Core Viewpoint - Bausch Health (BHC) reported quarterly earnings of $0.59 per share, missing the Zacks Consensus Estimate of $0.83 per share, indicating an earnings surprise of -28.92% [1] Financial Performance - The company posted revenues of $2.26 billion for the quarter ended March 2025, which was below the Zacks Consensus Estimate by 0.54%, compared to revenues of $2.15 billion a year ago [2] - Over the last four quarters, Bausch has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Bausch shares have declined approximately 31.6% since the beginning of the year, contrasting with the S&P 500's decline of -5.5% [3] - The current Zacks Rank for Bausch is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.05 on revenues of $2.46 billion, and for the current fiscal year, it is $4.26 on revenues of $9.92 billion [7] - The estimate revisions trend for Bausch is mixed, and changes in estimates for the coming quarters and current fiscal year are anticipated following the recent earnings report [6][7] Industry Context - The Medical - Generic Drugs industry, to which Bausch belongs, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Financial Structure and Debt Management - Bausch Health reported a significant focus on its capital structure, aiming to reduce long-term debt and improve financial flexibility [239]. - The company completed the April 2025 Refinancing Transactions, extending approximately $6,870 million in debt maturities from 2025-2028 to 2030-2032 [246]. - Bausch Health's total debt obligations as of April 8, 2025, amounted to $21,089 million, with $45 million due in 2025 and $672 million in 2026 [247]. - The company repurchased and retired senior unsecured notes with an aggregate par value of $555 million for approximately $530 million in early 2024 [248]. - The company may consider executing opportunistic financing transactions to manage debt maturities and improve capital structure [362]. - The company has a total debt obligation of $21,089 million as of April 8, 2025, with significant maturities in 2027 ($3,675 million) and 2028 ($6,199 million) [361]. - The company expects to maintain minimum liquidity of not less than $400 million on or after the Covenant Step Up Date under the 2025 Credit Agreement [376]. - The company anticipates making mandatory debt repayments of approximately $45 million and interest payments of approximately $1,225 million from April 1, 2025, to December 31, 2025 [415]. - The weighted average interest rate of the company's debt was 6.21% as of March 31, 2025, compared to a stated rate of 7.71% [404]. Revenue and Financial Performance - Revenues for Q1 2025 were $2,259 million, an increase of $106 million or 5% compared to $2,153 million in Q1 2024, driven by growth in Salix, Bausch + Lomb, and Solta Medical segments [293]. - Operating income for Q1 2025 was $276 million, a decrease of $5 million from $281 million in Q1 2024, influenced by non-cash charges for depreciation and amortization [295]. - Net loss attributable to Bausch Health was $58 million in Q1 2025, an improvement of $6 million compared to a net loss of $64 million in Q1 2024 [296]. - Product sales revenue increased by $98 million to $2,227 million in Q1 2025 from $2,129 million in Q1 2024 [298]. - Total revenues for the company increased by 5% to $2,259 million in Q1 2025 from $2,153 million in Q1 2024 [333]. - Total segment profits for Q1 2025 were $816 million, slightly up from $812 million in Q1 2024, with a profit margin of 36% [333]. Research and Development - As of March 31, 2025, Bausch Health had approximately 75 projects in its global R&D pipeline, with a dedicated team of 1,500 employees in 24 R&D facilities [252]. - CABTREO Topical Gel, launched in early 2024, is the first FDA-approved fixed-dose, triple-combination topical treatment for acne [254]. - Bausch + Lomb is conducting two global Phase 3 trials for rifaximin, with top line results expected by early 2026 [256]. - The Phase 2 study for Amiselimod (S1P modulator) for ulcerative colitis was completed in 2024, with regulatory feedback currently under review [256]. - MIEBO, the first FDA-approved treatment for dry eye disease targeting tear evaporation, launched in the U.S. in September 2023 and was approved in Canada in September 2024 [256]. - Bausch + Lomb acquired Whitecap Biosciences in January 2025, expanding its clinical-stage pipeline with therapies for glaucoma and geographic atrophy [261]. - The company acquired Elios Vision in December 2024, enhancing its glaucoma treatment portfolio with a minimally invasive surgery procedure [262]. Market and Product Developments - The Salix segment, primarily driven by the Xifaxan product line, accounted for approximately 85% of its revenues [235]. - SiHy Daily contact lenses have been launched in over 50 countries, with a multifocal lens launched in May 2023 and a toric lens in June 2024 [256]. - Bausch + Lomb segment revenue rose by 3% to $1,137 million in Q1 2025 from $1,099 million in Q1 2024, driven by a $63 million increase in volumes across all businesses [349]. - Salix segment revenue for Q1 2025 was $542 million, a 9% increase from $499 million in Q1 2024, primarily driven by a $20 million increase in net realized pricing and a $13 million increase in volumes [341]. - Solta Medical segment revenue increased by 28% to $113 million in Q1 2025 from $88 million in Q1 2024, mainly due to a $34 million increase in volumes [345]. Operational Challenges and Risks - The company anticipates facing generic competition for several products starting in 2026, including Aplenzin and Bryhali, which could significantly impact sales [289]. - The Inflation Reduction Act may lead to price negotiations for certain drugs, potentially accelerating revenue erosion prior to the expiration of intellectual property protections [286]. - The company is facing risks related to economic conditions, including heightened inflation and interest rates, which could adversely impact revenues and margins [427]. - Ongoing litigation and regulatory investigations related to the B+L IPO and Separation may affect the company's resources and management focus [428]. - The company anticipates challenges in completing the B+L Separation due to various conditions, including regulatory approvals and market conditions [428]. - The company is navigating challenges related to the launch of new products and the acceptance of these products in the market [430]. Strategic Initiatives and Future Outlook - The B+L Separation aims to create two independent companies, potentially unlocking additional value for shareholders [237]. - The company is committed to improving patient access and investing in sustainable growth drivers for long-term success [239]. - The company is considering further acquisition opportunities within its core therapeutic areas, which could be sizable [410]. - The company may consider divesting other businesses or refinancing debt to align with its long-term strategy [402]. - The company is implementing pricing strategies, limiting average annual price increases for branded prescription products to single digits [428].

Exhibit 99.1 Investor Contact: Media Contact: Garen Sarafian Katie Savastano (877) 281-6642 (toll free) (908) 541-3785 ir@bauschhealth.com corporate.communications@bauschhealth.com BAUSCH HEALTH ANNOUNCES FIRST QUARTER 2025 RESULTS BAUSCH HEALTH EXCLUDING BAUSCH + LOMB FIRST QUARTER 2025 RESULTS LAVAL, QC, April 30, 2025 – Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC) ("Bausch Health" or the "Company" or "we" or "our") today announced its first quarter 2025 financial results and other key updates from th ...

Core Viewpoint - Telix Pharmaceuticals Limited has appointed Anne Whitaker as a Non-Executive Director, effective April 7, 2025, enhancing its board with her extensive healthcare experience [1][4]. Group 1: Appointment Details - Anne Whitaker brings over 30 years of global corporate experience in the pharmaceutical and biotech sectors, having held board positions in various Nasdaq-listed life sciences companies [2]. - She is currently a Non-Executive Director at Icon PLC and Chair at QurAlis Corporation [2]. - Whitaker has previously served as Chair and CEO of Aerami Therapeutics Holdings Inc., and held senior roles at GlaxoSmithKline, Sanofi, and Bausch Health [3]. Group 2: Board's Perspective - Telix Chairman H Kevin McCann AO expressed that Whitaker is an outstanding addition to the board, bringing expertise in commercial risk management, mergers and acquisitions, and Nasdaq governance [4]. - The board anticipates her contributions as Telix continues its global growth [4]. Group 3: Company Overview - Telix Pharmaceuticals is focused on developing and commercializing therapeutic and diagnostic radiopharmaceuticals, addressing unmet medical needs in oncology and rare diseases [4]. - The company is headquartered in Melbourne, Australia, with operations in the United States, Brazil, Canada, Europe, and Japan [4].

Financial Data and Key Metrics Changes - Revenues for Bausch Health, excluding Bausch + Lomb, increased by 4% on a reported basis and 7% on an organic basis compared to Q4 2023, with full-year revenues increasing by 5% on a reported basis and 6% on an organic basis [9][10] - Adjusted EBITDA for Q4 2024 increased by approximately 7% compared to the prior period, with full-year adjusted EBITDA growing by 8% [10][29] - Adjusted operating cash flow for the full year was approximately $1.3 billion, reflecting an 85% growth year-over-year [30][35] Business Line Data and Key Metrics Changes - Salix revenues in Q4 were $634 million, a 9% growth year-over-year, driven by Xifaxan, which grew by 16% [36] - Solta revenues increased by 34% in Q4, primarily driven by volume growth, particularly in South Korea and China [41][42] - International segment revenues were $279 million, a decrease of 4% on a reported basis but an increase of 1% on an organic basis [38] Market Data and Key Metrics Changes - Canada and EMEA were the strongest contributors to growth, with Canadian revenue growing 9% on a reported basis and 16% on an organic basis [39] - The Latin American market saw a 14% decrease in organic revenue year-over-year, primarily due to the timing of government tenders in Mexico [40] Company Strategy and Development Direction - The company is focused on three fundamental pillars for value creation: enhancing operational assets, unlocking the value of the Bausch + Lomb equity stake, and optimizing capital structure [12][23] - The strategic priorities include people, growth, innovation, efficiency, and unlocking value, with a strong emphasis on operational excellence and innovation [13][16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in carrying momentum into 2025, with expectations for continued revenue and adjusted EBITDA growth [12][27] - The company is actively exploring avenues to unlock the full value of its Bausch + Lomb equity stake, ensuring benefits for shareholders [12][52] Other Important Information - The company reduced its net debt by approximately $520 million in Q4 and nearly $1 billion for the full year [45] - The 2025 financial guidance expects revenues between $4.950 billion and $5.100 billion, with adjusted EBITDA projected between $2.625 billion and $2.725 billion [47][48] Q&A Session Summary Question: Update on the Norwich situation and FDA lawsuit - Management stated that Norwich gained tentative approval but the FDA denied final approval, and they believe the FDA's determination regarding Teva's first filer status is correct [61][62] Question: Reasoning behind the discontinuation of the Crohn's disease study - Management clarified that the study was not discontinued but deemed not worth the investment based on performance data [67] Question: Details on recent international deals in the cardiometabolic market - Management highlighted two deals in Latin America aimed at expanding their branded generic portfolio, which are expected to drive growth [70] Question: Contribution of Xifaxan to future growth - Management indicated that Salix with Xifaxan and Solta will be the two biggest contributors to growth in 2025, with continued strong dynamics expected [78] Question: Impact of potential government initiatives on Xifaxan - Management acknowledged Xifaxan's inclusion in the Medicare renegotiation list for 2027 and emphasized the importance of demonstrating its value during negotiations [90][92] Question: Plans for accessing capital markets and pledging Bausch + Lomb shares - Management confirmed that they are exploring various financing options, including potentially pledging Bausch + Lomb shares, but did not provide specific quantification [113][115]

Revenue and Financial Performance - Total revenues for 2024 reached $9,625 million, representing a 9.9% increase from $8,757 million in 2023 and a 18.5% increase from $8,124 million in 2022[27] - The Salix segment generated $2,333 million in revenue for 2024, accounting for 24% of total revenues, compared to $2,250 million (26%) in 2023 and $2,090 million (26%) in 2022[27] - The Bausch + Lomb segment contributed $4,791 million in revenue for 2024, making up 50% of total revenues, up from $4,146 million (47%) in 2023 and $3,768 million (46%) in 2022[27] - In 2024, the U.S. and Puerto Rico accounted for approximately 60% of total revenue, while China accounted for approximately 5%[81] - Cencora Inc. contributed 19% of total revenue in 2024, consistent with 2023 and an increase from 18% in 2022[83] - McKesson Corporation accounted for 15% of total revenue in 2024, unchanged from 2023 and 2022[83] - Cardinal Health, Inc. represented 14% of total revenue in 2024, up from 13% in both 2023 and 2022[83] Research and Development - R&D expenses for 2024 were $616 million, which is approximately 6% of total revenue, compared to 7% in both 2023 and 2022[47] - The company has around 75 R&D projects currently in its pipeline, supported by approximately 1,500 dedicated R&D and quality assurance employees[46] - The company is focused on securing and maintaining third-party research, development, and distribution arrangements to support its product offerings[696] Product Portfolio and Market Strategy - The company has approximately 1,000 products in its portfolio, categorized into five reportable segments[27] - The Xifaxan product accounted for revenues of $1,993 million in 2024, up from $1,810 million in 2023 and $1,692 million in 2022[30] - The company is focusing on strategic acquisitions and licensing agreements to enhance its product portfolio and market presence[26] - The company completed the acquisition of XIIDRA in Q3 2023, enhancing its eye health product offerings[44] - The company is pursuing acquisitions, including recent purchases in the ophthalmology sector, which may increase debt levels[690] Regulatory and Compliance - The company is subject to extensive regulations governing the research, development, and marketing of its products, requiring significant time and financial resources[52] - Compliance with the GDPR may result in fines of up to 4% of global annual revenue or €20 million for violations[66] - The regulatory framework for data privacy and security is rapidly evolving, which may materially affect the company's operations and compliance costs[68] - The company is subject to price control restrictions on pharmaceutical products in several countries, limiting its ability to raise prices in anticipation of inflation[625] - The company is making investments in its ESG program to comply with evolving regulations, including the EU's Corporate Sustainability Reporting Directive[79] Financial Risks and Debt - As of December 31, 2024, the company had $14,552 million in fixed rate debt and $5,929 million in variable rate debt[632] - The company has substantial debt obligations, with significant amounts due in 2025 and 2026, impacting financial flexibility[690] - A 1% change in foreign currency exchange rates would have impacted the shareholders' deficit by approximately $40 million[627] - If interest rates were to increase by 100 basis points, the fair value of the company's issued fixed rate debt would decrease by approximately $260 million[632] Goodwill and Impairment - The company recorded goodwill impairment charges of $493 million in 2023 and $824 million in 2022, with no impairments during 2024[649] - The Dermatology reporting unit experienced a goodwill impairment of $151 million due to lower realized pricing and revised future expectations, with a long-term growth rate of 0.0% and a discount rate of 10.75% used in the assessment[656] - The Neurology reporting unit recognized a goodwill impairment of $622 million during the 2022 annual impairment test due to changing market dynamics and increased competition[660] - The Generics reporting unit recognized a goodwill impairment of $91 million as of October 1, 2023, with a long-term growth rate of 1.0% and a discount rate of 10.25% applied in the fair value test[663] Operational Efficiency and Challenges - The company is focused on improving operational efficiency and anticipates a positive impact from these plans[685] - The company expects to continue facing challenges due to ongoing litigation and regulatory investigations, which may affect financial results[686] - The company is actively managing its research and development portfolio, with ongoing evaluations that may lead to project terminations and potential impairment charges[697] - The company is exposed to economic factors such as inflationary pressures, heightened interest rates, and foreign currency rates, which may impact revenues and margins[694] Market Competition and Product Risks - The company faces increased competition from generic pharmaceutical products as patents expire, leading to potential revenue impacts[87] - The company faces risks related to macroeconomic factors, including inflation and potential trade policy changes that could affect operational costs[693] - A substantial amount of the company's revenue is derived from the Xifaxan product line, with potential material impact from the entry of a generic rifaximin product before January 2028[694] - The company faces risks from the introduction of generic, biosimilar, or other competitors to its branded products, which could affect revenue and profits[694] Employee and Workplace Safety - As of December 31, 2024, the company had approximately 20,700 employees, with 10,700 in production and 6,700 in sales and marketing[96] - The Lost Time Incident Rate for the company in 2024 was 1.7 recorded cases per 100 employees, consistent with the industry average[98] - Bausch + Lomb's Days Away Rate (DAR) in 2024 was 4.9, significantly lower than the industry standard DAR of 22[99] Future Outlook and Strategic Plans - The anticipated completion of the B+L Separation is subject to various conditions, including regulatory approvals and market conditions[688] - The company is preparing for potential changes in drug pricing regulations that could affect revenue[688] - The company is exploring plans for its aesthetic medical business, which may influence future growth strategies[698]

Revenue Performance - Total consolidated reported revenues for Q4 2024 were $2.56 billion, a 6% increase from $2.41 billion in Q4 2023, with organic revenue growth of 9%[4] - Full-year 2024 consolidated revenues reached $9.63 billion, up 10% from $8.76 billion in 2023, with organic revenue growth of 8%[4] - Product sales for Q4 2024 reached $2,528 million, a 6.1% increase from $2,382 million in Q4 2023[51] - Total revenues for the twelve months ended December 31, 2024, were $9,625 million, up 9.9% from $8,757 million in 2023[51] - Total revenues for Bausch Health Companies Inc. for the three months ended December 31, 2024, were $2.582 billion, an increase of 6% from $2.408 billion in 2023[64] - Bausch + Lomb's total revenue was $4,791 million, a 16% increase from $4,146 million in 2023[66] Segment Performance - The Salix segment reported Q4 revenues of $634 million, a 9% increase year-over-year, with organic growth of 12% after excluding divestitures[6] - The Solta Medical segment saw Q4 revenues of $138 million, a 34% increase, with organic growth of 35%[8] - The Bausch + Lomb segment reported Q4 revenues of $1.28 billion, a 9% increase, with organic growth of 10%[10] - Salix segment revenue reached $2,333 million, up 4% from $2,250 million in the previous year[66] - Solta Medical segment showed significant growth with revenue of $440 million, a 27% increase from $347 million in 2023[66] - Bausch Health's Pharmaceuticals segment revenue was $1,209 million, reflecting a 45% increase from $836 million in 2023[66] Profitability Metrics - Adjusted EBITDA for Q4 2024 was $935 million, an 8% increase from $869 million in Q4 2023, while full-year adjusted EBITDA was $3.31 billion, up 10% from $3.01 billion[16] - Consolidated net income for Q4 2024 was $93 million, compared to a net loss of $39 million in Q4 2023, marking a favorable change of $132 million[13] - Operating income for Q4 2024 was $558 million, compared to $362 million in Q4 2023, reflecting a 54.1% increase[51] - Adjusted net income for the twelve months ended December 31, 2024, was $1.394 billion, an increase from $1.274 billion in 2023, reflecting a growth of 9.4%[52] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $3.425 billion, an increase from $3.110 billion in 2023, reflecting a growth of 10.1%[62] Cash Flow and Debt Management - Cash provided by operating activities was $601 million for Q4 2024, compared to $390 million in Q4 2023, reflecting improved business performance[16] - Cash provided by operating activities for the twelve months ended December 31, 2024, was $1,597 million, compared to $1,032 million in 2023[68] - Consolidated cash, cash equivalents, and restricted cash totaled $1.20 billion as of December 31, 2024[18] - Total long-term debt decreased to $21,616 million in 2024 from $22,388 million in 2023[68] - The company reported a total of $20,480 million in debt obligations for 2024, down from $21,006 million in 2023[68] - The company is exploring capital market options to address its debt maturity profile, potentially involving pledging shares in Bausch + Lomb[18] Guidance and Future Outlook - The Company provides full-year 2025 revenue guidance of $9.900 - $10.150 billion, with a revenue growth of 2% - 6% compared to the prior year[20] - Adjusted EBITDA guidance for 2025 is set at $3.525 - $3.675 billion, reflecting a growth of 3% - 7% year-over-year[20] - Adjusted Operating Cash Flow is projected to be between $0.975 - $1.025 billion for 2025[20] Research and Development - CABTREO®, a triple combination product for acne vulgaris, was launched in Canada in October 2024[22] - RED-C, aimed at preventing overt hepatic encephalopathy, is on track for top-line Phase 3 results by early 2026[22] - Amiselimod, a treatment for ulcerative colitis, has met with major regulatory bodies and is awaiting feedback[22] - Thermage® FLX and Clear + Brilliant® Touch are undergoing regulatory approval processes in multiple countries, including Canada and Europe[22] - Research and development expenses for the twelve months ended December 31, 2024, totaled $616 million, slightly up from $604 million in 2023[51] - Research and development expenses for the three months ended December 31, 2024, were $163 million, slightly up from $152 million in 2023, reflecting a growth of 7.2%[54] Non-GAAP Measures - The Company emphasizes the importance of non-GAAP measures for evaluating performance and setting operational goals[29] - Adjusted EBITDA attributable to Bausch Health (non-GAAP) is used to provide a clearer picture of operational performance, excluding nonrecurring items[38] - Adjusted net income (non-GAAP) is utilized for strategic decision-making and evaluating performance trends, highlighting the company's focus on underlying operational results[42] - The company excluded acquisition-related costs and adjustments from its financial results to provide a clearer view of ongoing operations[39] - The Company does not provide reconciliations of projected Adjusted EBITDA to GAAP net income due to forecasting difficulties[20] Cost Management - The company reported a cost of goods sold of $711 million in Q4 2024, compared to $695 million in Q4 2023, indicating a 2.3% increase[51] - Bausch Health's adjusted cost of goods sold for the twelve months ended December 31, 2024, was $2.647 billion, compared to $2.496 billion in 2023, an increase of 6%[54] - Selling, general and administrative expenses for the twelve months ended December 31, 2024, totaled $3.296 billion, compared to $2.917 billion in 2023, marking a 13% increase[54] - The adjusted selling, general and administrative expenses for the three months ended December 31, 2024, were $795 million, up from $740 million in 2023, indicating a rise of 7.4%[54] Tax and Impairments - The company reported a provision for income taxes of $111 million for the three months ended December 31, 2024, compared to $40 million in 2023[62] - The company reported goodwill impairments of $91 million for the three months ended December 31, 2023, which were eliminated in 2024[55] - The company reported a tax effect of non-GAAP adjustments amounting to $(57) million for the twelve months ended December 31, 2024, compared to $25 million in 2023[55]

| --- | --- | --- | --- | --- | --- | --- | |------------------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | 3Q 2024 | | | | | | | | EARNINGS | | | | | | | | OCTOBER 30, 2024 | | | | | | | | | | | | | | | 1 Forward-Looking Statements; Non-GAAP Information 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 limite ...

Financial Data and Key Metrics Changes - Revenues for Bausch Health, excluding Bausch + Lomb, increased by 7% on a reported basis and 8% on an organic basis compared to Q3 2023 [5][6] - Adjusted EBITDA for Bausch Health, excluding Bausch + Lomb, increased by approximately 9% compared to the prior year period [6][21] - Adjusted cash flow from operations was $343 million, a 75% increase versus the same period a year ago [18] Business Line Data and Key Metrics Changes - Salix segment revenues increased by 5% year-over-year, with XIFAXAN driving most of the revenue growth [22] - International segment revenues were $291 million, an increase of 6% on a reported basis and 8% on an organic basis [23] - Solta Medical segment revenues were $112 million, reflecting a 35% increase year-over-year [24] - Diversified segment revenues were $269 million, an increase of 4% on a reported basis and 7% on an organic basis [25] Market Data and Key Metrics Changes - Strong consumer demand was noted in South Korea, driven by direct-to-consumer marketing investments [9] - In Canada, growth was particularly strong in promoted portfolio products, including Contrave, which achieved double-digit growth [8] Company Strategy and Development Direction - The company is focused on sustained growth and innovation, with significant strides made in meeting 2024 objectives [6][9] - The Red Sea program aims to address unmet needs in cirrhotic patients, with ongoing studies and a focus on operational innovation [10][11] - The full separation of Bausch + Lomb remains a strategic priority, with ongoing evaluations to maximize value [16][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate value from its portfolio and emphasized the importance of operational excellence [30][31] - The company is optimistic about growth opportunities in various segments, including Salix and Solta, and is focused on capitalizing on market demands [41][44] Other Important Information - The company reduced its net debt by approximately $110 million in Q3, with a year-to-date reduction of $555 million [26] - Adjusted gross margin for Bausch Health, excluding Bausch + Lomb, was 82.5%, reflecting favorable net pricing [19] Q&A Session All Questions and Answers Question: Status of XIFAXAN legal disputes - Management stated that Norwich cannot launch a generic until 2029 and emphasized the intention to vigorously defend XIFAXAN's intellectual property [34] Question: Potential dividend considerations - The company will prioritize meeting debt obligations and reinvesting in the business before considering any return to shareholders [52] Question: Addressing cost structure post-XIFAXAN exclusivity - Management indicated a focus on a fit-for-purpose model to manage costs and invest in growth opportunities, particularly in international markets [56][58] Question: Timing of XIFAXAN exclusivity expiration - Management confirmed confidence in defending patents until January 1, 2028, while acknowledging the presence of first filer status by Teva [62] Question: Insights from site visits - Management highlighted the excitement and energy among teams globally, with a focus on business development and growth opportunities [45][46] Question: Rationale for Red Sea program target population - The program aims to address a significant unmet need in cirrhotic patients, with a focus on preventing decompensation [67]

Part I. Financial Information This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the period ended September 30, 2024 [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Bausch Health's unaudited Q3 2024 consolidated financial statements, including balance sheets, operations, cash flows, and detailed notes on key accounting areas [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's total assets and liabilities decreased, leading to an increased total deficit from December 2023 to September 2024 Financial Position (in millions) | Metric | Sep 30, 2024 (millions) | Dec 31, 2023 (millions) | |:---|:---|:---| | Total Assets | $26,540 | $27,350 | | Total Liabilities | $26,782 | $27,432 | | Total Deficit | $(242) | $(82) | - Total assets decreased by **$810 million** from December 31, 2023, to September 30, 2024, while total liabilities decreased by **$650 million**. The total deficit increased from **$(82) million** to **$(242) million**[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported significant year-over-year revenue and operating income growth, substantially reducing its net loss for both the three and nine months ended September 30, 2024 Consolidated Statements of Operations (in millions, except per share data) | Metric | Three Months Ended Sep 30, 2024 (millions) | Three Months Ended Sep 30, 2023 (millions) | Nine Months Ended Sep 30, 2024 (millions) | Nine Months Ended Sep 30, 2023 (millions) | |:---|:---|:---|:---|:---| | Revenues | $2,510 | $2,238 | $7,066 | $6,349 | | Operating Income | $318 | $14 | $988 | $601 | | Net Loss Attributable to Bausch Health Companies Inc. | $(85) | $(378) | $(139) | $(553) | | Basic and Diluted Loss Per Share | $(0.23) | $(1.03) | $(0.38) | $(1.52) | - For the three months ended September 30, 2024, revenues increased by **$272 million** (**12.2% YoY**), and operating income significantly improved from **$14 million** to **$318 million**. Net loss attributable to Bausch Health Companies Inc. decreased from **$(378) million** to **$(85) million**[11](index=11&type=chunk) - For the nine months ended September 30, 2024, revenues increased by **$717 million** (**11.3% YoY**), operating income rose from **$601 million** to **$988 million**, and net loss attributable to Bausch Health Companies Inc. decreased from **$(553) million** to **$(139) million**[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) The company's comprehensive loss improved significantly for the three months ended September 30, 2024, primarily due to favorable foreign currency translation adjustments Consolidated Statements of Comprehensive (Loss) Income (in millions) | Metric | Three Months Ended Sep 30, 2024 (millions) | Three Months Ended Sep 30, 2023 (millions) | Nine Months Ended Sep 30, 2024 (millions) | Nine Months Ended Sep 30, 2023 (millions) | |:---|:---|:---|:---|:---| | Net Loss | $(92) | $(382) | $(170) | $(564) | | Other Comprehensive Income (Loss) | $54 | $(136) | $(64) | $(2) | | Comprehensive Loss Attributable to Bausch Health Companies Inc. | $(25) | $(527) | $(205) | $(548) | - For the three months ended September 30, 2024, other comprehensive income was **$54 million**, a significant improvement from a loss of **$(136) million** in the prior year, primarily due to foreign currency translation adjustments[13](index=13&type=chunk) [Condensed Consolidated Statements of Shareholders' (Deficit) Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20(Deficit)%20Equity) The total shareholders' deficit increased from January to September 2024, mainly due to accumulated deficit and other comprehensive loss Consolidated Statements of Shareholders' (Deficit) Equity (in millions) | Metric | Balances, Jan 1, 2024 (millions) | Balances, Sep 30, 2024 (millions) | |:---|:---|:---| | Common Shares Amount | $10,423 | $10,489 | | Additional Paid-In Capital | $214 | $201 | | Accumulated Deficit | $(9,778) | $(9,917) | | Accumulated Other Comprehensive Loss | $(1,881) | $(1,947) | | Total Bausch Health Companies Inc. Shareholders' Deficit | $(1,022) | $(1,174) | | Noncontrolling Interest | $940 | $932 | | Total Deficit | $(82) | $(242) | - Total Bausch Health Companies Inc. shareholders' deficit increased from **$(1,022) million** at January 1, 2024, to **$(1,174) million** at September 30, 2024, primarily due to accumulated deficit and other comprehensive loss[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced increased operating cash flow and significantly reduced cash used in investing activities, while financing activities shifted to an outflow due to debt repayments Consolidated Statements of Cash Flows (in millions) | Metric | Nine Months Ended Sep 30, 2024 (millions) | Nine Months Ended Sep 30, 2023 (millions) | |:---|:---|:---| | Net Cash Provided by Operating Activities | $996 | $642 | | Net Cash Used in Investing Activities | $(254) | $(1,997) | | Net Cash (Used in) Provided by Financing Activities | $(953) | $1,554 | | Net (Decrease) Increase in Cash, Cash Equivalents, Restricted Cash and Other Settlement Deposits | $(212) | $189 | | Cash, Cash Equivalents and Restricted Cash, End of Period | $750 | $780 | - Net cash provided by operating activities increased by **$354 million** to **$996 million** for the nine months ended September 30, 2024, compared to **$642 million** in the prior year[18](index=18&type=chunk) - Net cash used in investing activities significantly decreased from **$(1,997) million** in 2023 to **$(254) million** in 2024, primarily due to lower acquisition spending[18](index=18&type=chunk) - Net cash from financing activities shifted from a **$1,554 million** inflow in 2023 to a **$(953) million** outflow in 2024, mainly due to debt repayments[18](index=18&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the company's financial statements, covering accounting policies, revenue, acquisitions, debt, and legal matters [Description of Business](index=9&type=section&id=DESCRIPTION%20OF%20BUSINESS) Bausch Health Companies Inc. operates as a global, diversified specialty pharmaceutical and medical device company with a significant stake in eye health - Bausch Health Companies Inc. is a global, diversified specialty pharmaceutical and medical device company, primarily focused on gastroenterology, hepatology, neurology, and dermatology. It also holds an approximately **88% ownership** in Bausch + Lomb Corporation, focusing on eye health[19](index=19&type=chunk) - The Company markets its products directly or indirectly in approximately **90 countries**[19](index=19&type=chunk) [Significant Accounting Policies](index=9&type=section&id=SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the company's accounting principles, including its plan to separate the Bausch + Lomb business and the evaluation of new accounting standards - The unaudited Condensed Consolidated Financial Statements are prepared in U.S. dollars in accordance with U.S. GAAP for interim financial reporting, consistent with policies used for the annual financial statements[20](index=20&type=chunk) - The Company announced a plan to separate its eye health business (Bausch + Lomb) into an independent publicly traded entity, holding approximately **88%** of B+L's outstanding common shares as of September 30, 2024. The full separation is subject to debt leverage ratios and necessary approvals[21](index=21&type=chunk)[22](index=22&type=chunk) - New accounting standards issued by FASB, ASU 2023-09 (Income Taxes) and ASU 2023-07 (Segment Reporting), are effective for the Company's 2025 and 2024 annual reports, respectively, with early adoption permitted. The Company is evaluating their impact[27](index=27&type=chunk)[28](index=28&type=chunk) [Revenue Recognition](index=10&type=section&id=REVENUE%20RECOGNITION) The company's revenues are primarily derived from product sales, with gross sales subject to various variable consideration deductions estimated based on market conditions and historical data - Revenues are primarily from product sales in GI, hepatology, neurology, dermatology, and eye health, including branded, generic, OTC, and medical devices. Other revenues include licensing and contract manufacturing[29](index=29&type=chunk) - Gross product sales are subject to deductions for variable consideration (discounts, allowances, returns, rebates, chargebacks, distribution fees), which are estimated and adjusted based on market conditions and historical experience[30](index=30&type=chunk)[32](index=32&type=chunk) Variable Consideration Provisions (Nine Months Ended Sep 30, 2024 vs. 2023, in millions) | (in millions) | Jan 1, 2024 | Current Period Provisions | Payments and Credits | Sep 30, 2024 | |:---|:---|:---|:---|:---| | Discounts and Allowances | $191 | $500 | $(501) | $190 | | Returns | $380 | $115 | $(122) | $373 | | Rebates | $1,108 | $2,699 | $(2,459) | $1,348 | | Chargebacks | $216 | $1,465 | $(1,516) | $165 | | Distribution Fees | $44 | $226 | $(196) | $74 | | **Total** | **$1,939** | **$5,005** | **$(4,794)** | **$2,150** | | (in millions) | Jan 1, 2023 | Current Period Provisions | Payments and Credits | Sep 30, 2023 | |:---|:---|:---|:---|:---| | Discounts and Allowances | $188 | $457 | $(462) | $183 | | Returns | $427 | $103 | $(147) | $383 | | Rebates | $1,023 | $2,071 | $(2,017) | $1,077 | | Chargebacks | $196 | $1,514 | $(1,501) | $209 | | Distribution Fees | $76 | $190 | $(171) | $95 | | **Total** | **$1,910** | **$4,335** | **$(4,298)** | **$1,947** | - The total reserve balances for variable consideration increased from **$1,939 million** at January 1, 2024, to **$2,150 million** at September 30, 2024[35](index=35&type=chunk) [Licensing Agreements and Acquisitions](index=12&type=section&id=LICENSING%20AGREEMENTS%20AND%20ACQUISITIONS) This section details recent strategic acquisitions by Bausch + Lomb, expanding its presence in the dry eye, ophthalmology, and cataract treatment markets - In July 2024, Bausch + Lomb acquired Trukera Medical for approximately **$24 million**, expanding its dry eye market presence with the ScoutPro device[41](index=41&type=chunk) - In September 2023, Bausch + Lomb acquired XIIDRA and other ophthalmology assets from Novartis for an upfront cash payment of **$1,750 million**, recognizing **$1,600 million** in identifiable intangible assets[43](index=43&type=chunk) - In July 2023, Bausch + Lomb acquired the Blink product line of eye and contact lens drops from Johnson & Johnson Vision for **$107 million**, aiming to grow its global over-the-counter business[47](index=47&type=chunk) - In January 2023, Bausch + Lomb acquired AcuFocus, Inc. for an upfront payment of **$35 million**, gaining small aperture intraocular technology for cataract treatment[48](index=48&type=chunk) [Restructuring, Integration and Separation Costs](index=13&type=section&id=RESTRUCTURING,%20INTEGRATION%20AND%20SEPARATION%20COSTS) The company's restructuring, integration, and separation costs decreased for the nine-month period ended September 30, 2024 Restructuring, Integration and Separation Costs (Nine Months Ended Sep 30, in millions) | (in millions) | 2024 | 2023 | |:---|:---|:---| | Restructuring and Integration Costs | $23 | $37 | | Separation Costs | $2 | $3 | | **Total** | **$25** | **$40** | - Total restructuring, integration, and separation costs decreased from **$40 million** in 2023 to **$25 million** in 2024 for the nine-month period[50](index=50&type=chunk)[53](index=53&type=chunk) - Separation-related costs, included in Selling, general and administrative expenses, decreased from **$18 million** in 2023 to **$9 million** in 2024[54](index=54&type=chunk) [Fair Value Measurements and Financial Instruments](index=14&type=section&id=FAIR%20VALUE%20MEASUREMENTS%20AND%20FINANCIAL%20INSTRUMENTS) This section details the fair value measurements of financial assets and liabilities, including acquisition-related contingent consideration and long-term debt Financial Assets and Liabilities Measured at Fair Value (Sep 30, 2024, in millions) | (in millions) | Total | Level 1 | Level 2 | Level 3 | |:---|:---|:---|:---|:---! | **Assets:** | | | | | | Cash equivalents | $157 | $149 | $8 | $— | | Restricted cash | $31 | $31 | $— | $— | | Foreign currency exchange contracts | $1 | $— | $1 | $— | | **Liabilities:** | | | | | | Acquisition-related contingent consideration | $285 | $— | $— | $285 | | Cross-currency swaps | $94 | $— | $94 | $— | | Foreign currency exchange contracts | $5 | $— | $5 | $— | - Acquisition-related contingent consideration, measured using Level 3 unobservable inputs, totaled **$285 million** at September 30, 2024, with a weighted average risk-adjusted discount rate of **8%**[58](index=58&type=chunk)[67](index=67&type=chunk) - The fair value of long-term debt was **$18,022 million** as of September 30, 2024, estimated using Level 2 quoted market prices[69](index=69&type=chunk) [Inventories](index=16&type=section&id=INVENTORIES) The company's net inventories increased from December 2023 to September 2024, primarily driven by an increase in finished goods Inventories, Net (in millions) | Category | Sep 30, 2024 | Dec 31, 2023 | |:---|:---|:---| | Raw materials | $538 | $509 | | Work in process | $108 | $124 | | Finished goods | $1,009 | $911 | | **Total Inventories, net** | **$1,655** | **$1,544** | - Total inventories, net, increased by **$111 million** from **$1,544 million** at December 31, 2023, to **$1,655 million** at September 30, 2024, primarily driven by an increase in finished goods[70](index=70&type=chunk) [Intangible Assets and Goodwill](index=17&type=section&id=INTANGIBLE%20ASSETS%20AND%20GOODWILL) The company's net intangible assets decreased, while goodwill remained stable, with significantly lower impairment charges in 2024 compared to 2023 Intangible Assets, Net (in millions) | Category | Sep 30, 2024 | Dec 31, 2023 | |:---|:---|:---| | Product brands | $3,610 | $4,336 | | Corporate brands | $292 | $352 | | Product rights/patents | $34 | $53 | | Technology and other | $13 | $12 | | Acquired in-process research and development | $5 | $5 | | B&L Trademark | $1,698 | $1,698 | | **Total Intangible Assets, net** | **$5,652** | **$6,456** | - Total intangible assets, net, decreased by **$804 million** from **$6,456 million** at December 31, 2023, to **$5,652 million** at September 30, 2024, mainly due to amortization of product and corporate brands[72](index=72&type=chunk) - Asset impairments for the nine months ended September 30, 2024, were **$6 million**, primarily due to the discontinuance of a product brand, significantly lower than **$54 million** in 2023 which included a **$37 million** impairment for Uceris Foam[73](index=73&type=chunk)[74](index=74&type=chunk) Goodwill Carrying Amounts by Segment (in millions) | Segment | Dec 31, 2023 | Sep 30, 2024 | |:---|:---|:---| | Bausch + Lomb | $5,314 | $5,320 | | Salix | $3,159 | $3,159 | | International | $862 | $846 | | Solta Medical | $115 | $115 | | Diversified | $1,733 | $1,731 | | **Total Goodwill** | **$11,183** | **$11,171** | - Goodwill impairments for the nine months ended September 30, 2024, were **$0**, compared to **$402 million** in 2023, which resulted from impairments to the Dermatology (**$151 million**) and Neurology (**$251 million**) reporting units[76](index=76&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) [Accrued and Other Current Liabilities](index=20&type=section&id=ACCRUED%20AND%20OTHER%20CURRENT%20LIABILITIES) Total accrued and other current liabilities increased from December 2023 to September 2024, mainly due to higher product rebates and income taxes payable Accrued and Other Current Liabilities (in millions) | Category | Sep 30, 2024 | Dec 31, 2023 | |:---|:---|:---| | Product rebates | $1,305 | $1,069 | | Product returns | $373 | $380 | | Legal matters and related fees | $337 | $344 | | Employee compensation and benefit costs | $318 | $360 | | Interest | $237 | $236 | | Income taxes payable | $102 | $47 | | Other | $714 | $697 | | **Total** | **$3,386** | **$3,133** | - Total accrued and other current liabilities increased by **$253 million** from **$3,133 million** at December 31, 2023, to **$3,386 million** at September 30, 2024, primarily due to an increase in product rebates and income taxes payable[91](index=91&type=chunk) [Financing Arrangements](index=21&type=section&id=FINANCING%20ARRANGEMENTS) The company's total debt obligations decreased, and it remains in compliance with financial covenants, with significant debt maturities scheduled for 2025-2028 Principal Amounts of Debt Obligations (in millions) | Category | Sep 30, 2024 | Dec 31, 2023 | |:---|:---|:---| | Senior Secured Credit Facilities | $5,457 | $5,898 | | Senior Secured Notes | $7,306 | $7,306 | | B+L Senior Secured Notes | $1,400 | $1,400 | | 9.00% Intermediate Holdco Secured Notes | $999 | $999 | | Senior Unsecured Notes | $5,734 | $6,397 | | Other | $12 | $12 | | **Total Principal Amount** | **$20,908** | **$22,012** | | Less: Current portion of long-term debt | $453 | $450 | | **Non-current portion of long-term debt and other** | **$21,054** | **$21,938** | - Total principal amount of debt obligations decreased by **$1,104 million** from December 31, 2023, to September 30, 2024, primarily due to reductions in Senior Secured Credit Facilities and Senior Unsecured Notes[93](index=93&type=chunk) - The Company was in compliance with its financial maintenance covenant as of September 30, 2024, and expects to remain so for the next twelve months[96](index=96&type=chunk) - In January and May 2024, the Company repurchased and retired **$555 million** par value of senior unsecured notes for approximately **$530 million**, recognizing a net gain of **$23 million** on extinguishment of debt[142](index=142&type=chunk) Maturities of Debt Obligations (in millions) | Year | Amount | |:---|:---| | Remainder of 2024 | $39 | | 2025 | $2,370 | | 2026 | $757 | | 2027 | $6,823 | | 2028 | $7,168 | | 2029 | $1,609 | | Thereafter | $1,593 | | **Total debt obligations** | **$20,359** | [Share-Based Compensation](index=28&type=section&id=SHARE-BASED%20COMPENSATION) The company and Bausch + Lomb amended their incentive plans to authorize additional common shares, with total share-based compensation expenses increasing slightly - Bausch Health's 2014 Omnibus Incentive Plan was amended in May 2024 to authorize an additional **20,000,000** common shares, with approximately **32,688,000** common shares available for future grants as of September 30, 2024[149](index=149&type=chunk)[150](index=150&type=chunk) - Bausch + Lomb's 2022 Omnibus Incentive Plan was amended in May 2024 to increase authorized shares by **14,000,000**, totaling **52,000,000** common shares, with approximately **20,900,000** available for future grants as of September 30, 2024[152](index=152&type=chunk)[154](index=154&type=chunk) Share-Based Compensation Expenses (in millions) | Category | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---|:---|:---|:---|:---| | Stock options | $4 | $4 | $10 | $14 | | RSUs | $34 | $25 | $97 | $89 | | **Total** | **$38** | **$29** | **$107** | **$103** | [Accumulated Other Comprehensive Loss](index=31&type=section&id=ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) The accumulated other comprehensive loss increased, primarily due to foreign currency translation adjustments Accumulated Other Comprehensive Loss (in millions) | Category | Sep 30, 2024 | Dec 31, 2023 | |:---|:---|:---| | Foreign currency translation adjustment | $(1,929) | $(1,863) | | Pension adjustment, net of tax | $(18) | $(18) | | **Total** | **$(1,947)** | **$(1,881)** | - Accumulated other comprehensive loss increased from **$(1,881) million** at December 31, 2023, to **$(1,947) million** at September 30, 2024, primarily due to foreign currency translation adjustments[163](index=163&type=chunk) [Research and Development](index=31&type=section&id=RESEARCH%20AND%20DEVELOPMENT) Total research and development expenses remained stable for the nine months ended September 30, 2024, with a slight decrease for the three-month period Research and Development Costs (in millions) | Category | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---|:---|:---|:---|:---| | Product related research and development | $141 | $146 | $440 | $430 | | Quality assurance | $5 | $7 | $13 | $22 | | **Total** | **$146** | **$153** | **$453** | **$452** | - Total R&D expenses for the three months ended September 30, 2024, decreased by **$7 million** (**5% YoY**) to **$146 million**. For the nine months, R&D expenses remained stable at **$453 million**[164](index=164&type=chunk) [Other Expense, Net](index=31&type=section&id=OTHER%20EXPENSE,%20NET) Other expense, net, significantly increased for both the three and nine months ended September 30, 2024, primarily due to adjustments for legal matters and acquired in-process R&D costs Other Expense, Net (in millions) | Category | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---|:---|:---|:---|:---| | Litigation and other matters | $188 | $24 | $215 | $(55) | | Acquisition-related contingent consideration | $25 | $26 | $19 | $40 | | Gain on sale of assets, net | $(5) | $(5) | $(10) | $(4) | | Acquired in-process research and development costs | $15 | $— | $18 | $— | | Acquisition-related transaction costs | $2 | $15 | $3 | $18 | | Other, net | $— | $— | $— | $1 | | **Total** | **$225** | **$60** | **$245** | **$—** | - Other expense, net, significantly increased to **$225 million** for the three months ended September 30, 2024, from **$60 million** in the prior year, primarily due to adjustments for legal matters and acquired in-process R&D costs[165](index=165&type=chunk) - For the nine months, other expense, net, was **$245 million** in 2024, compared to **$0** in 2023, driven by litigation adjustments and acquired in-process R&D[165](index=165&type=chunk) [Income Taxes](index=32&type=section&id=INCOME%20TAXES) The provision for income taxes decreased for the nine months ended September 30, 2024, primarily due to a lower income tax provision for ordinary loss and net income tax benefit for discrete items Provision for Income Taxes (in millions) | Period | 2024 | 2023 | |:---|:---|:---| | Nine Months Ended Sep 30 | $128 | $181 | - Provision for income taxes for the nine months ended September 30, 2024, was **$128 million**, a decrease from **$181 million** in 2023, primarily due to a lower income tax provision for ordinary loss and net income tax benefit for discrete items[169](index=169&type=chunk)[170](index=170&type=chunk) - The valuation allowance against deferred tax assets increased from approximately **$2,254 million** at December 31, 2023, to **$2,493 million** at September 30, 2024[171](index=171&type=chunk) - The Company estimates a potential liability of up to **$2,100 million** (excluding penalties and interest) if unsuccessful in defending against the IRS's proposed disallowance of the 2017 Capital Loss[176](index=176&type=chunk) [Loss Per Share](index=33&type=section&id=LOSS%20PER%20SHARE) Basic and diluted loss per share significantly improved for both the three and nine months ended September 30, 2024 Loss Per Share Attributable to Bausch Health Companies Inc. | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---|:---|:---|:---|:---| | Net loss attributable to Bausch Health Companies Inc. (millions) | $(85) | $(378) | $(139) | $(553) | | Basic and diluted weighted-average common shares outstanding (millions) | 368.4 | 365.4 | 367.7 | 364.5 | | Basic and diluted loss per share | $(0.23) | $(1.03) | $(0.38) | $(1.52) | - Basic and diluted loss per share improved significantly to **$(0.23)** for the three months ended September 30, 2024, from **$(1.03)** in the prior year, and to **$(0.38)** for the nine months, from **$(1.52)** in the prior year[182](index=182&type=chunk) [Legal Proceedings](index=33&type=section&id=LEGAL%20PROCEEDINGS) The company has accrued $337 million for current loss contingencies related to legal matters, including ongoing securities class actions and patent litigation - As of September 30, 2024, the Company's Condensed Consolidated Balance Sheets includes accrued current loss contingencies of **$337 million** related to probable and reasonably estimable legal matters[187](index=187&type=chunk) - The U.S. District Court for the Northern District of Iowa unsealed a qui tam complaint against the Company regarding sales and marketing of dermatology products, with the U.S. and states declining to intervene[188](index=188&type=chunk) - The Company settled the consolidated securities class action in 2019, which became final in 2021. However, **21 individual opt-out actions** remain pending in the District of New Jersey, with one case (GMO Trust) recently settled[190](index=190&type=chunk)[193](index=193&type=chunk)[196](index=196&type=chunk) - The Norwich Appeal Decision affirmed the injunction preventing FDA approval of the Norwich First ANDA for Xifaxan until October 2029. Petitions for writ of certiorari were filed with the Supreme Court in September 2024[74](index=74&type=chunk)[223](index=223&type=chunk) - The Shower to Shower Products Liability Litigation involves **25 pending lawsuits**. Johnson & Johnson and its affiliates have indemnification obligations to the Company for these claims[241](index=241&type=chunk)[243](index=243&type=chunk) - A California consumer protection action against the Company and Johnson & Johnson regarding talcum powder products was dismissed with prejudice on October 23, 2024, following a **42-state Attorneys General settlement**[251](index=251&type=chunk) [Segment Information](index=46&type=section&id=Segment%20Information) The company operates in five reportable segments, with Bausch + Lomb and Solta Medical showing strong revenue growth for the three and nine months ended September 30, 2024 - The Company operates in five reportable segments: Salix (U.S. GI products, **80%** from Xifaxan), International (non-U.S. branded/generic pharma, OTC), Solta Medical (aesthetic medical devices), Diversified (U.S. neurology, dermatology, generics, dentistry), and Bausch + Lomb (global eye health)[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) Segment Revenues (in millions) | Segment | Three Months Ended Sep 30, 2024 (millions) | Three Months Ended Sep 30, 2023 (millions) | Nine Months Ended Sep 30, 2024 (millions) | Nine Months Ended Sep 30, 2023 (millions) | |:---|:---|:---|:---|:---| | Salix | $642 | $614 | $1,699 | $1,667 | | International | $291 | $275 | $832 | $781 | | Solta Medical | $112 | $83 | $302 | $244 | | Diversified | $269 | $259 | $722 | $684 | | Bausch + Lomb | $1,196 | $1,007 | $3,511 | $2,973 | | **Total Revenues** | **$2,510** | **$2,238** | **$7,066** | **$6,349** | Segment Profits (in millions) | Segment | Three Months Ended Sep 30, 2024 (millions) | Three Months Ended Sep 30, 2023 (millions) | Nine Months Ended Sep 30, 2024 (millions) | Nine Months Ended Sep 30, 2023 (millions) | |:---|:---|:---|:---|:---| | Salix | $436 | $429 | $1,142 | $1,129 | | International | $105 | $91 | $278 | $236 | | Solta Medical | $53 | $33 | $140 | $114 | | Diversified | $189 | $172 | $469 | $417 | | Bausch + Lomb | $283 | $244 | $799 | $699 | | **Total Segment Profits** | **$1,066** | **$969** | **$2,828** | **$2,595** | - For the three months ended September 30, 2024, Bausch + Lomb segment revenue increased by **19% YoY** to **$1,196 million**, and Solta Medical segment revenue increased by **35% YoY** to **$112 million**[261](index=261&type=chunk) - For the nine months ended September 30, 2024, Bausch + Lomb segment revenue increased by **18% YoY** to **$3,511 million**, and Solta Medical segment revenue increased by **24% YoY** to **$302 million**[261](index=261&type=chunk) Revenues by Geographic Region (in millions) | Region | Three Months Ended Sep 30, 2024 (millions) | Three Months Ended Sep 30, 2023 (millions) | Nine Months Ended Sep 30, 2024 (millions) | Nine Months Ended Sep 30, 2023 (millions) | |:---|:---|:---|:---|:---| | U.S. and Puerto Rico | $1,535 | $1,358 | $4,227 | $3,738 | | China | $132 | $113 | $351 | $315 | | Canada | $104 | $92 | $293 | $268 | | Poland | $92 | $82 | $256 | $232 | | Mexico | $88 | $90 | $248 | $234 | | France | $52 | $49 | $178 | $169 | | Japan | $46 | $47 | $136 | $145 | | Russia | $42 | $35 | $117 | $105 | | Germany | $40 | $34 | $125 | $119 | | South Korea | $38 | $24 | $102 | $69 | | United Kingdom | $34 | $32 | $100 | $92 | | Italy | $23 | $20 | $71 | $64 | | Spain | $21 | $20 | $71 | $67 | | Other | $263 | $242 | $791 | $732 | | **Total** | **$2,510** | **$2,238** | **$7,066** | **$6,349** | Major Customers (Percentage of Total Revenues) | Customer | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---|:---|:---| | Cencora Inc. | 19% | 19% | | McKesson Corporation | 16% | 15% | | Cardinal Health, Inc. | 14% | 13% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on Bausch Health's Q3 2024 financial condition and results, covering business overview, strategic initiatives, performance highlights, segment analysis, and liquidity [Introduction](index=50&type=section&id=INTRODUCTION) This section introduces the Management's Discussion and Analysis, emphasizing its forward-looking statements and the need to read it with the interim financial statements - The Management's Discussion and Analysis (MD&A) should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements for the quarter ended September 30, 2024[271](index=271&type=chunk) - The MD&A contains forward-looking statements regarding business strategy, product pipeline, financial performance, and the B+L Separation[271](index=271&type=chunk) [Overview](index=50&type=section&id=OVERVIEW) Bausch Health is a global, diversified specialty pharmaceutical and medical device company focused on strategic capital management, growth drivers, and the planned separation of Bausch + Lomb - Bausch Health is a global, diversified specialty pharmaceutical and medical device company with five reportable segments: Salix, International, Solta Medical, Diversified, and Bausch + Lomb[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) - The Company plans to separate its eye health business, Bausch + Lomb, into an independent publicly traded entity, holding approximately **88%** of B+L's outstanding common shares as of October 23, 2024. The separation aims to allow each company to focus on core businesses and optimize capital allocation[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk)[281](index=281&type=chunk) - Strategic focus includes managing capital structure, directing capital to core businesses, improving patient access, divesting non-core assets, and investing in sustainable growth drivers[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - In January and May 2024, the Company repurchased and retired **$555 million** of senior unsecured notes for approximately **$530 million**[289](index=289&type=chunk) - Bausch + Lomb acquired XIIDRA and other ophthalmology assets in September 2023, and the Blink OTC product line in July 2023, to expand its dry eye and global OTC businesses[290](index=290&type=chunk)[302](index=302&type=chunk) - Key R&D projects include Phase 3 studies for Rifaximin (RED-C) for hepatic encephalopathy, a Phase 2 study for Amiselimod for ulcerative colitis, and new product launches like CABTREO Topical Gel for acne and SiHy Daily contact lenses[296](index=296&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk) [Business Trends](index=57&type=section&id=Business%20Trends) This section discusses various business trends, including geopolitical impacts, tax regulations, healthcare reform, potential loss of exclusivity, and compliance status - The Russia-Ukraine war and Middle East regional conflict have not materially impacted the Company's revenues, which were approximately **2%** from Russia, Ukraine, and Belarus for the nine months ended September 30, 2024 and 2023[314](index=314&type=chunk)[315](index=315&type=chunk) - The OECD's global minimum corporate tax rate (Pillar 2) is effective in many jurisdictions starting January 2024. The estimated impact on the Company's tax provision is not material, but future implementation could have a material effect[318](index=318&type=chunk)[319](index=319&type=chunk) - Health care reform, including the Inflation Reduction Act (IRA) and state-level price controls, continues to create pricing pressures and regulatory changes for pharmaceutical products[320](index=320&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - Certain branded products, including Aplenzin, Bryhali, Relistor Subcutaneous, and Xifaxan in the U.S., and Jublia in Canada, could face loss of exclusivity (LOE) and generic competition between 2026 and 2028[326](index=326&type=chunk) - All global operations and facilities are in good compliance standing with relevant health authorities, with FDA sites rated as No Action Indicated or Voluntary Action Indicated[331](index=331&type=chunk) [Financial Performance Highlights](index=59&type=section&id=FINANCIAL%20PERFORMANCE%20HIGHLIGHTS) The company achieved significant revenue and operating income growth for both the three and nine months ended September 30, 2024, driven by higher revenues and reduced impairments Financial Performance Summary (in millions, except per share data) | Metric | Three Months Ended Sep 30, 2024 (millions) | Three Months Ended Sep 30, 2023 (millions) | Nine Months Ended Sep 30, 2024 (millions) | Nine Months Ended Sep 30, 2023 (millions) | |:---|:---|:---|:---|:---| | Revenues | $2,510 | $2,238 | $7,066 | $6,349 | | Operating Income | $318 | $14 | $988 | $601 | | Loss before income taxes | $(21) | $(326) | $(42) | $(383) | | Net loss attributable to Bausch Health Companies Inc. | $(85) | $(378) | $(139) | $(553) | | Basic and diluted loss per share | $(0.23) | $(1.03) | $(0.38) | $(1.52) | - For the three months ended September 30, 2024, revenues increased by **$272 million** (**12% YoY**), and operating income increased by **$304 million**, primarily due to higher revenues and a decrease in goodwill impairments[332](index=332&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk) - For the nine months ended September 30, 2024, revenues increased by **$717 million** (**11% YoY**), and operating income increased by **$387 million**, driven by higher revenues and reduced goodwill and asset impairments[332](index=332&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk) [Results of Operations](index=61&type=section&id=RESULTS%20OF%20OPERATIONS) This section provides a detailed analysis of the company's revenues and expenses, highlighting key drivers of financial performance for the reporting periods [Revenues (Three Months)](index=61&type=section&id=Revenues%20(Three%20Months)) Total revenues for the three months ended September 30, 2024, increased by 12%, driven by higher volumes, acquisitions, and improved net pricing - Total revenues for the three months ended September 30, 2024, were **$2,510 million**, an increase of **$272 million** (**12%**) compared to **$2,238 million** in 2023[345](index=345&type=chunk) - The increase was driven by higher volumes (**$115 million**), incremental sales from acquisitions (**$96 million**, primarily XIIDRA), and improved net pricing (**$86 million**), partially offset by divestitures/discontinuations (**$16 million**) and unfavorable foreign currency impact (**$9 million**)[345](index=345&type=chunk) Provisions to Reduce Gross Product Sales to Net Product Sales (Three Months Ended Sep 30, in millions) | (in millions) | 2024 Amount | 2024 Pct. | 2023 Amount | 2023 Pct. | |:---|:---|:---|:---|:---! | Gross product sales | $4,122 | 100.0% | $3,696 | 100.0% | | Discounts and allowances | $175 | 4.2% | $160 | 4.3% | | Returns | $26 | 0.6% | $24 | 0.6% | | Rebates | $897 | 21.9% | $707 | 19.2% | | Chargebacks | $463 | 11.2% | $525 | 14.2% | | Distribution fees | $79 | 1.9% | $67 | 1.8% | | **Total provisions** | **$1,640** | **39.8%** | **$1,483** | **40.1%** | | Net product sales | $2,482 | 60.2% | $2,213 | 59.9% | | Other revenues | $28 | | $25 | | | **Revenues** | **$2,510** | | **$2,238** | | - Total provisions as a percentage of gross product sales decreased by **0.3 percentage points** to **39.8%** for the three months ended September 30, 2024, primarily due to lower chargebacks, partially offset by higher rebates from acquisitions and new product launches[348](index=348&type=chunk) [Expenses (Three Months)](index=62&type=section&id=Expenses%20(Three%20Months)) Operating expenses for the three months ended September 30, 2024, saw increases in cost of goods sold and SG&A, while R&D decreased and goodwill impairments were zero - Cost of goods sold increased by **$70 million** (**11%**) to **$682 million**, primarily due to acquisition-related costs, higher unfavorable manufacturing variances, and increased volumes[351](index=351&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **$135 million** (**19%**) to **$850 million**, mainly due to higher selling, advertising, and promotion expenses related to Bausch + Lomb's XIIDRA acquisition and MIEBO launch[354](index=354&type=chunk) - Research and development (R&D) expenses decreased by **$7 million** (**5%**) to **$146 million**[356](index=356&type=chunk) - Amortization of intangible assets increased by **$21 million** (**8%**) to **$274 million**, driven by assets acquired by Bausch + Lomb in 2023[358](index=358&type=chunk) - Goodwill impairments were **$0** for the three months ended September 30, 2024, compared to **$402 million** in 2023[361](index=361&type=chunk) - Restructuring, integration, and separation costs decreased by **$13 million** to **$1 million**[367](index=367&type=chunk) - Other expense, net, increased by **$165 million** to **$225 million**, primarily due to adjustments for legal matters and acquired in-process R&D costs[371](index=371&type=chunk) [Non-Operating Income and Expense (Three Months)](index=65&type=section&id=Non-Operating%20Income%20and%20Expense%20(Three%20Months)) Non-operating expenses for the three months ended September 30, 2024, included increased interest expense and an unfavorable change in income tax provision - Interest expense increased by **$7 million** (**2%**) to **$346 million**, mainly due to interest associated with Bausch + Lomb's Secured Notes and Term Facility related to the XIIDRA acquisition[374](index=374&type=chunk) - Foreign exchange and other showed a favorable change of **$7 million**, resulting in **$0** for the three months ended September 30, 2024, compared to a loss of **$7 million** in 2023[377](index=377&type=chunk) - Provision for income taxes increased by **$15 million** to **$71 million**, an unfavorable change[378](index=378&type=chunk) [Reportable Segment Revenues and Profits (Three Months)](index=66&type=section&id=Reportable%20Segment%20Revenues%20and%20Profits%20(Three%20Months)) All segments reported revenue and profit growth for the three months ended September 30, 2024, with Bausch + Lomb and Solta Medical showing strong performance Segment Revenues and Profits (Three Months Ended Sep 30, 2024 vs. 2023, in millions) | Segment | 2024 Revenues (millions) | 2023 Revenues (millions) | Revenue Change (%) | 2024 Profits (millions) | 2023 Profits (millions) | Profit Change (%) | |:---|:---|:---|:---|:---|:---|:---! | Salix | $642 | $614 | 5% | $436 | $429 | 2% | | International | $291 | $275 | 6% | $105 | $91 | 15% | | Solta Medical | $112 | $83 | 35% | $53 | $33 | 61% | | Diversified | $269 | $259 | 4% | $189 | $172 | 10% | | Bausch + Lomb | $1,196 | $1,007 | 19% | $283 | $244 | 16% | | **Total** | **$2,510** | **$2,238** | **12%** | **$1,066** | **$969** | **10%** | - Organic revenue (non-GAAP) growth for the three months ended September 30, 2024, was **9%**, with Bausch + Lomb showing **10%** growth and Solta Medical **36%** growth[391](index=391&type=chunk) - Salix segment revenue increased by **5%** to **$642 million**, primarily due to increased net realized pricing for Xifaxan. Segment profit increased by **2%** to **$436 million**[392](index=392&type=chunk) - Solta Medical segment revenue increased by **35%** to **$112 million**, primarily due to higher volumes. Segment profit increased by **61%** to **$53 million**[395](index=395&type=chunk)[399](index=399&type=chunk) - Bausch + Lomb segment revenue increased by **19%** to **$1,196 million**, driven by acquisitions (**$96 million**), higher volumes (**$81 million**), and improved net pricing (**$20 million**). Segment profit increased by **16%** to **$283 million**[402](index=402&type=chunk)[403](index=403&type=chunk) [Revenues (Nine Months)](index=69&type=section&id=Revenues%20(Nine%20Months)) Total revenues for the nine months ended September 30, 2024, increased by 11%, primarily due to higher volumes, acquisitions, and improved net pricing - Total revenues for the nine months ended September 30, 2024, were **$7,066 million**, an increase of **$717 million** (**11%**) compared to **$6,349 million** in 2023[404](index=404&type=chunk) - The increase was primarily due to higher volumes (**$309 million**), incremental sales from acquisitions (**$288 million**, primarily XIIDRA), and improved net pricing (**$210 million**), partially offset by divestitures/discontinuations (**$48 million**) and unfavorable foreign currency impact (**$42 million**)[404](index=404&type=chunk) Provisions to Reduce Gross Product Sales to Net Product Sales (Nine Months Ended Sep 30, in millions) | (in millions) | 2024 Amount | 2024 Pct. | 2023 Amount | 2023 Pct. | |:---|:---|:---|:---|:---! | Gross product sales | $11,995 | 100.0% | $10,616 | 100.0% | | Discounts and allowances | $500 | 4.2% | $457 | 4.3% | | Returns | $115 | 1.0% | $103 | 1.0% | | Rebates | $2,699 | 22.4% | $2,071 | 19.5% | | Chargebacks | $1,465 | 12.2% | $1,514 | 14.2% | | Distribution fees | $226 | 1.9% | $190 | 1.8% | | **Total provisions** | **$5,005** | **41.7%** | **$4,335** | **40.8%** | | Net product sales | $6,990 | 58.3% | $6,281 | 59.2% | | Other revenues | $76 | | $68 | | | **Revenues** | **$7,066** | | **$6,349** | | - Total provisions as a percentage of gross product sales increased by **0.9 percentage points** to **41.7%** for the nine months ended September 30, 2024, primarily due to higher rebates from acquisitions and new product launches, partially offset by lower chargebacks[406](index=406&type=chunk) [Expenses (Nine Months)](index=70&type=section&id=Expenses%20(Nine%20Months)) Operating expenses for the nine months ended September 30, 2024, increased in cost of goods sold and SG&A, while goodwill and asset impairments significantly decreased - Cost of goods sold increased by **$194 million** (**11%**) to **$2,018 million**, driven by acquisition-related costs, higher manufacturing variances, and increased volumes, partially offset by the absence of Injector Recall charges from 2023[407](index=407&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **$325 million** (**15%**) to **$2,476 million**, mainly due to higher selling, advertising, and promotion expenses related to Bausch + Lomb's XIIDRA acquisition and MIEBO launch[409](index=409&type=chunk) - Research and development (R&D) expenses remained stable at **$453 million**[410](index=410&type=chunk) - Amortization of intangible assets increased by **$23 million** (**3%**) to **$818 million**, primarily due to assets acquired by Bausch + Lomb in 2023[411](index=411&type=chunk) - Goodwill impairments were **$0** for the nine months ended September 30, 2024, compared to **$402 million** in 2023[413](index=413&type=chunk) - Asset impairments decreased by **$48 million** (**89%**) to **$6 million**, compared to **$54 million** in 2023, which included a **$37 million** impairment for Uceris Foam[415](index=415&type=chunk)[416](index=416&type=chunk) - Restructuring, integration, and separation costs decreased by **$15 million** (**38%**) to **$25 million**[417](index=417&type=chunk) - Other expense, net, was **$245 million** in 2024, compared to **$0** in 2023, primarily due to adjustments for legal matters and acquired in-process R&D costs[420](index=420&type=chunk) [Non-Operating Income and Expense (Nine Months)](index=72&type=section&id=Non-Operating%20Income%20and%20Expense%20(Nine%20Months)) Non-operating expenses for the nine months ended September 30, 2024, included increased interest expense, a gain on debt extinguishment, and a favorable change in income tax provision - Interest expense increased by **$86 million** (**9%**) to **$1,051 million**, mainly due to interest associated with Bausch + Lomb's Secured Notes and Term Facility related to the XIIDRA acquisition[422](index=422&type=chunk) - A gain on extinguishment of debt of **$23 million** was recognized in 2024 due to repurchases of senior unsecured notes, with no comparable gain in 2023[423](index=423&type=chunk) - Foreign exchange and other showed a favorable net change of **$12 million**, resulting in a loss of **$26 million** in 2024 compared to a loss of **$38 million** in 2023[424](index=424&type=chunk) - Provision for income taxes decreased by **$53 million** to **$128 million**, a favorable change[425](index=425&type=chunk) [Reportable Segment Revenues and Profits (Nine Months)](index=73&type=section&id=Reportable%20Segment%20Revenues%20and%20Profits%20(Nine%20Months)) All segments reported revenue and profit growth for the nine months ended September 30, 2024, with Bausch + Lomb and Solta Medical leading the growth Segment Revenues and Profits (Nine Months Ended Sep 30, 2024 vs. 2023, in millions) | Segment | 2024 Revenues (millions) | 2023 Revenues (millions) | Revenue Change (%) | 2024 Profits (millions) | 2023 Profits (millions) | Profit Change (%) | |:---|:---|:---|:---|:---|:---|:---! | Salix | $1,699 | $1,667 | 2% | $1,142 | $1,129 | 1% | | International | $832 | $781 | 7% | $278 | $236 | 18% | | Solta Medical | $302 | $244 | 24% | $140 | $114 | 23% | | Diversified | $722 | $684 | 6% | $469 | $417 | 12% | | Bausch + Lomb | $3,511 | $2,973 | 18% | $799 | $699 | 14% | | **Total** | **$7,066** | **$6,349** | **11%** | **$2,828** | **$2,595** | **9%** | - Organic revenue (non-GAAP) growth for the nine months ended September 30, 2024, was **8%**, with Bausch + Lomb showing **10%** growth and Solta Medical **26%** growth[430](index=430&type=chunk) - Salix segment revenue increased by **2%** to **$1,699 million**, driven by increased net realized pricing and volumes. Segment profit increased by **1%** to **$1,142 million**[432](index=432&type=chunk)[433](index=433&type=chunk) - Solta Medical segment revenue increased by **24%** to **$302 million**, primarily due to higher volumes in the Asia-Pacific region. Segment profit increased by **23%** to **$140 million**[436](index=436&type=chunk)[437](index=437&type=chunk) - Bausch + Lomb segment revenue increased by **18%** to **$3,511 million**, driven by acquisitions (**$288 million**), higher volumes (**$226 million**), and improved net pricing (**$83 million**). Segment profit increased by **14%** to **$799 million**[440](index=440&type=chunk)[441](index=441&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's liquidity improved with increased operating cash flow and reduced investing activities, while managing debt obligations and maintaining compliance with financial covenants Cash Flows Summary (in millions) | Metric | Nine Months Ended Sep 30, 2024 (millions) | Nine Months Ended Sep 30, 2023 (millions) | |:---|:---|:---| | Net cash provided by operating activities | $996 | $642 | | Net cash used in investing activities | $(254) | $(1,997) | | Net cash (used in) provided by financing activities | $(953) | $1,554 | | Net (decrease) increase in cash, cash equivalents, restricted cash and other settlement Deposits | $(212) | $189 | | Cash, cash equivalents and restricted cash, End of Period | $750 | $780 | - Net cash provided by operating activities increased by **$354 million** to **$996 million** for the nine months ended September 30, 2024, primarily due to improved operating performance and favorable changes in operating assets and liabilities[442](index=442&type=chunk)[443](index=443&type=chunk)[444](index=444&type=chunk) - Net cash used in investing activities significantly decreased from **$(1,997) million** in 2023 to **$(254) million** in 2024, mainly due to lower acquisition spending[446](index=446&type=chunk)[447](index=447&type=chunk) - Net cash used in financing activities was **$(953) million** in 2024, a shift from **$1,554 million** provided in 2023, primarily due to **$1,049 million** in debt repayments, partially offset by **$155 million** in new debt issuance[447](index=447&type=chunk)[448](index=448&type=chunk) - The Company's primary liquidity sources are cash, cash from operations, revolving credit facilities, and potential debt/equity issuances. **$350 million** of cash is held by Bausch + Lomb entities and is generally not available to Bausch Health[450](index=450&type=chunk)[451](index=451&type=chunk) - Total debt obligations decreased by **$647 million** to **$20,359 million** as of September 30, 2024. The weighted average stated interest rate was **7.88%** (**6.37%** as reported in financial statements due to 2022 Exchange accounting)[458](index=458&type=chunk)[481](index=481&type=chunk) - The Company expects to meet its **$1,680 million** **5.50%** Senior Secured Notes due November 2025 using existing liquidity. Future debt obligations, including **$535 million** of **9.00%** Senior Unsecured Notes due December 2025, depend on operating performance and balance sheet improvements[455](index=455&type=chunk)[456](index=456&type=chunk) - As of October 30, 2024, the Company had approximately **$950 million** remaining availability under the 2027 Revolving Credit Facility and **$300 million** under the AR Credit Facility. Bausch + Lomb had **$121 million** remaining availability under its Revolving Credit Facility[473](index=473&type=chunk)[474](index=474&type=chunk)[475](index=475&type=chunk) - The Company was in compliance with its financial maintenance covenant as of September 30, 2024, and expects to remain so for the next twelve months[476](index=476&type=chunk) Credit Ratings as of October 30, 2024 | Rating Agency | Bausch Health Corporate Rating | Bausch Health Senior Secured Rating | Bausch Health Senior Unsecured Rating | Bausch Health Outlook | Bausch + Lomb Corporate Rating | Bausch + Lomb Senior Secured Rating | Bausch + Lomb Outlook | |:---|:---|:---|:---|:---|:---|:---|:---! | Moody's | Caa2 | Caa1 | Ca | Stable | | B1 | Stable | | Standard & Poor's | CCC+ | B- | CCC | Negative | B- | B- | Positive | | Fitch | CCC | B | C | No Outlook | B- | BB- | Rating Watch Evolving | - No material changes to off-balance sheet arrangements. Future cash requirements include **$400 million** for debt service (Q4 2024), **$100 million** for capital expenditures (Q4 2024), and **$10 million** for contingent consideration payments (Q4 2024)[485](index=485&type=chunk)[487](index=487&type=chunk) [Outstanding Share Data](index=83&type=section&id=OUTSTANDING%20SHARE%20DATA) As of October 25, 2024, Bausch Health had over 367 million common shares issued and outstanding, along with various stock options and restricted share units - As of October 25, 2024, Bausch Health had **367,803,401** issued and outstanding common shares[497](index=497&type=chunk) - The Company also had **8,367,591** stock options, **9,266,526** time-based restricted share units, and **1,781,092** performance-based restricted share units outstanding, with a maximum of **3,364,737** common shares issuable upon vesting of performance-based units[497](index=497&type=chunk) [Critical Accounting Policies and Estimates](index=83&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) No significant changes were made to critical accounting policies, but the company continues to monitor for potential goodwill impairment risks in certain reporting units - No significant changes were made to critical accounting policies and estimates during the three months ended September 30, 2024[498](index=498&type=chunk) - The Company continues to monitor market conditions and business performance for its Dermatology, Neurology, and Generics reporting units, as future deterioration could lead to material goodwill impairment charges[499](index=499&type=chunk) [New Accounting Standards](index=83&type=section&id=NEW%20ACCOUNTING%20STANDARDS) No new accounting standards were adopted during the nine months ended September 30, 2024, with future standards under evaluation - There were no new accounting standards adopted during the nine months ended September 30, 2024[27](index=27&type=chunk) [Forward-Looking Statements](index=83&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section highlights various forward-looking statements and associated risks, including those related to business strategy, financial performance, and ongoing litigation - This section outlines various forward-looking statements related to business strategy, product pipeline, financial performance, the B+L Separation, litigation outcomes, market conditions, and regulatory changes[503](index=503&type=chunk)[504](index=504&type=chunk) - Key risks and uncertainties include market and economic conditions, ongoing litigation (especially related to B+L IPO and separation), substantial debt, generic competition, and regulatory oversight[505](index=505&type=chunk)[506](index=506&type=chunk)[507](index=507&type=chunk)[508](index=508&type=chunk)[509](index=509&type=chunk)[511](index=511&type=chunk)[512](index=512&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=89&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses the company's exposure to interest rate and inflation risks, noting no material changes since the last annual report - As of September 30, 2024, the Company had **$14,551 million** in fixed-rate debt and **$5,808 million** in variable-rate debt[516](index=516&type=chunk) - A **100 basis-point** increase in interest rates would result in an annualized pre-tax effect of approximately **$58 million** in the Condensed Consolidated Statements of Operations and Cash Flows due to variable-rate debt[516](index=516&type=chunk) - The Company's ability to raise prices in anticipation of inflation may be limited in some markets due to price control restrictions on pharmaceutical products[517](index=517&type=chunk) [Item 4. Controls and Procedures](index=90&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of the company's disclosure controls and procedures, reporting no material changes in internal control over financial reporting - Management, with the participation of the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of September 30, 2024[518](index=518&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended September 30, 2024[519](index=519&type=chunk) Part II. Other Information This section provides additional disclosures on legal proceedings, risk factors, equity sales, and other corporate information [Item 1. Legal Proceedings](index=91&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 17 of the unaudited interim Condensed Consolidated Financial Statements for detailed information on legal proceedings - For information concerning legal proceedings, refer to Note 17, 'LEGAL PROCEEDINGS' in the unaudited interim Condensed Consolidated Financial Statements[521](index=521&type=chunk) [Item 1A. Risk Factors](index=91&type=section&id=Item%201A.%20Risk%20Factors) States no material changes to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K - No material changes to the risk factors as disclosed in Item 1A. 'Risk Factors' included in the Annual Report on Form 10-K for the year ended December 31, 2023[522](index=522&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=91&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered sales of equity securities by the company during the three months ended September 30, 2024 - There were no sales of equity securities by the Company during the three months ended September 30, 2024[523](index=523&type=chunk) [Item 3. Defaults Upon Senior Securities](index=91&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred during the reporting period[523](index=523&type=chunk) [Item 4. Mine Safety Disclosures](index=91&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Indicates that there are no mine safety disclosures to report - No mine safety disclosures are applicable or required[523](index=523&type=chunk) [Item 5. Other Information](index=91&type=section&id=Item%205.%20Other%20Information) Details an update to the Executive Officer Severance Arrangement, effective October 25, 2024, which modifies cash severance payments - Effective October 25, 2024, the cash severance payment for Executive Officers (excluding the CEO) in a qualifying termination will be one and a half times the sum of annual base salary and annual target incentive[524](index=524&type=chunk) - This updated severance provision is approved through December 31, 2025, with all other employment agreement terms remaining unchanged[525](index=525&type=chunk) [Item 6. Exhibits](index=92&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q, including employment agreements, certifications, and XBRL-related documents - Exhibits include employment agreements, certifications by the CEO and CFO (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents[527](index=527&type=chunk) [Signatures](index=93&type=section&id=Signatures) Contains the signatures of the Chief Executive Officer and Chief Financial Officer, certifying the filing of the report - The report is signed by Thomas J. Appio, Chief Executive Officer, and Jean-Jacques Charhon, Executive Vice President, Chief Financial Officer, on October 30, 2024[529](index=529&type=chunk)