Revenue and Financial Performance - Total revenues for 2023 were $8,757 million, an increase from $8,124 million in 2022 and $8,434 million in 2021[27]. - The Salix segment generated $2,250 million in revenue for 2023, maintaining a 26% share of total revenues, consistent with 2022[27]. - The Bausch + Lomb segment accounted for $4,146 million in revenue, representing 47% of total revenues, up from 46% in 2022[27]. - Xifaxan product revenues were $1,810 million in 2023, compared to $1,692 million in 2022 and $1,644 million in 2021[30]. - In 2023, the U.S. and Puerto Rico accounted for approximately 59% of total revenue, while China accounted for approximately 5%[78]. - Cencora Inc. accounted for 19% of total revenue in 2023, followed by McKesson Corporation at 15% and Cardinal Health, Inc. at 13%[79]. Research and Development - The company is focusing on R&D to enhance its product portfolio and is exploring co-promotions, licensing agreements, and strategic acquisitions[26]. - R&D expenses for 2023 were $604 million, representing approximately 7% of revenue, up from $529 million (7%) in 2022 and $465 million (6%) in 2021[45]. - The company has over 90 R&D projects in the pipeline, supported by approximately 1,450 dedicated R&D and quality assurance employees[44]. - CABTREO Topical Gel, a new acne treatment, received FDA approval and is set to launch in Q1 2024[39]. - MIEBO, the first FDA-approved eye drop targeting tear evaporation, was launched in the U.S. in Q3 2023[42]. Market and Competitive Landscape - The company faces increased competition from generic pharmaceutical products as patents expire, leading to potential price reductions[85]. - The company is impacted by global economic conditions, including inflation and foreign currency exchange volatility, which may affect revenues and expenses[704]. - The company is facing risks related to the introduction of generic competitors, particularly for its Xifaxan product line, which could significantly impact revenues[704]. Regulatory and Compliance - The company is subject to extensive regulations regarding the research, development, and marketing of its products, requiring substantial time and financial resources[50]. - Compliance with the U.S. Foreign Corrupt Practices Act and similar laws is mandatory, with violations potentially leading to significant penalties[58]. - The company is subject to various state, federal, and international laws regarding the processing of health-related and personal information, including HIPAA, which mandates uniform standards for electronic information exchange[59]. - The GDPR imposes strict obligations on the processing of personal data, with potential fines of up to 4% of global annual revenue or €20 million for violations[62]. - The company is subject to environmental regulations that could result in substantial fines or penalties if compliance is not maintained[76]. Operational Efficiency and Manufacturing - The company operates approximately 37 manufacturing sites worldwide, with 25 being Bausch + Lomb facilities[87]. - In 2023, 25% of product sales were produced in total or in part by third-party manufacturers[91]. - The company continues to invest in its manufacturing facilities to enhance operational capabilities[87]. Financial Obligations and Liabilities - As of December 31, 2023, the company had $15,108 million in fixed rate debt and $5,899 million in variable rate debt[642]. - A 1% change in foreign currency exchange rates would have impacted the shareholders' deficit by approximately $62 million[639]. - The company faces substantial debt obligations and potential future indebtedness, impacting its financial condition and cash flows[700]. - The company is subject to various loss contingencies, which may materially affect its financial condition and cash flows[687]. Goodwill and Impairment - The company recorded goodwill impairment charges of $493 million in 2023, $824 million in 2022, and $469 million in 2021[663]. - The carrying value of the Generics reporting unit exceeded its fair value as of October 1, 2023, leading to a recognized goodwill impairment[676]. - The Dermatology reporting unit experienced a goodwill impairment of $151 million due to lower realized pricing and increased market interest rates, with a long-term growth rate of 0.0% and a discount rate of 10.75% used in the assessment[671]. Strategic Initiatives and Future Outlook - The company is committed to improving access to medications through patient assistance programs, providing eligible patients with prescription products at no cost for up to one year[109]. - The company is evaluating the potential effects of macroeconomic factors, including inflation, on its business operations[698]. - The company anticipates uncertainties associated with the launch of new products, including the Blink product line and MIEBO, affecting market acceptance and demand[701]. - The company is working to stabilize its Dermatology business, focusing on the success of recently launched products and pipeline approvals[702].

[Fourth-Quarter and Full-Year 2023 Financial Highlights](index=1&type=section&id=BAUSCH%20HEALTH%20ANNOUNCES%20FOURTH-QUARTER%20AND%20FULL-YEAR%202023%20RESULTS) This section summarizes Bausch Health's financial performance for Q4 and full-year 2023, highlighting revenue growth, CEO commentary, and R&D updates [Performance Summary](index=1&type=section&id=Fourth-Quarter%20and%20Full-Year%202023%20Performance%20Summary) Bausch Health reported significant revenue growth for Q4 and full-year 2023, with reported increases of **10%** and **8%** respectively, alongside organic revenue growth and stable Adjusted EBITDA despite a GAAP Net Loss Q4 and Full-Year 2023 Key Financial Metrics | Metric | Q4 2023 | Full-Year 2023 | | :--- | :--- | :--- | | **Revenues** | $2.41 billion | $8.76 billion | | Reported Revenue Growth | 10% | 8% | | Organic Revenue Growth (non-GAAP) | 4% | 7% | | **GAAP Net Loss Attributable to BHC** | $39 million | $592 million | | **Adjusted EBITDA Attributable to BHC (non-GAAP)** | $869 million | $3.0 billion | - Full-year 2023 reported revenues increased by **$633 million** to **$8.76 billion**, an **8%** increase over 2022, with organic revenue growing by **7%**[17](index=17&type=chunk) - Fourth-quarter 2023 reported revenues increased by **$215 million** to **$2.41 billion**, a **10%** increase over Q4 2022, with organic revenue growing by **4%**[17](index=17&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO affirmed meeting 2023 financial guidance, noting progress in business segments, balance sheet, and R&D, positioning the company for continued growth in 2024 - CEO Thomas J. Appio stated the company delivered against its 2023 financial guidance and made meaningful progress across business segments, balance sheet management, and R&D initiatives[24](index=24&type=chunk) - The company's focus for 2024 includes advancing the pipeline, investing in growth initiatives, and positioning for long-term success[24](index=24&type=chunk) [R&D and Regulatory Update](index=1&type=section&id=Bausch%20Health%20(excl.%20B%2BL)%20R%26D%20Update) Bausch Health provided R&D updates, including positive Phase 2 data for Amiselimod, progress on RED-C Phase 3 trials, and recent regulatory approvals and launches for CABTREO and Thermage® FLX - **Amiselimod (S1P modulator):** Positive topline data from the Phase 2 study for mild to moderate ulcerative colitis was announced in December 2023[24](index=24&type=chunk) - **RED-C:** Enrollment for one of two global Phase 3 trials for hepatic encephalopathy is complete, with the second trial expected to complete enrollment in H1 2024[24](index=24&type=chunk) - **CABTREO:** Received FDA approval on October 20, 2023, for acne vulgaris, with the U.S. commercial launch in late January 2024[25](index=25&type=chunk) - **Thermage® FLX:** The device and its TR-4 Return Pad were approved by China's National Medical Products Administration in January 2024[25](index=25&type=chunk) - **Next Generation Fraxel®:** An FDA submission is planned for Q2 2024, with potential approval in the second half of 2024[25](index=25&type=chunk) [Detailed Financial Performance](index=3&type=section&id=Detailed%20Financial%20Performance) This section provides a detailed analysis of Bausch Health's revenue by segment, operating performance, net loss, Adjusted EBITDA, and cash flow for 2023 [Revenue Performance by Segment](index=3&type=section&id=Fourth-Quarter%20and%20Full-Year%202023%20Revenue%20Performance) Bausch Health achieved full-year 2023 revenue growth across most segments, notably Solta Medical (**16%**) and Bausch + Lomb (**10%**), with Bausch + Lomb also leading Q4 growth at **18%** Full-Year 2023 Revenue by Segment (in millions) | Segment | 2023 Revenue | 2022 Revenue | Reported Change | Organic Change (non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | **Total Bausch Health** | **$8,757** | **$8,124** | **+8%** | **+7%** | | Salix | $2,250 | $2,090 | +8% | +8% | | International | $1,071 | $988 | +8% | +6% | | Solta Medical | $347 | $300 | +16% | +18% | | Diversified Products | $943 | $978 | -4% | -3% | | Bausch + Lomb | $4,146 | $3,768 | +10% | +8% | Q4 2023 Revenue by Segment (in millions) | Segment | Q4 2023 Revenue | Q4 2022 Revenue | Reported Change | Organic Change (non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | **Total Bausch Health** | **$2,408** | **$2,193** | **+10%** | **+4%** | | Salix | $583 | $581 | 0% | 0% | | International | $290 | $261 | +11% | +6% | | Solta Medical | $103 | $99 | +4% | +5% | | Diversified Products | $259 | $256 | +1% | +2% | | Bausch + Lomb | $1,173 | $996 | +18% | +7% | - Full-year sales growth in the Salix segment was primarily driven by Xifaxan®, Relistor®, and Trulance®[18](index=18&type=chunk) [Operating Performance and Net Loss](index=4&type=section&id=Consolidated%20Operating%20Income%20(Loss)) Consolidated operating income significantly improved to **$963 million** in 2023 due to decreased goodwill impairments, though net loss attributable to Bausch Health widened to **$592 million** primarily from lower gains on debt extinguishment - Consolidated operating income for full-year 2023 was **$963 million**, a **$509 million** increase from **$454 million** in 2022[21](index=21&type=chunk) - The improvement in operating income was driven by a **$435 million** increase in contribution and decreases in Goodwill impairments (**$331 million**) and Amortization of intangible assets (**$138 million**), partially offset by higher SG&A and R&D expenses[21](index=21&type=chunk) - Net loss attributable to Bausch Health was **$592 million** for the full year 2023, an unfavorable change from a **$225 million** loss in 2022, primarily due to lower gains on the extinguishment of debt compared to the prior year[56](index=56&type=chunk) GAAP Loss Per Share | Period | 2023 | 2022 | | :--- | :--- | :--- | | **Q4** | ($0.11) | ($1.13) | | **Full Year** | ($1.62) | ($0.62) | [Adjusted EBITDA and Net Income (non-GAAP)](index=5&type=section&id=Adjusted%20EBITDA%20attributable%20to%20Bausch%20Health%20(non-GAAP)) Adjusted EBITDA attributable to Bausch Health increased **6%** to **$869 million** in Q4 2023, remaining nearly flat at **$3.014 billion** for the full year, with Adjusted Net Income also showing increases Adjusted EBITDA Attributable to Bausch Health (non-GAAP) | Period | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | **Q4** | $869 million | $823 million | +$46 million | | **Full Year** | $3,014 million | $3,022 million | -$8 million | Adjusted Net Income Attributable to Bausch Health (non-GAAP) | Period | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | **Q4** | $406 million | $372 million | +$34 million | | **Full Year** | $1,274 million | $1,113 million | +$161 million | [Cash Flow and Balance Sheet](index=5&type=section&id=Cash%20Provided%20by%20(Used%20in)%20Operating%20Activities) Cash provided by operating activities significantly improved to **$1.032 billion** in 2023, with the company holding **$962 million** in cash and equivalents and substantial revolving credit facility availability - Cash provided by operating activities was **$1,032 million** for the full year 2023, a significant improvement from the **$728 million** used in operating activities in 2022[58](index=58&type=chunk)[92](index=92&type=chunk) - As of December 31, 2023, the company had **$962 million** in cash, cash equivalents, and restricted cash[59](index=59&type=chunk) - At year-end, Bausch Health (excl. B+L) had approximately **$950 million** available under its revolving credit facility, and Bausch + Lomb had approximately **$199 million** available[59](index=59&type=chunk) [2024 Financial Outlook](index=5&type=section&id=2024%20Financial%20Outlook) This section outlines Bausch Health's financial projections for the full year 2024, including revenue and Adjusted EBITDA guidance for the consolidated entity and its segments [2024 Financial Guidance](index=5&type=section&id=2024%20Financial%20Guidance) Bausch Health projects full-year 2024 total revenues between **$9.300 billion** and **$9.550 billion** and Adjusted EBITDA between **$3.20 billion** and **$3.35 billion**, with **2%-5%** organic revenue growth for Bausch Health (excl. B+L) Full-Year 2024 Guidance (as of Feb. 22, 2024) | Metric (in Billions) | BHC | BHC (excl. B+L) | B+L | | :--- | :--- | :--- | :--- | | **Revenues** | $9.300 – $9.550 | $4.700 – $4.850 | $4.600 - $4.700 | | **Adjusted EBITDA (non-GAAP)** | $3.20 - $3.35 | $2.36 - $2.46 | $0.84 – $0.89 | - The company projects **2%-5%** organic revenue growth for Bausch Health (excluding B+L) versus the prior year[35](index=35&type=chunk) - The company does not provide a reconciliation of forward-looking Adjusted EBITDA to GAAP net income due to the inherent difficulty in forecasting certain items like restructuring costs and litigation matters[59](index=59&type=chunk)[60](index=60&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Information) This section explains the rationale and specific definitions for Bausch Health's non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Organic Revenue [Explanation of Non-GAAP Measures](index=7&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures like Adjusted EBITDA and Organic Revenue to provide supplemental information, believing they are key for evaluating operational performance and investor assessment by excluding certain items - Management uses non-GAAP measures as key metrics to evaluate performance, determine executive cash bonuses, and provide supplemental information to investors[40](index=40&type=chunk) - The company cautions that its non-GAAP measures may not be comparable to those of other companies and should be considered as a supplement to, not a substitute for, GAAP measures[65](index=65&type=chunk) [Specific Non-GAAP Definitions](index=8&type=section&id=Specific%20Non-GAAP%20Measures) Key non-GAAP metrics are defined, with Adjusted EBITDA adjusting GAAP Net Income for various non-operating items, Adjusted Net Income making similar adjustments, and Organic Revenue normalizing for currency and M&A impacts - **Adjusted EBITDA (non-GAAP):** Defined as Net income (loss) adjusted for interest expense, taxes, depreciation, amortization, and other specific items such as goodwill impairments, restructuring costs, and acquisition-related costs[42](index=42&type=chunk)[43](index=43&type=chunk) - **Adjusted Net Income (non-GAAP):** Defined as Net income adjusted for items including asset/goodwill impairments, restructuring costs, acquisition-related costs, gain/loss on debt extinguishment, and amortization of intangible assets[45](index=45&type=chunk) - **Organic Revenue (non-GAAP):** Defined as GAAP Revenue adjusted for changes in foreign currency exchange rates and excluding the impact of recent acquisitions, divestitures, and discontinuations to allow for a supplemental period-to-period comparison[4](index=4&type=chunk) [Financial Statements and Reconciliations](index=12&type=section&id=FINANCIAL%20TABLES%20FOLLOW) This section presents Bausch Health's consolidated financial statements, including statements of operations, reconciliations of GAAP net loss to Adjusted EBITDA, organic revenue growth, and a summary of the balance sheet and debt [Consolidated Statements of Operations (Unaudited)](index=13&type=section&id=Consolidated%20Statements%20of%20Operations) For 2023, Bausch Health reported total revenues of **$8.757 billion** and a net loss of **$611 million**, compared to **$8.124 billion** revenue and **$212 million** net loss in 2022 Consolidated Statements of Operations (in millions) | Line Item | Twelve Months Ended Dec 31, 2023 | Twelve Months Ended Dec 31, 2022 | | :--- | :--- | :--- | | **Total Revenues** | **$8,757** | **$8,124** | | Total Expenses | $7,794 | $7,670 | | **Operating Income** | **$963** | **$454** | | Loss before income taxes | ($390) | ($129) | | **Net Loss** | **($611)** | **($212)** | | **Net Loss Attributable to BHC Inc.** | **($592)** | **($225)** | [Reconciliation of GAAP Net Loss to Adjusted EBITDA (non-GAAP)](index=18&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA%20(non-GAAP)) A GAAP Net Loss of **$611 million** for full-year 2023 was reconciled to an Adjusted EBITDA of **$3.110 billion**, with **$3.014 billion** attributable to Bausch Health after noncontrolling interest adjustments Full-Year GAAP Net Loss to Adjusted EBITDA Reconciliation (in millions) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | **Net Loss (GAAP)** | **($611)** | **($212)** | | Interest expense, net | $1,302 | $1,450 | | Provision for income taxes | $221 | $83 | | Depreciation and amortization | $1,264 | $1,394 | | **EBITDA** | **$2,176** | **$2,715** | | Goodwill impairments | $493 | $824 | | Other Adjustments... | ... | ... | | **Adjusted EBITDA (non-GAAP)** | **$3,110** | **$3,080** | | Adjusted EBITDA attributable to noncontrolling interest | ($96) | ($58) | | **Adjusted EBITDA attributable to BHC Inc. (non-GAAP)** | **$3,014** | **$3,022** | [Organic Revenue Growth (non-GAAP) by Segment](index=19&type=section&id=Organic%20Growth%20(non-GAAP)%20-%20by%20Segment) The report details the reconciliation of reported to organic revenues, showing full-year 2023 total reported revenue of **$8.757 billion** adjusted to **$8.661 billion** organic revenue, representing **7%** growth Full-Year 2023 Organic Revenue Reconciliation (in millions) | Description | Amount | | :--- | :--- | | **Total Reported Revenue 2023** | **$8,757** | | Impact of Foreign Exchange | $45 | | Impact of Acquisitions | ($141) | | **Organic Revenue 2023 (non-GAAP)** | **$8,661** | | Total Reported Revenue 2022 | $8,124 | | Impact of Divestitures/Discontinuations | ($22) | | **Organic Revenue 2022 (non-GAAP)** | **$8,102** | | **Change in Organic Revenue** | **+$559 (+7%)** | [Balance Sheet and Debt Summary](index=21&type=section&id=Other%20Financial%20Information) As of December 31, 2023, total long-term debt increased to **$21.006 billion**, while cash and cash equivalents rose to **$947 million**, with significant debt maturities in 2025, 2027, and 2028 Key Balance Sheet Items (in millions) | Item | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $947 | $564 | | Total long-term debt and other | $21,006 | $19,110 | - The company's total debt obligations increased by approximately **$1.9 billion** from year-end 2022 to year-end 2023[12](index=12&type=chunk) Maturities of Debt Obligations (in millions) | Year | Amount | | :--- | :--- | | 2024 | $155 | | 2025 | $2,790 | | 2026 | $892 | | 2027 | $6,748 | | 2028 | $7,219 | | 2029 - 2031 | $3,202 |

Bausch Health (BHC) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the syst ...

Bausch Health Companies Inc. (NYSE:BHC) Q3 2023 Earnings Conference Call November 2, 2023 8:00 AM ET Company Participants Lisa Wilson - Investor Relations Thomas Appio - Chief Executive Officer John Barresi - Interim Chief Financial Officer Conference Call Participants Jason Gerberry - Bank of America Securities Umer Raffat - Evercore ISI David Amsellem - Piper Sandler Douglas Miehm - RBC Capital Markets Les Sulewski - Truist Securities Operator Greetings. Welcome to the Bausch Health Third Quarter 2023 Ear ...

Q3 2023 Earnings November 2, 2023 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 relating to Bausch Health Companies Inc.'s ("Bausch Health" or the "Company") future prospects and performance, financial guidance, research and development efforts and anticipated timing thereof, proposed plan to separate its ey ...

[Part I. Financial Information](index=2&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=2&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited condensed consolidated financial statements for Bausch Health Companies Inc. as of September 30, 2023, and for the three and nine-month periods then ended [Note 4. Licensing Agreements and Acquisitions](index=13&type=section&id=Note%204.%20LICENSING%20AGREEMENTS%20AND%20ACQUISITIONS) Bausch + Lomb acquired XIIDRA® and other ophthalmology assets for an upfront cash payment of **$1.75 billion**, with total preliminary purchase consideration of **$1.753 billion** - Bausch + Lomb acquired XIIDRA® from Novartis for an upfront cash payment of **$1.75 billion** on September 29, 2023. The deal also includes potential future milestone obligations of up to **$750 million**[99](index=99&type=chunk)[122](index=122&type=chunk) XIIDRA® Acquisition Consideration | Component | Amount (in millions) | | :--- | :--- | | Cash consideration paid at closing | $1,750 | | Estimated fair value of contingent consideration | $3 | | **Preliminary aggregate purchase consideration** | **$1,753** | - In July 2023, Bausch + Lomb acquired the Blink® product line of eye and contact lens drops for an upfront cash payment of **$107 million**[128](index=128&type=chunk) - In January 2023, Bausch + Lomb acquired AcuFocus, Inc., an ophthalmic medical device company, for an upfront payment of **$35 million**, plus potential future milestone payments[128](index=128&type=chunk) [Note 8. Intangible Assets and Goodwill](index=20&type=section&id=Note%208.%20INTANGIBLE%20ASSETS%20AND%20GOODWILL) The company reported net intangible assets of **$6.73 billion** and goodwill of **$11.19 billion** as of September 30, 2023, with significant impairments in Q3 2023 Goodwill Impairments in 2022 & 2023 | Reporting Unit | Impairment Date | Impairment Amount (in millions) | | :--- | :--- | :--- | | Dermatology | Q2 2022 | $83 | | Dermatology | Q3 2022 | $119 | | Neurology | Q4 2022 | $622 | | Dermatology | Q3 2023 | $151 | | Neurology | Q3 2023 | $251 | - The Q3 2023 goodwill impairments were triggered by revised forecasts indicating lower future financial results for the Dermatology and Neurology units, combined with increases in market interest rates[16](index=16&type=chunk)[152](index=152&type=chunk) - The Salix reporting unit was tested for impairment in Q3 2022 due to the Norwich Legal Decision regarding Xifaxan patents, showing limited headroom with fair value exceeding carrying value by less than **5%**[10](index=10&type=chunk)[26](index=26&type=chunk) - The Bausch + Lomb reporting units (Vision Care, Surgical, Pharmaceuticals) were tested in Q2 and Q4 of 2022, with fair values exceeding carrying values by more than **25%**, indicating no impairment risk[7](index=7&type=chunk)[36](index=36&type=chunk) Goodwill Balance by Segment (in millions) | Segment | Dec 31, 2022 | Sep 30, 2023 | | :--- | :--- | :--- | | Bausch + Lomb | $5,246 | $5,262 | | Salix | $3,159 | $3,159 | | International | $789 | $811 | | Solta Medical | $115 | $115 | | Diversified | $2,238 | $1,840 | | **Total** | **$11,547** | **$11,187** | [Note 10. Financing Arrangements](index=28&type=section&id=Note%2010.%20FINANCING%20ARRANGEMENTS) As of September 30, 2023, total long-term debt principal was **$21.0 billion**, with key activities including a **$2.47 billion** debt reduction and new **$1.9 billion** debt for the XIIDRA acquisition Total Long-Term Debt (in millions) | Date | Principal Amount | Net of Premiums, Discounts, etc. | | :--- | :--- | :--- | | Dec 31, 2022 | $19,110 | $20,766 | | Sep 30, 2023 | $20,952 | $22,430 | - In September 2022, the company completed an exchange offer, swapping **$5.6 billion** of existing unsecured notes for **$3.1 billion** of new secured notes, reducing outstanding principal by **$2.47 billion** and resulting in a net gain of **$570 million**[157](index=157&type=chunk)[158](index=158&type=chunk)[209](index=209&type=chunk) - In June 2023, the company established a new non-recourse Accounts Receivable (AR) Credit Facility for up to **$600 million**, with **$350 million** outstanding as of September 30, 2023[223](index=223&type=chunk)[224](index=224&type=chunk) - In September 2023, Bausch + Lomb financed the XIIDRA acquisition by issuing **$1.4 billion** in new 8.375% Senior Secured Notes due 2028 and entering a new **$500 million** term loan facility[226](index=226&type=chunk)[263](index=263&type=chunk) - As of September 30, 2023, the company was in compliance with its financial maintenance covenants[156](index=156&type=chunk) [Note 17. Legal Proceedings](index=41&type=section&id=Note%2017.%20LEGAL%20PROCEEDINGS) The company faces significant legal proceedings, including an appeal of the Norwich Legal Decision on Xifaxan® patents, ongoing individual investor lawsuits, and antitrust litigation - The company is appealing an August 2022 court decision (Norwich Legal Decision) that found patents for Xifaxan®'s use in treating IBS-D to be invalid, while upholding patents for hepatic encephalopathy (HE) until October 2029[335](index=335&type=chunk) - While the main U.S. securities class action was settled, **twenty-one** individual "opt-out" investor actions remain pending against the company[290](index=290&type=chunk) - The federal class action for the Glumetza® antitrust litigation has been settled, but related state-law insurer litigations are ongoing, with a trial scheduled for December 2024[305](index=305&type=chunk)[331](index=331&type=chunk) - The company is fully indemnified by Johnson & Johnson for all potential liability and legal costs arising from product liability lawsuits involving the Shower to Shower® body powder product[390](index=390&type=chunk) [Note 18. Segment Information](index=53&type=section&id=Note%2018.%20SEGMENT%20INFORMATION) For the nine months ended September 30, 2023, total revenue was **$6.35 billion**, with Bausch + Lomb contributing **$2.97 billion** and Salix **$1.67 billion** Segment Revenues and Profits (Nine Months Ended Sep 30, 2023) | Segment | Revenues (in millions) | Segment Profit (in millions) | Profit Margin | | :--- | :--- | :--- | :--- | | Salix | $1,667 | $1,129 | 68% | | International | $781 | $236 | 30% | | Solta Medical | $244 | $114 | 47% | | Diversified | $684 | $417 | 61% | | Bausch + Lomb | $2,973 | $699 | 24% | | **Total** | **$6,349** | **$2,595** | **41%** | - Sales of the Xifaxan® product line represented approximately **80%** of the Salix segment's revenues[381](index=381&type=chunk) Major Customers (% of Total Revenues) | Customer | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | | AmerisourceBergen Corporation | 19% | 16% | | McKesson Corporation | 15% | 13% | | Cardinal Health, Inc. | 13% | 11% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=57&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, strategic initiatives, and business trends, including the Bausch + Lomb separation, capital structure management, and R&D investments [Overview](index=57&type=section&id=OVERVIEW) Management's overview highlights the continued strategy to separate the Bausch + Lomb business, significant debt reduction efforts, and key growth drivers including R&D and strategic acquisitions - The company continues to plan the full separation of its Bausch + Lomb eye health business, which is subject to achieving targeted debt leverage ratios and receiving necessary approvals[414](index=414&type=chunk) - In 2022, the company reduced its aggregate debt principal by approximately **$3.8 billion** through a series of transactions, including a debt exchange offer that alone reduced principal by **$2.47 billion**[416](index=416&type=chunk)[426](index=426&type=chunk) - Strategic growth initiatives include R&D on a new Rifaximin formulation for OHE, Amiselimod for ulcerative colitis, and the recent FDA approval of CABTREO™ for acne[469](index=469&type=chunk)[470](index=470&type=chunk)[492](index=492&type=chunk) - The company faces potential loss of exclusivity (LOE) and generic competition for several branded products between 2023 and 2027, including Aplenzin®, Bryhali®, and Prolensa®[509](index=509&type=chunk) [Results of Operations](index=68&type=section&id=RESULTS%20OF%20OPERATIONS) Q3 2023 revenues increased **9%** to **$2.24 billion**, but operating income sharply declined to **$14 million** due to **$283 million** in goodwill impairments Financial Performance Summary (in millions) | Metric | Q3 2023 | Q3 2022 | Change | 9M 2023 | 9M 2022 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $2,238 | $2,046 | +$192 | $6,349 | $5,931 | +$418 | | **Operating Income** | $14 | $244 | -$230 | $601 | $690 | -$89 | | **Net (Loss)/Income to BHC** | $(378) | $399 | -$777 | $(553) | $185 | -$738 | - The primary driver for the sharp decrease in Q3 2023 operating income was a goodwill impairment charge of **$402 million**, compared to **$119 million** in Q3 2022[534](index=534&type=chunk)[576](index=576&type=chunk) - Salix segment revenue grew **13%** in Q3 2023 to **$614 million**, driven by higher volumes and pricing for products including Xifaxan®[597](index=597&type=chunk) - Bausch + Lomb segment revenue increased **7%** in Q3 2023 to **$1.007 billion**, reflecting volume growth, price increases, and contributions from the Blink® acquisition[625](index=625&type=chunk) [Liquidity and Capital Resources](index=87&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Net cash from operating activities significantly improved to **$642 million** for 9M 2023, while total debt principal increased to **$21.0 billion** primarily due to the XIIDRA acquisition Cash Flow Summary (Nine Months Ended Sep 30, in millions) | Cash Flow | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | **Net cash from operating activities** | $642 | $(1,203) | +$1,845 | | **Net cash used in investing activities** | $(1,997) | $(167) | -$1,830 | | **Net cash from financing activities** | $1,554 | $(198) | +$1,752 | - The **$1.8 billion** positive swing in operating cash flow was primarily due to a decrease in payments for accrued legal settlements compared to the prior year[676](index=676&type=chunk) - Total debt principal outstanding was **$20.95 billion** as of September 30, 2023, with significant maturities scheduled for **$2.8 billion** in 2025, **$6.6 billion** in 2027, and **$7.2 billion** in 2028[730](index=730&type=chunk)[432](index=432&type=chunk) - As of September 30, 2023, **$360 million** of the company's cash was held by Bausch + Lomb entities and is generally not available to support the operations of other Bausch Health legal entities[704](index=704&type=chunk)

Financial Data and Key Metrics - Total sales for Bausch Health, excluding Bausch & Lomb (B+L), were $1.13 billion in Q2 2023, up 10% reported and 11% organically year-over-year [20] - Bausch & Lomb revenues were $1 billion in Q2 2023, up 10% reported and 12% organically compared to the prior year [6] - Consolidated adjusted EBITDA was $727 million in Q2 2023, up 4% reported and 7% on a constant currency basis [32] - Adjusted EBITDA margin for Bausch Health, excluding B+L, was 50.2%, while Bausch & Lomb's adjusted EBITDA margin was 17.3% [32] - Full-year EBITDA for Bausch Health, excluding B+L, is expected to be $2.3 billion to $2.4 billion [14] Business Segment Performance Salix - Salix revenues grew 11% in Q2 2023 to $557 million, driven by Xifaxan, Relistor, and Trulance [21][38] - Xifaxan grew 9% in Q2 2023, with overall demand up 3% year-over-year [38] - Relistor and Trulance posted year-over-year growth of 42% and 73%, respectively [38] International - International revenues grew 11% in Q2 2023 to $259 million, led by strong performances in EMEA and Canada [22][29] - The growth was partially offset by a voluntary recall of Emerade epinephrine autoinjectors, resulting in $12 million in write-offs and charges [29] Solta Medical - Solta Medical revenues were $88 million in Q2 2023, up 60% organically year-over-year, driven by strong growth in Asia Pacific [13][37] - More than 70% of Solta revenues come from consumable sales, representing a durable business profile [12] Diversified - Diversified revenues decreased 3% in Q2 2023 to $228 million, with growth in dermatology and dentistry offsetting declines in neurology and generics [24][30] - Arestin in dentistry grew 4% year-over-year, driven by sales force restructuring and consumer awareness efforts [5] Market Performance - Growth in Asia Pacific markets was strong at 23%, though tempered by a decline in the US [13] - The company expects second-half revenue to be relatively flat compared to the prior year, driven by growth in Jublia, Arestin, and Aplenzin, offsetting declines in mature brands [14] Strategic Direction and Industry Competition - The company is focused on separating Bausch & Lomb, with plans to distribute 80% of B+L shares to shareholders [15][26] - The company is exploring a tax reduction of capital for the B+L distribution, which could provide additional strategic flexibility [26] - Investments in AI customer engagement and R&D are key to driving growth, with significant progress in the RED-C program for Xifaxan [10][95] - The company is advancing its pipeline, including Amiselimod for ulcerative colitis and IDP-126 for acne vulgaris [104] Management Commentary on Operating Environment and Future Outlook - The company expects full-year adjusted operating cash flow of $625 million for Bausch Health, excluding B+L, with higher second-half adjusted EBITDA anticipated [7] - Management remains committed to deleveraging the balance sheet, with $181 million in debt reduction in Q2 2023 [41] - The company is optimistic about the potential of AI to revolutionize customer engagement and drive growth [10] Other Important Information - The company entered into a $600 million non-recourse financing facility with KKR, providing additional liquidity [39] - The company expects a decision on the Xifaxan litigation appeal in Q1 2024, with confidence in its intellectual property position [36][71] Q&A Summary Question: Strategic flexibility and debt leverage post-B+L distribution - The company clarified that the revised distribution mechanism does not change the debt targets or liquidity needs, with the focus remaining on deleveraging [16][17] Question: Xifaxan litigation timeline and impact - The company expects a decision on the Xifaxan litigation appeal in Q1 2024 and remains confident in its position [36][71] Question: Use of the $600 million financing facility - The facility is for general corporate purposes, with $350 million drawn as of August 2, 2023, to pay down the revolver [43][64] Question: Long-term solvency and debt maturities - The company expects to generate significant cash flow growth between now and 2027-2028, with plans to prioritize debt reduction and refinance remaining debt [52] Question: RED-C program timeline and physician adoption - The company expects data readout for the RED-C program in late 2025 to early 2026, with a focus on educating physicians about the benefits of prophylactic treatment [56][93]

Q2 2023 Earnings August 3, 2023 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 relating to Bausch Health Companies Inc.'s ("Bausch Health" or the "Company") future prospects and performance, financial guidance, proposed plan to separate its eye health business, including the timing thereof, the timing of regu ...

• a decrease in Amortization of intangible assets of $70 million primarily attributable to fully amortized intangible assets no longer being amortized in 2023; • a favorable change in Other (income) expense, net of $62 million primarily attributable to: (i) insurance recoveries and (ii) adjustments to reflect changes in estimates of the liability for Acquisition-related contingent consideration. RESULTS OF OPERATIONS Revenues 57 | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------- ...

Bausch Health Companies Inc. (NYSE:BHC) Q1 2023 Earnings Conference Call May 4, 2023 8:00 AM ET Company Participants Thomas Appio - Chief Executive Officer Tom Vadaketh - Chief Financial Officer Mark Maico - Investor Relations Conference Call Participants Glen Santangelo - Jefferies Douglas Miehm - RBC Capital Markets David Amsellem - Piper Sandler Qi Yang - Bank of America Operator Greetings. Welcome to Bausch Health First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode ...