defense and pipeline development329331332 Financial Performance Highlights Selected Financial Information (Three and Six Months Ended June 30, 2025 vs. 2024) | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $2,530 | $2,403 | $127 | $4,789 | $4,556 | $233 | | Operating income | $444 | $389 | $55 | $720 | $670 | $50 | | Income (loss) before income taxes | $140 | $48 | $92 | $93 | $(21) | $114 | | Net income (loss) attributable to Bausch Health Companies Inc. | $148 | $10 | $138 | $90 | $(54) | $144 | | Earnings (loss) per share attributable to Bausch Health Companies Inc. | | | | | | | | Basic | $0.40 | $0.03 | $0.24 | $(0.15) | $0.39 | | Diluted | $0.40 | $0.03 | $0.37 | $0.24 | $(0.15) | $0.39 | - Three-month revenue increase of $127 million (5%) driven by higher volumes, improved net realized pricing, favorable foreign currencies, and acquisitions in Salix, Bausch + Lomb, and Solta Medical segments336337 - Six-month revenue increase of $233 million (5%) driven by higher volumes, improved net realized pricing, and acquisitions in Salix, Bausch + Lomb, and Solta Medical segments, partially offset by unfavorable foreign currencies340 Results of Operations Consolidated Statements of Operations (Three and Six Months Ended June 30, 2025 vs. 2024) | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $2,530 | $2,403 | $127 | $4,789 | $4,556 | $233 | | Cost of goods sold (excluding amortization and impairments of intangible assets) | $748 | $708 | $40 | $1,431 | $1,336 | $95 | | Selling, general and administrative | $894 | $832 | $62 | $1,761 | $1,626 | $135 | | Research and development | $159 | $156 | $3 | $302 | $307 | $(5) | | Amortization of intangible assets | $256 | $270 | $(14) | $512 | $544 | $(32) | | Asset impairments | $— | $5 | $(5) | $— | $6 | $(6) | | Restructuring, integration and separation costs | $31 | $12 | $19 | $32 | $24 | $8 | | Other (income) expense, net | $(18) | $20 | $(38) | $(3) | $20 | $(23) | | Operating income | $444 | $389 | $55 | $720 | $670 | $50 | | Interest income | $13 | $8 | $5 | $24 | $17 | $7 | | Interest expense | $(465) | $(350) | $(115) | $(795) | $(705) | $(90) | | Gain on extinguishment of debt | $178 | $12 | $166 | $178 | $23 | $155 | | Foreign exchange and other | $(30) | $(11) | $(19) | $(34) | $(26) | $(8) | | Income (loss) before income taxes | $140 | $48 | $92 | $93 | $(21) | $114 | | Provision for income taxes | $(12) | $(49) | $37 | $(51) | $(57) | $6 | | Net income (loss) | $128 | $(1) | $129 | $42 | $(78) | $120 | | Net loss attributable to noncontrolling interest | $20 | $11 | $9 | $48 | $24 | $24 | | Net income (loss) attributable to Bausch Health Companies Inc. | $148 | $10 | $138 | $90 | $(54) | $144 | - Revenues for Q2 2025 increased by $127 million (5%) to $2,530 million, driven by higher volumes ($77 million), improved net realized pricing ($21 million), favorable foreign currencies ($21 million), and acquisitions ($6 million)347 - SG&A expenses for Q2 2025 increased by $62 million (7%) to $894 million, primarily due to higher selling, advertising, and promotion expenses for MIEBO and increased compensation costs355 - Interest expense for Q2 2025 increased by $115 million (33%) to $465 million, mainly due to write-offs of premiums, discounts, and deferred issuance costs from April and B+L June 2025 Refinancing Activities, and higher effective interest rates366 Liquidity and Capital Resources Cash Flows (Six Months Ended June 30, 2025 vs. 2024) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $500 | $591 | $(91) | | Net cash used in investing activities | $(230) | $(152) | $(78) | | Net cash provided by (used in) financing activities | $212 | $(764) | $976 | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | $60 | $(14) | $74 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $542 | $(339) | $881 | | Cash, cash equivalents and restricted cash, beginning of period | $1,201 | $962 | $239 | | Cash, cash equivalents and restricted cash, end of period | $1,743 | $623 | $1,120 | - Net cash provided by operating activities decreased by $91 million to $500 million for H1 2025, primarily due to higher payments of accrued legal settlements437438 - Net cash provided by financing activities was $212 million for H1 2025, a significant increase from $764 million used in H1 2024, driven by $10,422 million in long-term debt issuance (April 2025 Refinancing and B+L June 2025 Refinancing) offset by $10,135 million in repayments441 - As of June 30, 2025, total debt obligations were $21,150 million. The company announced redemption of $602 million of 9.25% Senior Unsecured Notes due 2026 and repayment of $300 million AR Credit Facility in July 2025447 Off-Balance Sheet Arrangements and Contractual Obligations - No material off-balance sheet arrangements exist508 - Primary cash requirements for remainder of 2025 (July 1 - Dec 31, 2025): * Debt repayments and interest payments: ~$29 million maturities, ~$919 million interest payments (excluding announced July 28, 2025 redemptions) * Capital expenditures: ~$130 million for property, plant, and equipment * Acquisition of DURECT: ~$63 million upfront cash payment * Contingent consideration and milestone payments: ~$23 million514 - Future costs for the B+L Separation (legal, audit, advisory, rebranding, facility relocation) are expected to be material but cannot be reasonably estimated at this time510 Outstanding Share Data - As of July 25, 2025, 369,790,319 common shares were issued and outstanding519 - Outstanding equity awards as of July 25, 2025: * Stock options: 5,808,087 * Time-based restricted share units: 11,715,684 * Performance-based restricted share units: 3,804,224 (maximum 7,415,196 common shares issuable)519 Critical Accounting Policies and Estimates - No significant changes in critical accounting policies and estimates were identified during the three months ended June 30, 2025520 New Accounting Standards - No new accounting standards were adopted during the six months ended June 30, 2025521 Forward-Looking Statements - Forward-looking statements cover business strategy, product pipeline, financial forecasts, debt management, B+L separation, and potential impacts of IRA and Xifaxan drug price negotiation523 - Key risks include economic conditions, ongoing litigation (especially B+L IPO and Xifaxan Generics Litigation), regulatory scrutiny, generic competition, substantial debt, and geopolitical conflicts (Russia-Ukraine, Middle East)525526527 Item 3. Quantitative and Qualitative Disclosures About Market Risk Details Bausch Health's exposure to market risks, including interest rate and inflation risks on products and debt - As of June 30, 2025, the company had $14,238 million in fixed-rate debt and $6,912 million in variable-rate debt533 - A 100 basis-point increase in interest rates would have an annualized pre-tax effect of approximately $69 million on earnings and cash flows533 - Inflation risk exists due to price control restrictions on pharmaceutical products in several countries, limiting the ability to raise prices in anticipation of inflation535 Item 4. Controls and Procedures Management confirmed the effectiveness of Bausch Health's disclosure controls and procedures as of June 30, 2025, and reported no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were effective as of June 30, 2025, as evaluated by management, CEO, and CFO536 - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025537 PART II. OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 18 of the financial statements for detailed information on legal proceedings, indicating no new material updates beyond what is already disclosed there Item 1A. Risk Factors No new material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, were identified as of the date of this Form 10-Q Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds from such sales during the three months ended June 30, 2025 - No sales of equity securities by the Company occurred during the three months ended June 30, 2025541 Item 3. Defaults Upon Senior Securities There were no reported defaults upon senior securities during the reporting period - No defaults upon senior securities were reported542 Item 4. Mine Safety Disclosures This section indicates that there are no mine safety disclosures applicable to the company for the reporting period - No mine safety disclosures were reported543 Item 5. Other Information No other material information was reported in this section for the current period - No other information was reported544 Item 6. Exhibits This section lists all documents filed as exhibits to the Form 10-Q, including various certifications, indentures for debt, credit agreements, and the Shareholder Rights Plan Agreement, many of which are incorporated by reference - Key exhibits include: * Certifications of CEO and CFO (31.1, 31.2, 32.1, 32.2) * Indenture for 2032 Senior Secured Notes (4.1) * Shareholder Rights Plan Agreement (4.3) * Indenture for B+L January 2031 Senior Secured Notes (4.4) * Credit Agreement for 2025 Senior Secured Credit Facilities (10.1) * Bausch Health Companies Inc. 2025 Employee Stock Purchase Plan (10.2) * Third Amendment to B+L Credit and Guaranty Agreement (10.6)546547 Signatures The report is officially signed by the Chief Executive Officer and Chief Financial Officer, affirming its submission to the Securities and Exchange Commission - Report signed by Thomas J. Appio (CEO) and Jean-Jacques Charhon (EVP, CFO) on July 30, 2025549