What changed in this filing

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Item 9A. Controls and Procedures

2023-02-23 compared with 2022-02-23 · 1070 added, 658 removed, 2047 unchanged (46% of the section changed)

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Other Information

Departure of Directors or Certain Officers;

Election of Directors;

Appointment of Certain Officers;

Compensation Arrangements of Certain Officers

On February 21, 2023, the Talent and Compensation Committee of the Board of Directors of the Company (the “Committee”) approved changes to the compensation of Thomas J.

Appio, the Company’s Chief Executive Officer, based on a review of market data and Mr.

Appio’s performance.

The Committee increased Mr.

Appio’s annual base salary to $1,200,000 effective February 25, 2023 and his target annual cash bonus opportunity to 125% of his base salary commencing with his 2023 bonus.

In addition, the Committee also determined that Mr.

Appio’s annual aggregate target equity incentive compensation opportunity will be set at $11,000,000 commencing with annual equity awards to be made in 2023.

For 2023, Mr.

Appio’s annual equity award will be granted in the form of performance share units (subject to achievement of performance-based vesting conditions) and service-based restricted stock units.

This amount reflects only the target value of Mr.

Appio’s annual equity incentive awards;

the actual value that may be realized by Mr.

Appio in connection with these equity incentive awards will depend on the level of achievement of the applicable performance goals and satisfaction of the applicable service-vesting conditions.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Information required under this Item is incorporated herein by reference from information included in the 2023 Proxy Statement.

The Board of Directors has adopted a code of ethics (the "Code of Conduct") that applies to our Chief Executive Officer, Chief Financial Officer, the principal accounting officer, controller, and all vice presidents and above in the finance department of the Company worldwide.

The Board of Directors has adopted a code of ethics (the “Code of Conduct”) that applies to our employees, including the Chief Executive Officer, Chief Financial Officer, the principal accounting officer, controller, and all vice presidents and above in the finance department of the Company worldwide.

A copy of the Code of Conduct can be found on our website at:

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3.5 Articles of Bausch Health Companies Inc., as of July 13, 2018, originally filed as Exhibit 3.2 to the Company ’ s Current Report on Form 8-K filed on July 16, 2018, which is incorporated by reference herein.

4.1 Indenture, dated as of March 27, 2015 (the “VRX Escrow Corp Indenture”), between VRX Escrow Corp., the Bank of New York Mellon Trust Company, N.A., as trustee, registrar and US paying agent, and The Bank of New York Mellon, acting through its London branch, as the Euro paying agent, governing the 5.375% Senior Notes due 2020 (the “2020 Notes”), the 5.875% Senior Notes due 2023 (the “May 2023 Notes”), the 4.5 0 0% Senior Notes due 2023 (the “Euro Notes”) and the 6.125% Senior Notes due 2025 (the “2025 Notes” and together with the 2020 Notes, the May 2023 Notes and the Euro Notes, the “Notes”), originally filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 27, 2015, which is incorporated by reference herein.

4.2 First Supplemental Indenture to the VRX Escrow Corp Indenture, dated as of March 27, 2015, between Valeant Pharmaceuticals International, Inc., the guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as trustee, governing the Notes, originally filed as Exhibit 4.2 to the Company's Current Report on Form 8-K filed on March 27, 2015, which is incorporated by reference herein.

4.1 Indenture, dated as of March 21, 2017, by and among Valeant Pharmaceuticals International, Inc., the guarantors party thereto, The Bank of New York Mellon, as trustee and the notes collateral agents party thereto, governing the 6.500% Senior Secured Notes due 2022 and the 7.000% Senior Secured Notes due 2024, originally filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 21, 2017, which is incorporated by reference herein.

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4.4 Indenture, dated as of March 26, 2018, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the other guarantors party thereto and The Bank of New York Mellon, as trustee, governing the 9.250% Senior Secured Notes due 2026, originally filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 27, 2018, which is incorporated by reference herein.

4.7 Indenture, dated as of June 1, 2018, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals international, Inc., the other guarantors party thereto and The Bank of New York Mellon, as trustee, governing the 8.500% Senior Secure d Notes due 2027, originally filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 1, 2018, which is incorporated by reference herein.

4.5 Indenture, dated as of June 1, 2018, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals international, Inc., the other guarantors party thereto and The Bank of New York Mellon, as trustee, governing the 8.500% Senior Secured Notes due 2027, originally filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 1, 2018, which is incorporated by reference herein.

4.6 Indenture, dated as of March 8, 2019, by and among Bausch Health Companies Inc., the guarantors named therein, The Bank of New York Mellon Trust Company, N.A., as trustee, and the notes collateral agents party thereto, governing the 5.750% Senior Secured Notes due 2027, originally filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 8, 2019, which is incorporated by reference herein.

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4.12 Indenture, dated as of February 10, 2022, by and among Bausch Health Companies Inc., the guarantors named therein, The Bank of New York Mellon, N.A., as trustee and the notes collateral agents party thereto, governing the 6.125% Senior Secured Notes due 2027, originally filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on February 10, 2022, which is incorporated by reference herein.

4.13 Indenture, dated as of September 30, 2022, by and among Bausch Health Companies Inc., the guarantors party thereto, The Bank of New York Mellon, as trustee, and the notes collateral agents party thereto, governing the 11.00% Senior Secured Notes due 2028, originally filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 4, 2022, which is incorporated by reference herein .

4.14 Indenture, dated as of September 30, 2022, by and among Bausch Health Companies Inc., the guarantors party thereto, The Bank of New York Mellon, as trustee, and the notes collateral agents party thereto, governing the 14.00% Senior Secured Notes due 2030, originally filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on October 4, 2022, which is incorporated by reference herein.

4.15 Indenture, dated as of September 30, 2022, by and among 1375209 B.C.

Ltd., The Bank of New York Mellon, as trustee, and The Bank of New York Mellon, as notes collateral agent, governing the 9.00% Senior Secured Notes due 2028, originally filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on October 4, 2022, which is incorporated by reference herein.

4.16 Form of Common Share Certificate of Bausch Health Companies Inc., originally filed as Exhibit 4.1 to the Company ’ s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 16, 2018, which is incorporated by reference herein.

4.17 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, As Amended, originally filed as Exhibit 4.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 19, 2020, which is incorporated by reference herein.

4.18 Sixteenth Supplemental Indenture, dated as of September 14, 2022, by and among Bausch Health Americas, Inc.

and the Bank of New York Mellon, as trustee, amending that certain Indenture dated as of March 26, 2018 relating to the BHA ’ s 9.250% Senior Notes due 2026, originally filed as Exhibit 10.4 to the Company’s Current Report on Form 10-Q filed on November 3, 2022, which is incorporated by reference herein .

4.19 Sixteenth Supplemental Indenture, dated as of September 14, 2022, by and among Bausch Health Americas, Inc.

(“BHA”) and the Bank of New York Mellon, as trustee, amending that certain Indenture dated as of June 1, 2018 relating to the BHA’s 8.500% Senior Notes due 2027, originally filed as 10.5 to the Company’s Current Report on Form 10-Q filed on November 3, 2022, which is incorporated by reference herein.

4.20 Fourteenth Supplemental Indenture, dated as of September 14, 2022, by and among Bausch Health Companies Inc.

and the Bank of New York Mellon, as trustee, amending that certain Indenture dated as of May 23, 2019 relating to the Company’s 7.000% Senior Notes due 2028, originally filed as 10.6 to the Company’s Current Report on Form 10-Q filed on November 3, 2022, which is incorporated by reference herein.

4.21 Fourteenth Supplemental Indenture, dated as of September 14, 2022, by and among Bausch Health Companies Inc.

and the Bank of New York Mellon, as trustee, amending that certain Indenture dated as of December 30, 2019 relating to the Company’s 5.000% Senior Notes due 2028, originally filed as 10.7 to the Company’s Current Report on Form 10-Q filed on November 3, 2022, which is incorporated by reference herein.

4.22 Fifteenth Supplemental Indenture, dated as of September 28, 2022, by and among Bausch Health Companies Inc.

and the Bank of New York Mellon, as trustee, amending that certain Indenture dated as of May 23, 2019 relating to the Company’s 7.250% Senior Notes due 2029, originally filed as 10.8 to the Company’s Current Report on Form 10-Q filed on November 3, 2022, which is incorporated by reference herein.

10.1 Bausch Health Companies Inc.

Further Amended and Restated 2014 Omnibus Incentive Plan, effective as of April 28, 2020 (the "Amended and Restated 2014 Omnibus Incentive Plan") , originally filed as Exhibit 10 .

1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed on February 24, 2021, whi ch is incorporated by reference herein .†

Further Amended and Restated 2014 Omnibus Incentive Plan, effective as of April 28, 2020 (the "Amended and Restated 2014 Omnibus Incentive Plan"), originally filed as Exhibit 10.1 to the Company ’ s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed on February 24, 2021, which is incorporated by reference herein.†

10.2 Form of Matching Restricted Stock Unit Agreement (Matching Units) under the Amended and Restated 2014 Omnibus Incentive Plan, originally filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 filed on August 7, 2018, which is incorporated by reference herein.†

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10.7 Form of 2018 Share Unit Grant Agreement (Performance Vesting) (Performance Restricted Share Units), under the Amended and Restated 2014 Omnibus Incentive Plan, originally filed as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed on February 28, 2018, which is incorporated by reference herein.†

10.8 Form of RSU Grant Agreement, originally filed as Exhibit 10.13 to the Company’s Current Report on Form 10-Q filed on May 10, 2022, which is incorporated by reference herein.

10.9 Form of 2018 Restricted Stock Unit Agreement, under the Amended and Restated 2014 Omnibus Incentive Plan, originally filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed on February 28, 2018, which is incorporated by reference herein.†

10.10 Form of Option Grant Agreement, originally filed as Exhibit 10.14 to the Company’s Current Report on Form 10-Q filed on May 10, 2022, which is incorporated by reference herein.

10.11 Form of 2018 Stock Option Grant Agreement (Nonstatutory Stock Options), under the Amended and Restated 2014 Omnibus Incentive Plan, originally filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed on February 28, 2018, which is incorporated by reference herein.†

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2011 Omnibus Incentive Plan (the “2011 Omnibus Incentive Plan”), effective as of April 6, 2011, as amended on and approved by the shareholders on May 16, 2011, originally filed as Annex A to the Company ’ s Management Proxy Circular and Proxy Statement on Schedule 14A filed on April 14, 2011, as amended by the Supplement dated May 10, 2011 to the Company ’ s Management Proxy Circular and Proxy Statement filed on May 10, 2011, which is incorporated by reference herein.†

10.15 Bausch Health Companies Inc.

Further Amended and Restated 2014 Omnibus Incentive Plan, effective as of June 21, 2022, originally filed as Exhibit B to the Company’s definitive proxy statement (File No.

001-14956) filed on May 2, 2022, which is incorporated by reference herein.

10.16 Form of Stock Option Grant Agreement under the 2011 Omnibus Incentive Plan, originally filed as Exhibit 10.2 to the Company ’ s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed on February 28, 2012, which is incorporated by reference herein.†

10.14 Form of Spinoff Bonus Program Letter Agreement dated November 2, 2020 , o riginally filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fisc al year ended December 31, 2020 filed on February 24, 2 021, which is incorporated by reference herein .†

10.17 Form of Spinoff Bonus Program Letter Agreement dated November 2, 2020, originally filed as Exhibit 10.14 to the Company ’ s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed on February 24, 2021, which is incorporated by reference herein.†

10.18 Valeant Pharmaceuticals International, Inc.

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Papa, originally filed as Exhibit 10.1 to the Company ’ s Current Report on Form 8-K filed on April 27, 2016, which is incorporated by reference herein.†

10.17 Employment Agreement, dated as of August 17, 2016, between Valeant Pharmaceuticals International, Inc.

Herendeen, originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 23, 2016, which is incorporated by reference herein.†

10.18 Amendment to Employment Agreement, dated as of April 28, 2021, between Bausch Health Companies Inc.

and Paul Herendeen, originally filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed on November 2, 2021, which is incorporated by reference herein.†

10.20 Employment Agreement, dated July 8, 2016, between Valeant Pharmaceuticals International, Inc.

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10.21 Amended and Restated Employment Agreement, dated February 18, 2022, between Bausch Health Companies Inc.

and Thomas Appio.

and Thomas Appio, originally filed as Exhibit 10.20 on the Company’s Annual Report on Form 10-K filed on February 23, 2022, which is incorporated by reference herein.

10.22 Employment Agreement, dated August 2, 2018, between Bausch Health Companies Inc.

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Gordon, originally filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed on May 6, 2019, which is incorporated by reference herein.†

10.23 Employment Agreement, dated as of October 20, 2021, by and between Bausch Health Companies Inc.

and Tom Vadaketh, originally filed as 10.7 to the Company’s Current Report on Form 10-Q filed on August 9, 2022, which is incorporated by reference herein.

10.24 Employment Agreement, dated as of December 3, 2021, by and between Bausch Health Companies Inc.

and Seana Carson, originally filed as 10.8 to the Company’s Current Report on Form 10-Q filed on August 9, 2022, which is incorporated by reference herein.

10.25 Employment Agreement, dated as of June 1, 2021, between Bausch Health Companies Inc.

and Sam Eldessouky, originally filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended Jun e 30, 2021 filed on August 3, 2021, which is incorporated by reference herein.†

10.23 Employment Agreement between Valeant Pharmaceuticals International, Inc.

and William Humphries, dated December 1, 2016, originally filed as Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed on February 28, 2018, which is incorporated by reference herein.†

and Sam Eldessouky, originally filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 filed on August 3, 2021, which is incorporated by reference herein.†

10.26 First Incremental Amendment, dated as of November 27, 2018, to the Fourth Amended and Restated Credit and Guaranty Agreement, by and among Bausch Health Companies Inc., Valeant Pharmaceuticals International, certain subsidiaries of Bausch Health Companies Inc.

as guarantors, each of the financial institutions named therein as lenders and issuing banks and Barclays Bank PLC, as Administrative Agent, originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 27, 2018, which is incorporated by reference herein and which First Incremental Amendment appends, as an exhibit thereto, a copy of such Fourth Amended and Restated Credit and Guaranty Agreement, as amended to date.

10.27 Second Amendment to the Fourth Amended & Restated Credit and Guaranty Agreement, dated as of May 10, 2022, among Bausch Health Companies Inc., Bausch Health Americas, Inc., certain other subsidiaries of the Company as subsidiary guarantors, each of the financial institutions named therein as lenders and issuing banks and Barclays Bank PLC, as Administrative Agent, originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 10, 2022, which is incorporated by reference herein.

10.28 Credit Agreement, dated as of May 10, 2022, among Bausch + Lomb Corporation, certain subsidiaries of the Company as subsidiary guarantors, each of the financial institutions named therein as lenders and issuing banks, Citibank, N.A., as Revolving Facility Administrative Agent and Goldman Sachs Bank USA, as Term Facility Administrative Agent, originally filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 10, 2022, which is incorporated by reference herein .

10.29 Amended and Restated Supply Agreement dated October 25, 2018 among Salix Pharmaceuticals, Inc., Valeant Pharmaceuticals Ireland Limited, Valeant Pharmaceuticals Luxembourg s.à r.l.

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10.30 Amended and Restated License Agreement dated August 6, 2012 by and between Alfa Wassermann S.p.A.

and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.95 to Salix Pharmaceutical Inc.

’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein.

and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.95 to Salix Pharmaceutical Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein.

10.31 Letter Amendment dated September 5, 2012 by and between Alfa Wassermann S.p.A.

and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.100 to Salix Pharmaceutical Inc.

’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein.

and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.100 to Salix Pharmaceutical Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein.

10.32 Amendment No.

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10.33 Trademark License Agreement (Alfa to Salix) dated August 6, 2012 by and between Alfa Wassermann Hungary Kft.

and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.98 to Salix Pharmaceutical Inc.

’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein.

and Salix Pharmaceuticals, Inc., originally filed as Exhibit 10.98 to Salix Pharmaceutical Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 8, 2012, which is incorporated by reference herein.

10.34 Restatement Agreement, dated as of June 1, 2018, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, certain subsidiaries of Valeant Pharmaceuticals International, Inc.

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Icahn and the persons and entities listed therein, originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 24, 2021, which is incorporated by reference herein.

10.38 Arrangement Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation and the other parties thereto, dated as of April 28, 2022, originally filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 28, 2022, which is incorporated by reference herein.

10.39 Master Separation Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of March 30, 2022, originally filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on March 30, 2022, which is incorporated by reference herein.†#

10.40 Amendment to Master Separation Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of April 28, 2022, originally filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on April 28, 2022, which is incorporated by reference herein.

10.41 Transition Services Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of March 30, 2022, originally filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on March 30, 2022, which is incorporated by reference herein †#

10.42 Tax Matters Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of March 30, 2022, originally filed as Exhibit 99.3 to the Company’s Current Report on Form 8-K filed on March 30, 2022, which is incorporated by reference herein †#

10.43 Amendment to Tax Matters Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of April 28, 2022, originally filed as Exhibit 99.3 to the Company’s Current Report on Form 8-K filed on April 28, 2022, which is incorporated by reference herein.

10.44 Employee Matters Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of March 30, 2022, originally filed as Exhibit 99.4 to the Company’s Current Report on Form 8-K filed on March 30, 2022, which is incorporated by reference herein †#

10.45 Intellectual Property Matters Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of March 30, 2022, originally filed as Exhibit 99.5 to the Company’s Current Report on Form 8-K filed on March 30, 2022, which is incorporated by reference herein †#

10.46 Real Estate Matters Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of March 30, 2022, originally filed as Exhibit 99.6 to the Company’s Current Report on Form 8-K filed on March 30, 2022, which is incorporated by reference herein †#

10.47 Registration Rights Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of March 30, 2022, originally filed as Exhibit 99.7 to the Company’s Current Report on Form 8-K filed on March 30, 2022, which is incorporated by reference herein #

10.48 Loan Agreement by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, dated as of January 1, 2022, originally filed as Exhibit 10.10 to Bausch + Lomb Corporation’s Registration Statement on Form S-1 filed on April 28, 2022, which is incorporated by reference herein .

10.49 Assignment, Assumption and Amendment Agreement between Bausch Health Companies Inc., Bausch + Lomb Corporation and Joseph Papa dated as of January 3, 2022, originally filed as Exhibit 10.18 to Bausch + Lomb Corporation’s Registration Statement on Form S-1 filed on April 28, 2022, which is incorporated by reference herein.

10.50 Assignment, Assumption and Amendment Agreement between Bausch Health Companies Inc., Bausch + Lomb Corporation and Sam A.

Eldessouky dated as of January 3, 2022, originally filed as Exhibit 10.19 to Bausch + Lomb Corporation’s Registration Statement on Form S-1 filed on April 28, 2022, which is incorporated by reference herein.

10.51 Assignment, Assumption and Amendment Agreement between Bausch Health Companies Inc., Bausch + Lomb Corporation and Christina M.

Ackermann dated as of January 3, 2022, originally filed as Exhibit 10.20 to Bausch + Lomb Corporation’s Registration on Statement Form S-1 filed on April 28, 2022, which is incorporated by reference herein.

10.52 Assignment, Assumption and Amendment Agreement between Bausch Health Companies Inc., Bausch + Lomb Corporation and Joseph F.

Gordon dated as of January 3, 2022, originally filed as Exhibit 10.21 to Bausch + Lomb Corporation’s Registration Statement on Form S-1 filed on April 28, 2022, which is incorporated by reference herein.

21.1* Subsidiaries of Bausch Health Companies Inc.

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† Management contract or compensatory plan or arrangement.

# Portions of this exhibit have been omitted because they are both (i) not material and (ii) would likely cause competitive harm to Bausch Health Companies Inc.

if publicly disclosed.

†† One or more exhibits or schedules to this exhibit have been omitted pursuant to Item 601(a)(5) or Item 601(b)(2) of Regulation S-K.

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February 23, 2023 By:

/s/ JOSEPH C.

/s/ THOMAS J.

Chief Executive Officer

(Principal Executive Officer and Chairman of the Board)

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ JOSEPH C.

Chief Executive Officer and Chairman of the Board February 23, 2022

/s/ SAM ELDESSOUKY

Sam Eldessouky

Executive Vice President and Chief Financial Officer (Principal Financial Officer) February 23, 2022

/s/ FREDERICK J.

Senior Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) February 23, 2022

/s/ THOMAS J.

Chief Executive Officer and Director February 23, 2023

Executive Vice President,

Chief Financial Officer

(Principal Financial Officer) February 23, 2023

Senior Vice President, Controller and

Chief Accounting Officer (Principal Accounting Officer) February 23, 2023

Chairperson of the Board, Director February 23, 2023

/s/ RICHARD U.

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Director February 23, 2023

/s/ RICHARD C.

Director February 23, 2023

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Director February 23, 2023

/s/ ANDREW C.

VON ESCHENBACH

von Eschenbach

Director February 23, 2023

Director February 23, 2022

BAUSCH HEALTH COMPANIES INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Management on Financial Statements F- 2

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

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Notes to Consolidated Financial Statements F- 11

REPORT OF MANAGEMENT ON FINANCIAL STATEMENTS

The Company’s management is responsible for preparing the accompanying consolidated financial statements in conformity with United States generally accepted accounting principles (“U.S.

In preparing these consolidated financial statements, management selects appropriate accounting policies and uses its judgment and best estimates to report events and transactions as they occur.

Management has determined such amounts on a reasonable basis in order to ensure that the consolidated financial statements are presented fairly, in all material respects.

Financial information included throughout this Annual Report is prepared on a basis consistent with that of the accompanying consolidated financial statements.

PricewaterhouseCoopers LLP has been engaged by the Company to audit the consolidated financial statements.

The Board of Directors is responsible for ensuring that management fulfills its responsibility for financial reporting and is ultimately responsible for reviewing and approving the consolidated financial statements.

The Board of Directors carries out this responsibility principally through its Audit and Risk Committee.

The members of the Audit and Risk Committee are outside Directors.

The Audit and Risk Committee considers, for review by the Board of Directors and approval by the shareholders, the engagement or reappointment of the external auditors.

PricewaterhouseCoopers LLP has full and free access to the Audit and Risk Committee.

/s/ JOSEPH C.

PAPA /s/ SAM ELDESSOUKY

Chief Executive Officer Sam Eldessouky

Executive Vice President and

Chief Financial Officer

February 23, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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For certain rebate programs, such as Medicaid, provisions recognized by management are based on the terms of state government-managed programs, estimates of outstanding and future claims for end-customer sales and the sales mix.

As disclosed by management, for sales returns, management estimates provisions utilizing existing return policies with customers, historical return and exchange levels, external data with respect to inventory levels in the wholesale distribution channel, external data with respect to prescription demand for products, remaining shelf lives of products at the date of sale, and estimated returns liability to be processed by year of sale based on an analysis of lot information related to actual historical returns.

The principal considerations for our determination that performing procedures relating to Medicaid rebates and sales returns allowances is a critical audit matter are the significant judgment by management when developing the estimate of Medicaid rebates and allowances for sales returns as the estimates are based on assumptions developed using terms of state government-managed Medicaid programs, existing return policies with customers, and projected estimated outstanding and future claims for end-customer sales.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence relating to these assumptions.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to provisions for Medicaid rebates and allowances for sales returns, including controls over the assumptions used to estimate these rebates and allowances.

These procedures also included, among others (i) developing an independent estimate of Medicaid rebates by utilizing third-party information on inventory levels in the distribution channel, the terms of the specific Medicaid rebate programs, and the historical trends of actual Medicaid rebate claims paid, adjusted for price and projected market conditions, (ii) comparing the independent estimate for these Medicaid rebates to management’s estimates, (iii) evaluating management's process for developing the estimate of the allowance for sales returns and the reasonableness of management’s assumptions related to existing return policies, (iv) evaluating management's assumptions related to existing return policies involved comparing to historical trends and considering whether these assumptions were consistent with evidence obtained in other areas of the audit, (v) evaluating the appropriateness of the method for estimating the allowance for sales returns and testing the completeness and accuracy of underlying data used in the model, and (vi) testing Medicaid rebate and sales returns claims processed by the Company, including evaluating those claims for consistency with the contractual terms of the Company’s arrangements and policies.

Finite-Lived Intangible Assets Impairment Assessment

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s consolidated finite-lived net intangible assets balance was $5,250 million as of December 31, 2021, which consists of product and corporate brands, product rights/patents, partner relationships and technology and other assets.

Finite-lived intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset, which include the amount and timing of the projected future cash flows.

The principal considerations for our determination that performing procedures relating to the finite-lived intangible assets impairment assessment is a critical audit matter are the significant judgment by management in the identification of events that suggest an asset group might not be recoverable and in developing the assumptions used in the impairment testing assessment.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s undiscounted future cash flow projections.

For sales returns, management estimates provisions utilizing existing return policies with customers, historical return and exchange levels, external data with respect to inventory levels in the distribution channel, external data with respect to prescription demand for products, remaining shelf lives of products at the date of sale, and estimated returns liability to be processed by year of sale based on an analysis of lot information related to actual historical returns.

The principal considerations for our determination that performing procedures relating to Medicaid rebates and sales returns allowances is a critical audit matter are (i) the significant judgment by management when developing the estimate of Medicaid rebates and sales returns allowances which is based on the terms of state government-managed Medicaid programs and existing return policies with customers;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the terms of state government-managed Medicaid programs and existing return policies with customers and in evaluating management’s significant assumptions related to estimates of outstanding and future claims for end-customer sales;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s finite-lived intangible assets impairment assessment, including controls over the development of assumptions used to estimate recoverability and controls over the identification of events that suggest an asset group might not be recoverable.

These procedures also included, among others (i) testing management’s process for identifying potential impairment events and determining the recoverability of the intangible assets, (ii) evaluating the appropriateness of the undiscounted cash flow model used in the impairment testing assessment, (iii) testing the completeness and accuracy of underlying data used in the model, and (iv) evaluating the reasonableness of the significant assumptions used by management related to the undiscounted future cash flow projections.

Evaluating the reasonableness of management's assumptions for undiscounted future cash flow projections involved evaluating whether the assumptions used by management were reasonable considering the current and past performance of the asset group and whether these assumptions were consistent with evidence obtained in other areas of the audit.

Goodwill Impairment Assessments – Ortho Dermatologics Reporting Unit

As described in Note 2 and 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $12,457 million as of December 31, 2021, and the goodwill associated with the Ortho Dermatologics segment was $798 million, inclusive of a goodwill impairment of $469 million.

The Ortho Dermatologics segment consists of the Ortho Dermatologics and Global Solta reporting units.

These procedures included testing the effectiveness of controls relating to management’s estimation of provisions for Medicaid rebates and sales returns allowances, including controls over the assumptions used to estimate these rebates and sales returns allowances.

(ii) comparing the independent estimate for these Medicaid rebates to management’s estimates to evaluate the reasonableness of management’s estimate;

(iii) testing management’s process for developing the estimate of sales returns allowances;

(iv) evaluating the appropriateness of the method for estimating the sales returns allowances;

(v) testing the completeness and accuracy of underlying data used in the estimate of sales returns allowances;

(vi) evaluating the reasonableness of the sales returns allowances by considering current and historical return trends and whether assumptions related to estimates of outstanding and future claims for end-user sales were consistent with evidence obtained in other areas of the audit;

and (vii) testing, on a sample basis, Medicaid rebates and sales returns claims processed by the Company, including evaluating those claims for consistency with the contractual terms of the Company’s arrangements and policies.

Professionals with specialized skill and knowledge were used to assist in evaluating whether the Company’s Medicaid rebate program policies and methodology for estimating Medicaid rebates are compliant with the Center for Medicare and Medicaid Services (CMS) and federal regulations.

Goodwill Impairment Assessments – Ortho Dermatologics, Vision Care, Ophthalmic Pharmaceuticals, Surgical and Neurology and Other Reporting Units

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $11,547 million as of December 31, 2022, and the goodwill associated with the Ortho Dermatologics reporting unit, the Bausch + Lomb segment, and the Neurology and Other reporting unit was $480 million, $5,246 million, and $1,439 million, respectively.

The Bausch + Lomb segment consists of the Vision Care, Ophthalmic Pharmaceuticals, and Surgical reporting units.

Goodwill is not amortized but is tested for impairment at least annually as of October 1st at the reporting unit level.

An interim goodwill impairment test in advance of the annual impairment assessment may be required if events occur that indicate an impairment might be present.

Where the qualitative assessment suggested that it was more likely than not that the fair value of a reporting unit was less than its carrying amount, a quantitative fair value test was performed for that reporting unit.

Where the qualitative assessment suggested that it was more likely than not that the fair value of a reporting

unit was less than its carrying amount, a quantitative fair value test was performed for that reporting unit.

Goodwill impairment is measured by the amount the carrying value exceeds the fair value.

Fair value of each reporting unit is estimated by management using a discounted cash flow model.

During the quarter ended March 31, 2021, the Company revised its long-term forecasts for the Ortho Dermatologics reporting unit and thus Management conducted an interim quantitative fair value test for this reporting unit and recognized a goodwill impairment of $469 million.

Management also conducted its annual goodwill impairment test on October 1, 2021 and determined that there was no additional impairment of goodwill.

During the first, second and third quarters of 2022, increased interest rates and other macroeconomic factors suggested the fair value of the Ortho Dermatologics reporting unit could be less than its carrying value, and therefore, quantitative fair value tests were performed, resulting in no impairment to goodwill as of March 31, 2022, and the recognition of goodwill impairments of $83 million and $119 million as of June 30, 2022 and September 30, 2022, respectively.

In addition, during the second quarter of 2022, the equity and bond markets were negatively impacted by various macroeconomic and geopolitical factors, and therefore, separate quantitative fair value tests were performed for the Vision Care, Ophthalmic Pharmaceuticals, and Surgical reporting units of the Bausch + Lomb segment, resulting in no impairment to goodwill as of June 30, 2022.

During the annual goodwill impairment test as of October 1, 2022, management performed separate quantitative fair value tests for the Neurology and Other, Vision Care, Ophthalmic Pharmaceuticals, and Surgical reporting units.

As a result of revisions to long-term expectations to reflect changes in payer demands, health care legislation, and other regulations for the Neurology and Other reporting unit, management determined goodwill was impaired and the Company recognized a goodwill impairment of $622 million for the Neurology and Other reporting unit.

Utilizing the most recent cash flow projections to reflect current market conditions and current trends in business performance for the Vision Care, Ophthalmic Pharmaceuticals, and Surgical reporting units, management determined there was no impairment to goodwill.

Management’s discounted cash flow model relies on assumptions regarding revenue growth rates, gross profit, projected working capital needs, selling, general and administrative expenses, research and development expenses, capital expenditures, income tax rates, discount rates and terminal growth rates.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments of the Ortho Dermatologics reporting unit is a critical audit matter are the significant judgment by management when developing the fair value estimates of the reporting unit.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, gross profit, discount rates, and terminal growth rates.

Also, the audit effort involved the use of professionals with specialized skill and knowledge.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments of the Ortho Dermatologics, Vision Care, Ophthalmic Pharmaceuticals, Surgical, and Neurology and Other reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, discount rates, and terminal growth rates;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the Company’s Ortho Dermatologics reporting unit.

These procedures also included, among others (i) testing management’s process for developing the fair value estimates of the Ortho Dermatologics reporting unit, (ii) evaluating the appropriateness of the discounted cash flow models, (iii) testing the completeness and accuracy of underlying data used in the models, and (iv) evaluating the reasonableness of the significant assumptions used by management related to the revenue growth rates, gross profit, discount rates, and terminal growth rates.

Evaluating management’s assumptions related to revenue growth rates and gross profit involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow models and discount rate and terminal growth rate assumptions.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the Ortho Dermatologics, Vision Care, Ophthalmic Pharmaceuticals, Surgical, and Neurology and Other reporting units.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Ortho Dermatologics, Vision Care, Ophthalmic Pharmaceuticals, Surgical, and Neurology and Other reporting units;

(ii) evaluating the appropriateness of the discounted cash flow model;

(iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, discount rates, and terminal growth rates.

Evaluating management’s significant assumptions related to revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s discounted cash flow model and (ii) the reasonableness of the discount rates and terminal growth rates significant assumptions.

Interim Finite-Lived Intangible Assets and Goodwill Impairment Assessments - Xifaxan ® Finite-Lived Intangible Assets and Salix Reporting Unit

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s finite-lived intangible assets associated with Xifaxan ® and goodwill associated with the Salix reporting unit was $2,693 million and $3,159 million, respectively, as of December 31, 2022.

Xifaxan ® represents approximately 80% of the Salix reporting unit’s revenue.

Goodwill is not amortized but is tested for impairment at least annually as of October 1st at the reporting unit level.

Both goodwill and finite-lived intangible assets are tested for impairment if events occur that indicate an impairment might be present.

If indicators of impairment are present, impairment is measured by the amount the carrying value exceeds the fair value.

During the third quarter of 2022, a court held, that among other findings, that certain U.S.

patents protecting the composition and use of Xifaxan ® were invalid (the “Norwich Legal Decision”).

The ultimate outcome of this decision and other potential future related developments could impact the timing and extent of future revenues and cash flows associated with Xifaxan ® .

Therefore, management performed an assessment of the Xifaxan ® finite-lived intangible assets and the Salix reporting unit’s goodwill for potential impairment, resulting in no impairment as of September 30, 2022.

Management performed the assessments of the Xifaxan ® finite-lived intangible assets and Salix reporting unit using a probability-weighted undiscounted and discounted cash flow analyses, respectively.

Management’s probability-weighted undiscounted and discounted cash flow analyses have a base case and different scenarios representing a range of different outcomes which address the timing of loss of exclusivity for Xifaxan ® .

Management assigned a probability weighting to each scenario and calculated a weighted average of the valuations

derived from the undiscounted and discounted cash flows under each scenario.

Management’s probability-weighted undiscounted cash flow analysis for valuing the Xifaxan ® finite-lived intangible assets also relies on assumptions regarding revenue growth rates, gross profit, selling, general and administrative expenses, and research and development expenses.

Management’s probability-weighted discounted cash flow analysis for valuing the Salix reporting unit also relies on assumptions regarding revenue growth rates, gross profit, projected working capital needs, selling, general and administrative expenses, research and development expenses, capital expenditures, income tax rate, discount rate and terminal growth rate.

The principal considerations for our determination that performing procedures relating to the interim finite-lived intangible assets and goodwill impairment assessments of the Xifaxan ® finite-lived intangible assets and Salix reporting unit is a critical audit matter are (i) the significant judgment by management when developing the undiscounted cash flows associated with the Xifaxan ® finite-lived intangible assets and when developing the fair value of the Salix reporting unit;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the probability weighting assigned to each scenario to address the estimated timing of the potential loss of exclusivity for the Xifaxan ® product and in evaluating management’s significant assumptions related to revenue growth rates used in developing the undiscounted cash flows for the Xifaxan ® finite-lived intangible assets and fair value of the Salix reporting unit and the discount rate and terminal growth rate used in developing the fair value of the Salix reporting unit;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s finite-lived intangible assets and goodwill impairment assessments, including controls over the valuation of the Xifaxan ® finite-lived intangible assets and Salix reporting unit.

These procedures also included, among others (i) testing management’s process for developing the undiscounted cash flows associated with the Xifaxan ® finite-lived intangible assets and developing the fair value of the Salix reporting unit;

(ii) evaluating the appropriateness of the probability-weighted undiscounted and discounted cash flow analyses;

(iii) testing the completeness and accuracy of underlying data used in the undiscounted and discounted cash flow analyses;

and (iv) evaluating the reasonableness of the probability weighting assigned to each scenario to address the estimated timing of the potential loss of exclusivity for the Xifaxan ® product and management’s significant assumptions related to revenue growth rates used in developing the undiscounted cash flows for the Xifaxan ® finite-lived intangible assets and fair value of the Salix reporting unit and the discount rate and terminal growth rate used in developing the fair value the Salix reporting unit.

Evaluating the reasonableness of the probability weighting assigned to each scenario to address the estimated timing of the potential loss of exclusivity involved considering (i) the consistency with reports issued by investment analysts related to the timing of when a generic version of Xifaxan ® could potentially launch;

(ii) the consistency with internal and external briefings;

and (iii) whether the estimated timing of the potential loss of exclusivity was consistent with evidence obtained in other areas of the audit.

Evaluating management’s significant assumptions related to revenue growth rates for the Xifaxan ® finite-lived intangible assets and Salix reporting unit involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Xifaxan ® product line and Salix reporting unit;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s probability-weighted discounted cash flow analyses and (ii) the reasonableness of the discount rate and terminal growth rate significant assumptions for the Salix reporting unit.

/s/ PricewaterhouseCoopers LLP

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Accrued and other current liabilities 2,988 4,791

Current portion of long-term debt 432 —

Total current liabilities 3,941 5,198

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Commitments and contingencies (Notes 20 and 21)

Equity (Deficit)

Common shares, no par value, unlimited shares authorized, 361,898,846 and 359,405,748 issued and outstanding at December 31, 2022 and 2021, respectively

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Total Bausch Health Companies Inc.

shareholders’ (deficit) equity ( 106 ) 535

shareholders’ deficit ( 692 ) ( 106 )

Noncontrolling interest 952 72

Total (deficit) equity ( 34 ) 605

Total liabilities and (deficit) equity $ 29,202 $ 31,199

On behalf of the Board:

/s/ JOSEPH C.

PAPA /s/ RUSSEL C.

Papa Russel C.

Chief Executive Officer Chairperson, Audit and Risk Committee

Total equity (deficit) 260 ( 34 )

Total liabilities and equity (deficit) $ 25,686 $ 29,202

The accompanying notes are an integral part of these consolidated financial statements.

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7,670 7,984 7,351

Operating income (loss) 450 676 ( 203 )

Operating income 454 450 676

Interest income 14 7 13

Interest expense ( 1,464 ) ( 1,426 ) ( 1,534 )

Loss on extinguishment of debt ( 62 ) ( 59 ) ( 42 )

Gain (loss) on extinguishment of debt 875 ( 62 ) ( 59 )

Foreign exchange and other ( 8 ) 7 ( 30 )

Loss before benefit from income taxes ( 1,024 ) ( 934 ) ( 1,837 )

Benefit from income taxes 87 375 54

Loss before income taxes ( 129 ) ( 1,024 ) ( 934 )

(Provision for) benefit from income taxes ( 83 ) 87 375

Net loss ( 212 ) ( 937 ) ( 559 )

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Net loss $ ( 212 ) $ ( 937 ) $ ( 559 )

Other comprehensive (loss) income

Other comprehensive loss

Pension and postretirement benefit plan adjustments:

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Amortization or settlement recognition of net loss 10 10 1

Income tax benefit (expense) 1 2 ( 2 )

Income tax (expense) benefit ( 3 ) 1 2

Foreign currency impact 1 ( 3 ) —

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Foreign currency translation adjustment ( 257 ) ( 158 ) ( 29 )

Other comprehensive (loss) income ( 130 ) ( 45 ) 50

Other comprehensive loss ( 256 ) ( 130 ) ( 45 )

Comprehensive loss ( 468 ) ( 1,067 ) ( 604 )

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Balance, January 1, 2020 352.6 $ 10,172 $ 429 $ ( 7,452 ) $ ( 2,086 ) $ 1,063 $ 73 $ 1,136

Effect of application of new accounting standard:

financial instruments - credit losses — — — ( 1 ) — ( 1 ) — ( 1 )

Common shares issued under share-based compensation plans 2.8 55 ( 50 ) — — 5 — 5

2.7 51 ( 46 ) — — 5 — 5

Share-based compensation — — 105 — — 105 — 105

Share-based awards tax withholding

— — ( 40 ) — — ( 40 ) — ( 40 )

Employee withholding taxes related to share-based awards — — ( 30 ) — — ( 30 ) — ( 30 )

Noncontrolling interest distributions — — — — — — ( 6 ) ( 6 )

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Balance, December 31, 2020 355.4 10,227 454 ( 8,013 ) ( 2,133 ) 535 70 605

Effect of application of new accounting standard:

financial instruments - credit losses

— — — ( 1 ) — ( 1 ) — ( 1 )

Common shares issued under share-based compensation plans 4.0 90 ( 68 ) — — 22 — 22

2.8 55 ( 50 ) — — 5 — 5

Share-based compensation — — 128 — — 128 — 128

Share-based awards tax withholding

— — ( 30 ) — — ( 30 ) — ( 30 )

Employee withholding taxes related to share-based awards — — ( 52 ) — — ( 52 ) — ( 52 )

Release of foreign currency translation losses upon disposal of assets held for sale — — — — 340 340 — 340

Noncontrolling interest distributions — — — — — — ( 10 ) ( 10 )

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Balance, December 31, 2021 359.4 10,317 462 ( 8,961 ) ( 1,924 ) ( 106 ) 72 ( 34 )

Proceeds from B+L initial public offering, net of costs (Note 2) — — ( 327 ) — 137 ( 190 ) 865 675

Common shares issued under share-based compensation plans 2.5 74 ( 71 ) — — 3 — 3

4.0 90 ( 68 ) — — 22 — 22

Share-based compensation — — 126 — — 126 — 126

Share-based awards tax withholding

— — ( 52 ) — — ( 52 ) — ( 52 )

Release of foreign currency translation losses upon disposal of assets held for sale — — — — 340 340 — 340

Employee withholding taxes related to share-based awards — — ( 31 ) — — ( 31 ) — ( 31 )

Noncontrolling interest distributions — — — — — — ( 11 ) ( 11 )

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Deferred income taxes ( 176 ) ( 225 ) ( 475 )

Gain on disposal of assets ( 2 ) ( 1 ) ( 31 )

Net gain on sale of assets ( 5 ) ( 2 ) ( 1 )

Additions to accrued legal settlements 9 569 442

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Share-based compensation 126 128 105

Foreign exchange loss 6 8 7

Gain excluded from hedge effectiveness ( 6 ) ( 20 ) ( 23 )

Loss on extinguishment of debt 62 59 42

(Gain) loss on extinguishment of debt ( 875 ) 62 59

Third party fees paid in connection with the Exchange Offer ( 34 ) — —

Payments of contingent consideration adjustments, including accretion ( 2 ) ( 16 ) ( 1 )

Other ( 41 ) ( 18 ) 36

Foreign exchange and other 3 ( 35 ) ( 10 )

Changes in operating assets and liabilities:

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Accounts payable, accrued and other liabilities ( 75 ) 121 ( 471 )

Net cash provided by operating activities 1,426 1,111 1,501

Net cash (used in) provided by operating activities ( 728 ) 1,426 1,111

Cash Flows From Investing Activities

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Proceeds from sale of assets and businesses, net of costs to sell 5 669 21

Settlements from cross-currency swaps 27 23 —

Net cash provided by (used in) investing activities 409 ( 261 ) ( 419 )

Interest settlements from cross-currency swaps — 27 23

Net cash (used in) provided by investing activities ( 303 ) 409 ( 261 )

Cash Flows From Financing Activities

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Repayments of long-term debt ( 7,846 ) ( 3,440 ) ( 5,642 )

Borrowings of short-term debt — 1 12

Repayments of short-term debt — ( 1 ) ( 12 )

Proceeds from B+L initial public offering, net of costs 675 — —

Payment of employee withholding taxes related to share-based awards ( 31 ) ( 52 ) ( 30 )

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Other ( 11 ) 10 ( 3 )

Net cash (used in) provided by financing activities ( 1,513 ) ( 2,294 ) 1,443

Net cash used in financing activities ( 474 ) ( 1,513 ) ( 2,294 )

Effect of exchange rate changes on cash and cash equivalents ( 23 ) ( 19 ) 16

Net increase (decrease) in Cash and cash equivalents and Restricted cash and other settlement deposits 303 ( 1,428 ) 2,521

Cash and cash equivalents and Restricted cash and other settlement deposits, beginning of year 1,816 3,244 723

Cash and cash equivalents and Restricted cash and other settlement deposits, end of year $ 2,119 $ 1,816 $ 3,244

Net (decrease) increase in cash, cash equivalents, restricted cash and other settlement deposits ( 1,528 ) 303 ( 1,428 )

Cash, cash equivalents, restricted cash and other settlement deposits, beginning of period 2,119 1,816 3,244

Cash, cash equivalents, restricted cash and other settlement deposits, end of period $ 591 $ 2,119 $ 1,816

Cash and cash equivalents, end of year $ 564 $ 582 $ 605

Restricted cash and other settlement deposits, end of year 27 1,537 1,211

Cash and cash equivalents and Restricted cash and other settlement deposits, end of year $ 2,119 $ 1,816 $ 3,244

Cash, cash equivalents, restricted cash and other settlement deposits, end of period $ 591 $ 2,119 $ 1,816

The accompanying notes are an integral part of these consolidated financial statements.

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Bausch Health Companies Inc.

(the “Company”), formerly known as Valeant Pharmaceuticals International, Inc., is a multinational, specialty pharmaceutical and medical device company that develops, manufactures and markets a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment and aesthetics devices) which are marketed directly or indirectly in approximately 100 countries.

(the “Company” or “Bausch Health”) is a multinational, specialty pharmaceutical and medical device company that develops, manufactures and markets, primarily in the therapeutic areas of gastroenterology (“GI”) and dermatology, a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products and medical aesthetic devices and, through its approximately 89 % ownership of Bausch + Lomb Corporation (“Bausch + Lomb”), branded, and branded generic pharmaceuticals, OTC products and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment) in the therapeutic area of eye health.

The Company’s products are marketed directly or indirectly in approximately 100 countries.

Effective August 9, 2013, the Company continued from the federal jurisdiction of Canada to the Province of British Columbia, meaning that the Company became a company registered under the laws of the Province of British Columbia as if it had been incorporated under the laws of the Province of British Columbia.

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All intercompany transactions and balances have been eliminated.

Separation of the Bausch + Lomb Eye-Health Business and Initial Public Offering of Solta Medical Business

On August 6, 2020, the Company announced its intentions to separate its eye-health business into an independent publicly traded entity from the remainder of Bausch Health Companies Inc.

(the “B+L Separation”).

On August 3, 2021, the Company announced its intentions to conduct an initial public offering ("IPO") of its aesthetic medical device business, Global Solta (the “Solta IPO").

In January 2022, the Company completed the internal organizational design and structure of the new eye-health entity, Bausch + Lomb Corporation ("Bausch + Lomb"), and the new Global Solta entity, Solta Medical Corporation ("Solta"), as previously announced and aims to launch the B+L IPO and the Solta IPO when financial market conditions are favorable (and subject to receipt of regulatory, stock exchange and other approvals).

Following the B+L IPO the Company expects to complete the separation of Bausch + Lomb after the expiry of customary lockups related to the B+L IPO and achievement of targeted debt leverage ratios, subject to the receipt of applicable shareholder and other necessary approvals.

The B+L Separation and the proposed Solta IPO will establish three separate companies that include:

(i) a fully integrated eye-health company which will consist of the Company’s Bausch + Lomb Global Vision Care, Global Surgical, Global Consumer and Global Ophthalmic Pharmaceuticals businesses, (ii) a global provider of aesthetic medical devices which will consist of the Company’s Solta business and (iii) a diversified pharmaceutical company which will include the Company’s Salix, International Rx, dentistry, neurology, medical dermatology and generics pharmaceutical businesses.

These audited Consolidated Financial Statements do not include any adjustments to give effect to either the B+L Separation or the proposed Solta IPO.

Separation of the Bausch + Lomb Eye Health Business

On August 6, 2020, the Company announced its intentions to separate its eye health business into an independent publicly traded entity from the remainder of Bausch Health (the “B+L Separation”).

In January 2022, the Company completed the internal organizational design and structure of the new eye health entity, Bausch + Lomb, as previously announced.

The registration statement related to the initial public offering (“IPO”) of Bausch + Lomb (the “B+L IPO”) was declared effective on May 5, 2022, and Bausch + Lomb’s common stock began trading on the New York Stock Exchange and the Toronto Stock Exchange, in each case under the ticker symbol “BLCO” on May 6, 2022.

Prior to the effectiveness of the registration statement, Bausch + Lomb was an indirect wholly-owned subsidiary of the Company.

On May 10, 2022, a wholly owned subsidiary of the Company (the “Selling Shareholder”) sold 35,000,000 common shares of Bausch + Lomb, at an offering price of $ 18.00 per share, pursuant to the B+L IPO.

In addition, the Selling Shareholder granted the underwriters an option for a period of 30 days from the date of the B+L IPO to purchase up to an additional 5,250,000 common shares to cover over-allotments at the IPO price less underwriting commissions.

On May 31, 2022, the underwriters partially exercised the over-allotment option granted by the Selling Shareholder and, on June 1, 2022, the Selling Shareholder sold an additional 4,550,357 common shares of Bausch + Lomb at an offering price of $ 18.00 per share (less applicable underwriting discount).

The remainder of the over-allotment option granted to the underwriters expired.

Upon the closing of the B+L IPO and after giving effect to the partial exercise of the over-allotment option, Bausch Health indirectly holds 310,449,643 Bausch + Lomb common shares, which represent approximately 89 % of Bausch + Lomb’s outstanding common shares.

The aggregate net proceeds from the B+L IPO and the partial exercise of the over-allotment option by the underwriters, after deducting underwriting commissions were approximately $ 675 million.

The Company continues to believe that completing the B+L Separation makes strategic sense.

The completion of the B+L Separation is subject to the achievement of targeted debt leverage ratios and the receipt of applicable shareholder and other necessary approvals.

The Company continues to evaluate all factors and considerations related to completing the B+L Separation, including the effect of the Norwich Legal Decision (see “ Xifaxan ® Paragraph IV Proceedings ” of Note 20, “LEGAL PROCEEDINGS”) on the B+L Separation.

The B+L IPO established two separate companies that include:

(i) a diversified pharmaceutical company which includes the Company’s Salix, International, Diversified (dentistry, neurology, medical dermatology and generic pharmaceutical) products, and Solta aesthetic medical device businesses and (ii) a fully integrated eye health company which consists of the Bausch + Lomb Vision Care, Surgical and Ophthalmic Pharmaceuticals businesses.

Other than the effects of the B+L IPO described above, these audited Consolidated Financial Statements do not include any adjustments to give effect to the B+L Separation.

Suspended Initial Public Offering of Solta Medical Business

On August 3, 2021, the Company announced its intentions to conduct an IPO of its aesthetic medical device business, Solta Medical (formerly Global Solta) (the “Solta IPO”).

In January 2022, the Company completed the internal organizational design and structure of the new Solta Medical entity, Solta Medical Corporation (“Solta” or “Solta Medical”).

On June 16, 2022, as a result of challenging market conditions and other factors, the Company announced it was suspending its plans for the Solta IPO.

Solta will remain part of Bausch Health, as the Company plans to revisit alternate paths for its Solta medical aesthetic devices business.

Impacts of COVID-19 Pandemic

The unprecedented nature of the COVID-19 pandemic has, and continues to, adversely impact the global economy.

The unprecedented nature of the COVID-19 pandemic has had, and continues to have, an adverse impact on the global economy.

The COVID-19 pandemic and the reactions of governments, private sector participants and the public in an effort to contain the spread of the COVID-19 virus and/or address its impacts have had significant direct and indirect effects on businesses and commerce.

This includes, but is not limited to, disruption to supply chains, employee base and transactional activity, facility closures and production suspensions.

This includes, but is not limited to, disruption to supply chains, employee base and transactional activity, facilities closures and production suspensions.

The extent to which these events may continue to impact the Company’s business, financial condition, cash flows and results of operations, in particular, will depend on future developments which are highly uncertain and many of which are outside the Company’s control.

Such developments include the availability and effectiveness of vaccines for the COVID-19 virus, COVID-19 vaccine immunization rates, the ultimate geographic spread and duration of the pandemic, the extent and duration of a resurgence of the COVID-19 virus and variant strains thereof, such as the delta and omicron variants, new information concerning the severity of the COVID-19 virus, the effectiveness and intensity of measures to contain the COVID-19 virus and the economic impact of the pandemic and the reactions to it.

Such developments include the availability and effectiveness of vaccines for the COVID-19 virus, the ultimate geographic spread and duration of the pandemic, COVID-19 vaccine immunization rates, the extent and duration of a resurgence of the COVID-19 virus and variant strains thereof, such as the delta and omicron variants, new information concerning the severity of the COVID-19 virus, the effectiveness and intensity of measures to contain the COVID-19 virus, and the economic impact of the pandemic and the reactions to it.

Such developments, among others, depending on their nature, duration and intensity, could have a significant adverse effect on the Company’s business, financial condition, cash flows and results of operations.

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For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the Consolidated Statements of Operations during the current period.

The Company’s cross-currency swaps qualified for and had been designated as an accounting hedge of the foreign currency exposure of a net investment in a foreign operation and were remeasured at each reporting date to reflect changes in their

Bausch + Lomb’s cross-currency swaps qualified for and have been designated as an accounting hedge of the foreign currency exposure of a net investment in a foreign operation and are remeasured at each reporting date to reflect changes in their fair values.

The fair value was determined via a mark-to-market analysis, using observable (Level 2) inputs.

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dollar and (iii) the credit risk rating for each applicable counterparty.

The net change in fair value of cross-currency swaps is reported as a gain or loss in the Consolidated Statements of Comprehensive Loss as part of Foreign currency translation adjustment to the extent they are effective, and remain in Accumulated other comprehensive loss until either the sale or complete, or substantially complete, liquidation of the subsidiary.

The net change in fair value of cross-currency swaps is reported as a gain or loss in the Consolidated Statements of Comprehensive Income (Loss) as part of Foreign currency translation adjustment to the extent they are effective, and remain in Accumulated other comprehensive loss until either the sale or complete, or substantially complete, liquidation of the subsidiary.

No portion of the cross-currency swaps was ineffective.

The Company uses the spot method of assessing hedge effectiveness.

The Company had elected to amortize amounts excluded from the assessment of effectiveness over the term of its cross-currency swaps as a reduction of Interest expense in the Consolidated Statements of Operations.

Bausch + Lomb uses the spot method of assessing hedge effectiveness.

Bausch + Lomb has elected to amortize amounts excluded from the assessment of effectiveness over the term of its cross-currency swaps as a reduction of Interest expense in the Consolidated Statements of Operations.

The Company uses foreign currency exchange contracts to economically hedge the foreign exchange exposure on certain of the Company’s intercompany and third party balances.

1 unchanged sentence

These contracts have not been designated as an accounting hedge, and therefore the net change in their fair value is reported as a gain or loss in the Consolidated Statements of Operations as part of Foreign exchange and other.

Settlements of the Company’s foreign currency exchange contracts are reported as a gain or loss in the Consolidated Statements of Operations as part of Foreign exchange and other and reported as operating activities in the Consolidated Statements of Cash Flows.

Cash and Cash Equivalents

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Cash deposited at banks may exceed the amount of insurance provided on such deposits.

Generally, these cash deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk.

Generally, these cash deposits may be redeemed upon demand and are maintained with financial institutions with

reputable credit and therefore bear minimal credit risk.

The Company seeks to mitigate such risks by spreading its risk across multiple counterparties and monitoring the risk profiles of these counterparties.

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The Company monitors economic conditions, including volatility associated with international economies, and related impacts on the relevant financial markets and its business, especially in light of sovereign credit issues.

The credit and economic conditions within Argentina, Brazil, Egypt, Greece, among other members of the European Union, Turkey, Ukraine and Venezuela have been weak in recent years.

The credit and economic conditions within Argentina, Belarus, Brazil, Greece, Russia, Serbia, South Africa, Turkey, Ukraine and Venezuela have been weak in recent years.

These conditions have increased, and may continue to increase, the average length of time that it takes to collect on the Company’s trade receivables outstanding in these countries.

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wholesaler customers accounted for approximately 46 % of net trade receivables.

In addition, as of December 31, 2021 and 2020, the Company’s net trade receivable balance from Argentina, Brazil, Egypt, Greece, Serbia, South Africa, Turkey, Ukraine, Venezuela and Vietnam amounted to $ 78 million and $ 166 million, respectively, the majority of which is current or less than 90 days past due.

In addition, as of December 31, 2022 and 2021, the Company’s net trade receivable balance from Argentina, Belarus, Brazil, Greece, Russia, Serbia, South Africa, Turkey, Ukraine and Venezuela amounted to $ 136 million and $ 78 million, respectively, the majority of which is current or less than 90 days past due.

The portion of the net trade receivable from these countries that is past due more than 90 days amounted to $ 2 million, as of December 31, 2022, a portion of which is comprised of public hospitals.

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The counter-parties to the Company’s cross-currency swaps and foreign currency exchange contracts are major financial institutions, and there is no significant concentration of exposure with any one counter-party.

To date, no counterparty has failed to meet its obligations to the Company and management believes the risk of loss associated with these contracts is

To date, no counterparty has failed to meet its obligations to the Company and management believes the risk of loss associated with these contracts is remote.

See Note 5, “FAIR VALUE MEASUREMENTS” for additional details regarding the Company’s cross-currency swaps and foreign currency exchange contracts.

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Allowance for credit losses were $ 33 million, $ 35 million and $ 39 million as of December 31, 2022, 2021 and 2020, respectively.

The activity in the allowance for credit losses for trade receivables for the years 2021, 2020 and 2019 is as follows.

The activity in the allowance for credit losses for trade receivables was as follows:

(in millions) 2022 2021 2020

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Retrospective effect of application of new accounting standard — — 1

Provision ( 2 ) 2 10

Write-offs ( 3 ) ( 12 ) ( 10 )

Recoveries 2 3 1

Provision for expected credit losses 5 ( 2 ) 2

Write-offs charged against the allowance ( 6 ) ( 3 ) ( 12 )

Recoveries of amounts previously written off 2 2 3

Foreign exchange and other

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An interim goodwill impairment test in advance of the annual impairment assessment may be required if events occur that indicate an impairment might be present.

For example, a substantial decline in the Company’s market capitalization, changes in reportable segments, unexpected adverse business conditions, economic factors and unanticipated competitive activities may signal that an interim impairment test is needed.

Accordingly, among other factors, the Company monitors

changes in its share price between annual impairment tests.

For example, a substantial decline in the Company’s market capitalization, changes in reportable segments, unexpected adverse business conditions, economic factors, including rising interest rates and unanticipated competitive activities may signal that an interim impairment test is needed.

Accordingly, among other factors, the Company monitors changes in its share price between annual impairment tests.

The Company considers a decline in its share price that corresponds to an overall deterioration in stock market conditions to be less of an indicator of goodwill impairment than a unilateral decline in its share price reflecting adverse changes in its underlying operating performance, cash flows, financial condition and/or liquidity.

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Debt Discounts and Premiums, Issuance Costs and Deferred Financing Costs

Debt discounts, premiums and issuance costs are presented in the Consolidated Balance Sheets as a direct deduction from or addition to the carrying amount of the related debt and are amortized or accreted, using the effective interest method, as interest expense over the contractual lives of the related credit facilities or notes.

Debt discounts and issuance costs are presented in the Consolidated Balance Sheets as a direct deduction from or addition to the carrying amount of the related debt and are amortized or accreted, using the effective interest method, as interest expense over the contractual lives of the related credit facilities or notes.

Deferred financing costs associated with revolving credit facility arrangements are included in the balances of Prepaid expenses and other current assets and Other non-current assets in the Consolidated Balance Sheets and are amortized as interest expense over the contractual life of the related revolving credit facility.

The carrying value of modified debt accounted for as a troubled debt restructuring consists of all future undiscounted cash flows, both principal and contractual future interest, associated with such debt.

The excess of the carrying value over the principal amount of such debt is recorded as a premium and is reduced as stated interest payments are made on such debt.

Foreign Currency Translation

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The information utilized to estimate the returns provision includes:

(i) historical return and exchange levels, (ii) external data with respect to inventory levels in the wholesale distribution channel, (iii) external data with respect to prescription demand for products, (iv) remaining shelf lives of products at the date of sale and (v) estimated returns liability to be processed by year of sale based on an analysis of lot information related to actual historical returns.

(i) historical return and exchange levels, (ii) external data with respect to inventory levels in the distribution channel, (iii) external data with respect to prescription demand for products, (iv) remaining shelf lives of products at the date of sale and (v) estimated returns liability to be processed by year of sale based on an analysis of lot information related to actual historical returns.

In determining the estimate for returns, management is required to make certain assumptions regarding the timing of the introduction of new products and the potential of these products to capture market share.

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These assumptions are continually reassessed, and changes to the estimates and assumptions are made as new information becomes available.

A change of 1% in the estimated return rates would have impacted the Company’s pre-tax earnings by approximately $ 81 million for the year 2021.

The estimate for returns may be impacted by a number of factors, but the principal factor relates to the inventory levels in the distribution channel.

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These actions have had the effect of improving sales return experience, primarily related to branded and generic products.

Sales return provisions for 2021 and 2020 were $ 131 million and $ 120 million, respectively, and includes reductions in variable consideration for sales return provisions related to past sales of approximately $ 28 million and $ 38 million, respectively.

Sales return provisions for 2022 and 2021 were $ 131 million in each period, and include reductions in variable consideration for sales return provisions related to past sales of approximately $ 21 million and $ 28 million, respectively.

Rebates and Chargebacks

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The calculation of the Medicaid rebate reserve also requires other estimates, such as estimates of sales mix, to determine which sales are subject to rebates and the amount of such rebates.

A change of 1% in the estimated rates used in the Medicaid rebate reserve would have impacted the Company’s pre-tax earnings by approximately $ 76 million for 2021.

Quarterly, the Medicaid rebate reserve is adjusted based on actual claims paid.

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Management continually updates these factors based on new contractual or statutory requirements, and any significant changes in sales trends that may impact the percentage of products subject to rebates or chargebacks.

The amount of Managed Care, Medicaid and other rebates and chargebacks has become more significant as a result of a combination of deeper discounts implemented in each of the last three years, changes in the Company’s product portfolio due to recent acquisitions and increased Medicaid utilization due to expansion of government funding for these programs.

The amount of Managed Care, Medicaid and other rebates and chargebacks has become more significant as a result of a combination of deeper discounts implemented in each of the last three years, changes in the Company’s product mix and increased Medicaid utilization due to expansion of government funding for these programs.

Management’s estimate for rebates and chargebacks may be impacted by a number of factors, but the principal factor relates to the level of inventory in the distribution channel.

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Under the DSAs, the wholesalers agree to provide services, and the Company pays the contracted DSA distribution service fees for these services based on product volumes.

Additionally, price appreciation credits are generated when the Company increases a product’s wholesaler acquisition cost (“WAC”) under contracts with certain wholesalers.

Additionally, price appreciation credits are generated when the Company increases a

product’s wholesaler acquisition cost (“WAC”) under contracts with certain wholesalers.

Under such contracts, the Company is entitled to credits from such wholesalers for the impact of that WAC increase on inventory currently on hand at the wholesalers.

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For all asset classes, in determining future lease payments, the Company has elected to aggregate lease components, such as payments for rent, taxes and insurance costs with non-lease components such as maintenance costs, and account for these payments as a single lease component.

circumstances, when the information necessary to determine the rate implicit in a lease is available, the present value of the lease payments is determined using the rate implicit in that lease.

In limited circumstances, when the information necessary to determine the rate implicit in a lease is available, the present value of the lease payments is determined using the rate implicit in that lease.

If the information necessary to determine the rate implicit in a lease is not available, the Company uses its incremental borrowing rate at the commencement of the lease, which represents the rate of interest that the Company would incur to borrow on a collateralized basis over a similar term.

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Legal fees and other costs related to litigation and other legal proceedings or services are expensed as incurred and are included in Selling, general and administrative expenses.

Certain legal costs associated with acquisitions are included in Acquisition-related costs and certain legal costs associated with divestitures, legal settlements and other business development activities are included in Litigation and other matters or Net gain on sales of assets within Other expense (income), net, as appropriate.

Certain legal costs associated with acquisitions are included in Acquisition-related costs and certain legal costs associated with divestitures, legal settlements and other business development activities are included in Litigation and other matters or Net gain on sale of assets within Other expense (income), net, as appropriate.

Legal costs expensed are reported net of expected insurance recoveries.

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Comprehensive loss

Comprehensive loss comprises Net loss and Other comprehensive (loss) income.

Other comprehensive (loss) income includes items such as foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale and other investments and certain pension and other postretirement benefit plan adjustments.

Comprehensive loss comprises Net loss and Other comprehensive loss.

Other comprehensive loss includes items such as foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale and other investments and certain pension and other postretirement benefit plan adjustments.

Accumulated other comprehensive loss is recorded as a component of shareholders’ equity.

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The determination of defined benefit pension and postretirement plan obligations and their associated expenses requires the use of actuarial valuations to estimate the benefits employees earn while working, as well as the present value of those benefits.

estimated average future lifetime of the plan participants if the majority of plan participants are inactive) or the period until any anticipated final plan settlements.

Net actuarial gains and losses that exceed 10 percent of the greater of the plan’s projected benefit obligations or the market-related value of assets are amortized to earnings over the shorter of the estimated average future service period of the plan participants (or the estimated average future lifetime of the plan participants if the majority of plan participants are inactive) or the period until any anticipated final plan settlements.

Adoption of New Accounting Standards

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The application of this guidance did not have a material effect on the Company’s results of operations and cash flows.

In August 2018, the FASB issued guidance modifying the disclosure requirements for fair value measurement.

The guidance was effective for the Company beginning January 1, 2020.

The application of this guidance did not have a material effect on the Company's disclosures.

In August 2018, the FASB issued guidance modifying the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

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The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

The guidance is effective for the Company beginning with annual periods beginning January 1, 2021.

The guidance was effective for the Company beginning January 1, 2021.

The application of this guidance did not have a material effect on the Company’s financial position, results of operations and cash flows.

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Optional expedients are provided for contract modification accounting within the areas of receivables, debt, leases, derivatives and hedging.

The optional amendments are effective for all entities as of March 12, 2020, through December 31, 2022.

During 2020 and 2021, the Company has not entered into any contract modifications in which the optional expedients were applied.

However, if prior to December 31, 2022, the Company enters into a contract modification in which the optional expedients are applied, the Company will evaluate the impact of adoption of this guidance on its financial position, results of operations and cash flows.

The optional amendments are effective for all entities

as of March 12, 2020, through December 31, 2024.

For the years presented, the Company has not entered into any contract modifications in which the optional expedients were applied.

ACQUISITIONS, LICENSING AGREEMENTS AND DIVESTITURE

Acquisition Agreement for Synergy Pharmaceuticals Inc.

On March 6, 2019, the Company acquired certain assets of Synergy Pharmaceuticals Inc.

("Synergy") for a cash purchase price of approximately $ 180 million and the assumption of certain liabilities, pursuant to the terms approved by the U.S.

Bankruptcy Court for the Southern District of New York on March 1, 2019.

Among the assets acquired are the worldwide rights to the Trulance ® (plecanatide) product, a once-daily tablet for adults with chronic idiopathic constipation and irritable bowel syndrome with constipation.

This acquired business is included in the Company's Salix segment and is expected to result in additional revenues and costs savings associated with business synergies.

Assets Acquired and Liabilities Assumed

The acquisition of certain assets of Synergy has been accounted for as a business combination under the acquisition method of accounting since:

(i) substantially all of the fair value of the assets acquired is not concentrated in a single identifiable asset or group of similar identifiable assets and (ii) substantive inputs and processes were acquired to contribute to the creation of outputs.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the acquisition of certain assets of Synergy as of the acquisition date:

(in millions)

Accounts receivable $ 7

Inventories 24

Prepaid expenses and other current assets 5

Product brand intangible assets (estimated useful life 7 years)

Accounts payable ( 1 )

Accrued expenses ( 17 )

Total identifiable net assets 177

Total fair value of consideration transferred $ 180

Goodwill associated with the acquisition of certain assets of Synergy is not deductible for income tax purposes.

Revenue and Operating Results

Revenues associated with the acquired assets of Synergy during the period March 6, 2019 through December 31, 2019 were $ 55 million.

Operating results associated with the acquired assets of Synergy during the period March 6, 2019 through December 31, 2019 and pro-forma revenues and operating results for the year 2019 were no t material.

Included in Other expense, net for 2019 are acquisition-related costs of $ 8 million directly related to the acquisition of certain assets of Synergy, which include expenditures for advisory, legal, valuation, accounting and other similar services.

There were no other material business combinations in 2021, 2020 or 2019.

The measurement period for all acquisitions has closed.

Option to Purchase All Ophthalmology Assets of Allegro Ophthalmics, LLC ("Allegro")

On September 21, 2020, the Company announced that it had entered into an agreement to acquire an option to purchase all of the ophthalmology assets of Allegro (the "Option"), a privately held biopharmaceutical company focused on the development of therapies that regulate integrin functions for the treatment of ocular diseases.

Among the assets to be acquired if the Option was exercised, were the worldwide rights to risuteganib (Luminate ® ), Allegro's lead investigational compound in retina, which is believed to simultaneously act on the angiogenic, inflammatory and mitochondrial metabolic pathways implicated in diseases such as intermediate dry Age-related Macular Degeneration.

During the three months ended September 30, 2020, the Company made and expensed as acquired IPR&D included in Other expense, net, an initial upfront payment of $ 10 million to acquire the Option.

However, on June 23, 2021, Allegro notified the Company that it did not raise the additional funding required under the option agreement.

Pursuant to the terms of the option agreement, the Option thereby terminated, and the Company exercised its right to convert the $ 10 million upfront payment into a minor equity interest in Allegro.

The Company expects that it will make no additional payments pursuant to this option agreement.

Licensing Agreements

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Royalties due are recognized when earned and milestone payments are accrued when each milestone has been achieved and payment is probable and can be reasonably estimated.

Divestiture of Amoun Pharmaceutical Company S.A.E.

On March 31, 2021, the Company announced that it and certain of its affiliates had entered into a definitive agreement to sell all of its equity interests in Amoun for total gross consideration of approximately $ 740 million (including the assignment to the purchasing entity of an intercompany loan granted by the Company to Amoun), subject to certain adjustments (the “Amoun Sale”).

Paragon BioTeck, Inc.

On November 21, 2022, Bausch + Lomb acquired Paragon BioTeck, Inc., an eye-care focused drug development company, having a primary emphasis on the early detection of ocular diseases.

The acquisition of Paragon Bioteck has been accounted for as an asset acquisition.

The primary assets in the transaction, the trademarks, represented substantially all of the fair value of the gross assets acquired.

There are no future sales milestones associated with this transaction.

Total Titanium

On December 12, 2022, Bausch + Lomb acquired Total Titanium, Inc., a privately held ophthalmic microsurgical instrument and machined parts manufacturing company.

The transaction was completed to assist in driving revenue growth as well as increasing manufacturing capacity.

The fair value of the acquisition has been accounted for as a business combination.

Additional contingent payments may be payable upon reaching key future milestone achievements related to sales and employee retention.

As a result of these transactions, recorded within the Consolidated Balance Sheet are Trade receivables, net of $ 1 million, Inventories, net of $ 1 million, Property, plant and equipment of $ 2 million, Intangibles, net of $ 43 million, Goodwill of $ 5 million and Deferred tax liabilities, net of $ 11 million.

Supplemental pro forma information related to revenue and earnings for 2022 were not provided for the aforementioned transaction as they did not have a material impact on the Company’s operations.

Refer to Note 21, “COMMITMENTS AND CONTINGENCIES” for further detail regarding potential future milestone payments related to previously entered transactions and agreements.

On March 31, 2021, the Company announced that it and certain of its affiliates had entered into a definitive agreement to sell all of its equity interests in Amoun Pharmaceutical Company S.A.E.

(“Amoun”) for total gross consideration of approximately $ 740 million (including the assignment to the purchasing entity of an intercompany loan granted by the Company to Amoun), subject to certain adjustments (the “Amoun Sale”).

The Amoun Sale closed on July 26, 2021.

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Amoun manufactures, markets and distributes branded generics of human and animal health products.

The Amoun business was part of the International Rx segment (previously

included within the former Bausch + Lomb/International segment) and was reclassified as held for sale as of December 31, 2020.

The Amoun business was part of the International Rx segment (previously included within the former Bausch + Lomb/International segment) and was reclassified as held for sale as of December 31, 2020.

As a result of meeting the criteria for held for sale classification, the carrying value of the Amoun business, was adjusted to its estimated fair value, less costs to sell, and the Company recognized an impairment loss of $ 96 million during the three months ended December 31, 2020 and an additional impairment loss of $ 88 million during 2021, included within Asset impairments, including loss on assets held for sale in the Consolidated Statements of Operations.

In connection with completing the Amoun Sale, the Company recognized an additional loss of $ 26 million during 2021, included within Other (income) expense, net in the Combined Statements of Operations.

In connection with completing the Amoun Sale, the Company recognized an additional loss of $ 26 million during 2021, included within Other (income) expense, net in the Consolidated Statements of Operations.

The total loss of $ 210 million includes the release of non-cash cumulative foreign currency translation losses of $ 340 million, which were included as part of the carrying value of the Amoun business when measuring for impairment.

Included in the Consolidated Balance Sheets as of December 31, 2020 are the following carrying amounts of the Amoun business' assets and liabilities held for sale.

(in millions)

Prepaid expenses and other current assets:

Accrued and other current liabilities:

Trade receivables, net $ 91 Accounts payable $ 7

Inventories, net 63 Accrued and other current liabilities 28

Prepaid expenses and other current assets 8 $ 35

Other non-current assets:

Other non-current liabilities:

Property, plant and equipment, net $ 68 Deferred tax liabilities, net $ 36

Goodwill and Intangible assets, net 245 Other non-current liabilities 21

Deferred tax assets, net 2 $ 57

RESTRUCTURING, INTEGRATION, SEPARATION AND IPO COSTS

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Separation costs, Separation-related costs, IPO Costs and IPO-related Costs

The Company has incurred, and will incur, costs associated with activities to effectuate the B+L Separation and the Solta IPO.

These activities include:

(i) separating the Bausch + Lomb and Solta Medical businesses from the remainder of the Company and (ii) registering the Bausch + Lomb and Solta Medical businesses as independent publicly traded entities.

Separation and IPO costs are incremental costs directly related to the B+L Separation and Solta IPO and include, but are not limited to:

(i) legal, audit and advisory fees, (ii) talent acquisition costs and (iii) costs associated with establishing a new board of directors and related board committees for the Bausch + Lomb and Solta Medical entities.

The Company has incurred, and will incur, costs associated with activities relating to the B+L Separation.

In 2022 and 2021, the Company also incurred costs associated with activities relating to the Solta IPO, which was suspended in June 2022.

These B+L Separation and Solta IPO activities include:

(i) separating the Bausch + Lomb and Solta Medical businesses from the remainder of the Company, (ii) completing the B+L IPO and preparing for the suspended Solta IPO and (iii) the actions necessary for Bausch + Lomb to become an independent publicly traded entity.

Separation and IPO costs are incremental costs directly related to the B+L Separation and the suspended Solta IPO and include, but are not limited to:

(i) legal, audit and advisory fees, (ii) talent acquisition costs and (iii) costs associated with establishing a new board of directors and related board committees for Bausch + Lomb.

Included in Restructuring, integration, separation and IPO costs for the years ended December 31, 2022 and 2021 are Separation and IPO costs of $ 33 million and $ 32 million, respectively.

The Company has also incurred, and will incur, Separation-related and IPO-related costs which are incremental costs indirectly related to the B+L Separation and Solta IPO.

Separation-related and IPO-related costs include, but are not limited to:

The Company has also incurred, and expects to continue to incur with respect to the B+L Separation, separation-related and IPO-related costs which are incremental costs indirectly related to the B+L Separation and the suspended Solta IPO including, but are not limited to:

(i) IT infrastructure and software licensing costs, (ii) rebranding costs and (iii) costs associated with facility relocation and/or modification.

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Acquisition-related contingent consideration $ 241 $ — $ — $ 241 $ 241 $ — $ — $ 241

$ 241 $ — $ — $ 241 $ 328 $ — $ — $ 328

Cross-currency swaps $ 39 $ — $ 39 $ — $ — $ — $ — $ —

$ — $ — $ — $ — $ 70 $ — $ 70 $ —

Foreign currency exchange contracts $ 4 $ — $ 4 $ — $ — $ — $ — $ —

Cash equivalents consist of highly liquid investments, primarily money market funds, with maturities of three months or less when purchased, and are reflected in the Consolidated Balance Sheets at carrying value, which approximates fair value due to their short-term nature.

As of December 31, 2021, Restricted cash and other settlement deposits includes $ 1,510 million of payments into escrow funds under the terms of settlement agreements regarding that certain U.S.

securities litigation (subject to an objector's appeal of the final court approval) and the Glumetza Antitrust Litigation.

These payments are reflected in the Consolidated Balance Sheets at carrying value, which approximates fair value due to their short-term nature.

These payments will remain in escrow until final approval of the settlements as discussed in Note 20, "LEGAL PROCEEDINGS".

Cash, cash equivalents and restricted cash and other settlements as presented in the Consolidated Balance Sheet as of December 31, 2022 includes $ 380 million of cash, cash equivalents and restricted cash held by legal entities of Bausch + Lomb.

Cash held by Bausch + Lomb legal entities and any future cash from the operations, investing and financing activities of Bausch + Lomb, is expected to be retained by Bausch + Lomb entities and are generally not available to support the operations, investing and financing activities of other legal entities, including Bausch Health unless paid as a dividend which would be determined by the Board of Directors of Bausch + Lomb and paid pro rata to Bausch + Lomb’s shareholders.

As of December 31, 2021, Restricted cash and other settlement deposits included $ 1,510 million of payments into escrow funds under the terms of settlement agreements regarding certain U.S.

securities litigation, which was subject to one objector’s appeal of the final court approval and the Glumetza Antitrust Litigation.

With respect to the U.S.

Securities Litigation, the period to file a petition for an appeal with the U.S.

Supreme Court expired on August 10, 2022 and the objector did not file such a petition.

The expiration of this deadline means the securities litigation settlement and judgment have become “final”, as no more appeals can be filed.

As a result, the Company’s rights to the funds in escrow were extinguished and the Company reduced Restricted cash and other settlement deposits with a corresponding reduction to liabilities for legal settlements, included in Accrued and other current liabilities on the Company’s Consolidated Balance Sheets, by $ 1,210 million during the third quarter of 2022.

Securities Litigation - Opt -Out Litigation” of Note 20, “LEGAL PROCEEDINGS” for additional details.

There were no transfers into or out of Level 3 during 2022 and 2021.

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The gain arising from the transaction of the swaps has been included as a component of Other comprehensive loss.

As of December 31, 2021, there were no cross-currency swaps.

During the third quarter of 2022, Bausch + Lomb entered into cross-currency swaps (the “2022 Cross-Currency Swaps”), with aggregate notional amounts of $ 1,000 million, to mitigate fluctuation in the value of a portion of its euro-denominated net investment in its consolidated financial statements from fluctuation in exchange rates.

The euro-denominated net investment being hedged is Bausch + Lomb’s investment in certain Bausch + Lomb euro-denominated subsidiaries.

The assets and liabilities associated with the Company’s cross-currency swaps as included in the Consolidated Balance Sheets as of December 31, 2022 and 2021 are as follows:

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Location of gain of excluded component Interest Expense

For the years ended December 31, 2021 and 2020, the Company received $ 27 million and $ 23 million, respectively, in settlements of its cross-currency swaps which are reported as Investing activities in the Consolidated Statements of Cash Flows.

Interest settlement of the 2022 Cross-Currency Swaps occurs in January and July each year, with the first settlement in January 2023.

Future settlements of the 2022 Cross-Currency Swaps will be reported as investing activities in the Consolidated Statements of Cash Flows.

For the years ended December 31, 2022 and 2021, the Company received $ 0 and $ 27 million, respectively, in settlements of its cross-currency swaps which are reported as Investing activities in the Consolidated Statements of Cash Flows.

Foreign Currency Exchange Contracts

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(in millions) 2022 2021

Gain (loss) related to changes in fair value $ 9 $ ( 8 )

Gain related to changes in fair value $ 2 $ 9

Loss related to settlements $ ( 20 ) $ ( 17 )

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Significant increases or decreases in any of those inputs in isolation could result in a significantly higher or lower fair value measurement.

At December 31, 2021, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 6 % to 18 %, and a weighted average risk-adjusted discount rate of 7 %.

At December 31, 2022, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 6 % to 18 %, and a weighted average risk-adjusted discount rate

The weighted average risk-adjusted discount rate was calculated by weighting each contract’s relative fair value at December 31, 2022.

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Non-current portion $ 207 $ 202

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The following table presents the components and classification of the Company’s financial assets and liabilities measured at fair value on a non-recurring basis:

December 31, 2021 December 31, 2020

(in millions) Carrying

Value Level 1 Level 2 Level 3 Carrying

Value Level 1 Level 2 Level 3

Other non-current assets:

Non-current assets held for sale $ — $ — $ — $ — $ 245 $ — $ — $ 245

Non-current assets held for sale of $ 245 million as of December 31, 2020 were remeasured to estimated fair value, less costs to sell, which utilized Level 3 unobservable inputs.

See Note 3, "ACQUISITIONS, LICENSING AGREEMENTS AND DIVESTITURE" for additional details regarding these assets held for sale.

Fair Value of Long-term Debt

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Total finite-lived intangible assets 25,436 ( 21,334 ) 4,102 25,430 ( 20,180 ) 5,250

Acquired IPR&D not in service NA — — — 7 — 7

B&L Trademark NA 1,698 — 1,698 1,698 — 1,698

1 unchanged sentence

Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

Impairment charges associated with these assets are included in Asset impairments, including loss on assets held for sale in the Consolidated Statement of Operations.

The Company continues to monitor the recoverability of its finite-lived intangible assets and tests the intangible assets for impairment if indicators of impairment are present.

The Company estimates the fair values of long-lived assets with finite lives using an undiscounted cash flow model which utilizes Level 3 unobservable inputs.

The undiscounted cash flow model relies on assumptions regarding revenue growth rates, gross profit, selling, general and administrative expenses, research and development expenses.

Impairment charges associated with these assets are included in Asset impairments, including loss on assets held for sale in the Consolidated Statement of Operations.

Asset impairments, including loss on assets held for sale in 2022 were $ 15 million and included:

(i) impairments of $ 10 million, in aggregate, due to decreases in forecasted sales of certain product lines and (ii) impairments of $ 5 million, in aggregate, related to the discontinuance of certain product lines.

On August 10, 2022, a court held, that among other findings, that certain U.S.

patents protecting the composition and use of Xifaxan ® for treating inflammatory bowel syndrome with diarrhea (“IBS-D”) were invalid (the “Norwich Legal Decision”).

On August 16, 2022, the Company appealed the Norwich Legal Decision and intends to vigorously defend its Xifaxan ® intellectual property.

See “ Xifaxan ® Paragraph IV Proceedings ” of Note 20, “LEGAL PROCEEDINGS” for details of this litigation matter and the Company’s response.

Xifaxan ® revenues were $ 1,216 million and $ 1,194 million for the nine months ended September 30, 2022 and 2021, respectively.

As the ultimate outcome of the Norwich Legal Decision and other potential future related developments, including a competitor’s ability to launch a successful generic version to Xifaxan ® , could impact the timing and extent of future revenues and cash flows associated with Xifaxan ® , the Company determined that the ruling in the Norwich Legal Decision constituted an event requiring assessment of the Xifaxan ® finite-lived intangible assets for potential impairment.

The Company performed this assessment using a probability-weighted undiscounted cash flow analysis, with a base case representing the Company’s most recent cash flow projections as revised in the third quarter of 2022, as well as different scenarios representing a range of different outcomes which address, among other things, the timing of when a competitor or competitors will be able to successfully launch a generic version to Xifaxan ® , if they are able to launch one at all.

This assessment resulted in no impairment of the carrying value of the Xifaxan ® finite-lived intangible assets as of September 30, 2022.

During the fourth quarter of 2022 there were no material changes to the facts and circumstances of the Norwich Legal Decision or to actual or expected business performance for Xifaxan ® .

Based on these factors, no impairment to the carrying value of the Xifaxan ® finite-lived intangible assets was identified as of December 31, 2022.

The Company also determined that no change to the remaining useful lives of its Xifaxan ® finite-lived intangible assets was required.

Xifaxan ® finite-lived intangible assets included in the audited Consolidated Balance Sheets had a carrying value of $ 2,693 million and an estimated remaining useful life of 60 months as of December 31, 2022.

It is possible that the Norwich Legal Decision and other potential future developments:

(i) may adversely impact the estimated future cash flows associated with these products, which could result in an impairment of the value of these intangible assets in one or more future periods and (ii) may result in shortened useful lives of the Xifaxan ® finite-lived intangible assets, which would increase amortization expense in future periods.

Any such impairment or shortening of the useful lives of Xifaxan ® could be material to the results of operations of the Company in the period or periods in which they were to occur.

Asset impairments, including loss on assets held for sale in 2021 included:

(i) impairments of $ 105 million, in aggregate, due to decreases in forecasted sales of certain product lines, (ii) an $ 88 million loss on assets held for sale in connection with the Amoun Sale, (iii) impairments of $ 23 million, in aggregate, related to the discontinuance of certain product lines and (iv) $ 18 million related to a portion of an IT infrastructure improvement project no longer being utilized.

Asset impairments, including loss on assets held for sale in 2020 included impairments of:

(i) $ 96 million to reduce the carrying value of the Amoun business to its estimated fair value less costs to sell due to classifying the business as held for sale as discussed in Note 3, "ACQUISITIONS, LICENSING AGREEMENTS AND DIVESTITURE", (ii) $ 16 million in aggregate, due to decreases in forecasted sales of certain product lines, (iii) $ 1 million in aggregate, related to the discontinuance of certain product lines not aligned with the focus of the Company's core businesses and (iv) $ 1 million related to Acquired IPR&D not in service.

(i) impairments of $ 105 million, in aggregate, due to decreases in forecasted sales of certain product lines, (ii) an $ 88 million loss on assets held for sale in connection with the Amoun Sale as discussed in Note 3, “ACQUISITIONS, LICENSING AGREEMENTS AND DIVESTITURE”, (iii) impairments of $ 23 million, in aggregate, related to the discontinuance of certain product lines and (iv) $ 18 million related to a portion of an IT infrastructure improvement project no longer being utilized.

Asset impairments, including loss on assets held for sale in 2020 included impairments of:

(i) $ 58 million reflecting decreases in forecasted sales of certain product lines due to generic competition and other factors, (ii) $ 8 million related to assets being classified as held for sale, (iii) $ 5 million related to certain product/patent assets associated with the discontinuance of specific product lines not aligned with the focus of the Company's core businesses and (iv) $ 4 million related to Acquired IPR&D not in service.

(i) $ 96 million to reduce the carrying value of the Amoun business to its estimated fair value less costs to sell due to classifying the business as held for sale, (ii) $ 16 million in aggregate, due to decreases in forecasted sales of certain product lines, (iii) $ 1 million in aggregate, related to the discontinuance of certain product lines not aligned with the focus of the Company’s core businesses and (iv) $ 1 million related to Acquired IPR&D not in service.

The impairments to assets reclassified as held for sale were measured as the difference of the carrying value of these assets as compared to the estimated fair values of these assets less costs to sell determined using a discounted cash flow analysis which utilized Level 3 unobservable inputs.

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International Bausch +

Lomb Salix International Rx Ortho Dermatologics Diversified Products Total

Lomb Salix International Ortho Dermatologics Solta Medical Diversified Products Total

Balance, January 1, 2020 $ 5,786 $ — $ 3,159 $ — $ 1,267 $ — $ 2,914 13,126

Acquisition of certain assets of Synergy

— — 3 — — — 3

Goodwill reclassified to assets held for sale ( 18 ) — — — — — ( 18 )

Foreign exchange and other ( 1 ) — — — — — ( 1 )

Balance, December 31, 2019 5,786 — 3,159 — 1,267 2,914 13,126

Assets held for sale reclassified to goodwill 18 — — — — — — 18

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Balance, December 31, 2021 — 5,318 3,159 825 798 — 2,357 12,457

Realignment of segment goodwill — — — — ( 798 ) 115 683 —

Additions — 5 — — — — — 5

Impairment — — — — — — ( 824 ) ( 824 )

Foreign exchange and other — ( 77 ) — ( 36 ) — — 22 ( 91 )

Balance, December 31, 2022 $ — $ 5,246 $ 3,159 $ 789 $ — $ 115 $ 2,238 $ 11,547

Goodwill is not amortized but is tested for impairment at least annually on October 1st at the reporting unit level.

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Accordingly, if market conditions deteriorate, or if the Company is unable to execute its strategies, it may be necessary to record impairment charges in the future.

2019 Annual Goodwill Impairment Test

The Company conducted its annual goodwill impairment test as of October 1, 2019 by first assessing qualitative factors.

In each quantitative fair value test performed, the fair value was greater than the carrying value of the reporting unit.

As a result, there was no impairment to the goodwill of any reporting unit.

The negative impacts of the COVID-19 pandemic on the global economy have led to significant volatility in the global equity markets.

The Company has been able to continue its operations with limited disruptions and has assessed the potential impact that the COVID-19 pandemic is likely to have on its forecasted cash flows.

In performing its assessment, the Company considered the possible effects and outcomes of the COVID-19 pandemic on, among other things, its supply chain, customers and distributors, employee base, product sustainability, research and development activities, product pipeline and consumer demand and related rebates and discounts and has made adjustments, although not considered to be material, to its long-term forecasts used in its previous goodwill impairment assessments, for these and other matters.

After completing this assessment, although not completely insulated from the negative effects of the COVID-19 pandemic, the Company believes that its long-term forecasted cash flows, as adjusted for the possible outcome of the COVID-19 pandemic and other matters, do not indicate that the fair value of any reporting unit may be below its carrying value.

The Company's 2020 revenues were most negatively impacted during its second quarter by certain social restrictions and other precautionary measures taken in response to the COVID-19 pandemic.

However, as governments began lifting social restrictions, allowing offices of certain health care providers to reopen and certain surgeries and elective medical procedures to proceed, the negative trend in the revenues of certain businesses began to level off and stabilize prior to the third quarter of 2020.

Revenues for 2021 and 2020 were $ 8,434 million and $ 8,027 million, respectively.

The increase of $ 407 million in revenue represents an improving trend over the decreases in year-over-year revenues for the three month periods ended June 30, 2020, September 30, 2020 and December 31, 2020 of 23 %, 3 % and less than 1 %, respectively.

The Company's revenues returned to pre-pandemic levels for many of its businesses and geographies in 2021 and, presuming there continues to be increased availability of effective vaccines and any further resurgence of the COVID-19 virus, the delta and omicron variants and other variant strains thereof do not have a material adverse impact on efforts to contain the COVID-19 virus, the Company anticipates the COVID-19 pandemic to have a minimal impact on its remaining businesses and geographies in 2022.

However, the rates of recovery for each business will vary by geography and will be dependent upon, among other things, the availability and effectiveness of vaccines for the COVID-19 virus, government responses, rates of economic recovery, precautionary measures taken by patients and customers, the rate at which remaining social restrictions are lifted and once lifted, the presumption that social restrictions will not be materially reenacted in the event of a resurgence of the virus and other actions taken in response to the COVID-19 pandemic.

2020 Interim Goodwill Impairment Assessment

2020 Interim Impairment Assessment

The negative impacts of the COVID-19 pandemic on the global economy led to significant volatility in the global equity markets and the Company was able to continue its operations with limited disruptions.

In performing its assessment during 2020, the Company considered the possible effects and outcomes of the COVID-19 pandemic on, among other things, its supply chain, customers and distributors, employee base, product sustainability, research and development activities, product pipeline and consumer demand and related rebates and discounts and made adjustments to the long-term forecasts used in previous goodwill impairment assessments, for these and other matters.

After completing this assessment, the Company believed that, with the exception of the Ortho Dermatologics reporting unit, its long-term forecasted cash flows, as adjusted for the possible outcome of the COVID-19 pandemic and other matters, did not indicate that the fair value of any reporting unit may be below its carrying value.

During the interim periods of 2020, after giving consideration to the nature and timing of the negative impacts of the COVID-19 pandemic on the Company’s forecasted cash flows, with the exception of the Ortho Dermatologics reporting unit, no events occurred, or circumstances changed that would indicate that the fair value of any other reporting unit might be below its carrying value and therefore, no impairments were recorded.

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Therefore, a quantitative fair value test for impairment to the goodwill of the Ortho Dermatologics reporting unit was performed at March 31, 2020 and at June 30, 2020.

The quantitative fair value tests utilized the Company’s most recent cash flow projections for the Ortho Dermatologics reporting unit as revised in the then respective quarter of 2020 which reflected current market conditions and current trends in business performance.

Based on the quantitative fair value tests, the fair value of the Ortho Dermatologics reporting unit continued to be greater than its carrying value and as a result there was no impairment to the goodwill of the reporting unit at March 31, 2020 and at June 30, 2020.

2020 Annual Goodwill Impairment Test

2020 Annual Impairment Test

The Company conducted its annual goodwill impairment test as of October 1, 2020 by first assessing qualitative factors.

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The Company believed that these factors may suggest that it was more likely than not that the fair value of the Ortho Dermatologics reporting unit was less than its carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.

The Company performed a quantitative fair value test for the Ortho Dermatologics reporting unit as of October 1, 2020, utilizing a long-term growth rate of 2.0 % and a range of discount rates between 9.50 % and 9.75 %, in estimation of the fair value of this reporting unit.

The Company performed a quantitative fair value test for the Ortho Dermatologics reporting unit as of October 1, 2020.

The quantitative fair value test utilized the Company’s most recent cash flow projections as revised in the fourth quarter of 2020 which reflected current market conditions and current trends in business performance.

The quantitative fair value test utilized a long-term growth rate of 2.0 % and a range of discount rates between 9.50 % and 9.75 %, in estimation of the fair value of this reporting unit.

Based on the quantitative fair value test, the fair value of the Ortho Dermatologics reporting unit was approximately 10 % greater than its carrying value and as a result there was no impairment to the goodwill of the reporting unit.

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(i) Bausch + Lomb, (ii) Salix, (iii) International Rx, (iv) Ortho Dermatologics and (v) Diversified Products.

The Bausch + Lomb segment consists of the:

The Bausch + Lomb segment consisted of the:

Bausch + Lomb and (ii) International Bausch + Lomb reporting units.

The Salix segment consists of the Salix reporting unit.

The International Rx segment consists of the International Rx reporting unit.

The Ortho Dermatologics segment consists of the:

The Salix segment consisted of the Salix reporting unit.

The International Rx segment consisted of the International Rx reporting unit.

The Ortho Dermatologics segment consisted of the:

(i) Ortho Dermatologics and (ii) Global Solta reporting units.

The Diversified Products segment consists of the:

The Diversified Products segment consisted of the:

(i) Neurology and Other, (ii) Generics and (iii) Dentistry reporting units.

This realignment in segment structure resulted in a change in the Company's former International reporting unit, which is now divided between the International Bausch + Lomb reporting unit and International Rx reporting unit.

In addition, as part of this realignment of segment structure, certain products historically included in the Generics reporting unit are now included in the U.S.

This realignment in segment structure resulted in a change in the Company’s former International reporting unit, which was divided between the International Bausch + Lomb reporting unit and International Rx reporting unit.

In addition, as part of this realignment of segment structure, certain products historically included in the Generics reporting unit were included in the U.S.

Bausch + Lomb reporting unit.

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Based on the qualitative fair value assessment performed, management believed that it was more likely than not that the carrying values of its former:

(i) International and (ii)

Generics reporting units were less than their respective fair values and therefore, concluded a quantitative assessment was not required.

(i) International and (ii) Generics reporting units were less than their respective fair values and therefore, concluded a quantitative assessment was not required.

Immediately following the change in reporting units, as a result of the change in composition of the net assets for its current:

(i) International Bausch + Lomb, (ii) International Rx and (iii) Generics reporting units, the Company performed a quantitative fair value test.

The quantitative fair value test utilized the Company’s most recent cash flow projections as revised in the first quarter of 2021 which reflected current market conditions and current trends in business performance.

The quantitative fair value test utilized a range of long-term growth rates of 1.0 % to 3.0 % and a range of discount rates between 11.0 % and 12.25 %, in estimation of the fair value of the reporting units.

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Bausch + Lomb reporting unit was less than its fair value and therefore, concluded a quantitative assessment was not required.

March 31, 2021 Impairment to Goodwill

March 31, 2021 Impairment

During the three months ended March 31, 2021, management identified launches of certain Ortho Dermatologics products which were not going to achieve their trajectories as forecasted once the social restrictions associated with the COVID-19 pandemic began to ease in the U.S.

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The quantitative fair value test utilized the Company’s most recent cash flow projections as revised in the first quarter of 2021 to reflect the business changes previously discussed, including a range of potential outcomes, along with a long-term growth rate of 1.0 % and a range of discount rates between 9.0 % and 10.0 %.

Based on the quantitative fair value test, the carrying value of the Ortho Dermatologics reporting unit exceeded its fair value at March 31, 2021, and the Company recognized a goodwill impairment of $ 469 million.

Based on the quantitative fair value test, the carrying value of the Ortho Dermatologics reporting unit exceeded its fair value as of March 31, 2021, and the Company recognized a goodwill impairment of $ 469 million.

Second Quarter 2021 - Realignment of Bausch + Lomb Reporting Units

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(i) Vision Care / Consumer Products, (ii) Ophthalmic Pharmaceuticals and (iii) Surgical reporting units immediately following the change in the Bausch + Lomb segment.

The quantitative fair value test utilized the Company’s most recent cash flow projections as revised in the second quarter of 2021 which reflected current market conditions and current trends in business performance.

The quantitative fair value test utilized long-term growth rates of 2.0 % and 3.0 % and a range of discount rates between 7.0 % and 10.0 %, in estimation of the fair value of the reporting units.

After completing the testing, the fair value of each of these reporting units exceeded its carrying value by more than 45 %, and, therefore, there was no impairment to goodwill.

June 30, 2021 and September 30, 2021 Interim Assessments of Goodwill

The Company continues to monitor the market conditions impacting the Ortho Dermatologics reporting unit.

The Company's latest forecasts for the Ortho Dermatologics reporting unit include a range of potential outcomes for, among other matters:

June 30, 2021 and September 30, 2021 Interim Assessment

The Company continued to monitor the market conditions impacting the Ortho Dermatologics reporting unit.

The Company’s latest forecasts for the Ortho Dermatologics reporting unit included a range of potential outcomes for, among other matters:

(i) the impacts of the COVID-19 pandemic on operations, (ii) the impact of the loss of exclusivity of certain products, (iii) the impact of longer launch cycles for certain new products, (iv) progress of its product pipeline and (v) ongoing pricing pressures, which could negatively impact the reporting unit’s results over the long term.

The changes in the amounts and timing of revenues and expenses in the latest forecast as compared to the forecast used at March 31, 2021 (the last time goodwill of the Ortho Dermatologics reporting unit was tested), were not substantial enough to materially adversely affect the recoverability of the Ortho Dermatologics reporting unit's assets and are not material enough to indicate that the fair value of the Ortho Dermatologics reporting unit might be below its carrying value as last tested at March 31, 2021.

The changes in the amounts and timing of revenues and expenses in the latest forecast as compared to the forecast used at March 31, 2021 (the last time goodwill of the Ortho Dermatologics reporting unit was tested), were not substantial enough to materially adversely affect the recoverability of the Ortho Dermatologics reporting unit’s assets and were not material enough to indicate that the fair value of the Ortho Dermatologics reporting unit might be below its carrying value as last tested at March 31, 2021.

No other events occurred or circumstances changed during the period October 1, 2020 (the earliest date goodwill was tested for all other reporting units) through December 31, 2021 that indicated that the fair value of any reporting unit, other than the Ortho Dermatologics reporting unit, might be below its carrying value.

2021 Annual Goodwill Impairment Test

2021 Annual Impairment Test

The Company conducted its annual goodwill impairment test as of October 1, 2021 by first assessing qualitative factors.

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The Company believed that these facts and circumstances may suggest that it was more likely than not that the fair value of the Ortho Dermatologics reporting unit was less than its carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.

The Company performed a quantitative fair value test for the Ortho Dermatologics reporting unit as of October 1, 2021, utilizing a long-term growth rate of 1.0 % and a discount rate of 9.0 %, in estimation of the fair value of this reporting unit.

The quantitative fair value test utilized the Company’s most recent cash flow projections as revised in the fourth quarter of 2021 which reflected current market conditions and current trends in business performance.

The quantitative fair value test utilized a long-term growth rate of 1.0 % and a discount rate of 9.0 %, in estimation of the fair value of this reporting unit.

If market conditions deteriorate, if the factors and circumstances regarding the COVID-19 pandemic escalate beyond management’s current expectations, or if the Company is unable to execute its strategies, it may be necessary to record impairment charges in the future and those charges could be material.

First Quarter 2022 - Realignment of Segments

Commencing in the first quarter of 2022, the Company began operating in the following reportable segments:

(i) Salix, (ii) International, (iii) Diversified Products, (iv) Solta Medical and (v) Bausch + Lomb.

The Salix segment consists of the Salix reporting unit.

The International segment consists of the International reporting unit.

The Diversified Products segment consists of the:

(i) Neurology and Other, (ii) Generics, (iii) Ortho Dermatologics and (iv) Dentistry reporting units.

The Solta Medical segment consists of the Solta reporting unit.

The Bausch + Lomb segment consists of the:

(i) Vision Care (formerly Vision Care / Consumer Products), (ii) Ophthalmic Pharmaceuticals and (iii) Surgical reporting units.

As such, the new segment structure does not impact the Company’s reporting units but realigns the two reporting units of the former Ortho Dermatologics segment whereby the Ortho Dermatologics reporting unit is now part of the current Diversified Products segment and the Solta reporting unit is now its own operating and reportable segment, and therefore management concluded that a quantitative fair value test was not required.

March 31, 2022 Interim Assessment

During the three months ended March 31, 2022, macroeconomic factors had impacted interest rates and the U.S.

inflation rate was higher than previously expected.

Given the limited headroom of the Ortho Dermatologics reporting unit as calculated on October 1, 2021, the Company believed that these facts and circumstances suggested the fair value of the Ortho Dermatologics reporting unit could be less than its carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.

The quantitative fair value test utilized the Company’s most recent cash flow projections as revised in the fourth quarter of 2022 which reflected current market conditions and current trends in business performance.

The quantitative fair value test utilized a long-term growth rate of 1 % and a discount rate of 9 %.

The discount rate contemplated changes in the current macroeconomic conditions noting certain inputs such as the risk-free rate increased over the three months ended March 31, 2022, and was offset by decreases in other reporting unit specific risks during the same period.

Based on the quantitative fair value test, the fair value of the Ortho Dermatologics reporting unit was less than 2 % greater than its carrying value and as a result there was no impairment to the goodwill of the reporting unit.

June 30, 2022 Interim Assessment

Ortho Dermatologics

During the three months ended June 30, 2022, increases in interest rates and, to a lesser extent, higher than expected inflation in the U.S.

and other macroeconomic factors impacted key assumptions used to value the Ortho Dermatologics reporting unit as of March 31, 2022.

Given the limited headroom of the Ortho Dermatologics reporting unit as calculated on March 31, 2022, the Company believed that these facts and circumstances suggested the fair value of the Ortho Dermatologics reporting unit could be less than its carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.

The quantitative fair value test utilized the Company’s most recent cash flow projections for the Ortho Dermatologics reporting unit as revised in the second quarter of 2022 which reflected current market conditions and current trends in business performance.

The Company’s discounted cash flow model for the Ortho Dermatologics reporting unit included a range of potential outcomes for, among other matters, macroeconomic factors such as higher than expected inflation for many commodities, volatility in many of the equity markets and pressures on market interest rates.

The quantitative fair value test utilized a long-term growth rate of 1 % and a discount rate of 10 %.

The discount rate had increased 1 % since the assessment performed as of March 31, 2022, as a result of changes in macroeconomic conditions, including an increase in the risk-free rate during the three months ended June 30, 2022.

Based on the quantitative fair value test, the carrying value of the Ortho Dermatologics reporting unit exceeded its fair value as of June 30, 2022, and the Company recognized a goodwill impairment of $ 83 million.

Bausch + Lomb Reporting Units

During the period May 6, 2022 (the time Bausch + Lomb’s stock began trading publicly) through June 30, 2022, equity and bond markets were negatively impacted by various macroeconomic and geopolitical factors including, but not limited to:

rising inflation rates in the U.S.

and abroad, uncertainties created by the Russia/Ukraine conflict, interest rate volatility, COVID-19 related lockdowns and supply issues.

The equity markets negatively impacted the market price for Bausch + Lomb’s common stock which as of June 30, 2022 was trading below its IPO offering price.

The Company believed that these facts and circumstances suggest the fair value of the three reporting units of the Bausch + Lomb segment could be less than their respective carrying amounts.

Therefore, separate quantitative fair value tests were performed for the Vision Care, Surgical and Ophthalmic reporting units of the Bausch + Lomb segment.

The quantitative fair value tests utilized the Company’s most recent cash flow projections for each of its reporting units as revised in the second quarter of 2022 which reflected current market conditions and current trends in business performance.

The quantitative fair value tests utilized long-term growth rates of 2 % and 3 % and discount rates of 9.0 % and 11.5 %.

After completing the testing, the fair value of each of these reporting units exceeded their respective carrying values by more than 25 %, and, therefore, there was no impairment to goodwill.

September 30, 2022 Interim Assessment

Ortho Dermatologics

During the third quarter of 2022, the Company continued to monitor the market conditions impacting the Ortho Dermatologics reporting unit.

Continued increases in interest rates and, to a lesser extent, higher than expected inflation in the U.S.

and other macroeconomic factors impacted key assumptions used to value the Ortho Dermatologics reporting unit at June 30, 2022.

Based on the impairment of goodwill recognized in the second quarter of 2022 for the Ortho Dermatologics reporting unit, the reporting unit had no headroom as calculated on June 30, 2022, and as such, the Company believed that these facts and circumstances suggested the fair value of the Ortho Dermatologics reporting unit could be less than its carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.

The quantitative fair value test utilized the Company’s most recent cash flow projections for the Ortho Dermatologics reporting unit as revised in the third quarter of 2022 which reflected current market conditions and current trends in business performance.

The Company’s discounted cash flow model for the Ortho Dermatologics reporting unit includes, among other matters, volatility in many of the equity markets and pressures on market interest rates and macroeconomic factors such as changes in inflation for many commodities.

The quantitative fair value test utilized a long-term growth rate of 1 % and the discount rate increased from 10.0 % at June 30, 2022 to 10.5 % at September 30, 2022, which reflects the increases in market interest rates.

Based on the quantitative fair value test, the carrying value of the Ortho Dermatologics reporting unit exceeded its fair value at September 30, 2022, and the Company recognized a goodwill impairment of $ 119 million for the three months ended September 30, 2022.

As of September 30, 2022, the Ortho Dermatologics reporting unit had remaining goodwill of $ 480 million.

On August 10, 2022, the Norwich Legal Decision was issued that held, among other matters, that certain U.S.

Patents protecting the composition and use of Xifaxan ® for treating IBS-D were invalid.

On August 16, 2022, the Company appealed the Norwich Legal Decision and intends to vigorously defend its Xifaxan ® intellectual property.

See “ Xifaxan ® Paragraph IV Proceedings ” of Note 20, “LEGAL PROCEEDINGS” for details of this litigation matter and the Company’s response.

Xifaxan ® revenues represent approximately 80 % of the Salix reporting unit’s revenue.

The ultimate outcome of the Norwich Legal Decision and other potential future related developments, including a competitor’s ability to launch a successful generic version to Xifaxan ® , could impact the timing and extent of future revenues and cash flows associated with Xifaxan ® .

As such, the Company believes that the uncertainty of the possible outcomes of the Norwich Legal Decision and the potential impact on Xifaxan ® revenues are indicators that the Salix reporting unit’s fair value could be less than its carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.

The Company performed its quantitative fair value test using a probability-weighted discounted cash flow analysis, with a base case representing the Company’s most recent cash flow projections as revised in the third quarter of 2022, as well as different scenarios representing a range of different outcomes which address, among other things, the range of possible outcomes of the Norwich Legal Decision and the timing of when a competitor or competitors could be able to successfully launch a generic version of Xifaxan ® , if they are able to launch one at all.

The forecasted cash flows under each set of outcomes were discounted utilizing a long-term growth rate of 2.5 % and discount rates of 9.75 % and 10.0 %.

The Company assigned a probability weighting to each scenario reflecting its best estimate of likelihood of the outcome resulting in each scenario, and calculated a weighted average of the valuations derived from the discounted cash flows under each scenario using this probability weighting.

As of September 30, 2022, the carrying value of the Salix reporting unit was less than its fair value as determined by the Company’s probability-weighted discount valuation model and therefore no impairment was recorded as of September 30, 2022.

However, as the Company’s probability-weighted discount valuation includes certain scenarios under which the Company does not retain market exclusivity for Xifaxan ® through January 2028, these probability-weighted fair values of the Salix reporting unit exceeded its carrying value by less than 5 %.

During the interim periods of 2022, no events occurred, or circumstances changed during the period October 1, 2021 (the date of the last annual impairment test) through September 30, 2022, that indicated that the fair value of any reporting unit, other than the Ortho Dermatologics reporting unit, the Salix reporting unit and the reporting units of the Bausch + Lomb segment, might be below their respective carrying values.

2022 Annual Impairment Test

The Company’s annual goodwill impairment test as of October 1, 2022, included performing separate quantitative fair value tests for the Neurology and Other reporting unit and the Vision Care, Surgical and Ophthalmic reporting units of the Bausch + Lomb segment.

For its remaining reporting units, the Company conducted its annual goodwill impairment test as of October 1, 2022, by first assessing qualitative factors.

Based on its qualitative assessment as of October 1, 2022, management believed that, it was more likely than not that the carrying amounts of its remaining reporting units were less than their respective fair values and therefore concluded that a quantitative fair value test for those reporting units was not required.

Neurology and Other

The Neurology and Other reporting unit operates in the United States, where shifting market dynamics, including changes in payer demands, health care legislation, and other regulations are contributing to increasing pressure for the reduction of healthcare costs, through both pricing of pharmaceutical products and/or directing patients to lower cost unbranded generic products.

The nature of the Neurology and Other reporting unit’s product portfolio, which includes branded generic pharmaceuticals, is by its nature impacted by these changing market dynamics.

As a result, the Company has begun taking steps to:

(i) reassess its pricing strategies, (ii) re-evaluate its marketing and promotional efforts, and (iii) reduce its cost structure, and has revised its long-term forecasts for the Neurology and Other reporting unit to reflect these developments.

The quantitative fair value test for the Neurology and Other reporting unit utilized the most recent cash flow projections for the reporting unit as revised in the fourth quarter of 2022 to reflect current market conditions and current trends in business performance.

The quantitative assessment utilized a long-term growth rate of - 2.5 % and a discount rate of 10.25 %, in the estimation of the reporting unit’s fair value.

As a result of the revisions to its long-term expectations for these and other factors, goodwill for the Neurology and Other reporting unit was impaired during the Company’s most recent annual impairment test reflecting its best estimate at that time of the outlook and risks of this business.

Based on the quantitative fair value test, the carrying value of the Neurology and Other reporting unit exceeded its fair value as of October 1, 2022, and the Company recognized a goodwill impairment of $ 622 million.

As of December 31, 2022, the Neurology and Other reporting unit had remaining goodwill of $ 1,439 million.

Bausch + Lomb Reporting Units

The quantitative fair value test for the Vision Care, Surgical and Ophthalmic reporting units of the Bausch + Lomb segment utilized the most recent cash flow projections for each of the reporting units as revised in the fourth quarter of 2022 which reflected current market conditions and current trends in business performance.

The quantitative assessment utilized long-term growth rates of 2.0 % and 3.0 % and discount rates of 9.50 % and 12.25 %, in estimation of the fair value of the reporting units.

After completing the testing, the fair value of each of these reporting units exceeded its respective carrying value by more than 25 %, and, therefore, there was no impairment to goodwill.

December 31, 2022

During the period October 1, 2022 through December 31, 2022, the Company continued to monitor the market conditions and trends in business performance for all its reporting units, particularly as they pertain to the Ortho Dermatologics and Salix reporting units, and determined that, no events occurred, or circumstances changed that would indicate that the fair value of any reporting unit might be below its carrying value.

However, if market conditions deteriorate, or if the Company is unable to execute its strategies, it may be necessary to record impairment charges in the future and those charges could be material.

Ortho Dermatologics

As a result of the impairment of goodwill in the third quarter of 2022, the Ortho Dermatologics reporting unit had no headroom on September 30, 2022, and as such, the Company continued to monitor the market conditions impacting the Ortho Dermatologics reporting unit during the period October 1, 2022 through December 31, 2022.

During the fourth quarter of 2022, the Company evaluated the reporting unit’s performance as well as its revised long-term forecasts in light of current market conditions, current trends in business performance and the expected impacts of management’s latest business strategies.

This evaluation supported management’s previous expectations for long-term business performance.

Additionally, based on corporate bond rates as of December 31, 2022, the Company concluded that discount rates would not have increased during the fourth quarter as compared to the discount rate used in determining the fair value of the reporting unit as of September 30, 2022.

Based on these factors, management concluded that it was more likely than not that the carrying value of its Ortho Dermatologics reporting unit was less than its fair value and therefore, concluded a quantitative assessment was not required during the quarter ended December 31, 2022.

However, given the reporting unit’s limited headroom, any changes or other potential future developments may adversely impact the estimated fair value of the Ortho Dermatologics reporting unit in one or more future periods requiring an impairment to goodwill to be recognized.

Any such impairment could be material to the Company’s results of operations in the period in which it was to occur.

Based on the quantitative fair value testing performed in the third quarter of 2022, the Salix reporting unit had limited headroom as of September 30, 2022, and as such, the Company continued to monitor the potential impacts of changes in the Norwich Legal Decision and market conditions on the valuation of the Salix reporting unit during the period October 1, 2022 through December 31, 2022.

Through December 31, 2022, there were no material changes in the facts and circumstances of the Norwich Legal Decision, including management’s assessment as to a competitor’s ability to launch a successful generic version to Xifaxan ® prior to January 2028, if they are able to launch one at all.

The Company also evaluated the reporting unit’s performance in the fourth quarter as well as its revised long-term forecasts in light of current market conditions, current trends in business performance and the expected impacts of management’s latest business strategies.

This evaluation supported management’s previous expectations for long-term business performance.

Additionally, based on corporate bond rates as of December 31, 2022, the Company concluded that discount rates would not have increased during the fourth quarter as compared to the discount rates used in determining the fair value of the reporting unit as of September 30, 2022.

Based on these factors, management concluded that it was more likely than not that the carrying value of its Salix reporting unit was less than its fair value and therefore, concluded a quantitative assessment was not required during the quarter ended December 31, 2022.

However, it is possible that the Norwich Legal Decision and other potential future developments may adversely impact the estimated fair value of the Salix reporting unit in one or more future periods.

Any such impairment could be material to the Company’s results of operations in the period in which it were to occur.

Accumulated goodwill impairment charges through December 31, 2022 were $ 5,004 million.

14 unchanged sentences

Senior Secured Credit Facilities:

2018 Restated Credit Agreement

2023 Revolving Credit Facility June 2023 $ — $ — $ 285 $ 285

1 unchanged sentence

November 2025 Term Loan B Facility November 2025 — — 994 984

2022 Amended Credit Agreement

2027 Revolving Credit Facility February 2027 470 470 — —

February 2027 Term Loan B Facility February 2027 2,437 2,392 — —

B+L Credit Facilities

B+L Revolving Credit Facility May 2027 — — — —

B+L Term Facility May 2027 2,488 2,439 — —

Senior Secured Notes:

5.500 % Secured Notes

March 2024 — — 2,000 1,987

5.500 % Secured Notes

November 2025 1,680 1,672 1,750 1,739

6.125 % Secured Notes

February 2027 1,000 987 — —

5.750 % Secured Notes

August 2027 500 496 500 495

1 unchanged sentence

June 2028 1,600 1,583 1,600 1,580

11.00 % First Lien Secured Notes

September 2028 1,774 2,826 — —

14.00 % Second Lien Secured Notes

October 2030 352 711 — —

9.00 % Intermediate Holdco Secured Notes

January 2028 999 1,423 — —

Senior Unsecured Notes:

15 unchanged sentences

Covenant Compliance

The Senior Secured Credit Facilities (as defined below) and the indentures governing the Senior Secured Notes and Senior Unsecured Notes contain customary affirmative and negative covenants and specified events of default.

The Senior Secured Credit Facilities (as defined below), the B+L Credit Facilities (as defined below) and the indentures governing the Senior Secured Notes (as defined and described in the table above), the 9.00 % Intermediate Holdco Secured Notes (as defined below) and Senior Unsecured Notes (as defined and described in the table above) contain customary affirmative and negative covenants and specified events of default.

These affirmative and negative covenants include, among other things, and subject to certain qualifications and exceptions, covenants that restrict the Company’s ability and the ability of its subsidiaries to:

1 unchanged sentence

create or permit liens on assets;

pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness;

pay dividends

on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness;

make certain investments and other restricted payments;

7 unchanged sentences

The Company, based on its current forecast for the next twelve months from the date of issuance of these financial statements, expects to remain in compliance with its financial maintenance covenant and meet its debt service obligations over that same period.

The Company continues to take steps to improve its operating results to ensure continual compliance with its financial maintenance covenant and may take other actions to reduce its debt levels to align with the Company’s long-term strategy, including divesting other businesses, refinancing debt and issuing equity or equity-linked securities as deemed appropriate.

On November 29, 2022, the Company designated 1261229 B.C.

Ltd., the entity that directly or indirectly holds 89 % of the issued and outstanding shares of Bausch + Lomb, as an unrestricted subsidiary of the Company in accordance with the terms of the Company’s indentures.

In connection therewith, Bausch + Lomb and its subsidiaries, are now unrestricted subsidiaries of the Company and, as a result, are no longer subject to the covenants under the relevant Bausch Health indentures, and the earnings and debt of Bausch + Lomb, as defined in the relevant indentures, are also not included in the calculation of the Company’s financial maintenance covenant.

The Company continues to take steps to ensure compliance with its financial maintenance covenant and may take other actions to reduce its debt levels to align with the Company’s long-term strategy, including divesting other businesses, refinancing debt and issuing equity or equity-linked securities as deemed appropriate.

Exchange Offer

On September 30, 2022, the Company closed a series of transactions whereby it exchanged (the “Exchange Offer”) validly tendered senior unsecured notes with an aggregate outstanding principal balance of $ 5,594 million as set forth in the table below (collectively, the “Existing Unsecured Senior Notes”) for $ 3,125 million in aggregate principal balance of newly issued secured notes, a reduction of outstanding principal of $ 2,469 million.

The secured notes issued in the Exchange Offer consist of:

(i) $ 1,774 million in aggregate principal amount of new 11.00 % First Lien Secured Notes due 2028 (the “ 11.00 % First Lien Secured Notes”) issued by the Company, (ii) $ 352 million in aggregate principal amount of new 14.00 % Second Lien Secured Notes due 2030 (the “ 14.00 % Second Lien Secured Notes” and, together with the 11.00 % First Lien Secured Notes, the “New BHC Secured Notes”) issued by the Company and (iii) $ 999 million in aggregate principal amount of new 9.00 % Senior Secured Notes due 2028 (the “ 9.00 % Intermediate Holdco Secured Notes” and, together with the New BHC Secured Notes, the “New Secured Notes”) issued by 1375209 B.C.

(“Intermediate Holdco”), an existing indirect wholly-owned unrestricted subsidiary of the Company that holds 38.6 % of the issued and outstanding common shares of Bausch + Lomb.

The aggregate principal amounts of the Existing Unsecured Senior Notes that were validly tendered and accepted by the Company in the Exchange Offer are set forth below:

(in millions)

9.00 % Senior Notes due 2025

9.25 % Senior Notes due 2026

8.50 % Senior Notes due 2027

7.00 % Senior Notes due 2028

5.00 % Senior Notes due 2028

7.25 % Senior Notes due 2029

6.25 % Senior Notes due 2029

5.00 % Senior Notes due 2029

5.25 % Senior Notes due 2030

5.25 % Senior Notes due 2031

Total $ 5,594

In connection with the Exchange Offer and following receipt of the requisite number of consents from noteholders, the Company and the applicable notes trustee, executed supplemental indentures to amend each of the indentures governing the 9.25 % Senior Notes due 2026, 8.50 % Senior Notes due 2027, 5.00 % Senior Notes due 2028, 7.00 % Senior Notes due 2028 and 7.25 % Senior Notes due 2029, which amendments eliminate substantially all of the restrictive covenants as well as certain events of default and related provisions applicable to such series of notes.

The Company performed an assessment of the Exchange Offer and determined that it met the criteria to be accounted for as a troubled debt restructuring under Accounting Standards Codification 470-60.

For each series of the Existing Unsecured Senior Notes exchanged, the undiscounted cash flows associated with the New Secured Notes issued were compared to the carrying value of the Existing Unsecured Senior Notes exchanged for such New Secured Notes and the applicable exchange was accounted for as follows:

(i) to the extent the undiscounted cash flows of the New Secured Notes in question were lower than the carrying value of the applicable Existing Unsecured Senior Notes exchanged, the carrying value of the applicable New Secured Notes was established at the total of these undiscounted cash flows, with a gain recorded for the remaining difference between this value and the carrying value of the applicable Existing Senior Unsecured Notes (as such, no interest expense will be recorded for the applicable New Secured Notes prospectively) and (ii) to the extent the undiscounted cash flows of the New Secured Notes in question exceeded the carrying value of the applicable Existing Unsecured Senior Notes exchanged, the carrying value of the applicable New Secured Notes was established at the carrying value of the applicable Existing Senior Unsecured Notes, and the Company established new effective interest rates based on the carrying value of the applicable Existing Unsecured Senior Notes prior to the Exchange Offer.

The difference between the principal amount of the New Secured Notes and their carrying value was recorded as a premium and is included in long-term debt on the Company’s Consolidated Balance Sheet.

For the three months ended September 30, 2022, the Company recorded a gain of $ 570 million, net of third party fees of $ 25 million, in connection with the Exchange Offer.

The premium recorded on the New Secured Notes was $ 1,835 million, which will be reduced as contractual interest payments are made on the New Secured Notes.

Further details of the New Secured Notes are discussed below.

Senior Secured Credit Facilities

On June 1, 2018, the Company and certain of its subsidiaries as guarantors entered into the "Senior Secured Credit Facilities" under the Company's Fourth Amended and Restated Credit and Guaranty Agreement (the “Restated Credit Agreement”), with a syndicate of financial institutions and investors as lenders.

The Restated Credit Agreement provides for a revolving credit facility of $ 1,225 million (the "2023 Revolving Credit Facility") and a seven year Tranche B Term Loan Facility of $ 4,565 million (the “June 2025 Term Loan B Facility”) borrowed by the Company’s subsidiary, Bausch Health Americas, Inc.

The 2023 Revolving Credit Facility matures on the earlier of June 1, 2023 and the date that is 91 calendar days prior to the scheduled maturity of indebtedness for borrowed money of the Company or BHA in an aggregate principal amount in excess of $ 1,000 million.

Both the Company and BHA are borrowers with respect to the 2023 Revolving Credit Facility.

Borrowings under the 2023 Revolving Credit Facility may be made in U.S.

dollars or Canadian dollars (or if an amendment to the Restated Credit Agreement is made to replace LIBOR with an alternative benchmark rate with respect to borrowings under the Revolving Credit Facility denominated in euros, euros).

As of December 31, 2021, the Company had $ 285 million of outstanding borrowings, $ 54 million of issued and outstanding letters of credit, and remaining availability of $ 886 million under its 2023 Revolving Credit Facility.

On November 27, 2018, the Company entered into the First Incremental Amendment to the Restated Credit Agreement, which provided an additional seven year Tranche B Term Loan Facility of $ 1,500 million (the "November 2025 Term Loan B Facility").

Current Description of Senior Secured Credit Facilities

Borrowings under the Senior Secured Credit Facilities in U.S.

Senior Secured Credit Facilities under the 2018 Restated Credit Agreement

On June 1, 2018, the Company and certain of its subsidiaries as guarantors entered into the “Senior Secured Credit Facilities” under the Company’s Fourth Amended and Restated Credit and Guaranty Agreement, as amended by the First Incremental Amendment to the Restated Credit Agreement, dated as of November 27, 2018 (the “2018 Restated Credit Agreement”) with a syndicate of financial institutions and investors as lenders.

Prior to the 2022 Amended Credit Agreement (as defined below), the 2018 Restated Credit Agreement provided for a revolving credit facility of $ 1,225 million, maturing on the earlier of June 1, 2023 and the date that is 91 calendar days prior to the scheduled maturity of indebtedness for borrowed money of the Company and Bausch Health Americas, Inc.

(“BHA”) in an aggregate principal amount in excess of $ 1,000 million (the “2023 Revolving Credit Facility”) and term loan facilities of original principal

amounts of $ 4,565 million and $ 1,500 million, maturing in June 2025 (the “June 2025 Term Loan B Facility”) and November 2025 (the “November 2025 Term Loan B Facility”), respectively.

Senior Secured Credit Facilities under the 2022 Amended Credit Agreement

On May 10, 2022, the Company and certain of its subsidiaries as guarantors entered into a Second Amendment (the “Second Amendment”) to the Fourth Amended and Restated Credit and Guaranty Agreement (as amended by the Second Amendment, the “2022 Amended Credit Agreement”).

The 2022 Amended Credit Agreement provides for a new term loan facility with an aggregate principal amount of $ 2,500 million (the “2027 Term Loan B Facility”) maturing on February 1, 2027 and a new revolving credit facility of $ 975 million (the “2027 Revolving Credit Facility”) that will mature on the earlier of February 1, 2027 and the date that is 91 calendar days prior to the scheduled maturity of indebtedness for borrowed money of the Company and BHA in an aggregate principal amount in excess of $ 1,000 million.

Borrowings under the 2027 Revolving Credit Facility can be made in U.S.

dollars, Canadian dollars or Euros.

After giving effect to the Second Amendment, the 2023 Revolving Credit Facility, June 2025 Term Loan B Facility and November 2025 Term Loan B Facility were refinanced (such refinancing, the “Credit Agreement Refinancing”), along with certain of the Company’s existing senior notes, using net proceeds from the borrowings under the 2027 Term Loan B Facility, the B+L IPO and the B+L Debt Financing (as defined below) and available cash on hand.

As of December 31, 2022, the Company had drawn $ 470 million and $ 25 million of issued and outstanding letters of credit on the 2027 Revolving Credit Facility.

Borrowings under the 2027 Term Loan B Facility bear interest at a rate per annum equal to, at the Company’s option, either:

(a) a forward-looking term rate determined by reference to the financing rate for borrowing U.S.

dollars overnight collateralized by U.S.

Treasury securities (“term SOFR rate”) for the interest period relevant to such borrowing or (b) a base rate determined by reference to the highest of:

(i) the prime rate (as defined in the 2022 Amended Credit Agreement), (ii) the federal funds effective rate plus 1/2 of 1.00% and (iii) the term SOFR rate for a period of one month plus 1.00 % (or if such rate shall not be ascertainable, 1.50 %) (provided, however that the term SOFR rate with respect to the 2027 Term Loan B Facility shall at no time be less than 0.50 % per annum), in each case, plus an applicable margin.

Borrowings under the 2027 Revolving Credit Facility in:

dollars bear interest at a rate per annum equal to, at the Company’s option, either:

(i) a base rate determined by reference to the highest of:

(a) the prime rate (as defined in the Restated Credit Agreement), (b) the federal funds effective rate plus 1/2 of 1.00% or (c) the eurocurrency rate (as defined in the Restated Credit Agreement) for a period of one month plus 1.00 % (or if such eurocurrency rate shall not be ascertainable, 1.00 %) or (ii) a eurocurrency rate determined by reference to the costs of funds for U.S.

dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs (provided however, that the eurocurrency rate shall at no time be less than 0.00 % per annum), in each case plus an applicable margin.

Borrowings under the 2023 Revolving Credit Facility in euros, when available, are expected to bear interest at a term benchmark rate determined by reference to the costs of funds for euro deposits for the interest period relevant to such borrowing (provided however, that the eurocurrency rate is at no time expected to be less than 0.00 % per annum), plus an applicable margin.

Borrowings under the 2023 Revolving Credit Facility in Canadian dollars bear interest at a rate per annum equal to, at the Company's option, either:

(i) a prime rate determined by reference to the higher of:

(a) the rate of interest last quoted by The Wall Street Journal as the “Canadian Prime Rate” or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Bank of Canada as its prime rate and (b) the 1 month BA rate (as defined below) calculated daily plus 1.00 % (provided however, that the prime rate shall at no time be less than 0.00 %) or (ii) the bankers’ acceptance rate for Canadian dollar deposits in the Toronto interbank market (the “BA rate”) for the interest period relevant to such borrowing (provided however, that the BA rate shall at no time be less than 0.00 % per annum), in each case plus an applicable margin.

Subject to certain exceptions and customary baskets set forth in the Restated Credit Agreement, the Company is required to make mandatory prepayments of the loans under the Senior Secured Credit Facilities under certain circumstances, including from:

(i) 100 % of the net cash proceeds of insurance and condemnation proceeds for property or asset losses (subject to reinvestment rights, decrease based on leverage ratios and net proceeds threshold), (ii) 100 % of the net cash proceeds from the incurrence of debt (other than permitted debt as described in the Restated Credit Agreement), (iii) 50 % of Excess Cash Flow (as defined in the Restated Credit Agreement) subject to decrease based on leverage ratios and subject to a threshold amount and (iv) 100 % of net cash proceeds from asset sales (subject to reinvestment rights, decrease based on leverage ratios and net proceeds threshold).

These mandatory prepayments may be used to satisfy future amortization.

The applicable interest rate margins for the June 2025 Term Loan B Facility and the November 2025 Term Loan B Facility are 2.00 % and 1.75 %, respectively, with respect to base rate and prime rate borrowings and 3.00 % and 2.75 %,

respectively, with respect to eurocurrency rate and BA rate borrowings.

As of December 31, 2021, the stated rates of interest on the Company’s borrowings under the June 2025 Term Loan B Facility and the November 2025 Term Loan B Facility were 3.09 % and 2.84 % per annum, respectively.

The amortization rate for both the June 2025 Term Loan B Facility and the November 2025 Term Loan B Facility is 5.00 % per annum.

The Company may direct that prepayments be applied to such amortization payments in order of maturity.

As of December 31, 2021, there were no remaining mandatory quarterly amortization payments for the Senior Secured Credit Facilities.

The applicable interest rate margins for borrowings under the 2023 Revolving Credit Facility are 1.50 %- 2.00 % with respect to base rate or prime rate borrowings and 2.50 %- 3.00 % with respect to eurocurrency rate or BA rate borrowings.

As of December 31, 2021, the stated rate of interest on the 2023 Revolving Credit Facility was 2.84 % per annum.

(a) the term SOFR rate (subject to a floor of 0.00 % per annum) or (b) a U.S.

dollar base rate, (ii) Canadian dollars bear interest at a rate per annum equal to, at the Company’s option, either:

(a) a Canadian dollar offer rate or (b) a Canadian dollar prime and (iii) euros bear interest at a rate per annum equal to a term benchmark rate determined by reference to the cost of funds for euro deposits (“EURIBOR”) for the interest period relevant to such borrowing (subject to a floor of 0.00 % per annum), in each case, plus an applicable margin.

Term SOFR rate loans are subject to a credit spread adjustment ranging from 0.10 %- 0.25 %.

The applicable interest rate margin for borrowings under the 2027 Term Loan B Facility is 5.25 % for term SOFR rate loans and 4.25 % for U.S.

dollar base rate loans.

The applicable interest rate margin for borrowings under the 2027 Revolving Credit Facility ranges from 4.75 % to 5.25 % for term SOFR rate loans, BA rate loans and EURIBOR loans and 3.75 % to 4.25 % for U.S.

dollar base rate loans and Canadian prime rate loans.

In addition, the Company is required to pay commitment fees of 0.25 %- 0.50 % per annum with respect to the unutilized commitments under the 2027 Revolving Credit Facility, payable quarterly in arrears.

The Company also is required to pay:

(i) letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on eurocurrency rate borrowings under the 2023 Revolving Credit Facility on a per annum basis, payable quarterly in arrears, (ii) customary fronting fees for the issuance of letters of credit and (iii) agency fees.

The Restated Credit Agreement permits the incurrence of incremental credit facility borrowings, up to the greater of $ 1,000 million and 28.5 % of Consolidated Adjusted EBITDA (non-GAAP) (as defined in the Restated Credit Agreement), subject to customary terms and conditions, as well as the incurrence of additional incremental credit facility borrowings subject to, in the case of secured debt, a secured leverage ratio of not greater than 3.50 :1.00, and, in the case of unsecured debt, either a total leverage ratio of not greater than 6.50 :1.00 or an interest coverage ratio of not less than 2.00 :1.00.

(i) letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on term SOFR rate borrowings under the 2027 Revolving Credit Facility on a per annum basis, payable quarterly in arrears, (ii) customary fronting fees for the issuance of letters of credit and (iii) agency fees.

Subject to certain exceptions and customary baskets set forth in the 2022 Amended Credit Agreement, the Company is required to make mandatory prepayments of the loans under the Senior Secured Credit Facilities under certain circumstances, including from:

(i) 100 % of the net cash proceeds of insurance and condemnation proceeds for property or asset losses (subject to reinvestment rights and net proceeds thresholds), (ii) 100 % of the net cash proceeds from the incurrence of debt (other than permitted debt as described in the 2022 Amended Credit Agreement), (iii) 50 % of Excess Cash Flow (as defined in the 2022 Amended Credit Agreement) subject to decrease based on leverage ratios and subject to a threshold amount and (iv) 100 % of net cash proceeds from asset sales (subject to reinvestment rights and net proceeds thresholds).

These mandatory prepayments may be used to satisfy future amortization.

The amortization rate for the 2027 Term Loan B Facility is 5.00 % per annum, or $ 125 million, payable in quarterly installments beginning on September 30, 2022.

The Company may direct that prepayments be applied to such amortization payments in order of maturity.

As of December 31, 2022, the remaining mandatory quarterly amortization payments for the 2027 Term Loan B Facility were $ 500 million through December 2026.

The 2022 Amended Credit Agreement permits the incurrence of incremental credit facility borrowings up to the greater of $ 1,000 million and 40 % of Consolidated Adjusted EBITDA (non-GAAP) (as defined in the 2022 Amended Credit Agreement), subject to customary terms and conditions, as well as the incurrence of additional incremental credit facility borrowings subject to, in the case of secured debt, a secured leverage ratio of not greater than 3.50 :1.00, and, in the case of unsecured debt, either a total leverage ratio of not greater than 6.50 :1.00 or an interest coverage ratio of not less than 2.00 :1.00.

The 2022 Amended Credit Agreement provides that Bausch + Lomb shall initially be a “restricted” subsidiary subject to the terms of the 2022 Amended Credit Agreement covenants, but does not require Bausch + Lomb to guarantee the obligations under the 2022 Amended Credit Agreement.

The 2022 Amended Credit Agreement permits the Company to designate Bausch + Lomb as an “unrestricted” subsidiary under the 2022 Amended Credit Agreement and no longer subject to the terms of the covenants thereunder provided that no event of default is continuing or will result from such designation and the total leverage ratio of Remainco (as defined in the 2022 Amended Credit Agreement) will not be greater than 7.60 :1.00 on a pro forma basis.

The Credit Agreement Refinancing contains provisions designed to facilitate the B+L Separation.

On November 29, 2022, the Company designated 1261229 B.C.

Ltd., the entity that directly or indirectly holds approximately 89 % of the issued and outstanding shares of Bausch + Lomb, as an unrestricted subsidiary of the Company in accordance with the terms of the Company’s debt documents.

In connection therewith, all of the subsidiaries of 1261229 B.C.

Ltd., including Bausch + Lomb and its subsidiaries, are also now unrestricted subsidiaries of the Company and, as a result, are no longer subject to the covenants under the Bausch Health debt documents, and the earnings and debt of Bausch + Lomb, as defined in the relevant debt documents, are also not included in the calculation of the Company’s financial maintenance covenant.

Senior Secured Credit Facilities under the B+L Credit Agreement

On May 10, 2022, Bausch + Lomb entered into a credit agreement (the “B+L Credit Agreement”, and the credit facilities thereunder, the “B+L Credit Facilities”) providing for a term loan of $ 2,500 million with a five-year term to maturity (the “B+L Term Facility”) and a five-year revolving credit facility of $ 500 million (the “B+L Revolving Credit Facility” and such financing, the “B+L Debt Financing”).

The B+L Credit Facilities are secured by substantially all of the assets of Bausch + Lomb and its material, wholly-owned Canadian, U.S., Dutch and Irish subsidiaries, subject to certain exceptions.

The term loan is denominated in U.S.

dollars, and borrowings under the revolving credit facility may be made available in U.S.

dollars, euros, pounds sterling and Canadian dollars.

As of December 31, 2022, the principal amount outstanding under the B+L Term Facility was $ 2,488 million and $ 2,439 million net of issuance costs.

As of December 31, 2022, Bausch + Lomb had no outstanding borrowings, $ 24 million of issued and outstanding letters of credit and remaining availability of $ 476 million under its Revolving Credit Facility.

The B+L Revolving Credit Facility is a source of funding for Bausch + Lomb and its subsidiaries only.

Absent the payment of a dividend, which would be determined by the Board of Directors of Bausch + Lomb and paid pro rata to Bausch + Lomb’s shareholders, proceeds from the B+L Revolving Credit Facility are not available to fund the operations, investing and financing activities of Bausch Health.

Borrowings under the B+L Revolving Credit Facility in:

dollars bear interest at a rate per annum equal to, at Bausch + Lomb’s option, either:

(a) a term Secured Overnight Financing Rate (“SOFR”)-based rate or (b) a U.S.

dollar base rate, (ii) Canadian dollars bear interest at a rate per annum equal to, at Bausch + Lomb’s option, either:

(a) a Canadian Dollar Offered Rate (“CDOR”) or (b) a Canadian dollar prime rate, (iii) euros bear interest at a rate per annum equal to EURIBOR and (iv) pounds sterling bear interest at a rate per annum equal to Sterling Overnight Index Average (“SONIA”) (provided, however, that the term SOFR-based rate, CDOR, EURIBOR and SONIA shall be no less than 0.00 % per annum at any time and the U.S.

dollar base rate and the Canadian dollar prime rate shall be no less than 1.00 % per annum at any time), in each case, plus an applicable margin.

Term SOFR-based loans are subject to a credit spread adjustment of 0.10 %.

The applicable interest rate margins for borrowings under the B+L Revolving Credit Facility are:

(i) between 0.75 % to 1.75 % with respect to U.S.

dollar base rate or Canadian dollar prime rate borrowings and between 1.75 % to 2.75 % with respect to SOFR, EURIBOR, SONIA or CDOR borrowings based on Bausch + Lomb’s total net leverage ratio and (ii) after:

(x) Bausch + Lomb’s senior unsecured non-credit-enhanced long term indebtedness for borrowed money receives an investment grade rating from at least two of S&P, Moody’s and Fitch and (y) the B+L Term Facility has been repaid in full in cash (the “IG Trigger”), between 0.015 % to 0.475 % with respect to U.S.

dollar base rate or Canadian dollar prime rate borrowings and between 1.015 % to 1.475 % with respect to SOFR, EURIBOR, SONIA or CDOR borrowings based on Bausch + Lomb’s debt rating.

In addition, Bausch + Lomb is required to pay commitment fees of 0.25 % per annum in respect of the unutilized commitments under the B+L Revolving Credit Facility, payable quarterly in arrears until the IG Trigger and a facility fee between 0.110 % to 0.275 % of the total revolving commitments, whether used or unused, based

on Bausch + Lomb’s debt rating and payable quarterly in arrears.

Bausch + Lomb is also required to pay letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on SOFR borrowings under the B+L Revolving Credit Facility on a per annum basis, payable quarterly in arrears, as well as customary fronting fees for the issuance of letters of credit and agency fees.

Borrowings under the B+L Term Facility bear interest at a rate per annum equal to, at Bausch + Lomb’s option, either (i) a term SOFR-based rate, plus an applicable margin of 3.25 % or (ii) a U.S.

dollar base rate, plus an applicable margin of 2.25 % (provided, however, that the term SOFR-based rate shall be no less than 0.50 % per annum at any time and the U.S.

dollar base rate shall not be lower than 1.50 % per annum at any time).

Term SOFR-based loans are subject to a credit spread adjustment of 0.10 %.

The stated rate of interest under the Term Facility at December 31, 2022 was 7.84 % per annum.

Subject to certain exceptions and customary baskets set forth in the B+L Credit Agreement, Bausch + Lomb is required to make mandatory prepayments of the loans under the B+L Term Facility under certain circumstances, including from:

(i) 100 % of the net cash proceeds of insurance and condemnation proceeds for property or asset losses (subject to reinvestment rights, decrease based on leverage ratios and net proceeds threshold), (ii) 100 % of the net cash proceeds from the incurrence of debt (other than permitted debt as described in the B+L Credit Agreement), (iii) 50 % of Excess Cash Flow (as defined in the B+L Credit Agreement) subject to decrease based on leverage ratios and subject to a threshold amount and (iv) 100 % of net cash proceeds from asset sales (subject to reinvestment rights, decrease based on leverage ratios and net proceeds threshold).

These mandatory prepayments may be used to satisfy future amortization.

The amortization rate for the B+L Term Facility is 1.00 % per annum, or $ 25 million, and the first installment was paid on September 30, 2022.

Bausch + Lomb may direct that prepayments be applied to such amortization payments in order of maturity.

As of December 31, 2022, the remaining mandatory quarterly amortization payments for the B+L Term Facility were $ 106 million through March 2027, with the remaining term loan balance being due in May 2027.

Senior Secured Notes

The Senior Secured Notes are guaranteed by each of the Company’s subsidiaries that is a guarantor under the Restated Credit Agreement and existing Senior Unsecured Notes (together, the “Note Guarantors”).

The Senior Secured Notes and the guarantees related thereto are senior obligations and are secured, subject to permitted liens and certain other exceptions, by the same first priority liens that secure the Company’s obligations under the Restated Credit Agreement under the terms of the indentures governing the Senior Secured Notes.

The Senior Secured Notes are guaranteed by each of the Company’s subsidiaries that is a guarantor under the 2022 Amended Credit Agreement and existing Senior Unsecured Notes (together, the “Note Guarantors”).

In connection with the closing of the B+L IPO, the redemption of the Company’s 6.125 % Senior Unsecured Notes due 2025 (the “April 2025 Unsecured Notes” and the related indenture, the “April 2025 Unsecured Notes Indenture”) (as discussed below) and the related release in respect of the 2018 Restated Credit Agreement, the guarantees and related security provided by Bausch + Lomb and its subsidiaries in respect of the existing senior notes of the Company and BHA were released.

The Senior Secured Notes and the guarantees related thereto are senior obligations and are secured, subject to permitted liens and certain other exceptions, by the same first priority liens that secure the Company’s obligations under the 2022 Amended Credit Agreement under the terms of the indentures governing the Senior Secured Notes.

The Senior Secured Notes and the guarantees rank equally in right of repayment with all of the Company’s and Note Guarantors’ respective existing and future unsubordinated indebtedness and senior to the Company’s and Note Guarantors’ respective future subordinated indebtedness.

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5.500 % Senior Secured Notes due 2025

On October 17, 2017, the Company issued $ 1,000 million, and, on November 21, 2017, the Company issued $ 750 million, aggregate principal amount of 5.500 % Senior Secured Notes due November 2025 (the “November 2025 Secured Notes”),

in a private placement.

Interest on the November 2025 Secured Notes is payable semi-annually in arrears on each May 1 and November 1.

The November 2025 Secured Notes are redeemable at the option of the Company, in whole or in part, at any time, at the redemption prices set forth in the indenture.

5.750 % Senior Secured Notes due 2027 - March 2019 Refinancing Transactions

5.750 % Senior Secured Notes due 2027

On March 8, 2019, BHA and the Company issued:

(i) $ 1,000 million aggregate principal amount of 8.500 % Senior Unsecured Notes due 2027 (the “January 2027 Unsecured Notes”) and (ii) $ 500 million aggregate principal amount of 5.750 % Senior Secured Notes due August 2027 (the “August 2027 Secured Notes”), respectively, in a private placement.

A portion of the proceeds and cash on hand were used to:

(i) repurchase $ 584 million of 5.875 % Senior Unsecured Notes due 2023 (the "May 2023 Unsecured Notes"), (ii) repurchase $ 518 million of 5.625 % Senior Unsecured Notes due 2021 (the “December 2021 Unsecured Notes”), (iii) repurchase $ 216 million of 5.500 % Senior Unsecured Notes due 2023 (the "March 2023 Unsecured Notes”) and (iv) pay all fees and expenses associated with these transactions (collectively, the “March 2019 Refinancing Transactions”).

During April 2019, the Company redeemed $ 182 million of the December 2021 Unsecured Notes, representing the remaining outstanding principal balance of the December 2021 Unsecured Notes and completing the refinancing of $ 1,500 million of debt in connection with the March 2019 Refinancing Transactions.

The March 2019 Refinancing Transactions were accounted for as an extinguishment of debt and the Company incurred a loss on extinguishment of debt of $ 8 million representing the difference between the amount paid to settle the extinguished debt and the extinguished debt’s carrying value.

Interest on the August 2027 Secured Notes is payable semi-annually in arrears on each February 15 and August 15.

The August 2027 Secured Notes are redeemable at the option of the Company, in whole or in part, at any time on or after August 15, 2022, at the redemption prices set forth in the indenture.

The Company may redeem some or all of the August 2027 Secured Notes prior to August 15, 2022 at a price equal to 100 % of the principal amount thereof plus a “make-whole” premium.

Prior to August 15, 2022, the Company may redeem up to 40 % of the aggregate principal amount of the August 2027 Secured Notes using the proceeds of certain equity offerings at the redemption price set forth in the indenture.

The August 2027 Secured Notes are redeemable at the option of the Company, in whole or in part, at the redemption prices set forth in the indenture, plus accrued and unpaid interest to the date of redemption.

4.875 % Senior Secured Notes due 2028 - June 2021 Refinancing Transactions

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In addition, at any time prior to June 1, 2024, the Company may redeem up to 40 % of the aggregate principal amount of the June 2028 Secured Notes using the net proceeds of certain equity offerings at the redemption price set forth in the June 2028 Secured Notes indenture.

6.125 % Senior Secured Notes due 2027 - February 2022 Financing

On February 10, 2022, the Company issued $ 1,000 million aggregate principal amount of 6.125 % Senior Secured Notes due February 2027 (the “February 2027 Secured Notes”).

The proceeds from the February 2027 Secured Notes, along with proceeds from the B+L IPO, the 2027 Term Loans and the B+L Debt Financing and cash on hand, were used to redeem the April 2025 Unsecured Notes and the Credit Agreement Refinancing as discussed below.

The February 2027 Secured Notes accrue interest at a rate of 6.125 % per year, payable semi-annually in arrears on each February and August.

The February 2027 Secured Notes are redeemable at the option of the Company, in whole or in part, at any time on or after February 2024, at the redemption prices set forth in the indenture.

The Company may redeem some or all of the February 2027 Secured Notes prior to February 2024 at a price equal to 100 % of the principal amount thereof plus a “make-whole” premium.

Prior to February 2024, the Company may redeem up to 40 % of the aggregate principal amount of the February 2027 Secured Notes using the proceeds of certain equity offerings at the redemption price set forth in the indenture.

New BHC Secured Notes

The 11.00 % First Lien Secured Notes mature on September 30, 2028, and have a stated interest of 11.00 % per year that is payable semi-annually in arrears on each March 30 and September 30.

The 11.00 % First Lien Secured Notes are redeemable, in whole or in part, at any time at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but not including, the date of redemption plus a “make-whole” premium as described in the 11.00 % First Lien Secured Notes indenture.

The 14.00 % Second Lien Secured Notes mature on October 15, 2030, and have stated interest of 14.00 % per year that is payable semi-annually in arrears on each April 15 and October 15.

The 14.00 % Second Lien Secured Notes will be redeemable, in whole or in part, at any time on or after October 15, 2025 at the applicable redemption prices set forth in the 14.00 % Second Lien Secured Notes indenture.

In addition, some or all of the 14.00 % Second Lien Secured Notes may be redeemed prior to October 15, 2025 at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but not including, the date of redemption plus a “make-whole” premium as described in the 14.00 % Second Lien Secured Notes indenture.

At any time prior to October 15, 2025, up to 40 % of the aggregate principal amount of the 14.00 % Second Lien Secured Notes may be redeemed with the net proceeds of certain equity offerings at the redemption price set forth in the 14.00 % Second Lien Secured Notes indenture.

9.00 % Intermediate Holdco Senior Secured Notes

The 9.00 % Intermediate Holdco Secured Notes mature on January 30, 2028, and have a stated interest of 9.00 % per year that is interest payable semi-annually in arrears on each January 30 and July 30.

The 9.00 % Intermediate Holdco Secured Notes are redeemable at the option of Intermediate Holdco, in whole or in part, at any time, at the redemption prices set forth in the 9.00 % Intermediate Holdco Secured Notes indenture.

The 9.00 % Intermediate Holdco Secured Notes are general senior secured obligations of Intermediate Holdco and secured by first priority liens (subject to permitted liens and certain other exceptions) on substantially all of the assets of Intermediate Holdco, which as of December 31, 2022 were comprised of 38.6 % of the issued and outstanding common shares of Bausch + Lomb Corporation.

The 9.00 % Intermediate Holdco Secured Notes and Intermediate Holdco’s other obligations under the indenture governing such notes are not obligations or responsibilities of, or guaranteed by, the Company, Bausch + Lomb or any of their respective affiliates or subsidiaries (other than the issuer Intermediate Holdco).

The sole recourse of the holders of the 9.00 % Intermediate Holdco Secured Notes under the 9.00 % Intermediate Holdco Secured Notes and the indenture governing such notes is limited to Intermediate Holdco and its assets.

Senior Unsecured Notes

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If the Company experiences a change in control, the Company may be required to make an offer to repurchase each series of Senior Unsecured Notes, in whole or in part, at a purchase price equal to 101 % of the aggregate principal amount of the Senior Unsecured Notes repurchased, plus accrued and unpaid interest.

Redemption of April 2025 Unsecured Notes

On January 18, 2022, the Company issued conditional notices of redemption to redeem:

(i) all of the April 2025 Unsecured Notes conditioned upon the completion of the Credit Agreement Refinancing and (ii) $ 370 million in aggregate principal amount of the Company’s outstanding 9.00 % Senior Unsecured Notes due 2025 (the “December 2025 Unsecured Notes”) conditioned upon the receipt of aggregate proceeds of at least $ 7,000 million from:

(a) the B+L IPO, (b) the B+L Debt Financing, (c) the Credit Agreement Refinancing and (d) the issuance of the February 2027 Secured Notes.

In connection with the closing of the B+L IPO, the conditions of the redemption of its April 2025 Unsecured Notes were satisfied and the Company discharged the April 2025 Unsecured Notes Indenture using:

(i) the net proceeds from the issuance of the February 2027 Secured Notes, (ii) the net proceeds from the B+L IPO, (iii) the net proceeds from the borrowings under the B+L Debt Financing and (iv) cash on hand.

On May 10, 2022, the Company caused sufficient funds for the redemption in full of its April 2025 Unsecured Notes at a redemption price of 101.021 % of the principal amount then outstanding to be irrevocably deposited with the Bank of New York Mellon, N.A., as trustee under the April 2025 Unsecured Notes Indenture, and the April 2025 Unsecured Notes Indenture was discharged.

The April 2025 Unsecured Notes were redeemed on May 16, 2022.

The redemption was accounted for as an extinguishment of debt.

On May 10, 2022, the Company notified the Trustee and holders of its outstanding December 2025 Unsecured Notes that the conditions to its previously announced redemption would not be satisfied, and the conditional redemption was cancelled.

In connection with the closing of the B+L IPO, the discharge of the April 2025 Unsecured Notes Indenture and the related release in respect of the 2018 Restated Credit Agreement as described above, the guarantees and related security provided by Bausch + Lomb and its subsidiaries in respect of the existing senior notes of the Company and BHA were released.

5.500 % Senior Unsecured Notes due 2023

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The March 2023 Unsecured Notes accrued interest at the rate of 5.500 % per year, payable semi-annually in arrears.

On March 8, 2019 and May 23, 2019, the Company repurchased $ 216 million and $ 382 million of March 2023 Unsecured Notes as part of the March 2019 Refinancing Transactions and the May 2019 Refinancing Transactions (as defined below), respectively.

Throughout 2020, the Company repurchased, in aggregate, $ 169 million of March 2023 Unsecured Notes using cash on hand.

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5.375 % Senior Unsecured Notes due 2020, 5.875 % Senior Unsecured Notes due 2023, 4.500 % Senior Unsecured Notes due 2023 and 6.125 % Senior Unsecured Notes due 2025

On March 27, 2015, VRX Escrow Corp.

(the "VRX Issuer"), a newly formed wholly owned subsidiary of the Company, issued $ 2,000 million aggregate principal amount of 5.375 % Senior Unsecured Notes due 2020 (the "March 2020 Unsecured Notes"), $ 3,250 million aggregate principal amount of May 2023 Unsecured Notes, € 1,500 million aggregate principal amount of 4.500 % Senior Unsecured Notes due 2023 (the "Euro Notes”) and $ 3,250 million aggregate principal amount of 6.125 % Senior Unsecured Notes due 2025 (the "April 2025 Unsecured Notes" and, together with the March 2020 Unsecured Notes, the May 2023 Unsecured Notes and the Euro Notes, the "VRX Notes") in a private placement.

On March 27, 2015, VRX Escrow Corp., a newly formed wholly owned subsidiary of the Company, issued $ 2,000 million aggregate principal amount of 5.375 % Senior Unsecured Notes due 2020 (the “March 2020 Unsecured Notes”), $ 3,250 million aggregate principal amount of May 2023 Unsecured Notes, € 1,500 million aggregate principal amount of 4.500 % Senior Unsecured Notes due 2023 (the “Euro Notes”) and $ 3,250 million aggregate principal amount of 6.125 % Senior Unsecured Notes due 2025 (the “April 2025 Unsecured Notes” and, together with the March 2020 Unsecured Notes”, the May 2023 Unsecured Notes and the Euro Notes) in a private placement.

The March 2020 Unsecured Notes accrued interest at the rate of 5.375 % per year and were repaid in full as part of certain refinancing transactions completed in 2017 and 2018.

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The April 2025 Unsecured Notes accrue interest at the rate of 6.125 % per year, payable semi-annually in arrears.

As part of a refinancing transaction completed in June 2018, the Company repaid the remaining outstanding principal amounts of the March 2020 Unsecured Notes.

During 2019, the Company repurchased $ 584 million and $ 1,118 million of May 2023 Unsecured Notes as part of the March 2019 Refinancing Transactions and the May 2019 Refinancing Transactions (as defined below), respectively, and on October 3, 2019, the Company repaid an additional $ 100 million of May 2023 Unsecured Notes using cash on hand.

On January 16, 2020, the Company redeemed $ 1,240 million aggregate principal amount of the May 2023 Unsecured Notes as part of the December 2019 Financing and Refinancing Transactions (as defined below).

On January 16, 2020, the Company redeemed $ 1,240 million aggregate principal amount of the May 2023 Unsecured Notes.

Throughout 2020, the Company repaid, in aggregate, $ 208 million of the May 2023 Unsecured Notes, with the May 2023 Unsecured Notes having been fully repaid during November 2020.

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Throughout 2021, the Company repaid, in aggregate, $ 600 million of the April 2025 Unsecured Notes.

The Company may redeem all or a portion of the April 2025 Unsecured Notes at the redemption prices set forth in the applicable indenture, plus accrued and unpaid interest to the date of redemption.

As noted above, the April 2025 Unsecured Notes were redeemed and discharged in the second quarter of 2022.

9.000 % Senior Unsecured Notes due 2025

On December 18, 2017, the Company issued $ 1,500 million aggregate principal amount of 9.000 % Senior Unsecured Notes due 2025 (the “December 2025 Unsecured Notes”) in a private placement, the net proceeds of which were used to repurchase $ 1,500 million in aggregate principal amount of previously outstanding senior unsecured notes (the "December 2017 Refinancing Transactions").

On December 18, 2017, the Company issued $ 1,500 million aggregate principal amount of 9.000 % Senior Unsecured Notes due 2025 (the “December 2025 Unsecured Notes”) in a private placement.

The related fees and expenses were paid using cash on hand.

The December 2025 Unsecured Notes accrue interest at the rate of 9.000 % per year, payable semi-annually in arrears on each of June 15 and December 15.

The Company may redeem all or a portion of the December 2025 Unsecured Notes at any time prior to December 15, 2021, at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium.

In addition, at any time prior to December 15, 2020, the Company may redeem up to 40 % of the aggregate principal amount of the outstanding December 2025 Unsecured Notes with the net proceeds of certain equity offerings at the redemption price set forth in the December 2025 Unsecured Notes indenture.

On or after December 15, 2021, the Company may redeem all or a portion of the December 2025 Unsecured Notes at the applicable redemption prices set forth in the December 2025 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

The Company may redeem all or a portion of the December 2025 Unsecured Notes, at the applicable redemption prices set forth in the December 2025 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

On September 30, 2022, $ 541 million in aggregate principal balance of the December 2025 Unsecured Notes were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

9.250 % Senior Unsecured Notes due 2026

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The April 2026 Unsecured Notes accrue interest at the rate of 9.250 % per year, payable semi-annually in arrears on each of April 1 and October 1.

BHA may redeem all or a portion of the April 2026 Unsecured Notes at any time prior to April 1, 2022, at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium.

In addition, at any time prior to April 1, 2021, BHA may redeem up to 40 % of the aggregate principal amount of the outstanding April 2026 Unsecured Notes with the net proceeds of certain equity offerings at the redemption price set forth in the April 2026 Unsecured Notes indenture.

On or after April 1, 2022, BHA may redeem all or a portion of the April 2026 Unsecured Notes at the applicable redemption prices set forth in the April 2026 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

BHA may redeem all or a portion of the April 2026 Unsecured Notes at the applicable redemption prices set forth in the April 2026 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

On September 30, 2022, $ 752 million in aggregate principal balance of the April 2026 Unsecured Notes were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

8.500 % Senior Unsecured Notes due 2027

As part of a 2018 refinancing transaction, BHA issued $ 750 million in aggregate principal amount of January 2027 Unsecured Notes in a private placement.

In June 2018, BHA issued $ 750 million in aggregate principal amount of January 2027 Unsecured Notes in a private placement.

The January 2027 Unsecured Notes accrue interest at the rate of 8.500 % per year, payable semi-annually in arrears on each of January 31 and July 31.

As part of the March 2019 Refinancing Transactions described above, BHA issued $ 1,000 million aggregate principal amount of 8.500 % Senior Unsecured Notes due January 2027.

In March 2019, BHA issued $ 1,000 million aggregate principal amount of 8.500 % Senior Unsecured Notes due January 2027.

These are additional notes and form part of the same series as BHA’s existing January 2027 Unsecured Notes.

BHA may redeem all or a portion of the January 2027 Unsecured Notes at any time prior to July 31, 2022, at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium.

In addition, at any time prior to July 31, 2021, BHA may redeem up to 40 % of the aggregate principal amount of the outstanding January 2027 Unsecured Notes with the net proceeds of certain equity offerings at the redemption price set forth in the January 2027 Unsecured Notes indenture.

On or after July 31, 2022, BHA may redeem all or a portion of the January 2027 Unsecured Notes at the applicable redemption prices set forth in the January 2027 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

7.000 % Senior Unsecured Notes due 2028 and 7.250 % Senior Unsecured Notes due 2029 - May 2019 Refinancing Transactions

BHA may redeem all or a portion of the January 2027 Unsecured Notes at the applicable redemption prices set forth in the January 2027 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

On September 30, 2022, $ 1,099 million in aggregate principal balance of the 8.500 % January 2027 Unsecured Notes were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

7.000 % Senior Unsecured Notes due 2028 and 7.250 % Senior Unsecured Notes due 2029

On May 23, 2019, the Company issued:

(i) $ 750 million aggregate principal amount of 7.000 % Senior Unsecured Notes due January 2028 (the “ 7.000 % January 2028 Unsecured Notes”) and (ii) $ 750 million aggregate principal amount of 7.250 % Senior Unsecured Notes due May 2029 (the “May 2029 Unsecured Notes”), respectively, in a private placement.

The proceeds and cash on hand were used to:

(i) repurchase $ 1,118 million of May 2023 Unsecured Notes, (ii) repurchase $ 382 million of March 2023 Unsecured Notes and (iii) pay all fees and expenses associated with these transactions (collectively, the “May 2019 Refinancing Transactions”).

The May 2019 Refinancing Transactions were accounted for as an extinguishment of debt and the Company incurred a loss on extinguishment of debt of $ 32 million representing the difference between the amount paid to settle the extinguished debt and the extinguished debt’s carrying value.

Interest on the 7.000 % January 2028 Unsecured Notes is payable semi-annually in arrears on each January 15 and July 15.

The proceeds and cash on hand was used to repurchase certain unsecured notes.

Interest on the May 2029 Unsecured Notes is payable semi-annually in arrears on each May 30 and November 30.

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The Company may redeem some or all of the 7.000 % January 2028 Unsecured Notes or the May 2029 Unsecured Notes prior to January 15, 2023 and May 30, 2024, respectively, at a price equal to 100 % of the principal amount thereof plus a “make-whole” premium.

Prior to July 15, 2022, and May 30, 2022, the Company may redeem up to 40 % of the aggregate principal amount of the 7.000 % January 2028 Unsecured Notes or the May 2029 Unsecured Notes, respectively, using the proceeds of certain equity offerings at the redemption price set forth in the respective indenture.

5.000 % Senior Unsecured Notes due 2028 and 5.250 % Senior Unsecured Notes due 2030 - December 2019 Financing and Refinancing Transactions

On September 30, 2022, $ 540 million and $ 373 million in aggregate principal balance of the 7.000 % January 2028 Unsecured Notes and 7.250 % May 2029 Unsecured Notes, respectively, were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

5.000 % Senior Unsecured Notes due 2028 and 5.250 % Senior Unsecured Notes due 2030

On December 30, 2019, the Company issued:

(i) $ 1,250 million aggregate principal amount of 5.000 % Senior Unsecured Notes due January 2028 (the “ 5.000 % January 2028 Unsecured Notes”) and (ii) $ 1,250 million aggregate principal amount of 5.250 % Senior Unsecured Notes due January 2030 (the “January 2030 Unsecured Notes”) in a private placement.

proceeds and cash on hand were used to:

(i) redeem $ 1,240 million of May 2023 Unsecured Notes on January 16, 2020, (ii) finance the $ 1,210 million settlement of certain U.S.

Securities litigation as discussed in Note 20, "LEGAL PROCEEDINGS" and (iii) pay all fees and expenses associated with these transactions (collectively, the "December 2019 Financing and Refinancing Transactions").

The redemption of $ 1,240 million of May 2023 Unsecured notes was accounted for as an extinguishment of debt and the Company incurred a loss on extinguishment of debt of $ 24 million representing the difference between the amount paid to settle the extinguished debt and the extinguished debt's carrying value.

The proceeds and cash on hand was used to repurchase certain unsecured notes.

Interest on the 5.000 % January 2028 Unsecured Notes is payable semi-annually in arrears on each January 30 and July 30.

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The Company may redeem some or all of the 5.000 % January 2028 Unsecured Notes or the January 2030 Unsecured Notes prior to January 30, 2023 and January 30, 2025, respectively, at a price equal to 100 % of the principal amount thereof plus a “make-whole” premium.

Prior to January 30, 2023, the Company may redeem up to 40 % of the aggregate principal amount of the 5.000 % January 2028 Unsecured Notes or the January 2030 Unsecured Notes using the proceeds of certain equity offerings at the redemption price set forth in the respective indenture.

6.250 % Senior Unsecured Notes due 2029 - May 2020 Refinancing Transactions

On September 30, 2022, $ 710 million and $ 332 million in aggregate principal balance of the 5.000 % January 2028 Unsecured Notes and 5.250 % January 2030 Unsecured Notes, respectively, were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

6.250 % Senior Unsecured Notes due 2029

On May 26, 2020, the Company issued $ 1,500 million aggregate principal amount of 6.250 % Senior Unsecured Notes due February 2029 (the “ 6.250 % February 2029 Unsecured Notes”) in a private placement.

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On or after February 15, 2024, the Company may redeem all or a portion of the 6.250 % February 2029 Unsecured Notes at the applicable redemption prices set forth in the 6.250 % February 2029 Unsecured Notes indenture, plus accrued and unpaid interest to, but not including, the date of redemption.

5.000 % Senior Unsecured Notes due 2029 and 5.250 % Senior Unsecured Notes due 2031 – December 2020 Refinancing Transactions

On September 30, 2022, $ 540 million in aggregate principal balance of the 6.250 % February 2029 Unsecured Notes were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

5.000 % Senior Unsecured Notes due 2029 and 5.250 % Senior Unsecured Notes due 2031

On December 3, 2020, the Company issued $ 1,000 million aggregate principal amount of 5.000 % Senior Unsecured Notes due February 2029 (the “ 5.000 % February 2029 Unsecured Notes”) and $ 1,000 million aggregate principal amount of 5.250 % Senior Unsecured Notes due February 2031 (the “February 2031 Unsecured Notes”) in a private placement.

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The Company may redeem all or a portion of the 5.000 % February 2029 Unsecured Notes at any time prior to February 15, 2024, at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium.

In addition, at any time prior to February 15, 2024, the Company may redeem up to 40 % of the aggregate principal amount of the outstanding 5.000 % February 2029 Unsecured Notes with the net proceeds of certain equity offerings at the redemption price set forth in the 5.000 % February 2029 Unsecured Notes

On or after February 15, 2024, the Company may redeem all or a portion of the 5.000 % February 2029 Unsecured Notes at the applicable redemption prices set forth in the 5.000 % February 2029 Unsecured Notes indenture, plus accrued and unpaid interest to, but not including, the date of redemption.

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On or after February 15, 2026, the Company may redeem all or a portion of the February 2031 Unsecured Notes at the applicable redemption prices set forth in the February 2031 Unsecured Notes indenture, plus accrued and unpaid interest to, but not including, the date of redemption.

On September 30, 2022, $ 371 million and $ 336 million in aggregate principal balance of the 5.000 % February 2029 Unsecured Notes and 5.250 % February 2031 Unsecured Notes, respectively, were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

Weighted Average Stated Rate of Interest

The weighted average stated rate of interest for the Company’s outstanding debt obligations as of December 31, 2022 and 2021 was 7.74 % and 5.88 %, respectively.

Due to the accounting treatment for the New Secured Notes, interest expense in the Company’s financial statements for 2022 and in future periods will not be representative of the weighted average stated rate of interest.

Gain (Loss) on Extinguishment of Debt

In June 2022 and December 2022, the Company repurchased and retired certain outstanding Senior Notes with an aggregate par value of $ 927 million in the open market, for an aggregate cost of $ 550 million.

In connection with these repurchases, the Company recognized a gain of $ 369 million, net of write-offs of debt premiums, discounts and deferred

issuance costs, on extinguishment of debt which represents the differences between the amounts paid to settle the extinguished debt and its carrying value.

In September 2022, the Company completed the Exchange Offer and recorded a net gain on extinguishment of debt of $ 570 million as described above.

In connection with (i) the repayment of the June 2025 Term Loan B Facility, November 2025 Term Loan B Facility and 2023 Revolving Credit Facility and (ii) the redemption of April 2025 Unsecured Notes, the Company incurred a loss on extinguishment of debt of $ 64 million representing the difference between the amount paid to settle the extinguished debt and the extinguished debt’s carrying value.

Maturities and Mandatory Payments

The Company may, from time to time, purchase outstanding debt for cash in open market purchases or privately negotiated transactions.

Such repurchases or exchanges, if any, will depend on prevailing market conditions, future liquidity requirements, contractual restrictions and other factors.

Maturities and mandatory payments of debt obligations for the five succeeding years ending December 31 and thereafter are as follows:

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Thereafter 8,192

Total gross maturities 22,870

Unamortized discounts ( 216 )

Total debt obligations 19,110

Unamortized premiums, discounts and issuance costs 1,656

Total long-term debt and other $ 20,766

Under the Restated Credit Agreement, there is no Excess Cash Flow payment due for 2021.

On February 11, 2022, the Company repaid its outstanding balance of $ 285 million under its 2023 Revolving Credit Facility.

As more fully discussed in Note 23, "SUBSEQUENT EVENTS", during January 2022, the Company:

(i) issued conditional notices of redemption to redeem in full all of its outstanding April 2025 Unsecured Notes and to redeem $ 370 million aggregate principal amount of its outstanding December 2025 Unsecured Notes and (ii) issued $ 1,000 million aggregate principal amount of 6.125 % Senior Secured Notes due February 2027.

Under the 2022 Amended Credit Agreement, there is no Excess Cash Flow payment due for 2022.

PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS

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postretirement benefit plan was amended effective January 1, 2005 to eliminate employer contributions after age 65 for participants who did not meet the minimum requirements of age and service on that date.

The employer contributions for medical and prescription

drug benefits for participants retiring after March 1, 1989 were frozen effective January 1, 2010.

The employer contributions for medical and prescription drug benefits for participants retiring after March 1, 1989 were frozen effective January 1, 2010.

Effective January 1, 2014, the Company no longer offers medical and life insurance coverage to new retirees.

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(in millions) 2022 2021 2022 2021 2022 2021

Unrecognized actuarial losses $ ( 18 ) $ ( 21 ) $ ( 42 ) $ ( 76 ) $ ( 2 ) $ ( 3 )

Unrecognized actuarial (losses) gains $ ( 35 ) $ ( 18 ) $ ( 21 ) $ ( 42 ) $ 3 $ ( 2 )

Unrecognized prior service credits $ — $ — $ 23 $ 25 $ 6 $ 8

Net Periodic (Benefit) Cost

The following table provides the components of net periodic (benefit) cost for the Company’s defined benefit pension plans and postretirement benefit plan in 2021, 2020 and 2019:

The table below provides the components of net periodic (benefit) cost for the Company’s defined benefit pension plans and postretirement benefit plan in 2022, 2021 and 2020:

Pension Benefit Plans U.S.

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Settlement loss recognized 1 — — 8 8 — — — —

Other — — — — — 1 — — —

Net periodic (benefit) cost $ ( 3 ) $ ( 6 ) $ ( 6 ) $ 12 $ 11 $ 3 $ ( 1 ) $ ( 2 ) $ ( 2 )

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Benefits paid ( 11 ) ( 11 ) ( 4 ) ( 4 ) ( 4 ) ( 3 )

Actuarial (gain) losses ( 6 ) 17 ( 8 ) 13 ( 2 ) 1

Actuarial gain ( 36 ) ( 6 ) ( 54 ) ( 8 ) ( 5 ) ( 2 )

Currency translation adjustments — — ( 15 ) ( 18 ) — —

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Other non-current liabilities $ 10 $ — $ 38 $ 51 $ 23 $ 31

Included in Settlement loss recognized and Settlements in the tables above are the costs and payments associated with the conversion of a portion of the Company’s defined benefit plan in Ireland to a defined contribution plan during the fourth quarter of 2021.

A number of the Company’s pension benefit plans were underfunded as of December 31, 2022 and 2021, having accumulated benefit obligations exceeding the fair value of plan assets.

There were no U.S.

pension benefit plans that were underfunded as of December 31, 2021, having accumulated benefit obligations exceeding the fair value of plan assets.

Information for the underfunded pension benefit plans is as follows:

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The 2023 expected rate of return for the Ireland pension benefit plans will be 4.25 %.

Pension Benefit Plans Assets

Pension Benefit Plan Assets

Pension benefit plan assets are invested in several asset categories.

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Investment grade — 2 — 2 — 3 — 3

Global high yield — — — — — 1 — 1

Government bond funds 1 39 — 40 1 65 — 66

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SHARE-BASED COMPENSATION

In May 2014, shareholders approved the Company’s 2014 Omnibus Incentive Plan (the “2014 Plan”), which replaced the Company’s 2011 Omnibus Incentive Plan (the “2011 Plan”) for future equity awards granted by the Company.

Bausch Health’s Long-Term Incentive Plan

In May 2014, shareholders approved Bausch Health’s 2014 Omnibus Incentive Plan (the “2014 Plan”), which replaced the Company’s 2011 Omnibus Incentive Plan (the “2011 Plan”) for future equity awards granted by the Company.

The Company transferred the common shares available under the 2011 Plan to the 2014 Plan.

The maximum number of common shares that may be issued to participants under the 2014 Plan was equal to 18,000,000 common shares, plus the number of common shares under the 2011 Plan reserved but unissued and not underlying outstanding awards and the number of common shares becoming available for reuse after awards are terminated, forfeited, cancelled, exchanged or

surrendered under the 2011 Plan and the Company’s 2007 Equity Compensation Plan.

number of common shares becoming available for reuse after awards are terminated, forfeited, cancelled, exchanged or surrendered under the 2011 Plan and the Company’s 2007 Equity Compensation Plan.

The Company registered 20,000,000 common shares of common stock for issuance under the 2014 Plan.

Effective April 30, 2018, the Company amended and restated the 2014 Plan (the “Amended and Restated 2014 Plan”).

The Amended and Restated 2014 Plan includes the following amendments:

(i) the number of common shares authorized for issuance under the Amended and Restated 2014 Plan has been increased by an additional 11,900,000 common shares, as approved by the requisite number of shareholders at the Company’s annual general meeting held on April 30, 2018, (ii) introduction of a $ 750,000 aggregate fair market value limit on awards (in either equity, cash or other compensation) that can be granted in any calendar year to a participant who is a non-employee director, (iii) housekeeping changes to address recent changes to Section 162(m) of the Internal Revenue Code, (iv) awards are expressly subject to the Company’s clawback policy and (v) awards not assumed or substituted in connection with a Change of Control (as defined in the Amended and Restated 2014 Plan) will only vest on a pro rata basis.

Effective April 28, 2020, the Company further amended and restated the Amended and Restated 2014 Plan (the “Further Amended and Restated 2014 Plan”).

The 2014 Plan was amended and restated effective April 30, 2018 to, among other things, increase the number of common shares authorized for issuance under the 2014 Plan.

Effective April 28, 2020, Bausch Health further amended and restated the Amended and Restated 2014 Plan (the “Further Amended and Restated 2014 Plan”).

The Further Amended and Restated 2014 Plan includes the following amendments:

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(a) stock options and SARs will not be eligible for the payment of dividend or dividend equivalents and (b) the Talent and Compensation Committee of the Board of Directors of the Company cannot, without shareholder approval, seek to effect any repricing of any previously granted “underwater” stock option or SAR and (iv) other housekeeping and/or clerical changes.

Effective June 21, 2022, Bausch Health further amended and restated the 2014 Plan, as subsequently amended and restated (the “Amended and Restated 2014 Plan”).

Such amendment and restatement increased the number of common shares authorized for issuance under the Amended and Restated 2014 Plan by an additional 11,500,000 common shares, among other things.

Approximately 18,226,000 common shares were available for future grants as of December 31, 2022.

The Company uses reserved and unissued common shares to satisfy its obligation under its share-based compensation plans.

The Company has a long-term incentive program with the objective of aligning the share-based awards granted to senior management with the Company’s focus on improving its tangible capital usage and allocation, while maintaining focus on improving total shareholder return over the long-term.

Bausch Health has a long-term incentive program with the objective of aligning the share-based awards granted to senior management with the Company’s focus on improving its tangible capital usage and allocation, while maintaining focus on improving total shareholder return over the long-term.

The share-based awards granted under this long-term incentive program consist of time-based stock options, time-based RSUs and performance-based RSUs.

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(i) awards that vest upon achievement of certain share price appreciation conditions that are based on total shareholder return (“TSR”), (ii) awards that vest upon attainment of certain performance targets that are based on the Company’s return on tangible capital (“ROTC”) and (iii) vest fully or partially upon attainment of certain goals that are linked to the B+L Separation.

The components and classification of share-based compensation expense related to stock options and RSUs for the years 2021, 2020 and 2019 were as follows:

In order to retain and incentivize certain members of Bausch Health’s senior leadership team, on September 5, 2022, the Talent and Compensation Committee of the Board of Directors approved a retention program for certain executive officers and other members of leadership.

Under the retention program, certain executive officers and other members of leadership were granted a one-time award of restricted stock units (the “Retention RSU Grant”) under the Amended and Restated 2014 Plan.

The Retention RSU Grants will generally vest in 1/3 installments on each of the first three anniversaries of the grant date based on continuous employment with Bausch Health.

The following table summarizes the components and classification of the Company’s share-based compensation expense related to stock options and RSUs for the years 2022, 2021 and 2020 were as follows:

(in millions) 2022 2021 2020

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Stock Options

Stock options granted under the 2011 Plan and the Amended and Restated 2014 Plan generally expire on the fifth or tenth anniversary of the grant date.

Stock options granted under the 2011 Plan and the Amended and Restated 2014 Plan generally expire on ten th anniversary of the grant date.

The exercise price of any stock option granted under the 2011 Plan and the Amended and Restated 2014 Plan will not be less than the closing price per common share on the date of grant.

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If the ROTC performance-based RSUs do not ultimately vest due to the ROTC targets not being met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

There were no TSR performance-based RSUs granted in 2022.

The fair values of TSR performance-based RSUs granted during 2021 and 2020 were estimated with the following assumptions:

2022 2021 2020

Contractual term (years) 3.0 3.0 3.0

Expected Company share volatility 52 % 38.6 % 46.5 %

Risk-free interest rate 0.4 % 1.2 % 2.5 %

Contractual term (years) N/A 3.0 3.0

Expected Company share volatility N/A 52 % 38.6 %

Risk-free interest rate N/A 0.4 % 1.2 %

The expected company share volatility was determined based on implied volatility in the market traded options of the Company’s common stock.

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Vested ( 1.0 ) $ 30.89

Forfeited ( 0.1 ) $ 34.32

Non-vested, December 31, 2022 1.6 $ 29.83

During 2021, the Company granted approximately 1,035,000 performance-based RSUs, consisting of approximately 400,000 units of TSR performance-based RSUs with an average grant date fair value of $ 56.04 per RSU, approximately 413,000 units of ROTC performance-based RSUs with a weighted-average grant date fair value of $ 31.72 per RSU and approximately 222,000 of other performance-based RSU's with a weighted-average grant date fair value of $ 28.49 .

During 2022, the Company granted approximately 369,000 performance-based RSUs, consisting of ROTC performance-based RSUs with a weighted-average grant date fair value of $ 9.40 per RSU.

As of December 31, 2022, the total remaining unrecognized compensation expense related to non-vested performance-based RSUs amounted to $ 7 million, which will be amortized over the weighted-average remaining requisite service period of approximately 0.4 years.

A maximum of approximately 1,104,000 common shares could be issued upon vesting of the performance-based RSUs outstanding as of December 31, 2022.

The total fair value of performance-based RSUs vested in 2022 was $ 31 million.

Bausch + Lomb Long-Term Incentive Plan

Prior to May 5, 2022, Bausch + Lomb participated in Bausch Health’s long-term incentive program.

Effective May 5, 2022, Bausch + Lomb established the Bausch + Lomb Corporation 2022 Omnibus Incentive Plan (the “B+L Plan”).

A total of 28,000,000 common shares of Bausch + Lomb are authorized under the B+L Plan.

The B+L Plan provides for the grant of various types of awards including RSUs, stock appreciation rights, stock options, performance-based awards and cash awards.

Under the Plan, the exercise price of awards, if any, is set on the grant date and may not be less than the fair market value per share on that date.

Generally, stock options have a term of ten years and a three-year vesting period, subject to limited exceptions.

On May 5, 2022, in connection with the B+L IPO, Bausch + Lomb granted certain awards to certain eligible recipients (the “IPO Founder Grants”).

Eligible recipients are individuals employed by Bausch + Lomb or employed by an affiliate of Bausch + Lomb.

Approximately 3,900,000 IPO Founder Grants were issued to Bausch + Lomb executive officers and were awarded 50 % in the form of stock options and 50 % in the form of RSUs.

Additionally, Bausch + Lomb granted approximately 5,700,000 stock options and RSUs to non-executive eligible recipients, of which approximately 4,300,000 were B+L IPO Founder Grants.

The IPO Founder grants in the form of stock options have a three-year graded vesting period and the IPO Founder RSUs vest 50 % in the second year and 50 % in the third year after the grant.

With the exception of the separation agreement and retention program, as discussed below, vesting of the IPO Founder Grants are linked to the completion of the B+L Separation and expense recognition will begin near the time of the B+L Separation.

On July 19, 2022, Bausch + Lomb entered into a separation agreement in connection with the departure of its Chief Executive Officer (“CEO”).

Under the terms of the separation agreement, the CEO’s IPO Founder Grants in the form of RSUs will vest upon his termination of service date (pro rated based on his period of service relative to the original three-year vesting period associated with such grants), but the shares received upon settlement will remain fully restricted and nontransferable until the earliest to occur of the distribution date, a change in control, the date the Board determines that Bausch Health will no longer pursue a distribution, and the two-year anniversary of the CEO’s termination of service date (such applicable date, the “Unrestricted Date”).

Under the terms of the separation agreement, the CEO’s IPO Founder Grants in the form of stock options will vest and become exercisable (pro-rated based on his period of service relative to the original three-year vesting period associated with such grants) upon the Unrestricted Date and will remain exercisable for two years following this date.

On December 22, 2022, Bausch + Lomb entered into an Amended and Restated Separation Agreement (the “A&R Separation Agreement”) in connection with the departure of Bausch + Lomb’s CEO.

Under the A&R Separation Agreement, Bausch + Lomb’s CEO agreed to continue serving as CEO until at least March 4, 2023 and lasting until such date as the Board determines in its discretion or his successor is appointed, but no later than June 30, 2023.

On the CEO’s termination date, in lieu of pro-rated vesting, partial vesting of a set number of the CEO’s IPO Founder Grants, in the amount of:

(a) 315,592 of the CEO’s IPO Founder Grants in the form of restricted stock units will accelerate and vest, but the shares received upon settlement will still remain fully restricted and nontransferable until the Unrestricted Date and (b)

1,248,496 of the CEO’s IPO Founder Grants in the form of stock options will remain eligible to vest upon the Unrestricted Date and remain exercisable for two years following the Unrestricted Date.

During the third quarter of 2022, the Talent and Compensation Committee of the Bausch + Lomb Board of Directors approved a retention program that includes Bausch + Lomb’s named executive officers (other than the CEO) and certain other employees.

This program provides these Executive Officers (other than the CEO), among other benefits, pro-rata vesting of the IPO Founder Grants previously issued to these named executives, subject to certain restrictions, in the event of an involuntary termination of employment by Bausch + Lomb without “cause” or the executive’s resignation for “good reason”, in each case within the one-year anniversary of Bausch + Lomb’s appointment of the successor to the CEO (pro-rated based on the period of service relative to the original three-year vesting period associated with such grants).

However, the IPO Founder Grants in the form of RSUs (while settled in connection with the termination of employment) will not be transferrable until, and the IPO Founder Grants in the form of stock options will not be exercisable until, the earliest to occur of:

(i) the date the spinoff distribution is completed, (ii) a “change in control” (as defined in the applicable retention award letter), (iii) the date the Board of Directors of the Company determines that it will no longer pursue the spinoff distribution and (iv) the two-year anniversary of the executive’s termination of employment and the IPO Founder Grants in the form of stock options will be exercisable for two years following the later of this date and the termination date Additionally, these named executive officers (other than the CEO) and certain other employees were granted a one-time award of approximately 850,000 RSUs under the retention program pursuant to Bausch + Lomb’s 2022 Omnibus Incentive Plan.

The retention grant will generally vest in 1/3 installments on each of the first three anniversaries of the grant date based on continuous employment with Bausch + Lomb.

Approximately 17,500,000 Bausch + Lomb common shares were available for future grants as of December 31, 2022 under the B+L Plan.

Bausch + Lomb uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans.

Stock Options

Stock options granted under the B+L Plan generally expire on the ten th anniversary of the grant date.

The exercise price of any stock option granted under the B+L Plan will not be less than the closing price per common share preceding the date of grant.

Stock options generally vest 33 % each year over a three-year period, on the anniversary of the date of grant.

The fair values of all stock options granted under the Bausch + Lomb Corporation 2022 Omnibus Incentive Plan for the year 2022 were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Expected stock option life (years) 3.0

Expected volatility 31.5 %

Risk-free interest rate 3.1 %

Expected dividend yield — %

The expected stock option life was determined based on historical exercise and forfeiture patterns associated with historical stock options granted to Bausch + Lomb employees under BHC’s long-term incentive plan.

The expected volatility was determined based on implied and historical volatility of Bausch + Lomb’s selected peer companies.

Bausch + Lomb will continue to leverage BHC’s historical stock option experience and peer company data until it has sufficient experience with its own equity awards and market data.

The risk-free interest rate was determined based on the rate at the time of grant for zero-coupon U.S.

government bonds with maturity dates equal to the expected life of the stock option.

The expected dividend yield was determined based on the stock option’s exercise price and expected Bausch + Lomb annual dividend rate at the time of grant.

The Black-Scholes option-pricing model used by the Company to calculate stock option values was developed to estimate the fair value of freely tradable, fully transferable stock options without vesting restrictions, which significantly differ from Bausch + Lomb’s stock option awards.

This model also requires highly subjective assumptions, including future stock price volatility and expected time until exercise, which greatly affect the calculated values.

The following table summarizes stock option activity under Bausch + Lomb’s Plan during 2022:

(in millions, except per share amounts) Options Weighted-

Price Per Share Weighted-

(Years) Aggregate

Outstanding, January 1, 2022 — $ —

Granted 6.4 $ 18.00

Exercised — $ —

Expired or forfeited ( 0.1 ) $ 18.00

Outstanding, December 31, 2022 6.3 $ 18.00 9.4 $ —

Vested and expected to vest, December 31, 2022 1.2 $ 18.00 4.5 $ —

Vested and exercisable, December 31, 2022 — $ — 0 $ —

The weighted-average fair values of all stock options granted in 2022 were $ 3.84 .

There were no stock options exercised in 2022.

As of December 31, 2022, the total remaining unrecognized compensation expense related to non-vested stock options amounted to $ 4 million, which will be amortized over the weighted-average remaining requisite service period of approximately 0.7 years.

Unrecognized compensation does not include IPO Founder Grants as they are linked to the completion of the Separation and expense recognition will begin near the time of the separation.

There were no stock options that vested during 2022.

RSUs under the Bausch + Lomb Corporation 2022 Omnibus Incentive Plan generally vest 33 % a year over a three-year period with the exception of IPO Founder RSUs which vest 50 % in the second year and 50 % in the third year after the grant.

RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on the Bausch + Lomb’s common shares.

Such additional RSUs will have the same vesting dates and will vest under the same terms as the RSUs in respect of which such additional RSUs are credited.

To the extent provided for in a RSU agreement, Bausch + Lomb may, in lieu of all or a portion of the common shares which would otherwise be provided to a holder, elect to pay a cash amount equivalent to the market price of the Company’s common shares on the vesting date for each vested RSU.

The amount of cash payment will be determined based on the average market price of the Company’s common shares on the vesting date.

The Company’s current intent is to settle vested RSUs through the issuance of common shares.

Each vested RSU represents the right of a holder to receive one of the Company’s common shares.

The fair value of each RSU granted is estimated based on the trading price of the Company’s common shares on the date of grant.

The following table summarizes non-vested time-based RSU activity under Bausch + Lomb’s Plan during 2022:

(in millions, except per share amounts) Performance-based

RSUs Weighted-

Fair Value Per Share

Non-vested, January 1, 2022 — $ —

Granted 4.3 $ 16.70

Forfeited ( 0.1 ) $ 17.93

Non-vested, December 31, 2022 4.2 $ 16.67

As of December 31, 2022, the total remaining unrecognized compensation expense related to non-vested time-based RSUs amounted to $ 41 million, which will be amortized over the weighted-average remaining requisite service period of approximately 1.5 years.

Unrecognized compensation does not include IPO Founder Grants as they are linked to the completion of the Separation and expense recognition will begin near the time of the separation.

The total fair value of time-based RSUs vested in 2022 was not material.

In addition, while Bausch + Lomb did not grant performance-based RSUs during 2022, certain Bausch + Lomb employees continued to participate in BHC’s performance-based RSUs granted prior to May 5, 2022.

As of December 31, 2022, the total remaining unrecognized compensation expense related to non-vested performance-based RSUs amounted to $ 4 million, which will be amortized over the weighted-average remaining requisite service period of approximately 0.2 years.

ACCUMULATED OTHER COMPREHENSIVE LOSS

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dollar, except to the extent of translation adjustments related to the Company’s retained earnings for foreign jurisdictions in which the Company is not considered to be permanently reinvested.

As a result of the change in the Company’s ownership interest in Bausch + Lomb, the carrying amount of accumulated other comprehensive income was adjusted to reflect the change in the ownership interest in Bausch + Lomb through a corresponding credit of $ 137 million to equity attributable to the Company.

RESEARCH AND DEVELOPMENT

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Acquired in-process research and development costs 1 8 32

Net gain on sales of assets ( 2 ) ( 1 ) ( 31 )

Net gain on sale of assets ( 5 ) ( 2 ) ( 1 )

Acquisition-related contingent consideration 29 11 48

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In 2020, Litigation and other matters also includes an insurance recovery related to a certain litigation matter.

In 2019, Litigation and other matters of $ 1,401 million includes the settlement of a legacy U.S.

securities class action matter.

Certain of these matters and other significant matters are discussed in further detail in Note 20, “LEGAL PROCEEDINGS”.

In 2020 and 2019, Acquired in-process research and development costs of $ 32 million and $ 41 million, primarily consist of costs associated with the upfront payments to enter into certain exclusive licensing agreements.

In 2019, Net gain on sales of assets includes $ 20 million related to the achievement of a milestone related to a certain product.

The components of Loss before benefit from income taxes for 2021, 2020 and 2019 consist of:

Net gain on sales of assets includes $ 25 million related to the achievement of a milestone related to a certain product and a $ 26 million loss upon completion of the Amoun Sale during 2021.

In 2020, Acquired in-process research and development costs of $ 32 million, primarily consist of costs associated with the upfront payments to enter into certain exclusive licensing agreements.

The components of Loss before income taxes for 2022, 2021 and 2020 consist of:

(in millions) 2022 2021 2020

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$ ( 129 ) $ ( 1,024 ) $ ( 934 )

The components of Benefit from income taxes for 2021, 2020 and 2019 consist of:

The components of (Provision for) benefit from income taxes for 2022, 2021 and 2020 consist of:

(in millions) 2022 2021 2020

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$ ( 83 ) $ 87 $ 375

The Benefit from income taxes differs from the expected amount calculated by applying the Company’s Canadian statutory rate of 26.9 % to Loss before benefit from income taxes for 2021, 2020 and 2019 as follows:

The (Provision for) benefit from income taxes differs from the expected amount calculated by applying the Company’s Canadian statutory rate of 26.9 % to Loss before income taxes for 2022, 2021 and 2020 as follows:

(in millions) 2022 2021 2020

Loss before benefit from income taxes $ ( 1,024 ) $ ( 934 ) $ ( 1,837 )

Benefit from income taxes

Loss before income taxes $ ( 129 ) $ ( 1,024 ) $ ( 934 )

(Provision for) benefit from income taxes

Expected benefit from income taxes at Canadian statutory rate $ 35 $ 275 $ 251

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Change in valuation allowance on Canadian deferred tax assets and tax rate changes

40 687 ( 142 )

Change in uncertain tax positions ( 50 ) 112 ( 163 )

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$ ( 83 ) $ 87 $ 375

Other consists of immaterial adjustments affecting the tax provision such as those related to the filing of tax returns.

Deferred tax assets and liabilities as of December 31, 2022 and 2021 consist of:

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Provisions 859 991

Debt discounts and deferred financing costs 370 —

Research and development tax credits 140 173

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Outside basis differences 125 110

Unrealized FX on U.S.

dollar debt and other financing cost — 2

Total deferred tax liabilities 390 342

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A valuation allowance has been provided for the portion of the deferred tax assets that the Company determined is more likely than not to remain unrealized based on estimated future taxable income and tax planning strategies.

In 2022, the valuation allowance decreased $ 199 million primarily due to book taxable income in Canada and the expiration of tax losses in the United States.

In 2021, the valuation allowance decreased by $ 30 million primarily due to book taxable income in Canada, the change in deferred tax assets in Canada and the use of deferred tax assets in the U.S.

in connection with internal restructurings.

In 2020, the valuation allowance decreased by $ 579 million as a result of taxable losses in Canada as offset by a reduction of deferred tax assets due to internal restructurings.

Given the Company’s history of pre-tax losses and expected future losses in Canada, the Company maintained that there was insufficient objective evidence to release the valuation allowance against Canadian tax loss carryforwards, International Tax Credits (“ITC”) and pooled Scientific Research and Experimental Development Tax Incentive (“SR&ED”) expenditures.

The Canadian valuation allowance represents a material portion of the Company's total valuation allowance.

As of December 31, 2022 and 2021, the Company had accumulated taxable losses available to offset future years’ federal and provincial taxable income in Canada of approximately $ 5,878 million and $ 6,669 million, respectively.

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were approximately $ 75 million and $ 119 million, respectively, which includes acquired research and development credits and which expire in the years 2023 through 2042.

the Company has a capital loss of which is offset by a full valuation allowance since the benefit is not expected to be realized.

As of December 31, 2022 and 2021, the Company had accumulated taxable losses available to offset future years’ taxable income in Ireland of approximately $ 10,691 million and $ 10,040 million, respectively.

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subsidiaries will be permanently reinvested and not repatriated.

As of December 31, 2021, the Company estimates that there will be no tax liability attributable to unremitted earnings of its U.S.

As of December 31, 2022, the Company estimates that there will be no tax liability

attributable to unremitted earnings of its U.S.

subsidiaries.

However, distribution of future earnings could be subject to U.S.

However, future distributions could be subject to U.S.

withholding tax.

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France 2013 - 2021

China 2016 - 2020

Ireland 2018 - 2021

Netherlands 2017 - 2020

Australia 2018 - 2021

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However, the 2014 tax year remains open to the extent of a 2017 capital loss carried back to that year.

Additionally, the IRS has selected for examination the Company's annual tax filings for 2015 and 2016 and the Company's short period tax return for the period ended September 8, 2017, which was filed as a result of the Company's internal restructuring efforts during 2017.

In 2017, the Company undertook an internal restructuring in the form of what is commonly known as a Granite Trust transaction, which resulted in a recorded capital loss (the “2017 Capital Loss”).

Recently, the Company has received a notice of proposed adjustment from the IRS that would disallow the 2017 Capital Loss and expects to receive a notice of proposed tax deficiency from the IRS, after which the Company intends to contest proposed tax deficiency through the IRS administrative appeals process.

If the Company were ultimately unsuccessful in defending its position, and all or a substantial portion of the 2017 Capital Loss deduction were disallowed, the Company could be liable for additional taxes (excluding penalties and interest) of up to $ 2,100 million, which could have an adverse effect on the Company’s financial condition and results of operations.

The Company intends to vigorously defend its position, including through appropriate litigation, if necessary, and ultimately believes it will sustain its deduction of the 2017 Capital Loss, and, accordingly, no income tax provision has been recorded.

The Company’s annual tax filings for 2015 and 2016 and short period tax return for the period ended September 8, 2017, which was filed as a result of the Company’s internal restructuring efforts during 2017 is currently under IRS examination.

As part of its examination, the Company received a notice of proposed adjustment from the IRS that would disallow the 2017 Capital Loss resulting from its internal restructuring.

The Company has contested this proposed tax deficiency through the IRS administrative appeals process, and if necessary, will continue to contest any proposed tax deficiency through appropriate litigation.

Accordingly, no income tax provision has been recorded as of December 31, 2022.

If the Company were ultimately unsuccessful in defending its position, and all or a substantial portion of the 2017 capital loss deduction were disallowed, the Company estimates, in a worst-case scenario, that it could be liable for additional income taxes (excluding penalties and interest) of up to $ 2,100 million, which could have an adverse effect on the Company’s financial condition and results of operations.

In January 2023, as part of an alternative dispute resolution process with the IRS, the Company has reached a tentative settlement on the 2017 Capital Loss.

This tentative settlement is subject to further review and approvals before it is finalized.

The Company expects that the tentative settlement, if finalized without further modification, will affect the Company’s 2023 income tax provision, and while such settlement may be material to the Company’s results of operations or cash flows in the quarter in which it is recorded, will not be material to its results of operations or cash flows for the year ended December 31, 2023.

The Company is currently under examination by the Canada Revenue Agency (“CRA”) for three separate cycles:

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The Company believes that the CRA will open an audit cycle for the years 2018 – 2019 in 2023.

The Company settled the tax years from 2005 through 2009

with the CRA.

The Company had previously filed a Notice of Objection related to the assessment of these years and reduced net operating losses with a full valuation allowance by CAD 44 million to close these years.

The Company settled the tax years from 2005 through 2009 with the CRA.

The Company had previously filed a Notice of Objection related to the assessment of these years and

reduced net operating losses with a full valuation allowance by CAD 44 million to close these years.

The adjustment did not result in a material change to the provision for income taxes.

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The Company disagrees with the adjustments and has filed a Notice of Objection for 2012 and 2013.

The Company settled certain transfer pricing matters relating the 2015 and 2016 tax years resulting in a reduction to its NOLs of approximately CAD 21 million for 2015 and will receive a further adjustment for 2016.

The expected adjustment for 2016 will reduce NOLs currently offset by a full valuation allowance.

The Company settled certain transfer pricing matters relating the 2015 and 2016 tax years resulting in a reduction to its NOLs of approximately CAD 21 million for 2015 and CAD 23 million for 2016.

The adjustments for 2015 and 2016 will reduce NOLs currently offset by a full valuation allowance.

The Company’s subsidiaries in Germany are under audit for tax years 2014 through 2016.

At this time, the Company does not expect that proposed adjustments, if any, would be material to the Company’s Consolidated Financial Statements.

The Company’s subsidiaries in Australia are under audit by the Australian Tax Office for various years beginning in 2010.

On August 8, 2017, the Australian Taxation Office issued a notice of assessment for the tax years 2011 through 2017 in the aggregate amount of $ 117 million, which includes penalties and interest.

The Company disagrees with the assessment and continues to believe that its tax positions are appropriate and supported by the facts, circumstances and applicable laws.

The Company intends to defend its tax position in this matter vigorously and has filed a holding objection against the assessment by the Australian Taxation Office and has secured a bank guarantee to cover any potential cash outlays regarding this assessment.

The bank guarantee has been reduced over time to now be an immaterial value.

Negotiations with the Australian Tax Office are ongoing and the Company expects to enter into a Settlement Deed in early 2022 with no material adverse results.

On November 8, 2022 the Company’s affiliate in Netherlands received an assessment from the Luxembourg Tax Authorities as successor in interest to its affiliate in Luxembourg for tax years 2018 – 2019 for € 271.7 million.

The Company is vigorously defending its position and no reserves have been recorded.

The Company’s subsidiaries in Australia were under audit by the Australian Tax Office for various years beginning in 2010.

On August 8, 2017, the Australian Taxation Office (“ATO”) issued a notice of assessment for the tax years 2011 through 2017 in the aggregate amount of $ 117 million, which includes penalties and interest.

On April 13, 2022, the Company and the ATO entered into a settlement agreement resulting in an immaterial income tax provision.

The Company’s U.S.

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LOSS PER SHARE

Loss per share attributable to Bausch Health Companies Inc.

for 2021, 2020 and 2019 were calculated as follows:

Basic and diluted loss per share attributable to Bausch Health Companies Inc.

for 2022, 2021 and 2020 was calculated as follows:

(in millions, except per share amounts) 2022 2021 2020

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$ ( 225 ) $ ( 948 ) $ ( 560 )

Basic and diluted weighted-average common shares 358.9 355.0 352.1

Basic and diluted weighted-average common shares outstanding 362.0 358.9 355.0

Basic and diluted loss per share attributable to Bausch Health Companies Inc.

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Additionally, in 2022, 2021 and 2020, stock options, time-based RSUs and performance-based RSUs to purchase approximately 14,396,000 , 3,428,000 and 9,551,000 common shares of the Company, respectively, were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive under the treasury stock method.

During 2021, an additional 156,000 performance-based RSUs were not included in the computation of diluted earnings per share as the required performance conditions had not been met.

During 2022 and 2021, an additional 156,000 performance-based RSUs were not included in the computation of diluted earnings per share as the required performance conditions had not been met.

SUPPLEMENTAL CASH FLOW DISCLOSURES

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On a quarterly basis, the Company evaluates developments in legal proceedings, potential settlements and other matters that could increase or decrease the amount of the liability accrued.

As of December 31, 2021, the Company's Consolidated Balance Sheets includes accrued current loss contingencies of $ 1,890 million related to matters which the Company believes a potential resolution or settlement is both probable and reasonably estimable.

As of December 31, 2022, the Company’s Consolidated Balance Sheets includes accrued current loss contingencies of $ 326 million related to matters which are both probable and reasonably estimable.

For all other matters, unless otherwise indicated, the Company cannot reasonably predict the outcome of these legal proceedings, nor can it estimate the amount of loss, or range of loss, if any, that may result from these proceedings.

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In August 2019, the Company received a subpoena from the U.S.

Attorney's Office for the District of Massachusetts, requesting materials including documents concerning the sales, marketing, coverage and reimbursement of Arestin ® , including related support services, and other matters.

The Company is cooperating with this investigation.

Attorney’s Office for the District of Massachusetts (Department of Justice), requesting materials including documents concerning the sales, marketing, coverage and reimbursement of Arestin ® , including related support services, and other matters.

In February 2023, the Company’s subsidiary OraPharma, Inc.

entered into a civil settlement agreement with the Department of Justice fully resolving this investigation.

Under the terms of the settlement, OraPharma, Inc.

has paid a settlement payment of $ 100,000 , plus payment of additional immaterial amounts in applicable interest and other related costs, to resolve the civil False Claims Act (“FCA”) investigation.

A related complaint brought by a former OraPharma employee pursuant to the FCA and certain state statutes will be dismissed.

Investigation by the U.S.

Attorney’s Office for the District of Iowa – re OrthoDerm

The Company received a Civil Investigative Demand in May 2021 from the Civil Division of the United States Department of Justice and the United States Attorney’s Office for the District of Iowa, requesting documents and other information concerning the sales and marketing of Bryhali ® , Duobrii ® , Jublia ® , and Siliq ® .

The Company is cooperating with this

investigation.

The Company cannot predict the outcome or the duration of this investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of this investigation.

Securities and RICO Class Actions and Related Matters

Securities Litigation

Securities Litigation - Opt-Out Litigation

On December 16, 2019, the Company announced that it had agreed to settle, subject to final court approval, the consolidated securities class action filed in the U.S.

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Securities Litigation, Case No.

15-cv-07658).

On January 31, 2021, the District Court

issued an order granting final approval of this settlement.

On February 4, 2021, Timber Hill LLC filed a notice of appeal of the Court’s final approval order, which overruled its objections to the allocation of settlement proceeds as between common stock and options.

15-cv-07658) (the “Securities Class Action Settlement”).

On January 31, 2021, the District Court issued an order granting final approval of this settlement.

On February 4, 2021, Timber Hill LLC (“Timber Hill”) filed a notice of appeal of the Court’s final approval order, which overruled its objections to the allocation of settlement proceeds as between common stock and options.

On March 1, 2021, Cathy Lochridge filed a notice of appeal of the Court’s final approval order, which overruled her objections as to the attorneys’ fees awarded to class counsel.

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On December 20, 2021, the Third Circuit denied Lochridge’s appeal.

On January 3, 2022, Lochridge filed a petition for rehearing of the appeal en banc which remains pending.

On January 3, 2022, Lochridge filed a petition for rehearing of the appeal en banc.

On May 12, 2022, the Third Circuit denied Lochridge’s petition for rehearing en banc.

The deadline for Lochridge to file a petition for a writ of certiorari with the U.S.

Supreme Court was August 10, 2022 and no petition was filed.

As such, the deadline for further appeals has passed and the settlement has become final pursuant to the stipulation of settlement.

The matter is now concluded with respect to the Company and all claims have been resolved and discharged as to the Company and its current/former officers and directors.

In October 2015, four putative securities class actions were filed in the U.S.

District Court for the District of New Jersey against the Company and certain current or former officers and directors.

The allegations related to, among other things, allegedly false and misleading statements and/or failures to disclose information about the Company’s business and prospects, including relating to drug pricing, the Company’s use of specialty pharmacies, and the Company’s relationship with Philidor.

On May 31, 2016, the court entered an order consolidating the four actions under the caption In re Valeant Pharmaceuticals International, Inc.

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On December 16, 2019, the Company, the current or former officers and directors, ValueAct, and the underwriters announced that they agreed to resolve the securities action for $ 1,210 million, subject to final court approval.

This settlement received final approval from the court on January 31, 2021 and will resolve and discharge all claims against the Company in the class action.

This settlement received final approval from the court on January 31, 2021 and resolved and discharged all claims against the Company in the class action.

As part of the settlement, the Company and the other settling defendants admitted no liability as to the claims against it and deny all allegations of wrongdoing.

The settlement remains subject to an appeal of the final court approval (as such appeal is further described above).

The settlement was subject to appeal of the final court approval (as such appeal is further described above).

In order to qualify for a settlement payment all persons and entities that purchased or otherwise acquired the Company securities during the class period must have submitted a proof of claim and release form by May 6, 2020.

The settlement payments have been paid into an escrow account in accordance with the payment schedule outlined in the settlement agreement.

These payments, less certain settlement expenses and attorneys' fees, will remain in escrow until resolution of the appeal of the final court approval of the settlement agreement.

The opt-out litigations discussed below remain ongoing.

As of December 31, 2021, Restricted cash and other settlement deposits includes an aggregate $ 1,210 million of:

(i) payments in the escrow fund and (ii) certain disbursements for settlement expenses and attorney's fees.

Disbursements for attorney's fees remain refundable until resolution of the appeal of the final court approval of the settlement agreement.

The settlement payments were paid into an escrow account in accordance with the payment schedule outlined in the settlement agreement.

During 2022, the Company’s rights to the funds previously paid into the escrow account have been extinguished in accordance with the settlement agreement.

On June 6, 2018, a putative class action was filed in the U.S.

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Valeant Pharmaceuticals International, Inc., et al., (Case No.

18-cv-10246) (“Timber Hill”), asserts securities fraud claims under Sections 10(b) and 20(a) of the Exchange Act on behalf of a putative class of persons who purchased call options or sold put options on the Company’s common stock during the period January 4, 2013 through August 11, 2016.

18-cv-10246), asserts securities fraud claims under Sections 10(b) and 20(a) of the Exchange Act on behalf of a putative class of persons who purchased call options or sold put options on the Company’s common stock during the period January 4, 2013 through August 11, 2016.

On June 11, 2018, this action was consolidated with In re Valeant Pharmaceuticals International, Inc.

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Valeant Pharmaceuticals International, Inc.

16-cv-5034) (“T.

Equity Trustees Limited as Responsible Entity for T.

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Valeant Pharmaceuticals International Inc.

16-cv-6127) (“Equity Trustees”);

Principal Funds, Inc.

Valeant Pharmaceuticals International, Inc.

16-cv-6128) (“Principal Funds”);

BloombergSen Partners Fund LP v.

Valeant Pharmaceuticals International, Inc.

16-cv-7212) (“Bloombergsen”);

Discovery Global Citizens Master Fund, Ltd.

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VALIC Company I v.

Valeant Pharmaceuticals International, Inc.

Valeant Pharmaceuticals International,

Janus Aspen Series v.

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Valeant Pharmaceuticals International, Inc.

17-cv-6513) (“Okumus”);

Lord Abbett Investment Trust- Lord Abbett Short Duration Income Fund, v.

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Valeant Pharmaceuticals International Inc., et al., (Case No.

17-cv-7636) (“Boeing”);

State Board of Administration of Florida v.

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Valeant Pharmaceuticals International, Inc.

17-cv-13488);

17-cv-13488) (“UC Regents”);

Valeant Pharmaceuticals International, Inc.

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Valeant Pharmaceuticals International, Inc.

18-cv-0032) (“NYCERS”);

Hound Partners Offshore Fund, LP v.

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Valeant Pharmaceuticals International, Inc.

18-cv-0343) (“Blackrock”);

Colonial First State Investments Limited As Responsible Entity for Commonwealth Global Shares Fund 1 v.

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Valeant Pharmaceuticals International, Inc.

18-cv-01223) (“Prudential”);

18-cv-01223);

Senzar Healthcare Master Fund LP v.

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Valeant Pharmaceuticals International, Inc.

18-cv-08595) ("2012 Dynasty");

18-cv-08595);

Catalyst Dynamic Alpha Fund v.

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Valeant Pharmaceuticals International, Inc.

18-cv-15286) (“Northwestern Mutual”);

18-cv-15286);

Bahaa Aly, et al.

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Valeant Pharmaceuticals International, Inc.

20-cv-02190) (“Maverick”), Templeton v.

20-cv-02190);

Valeant Pharmaceuticals International, Inc.

20-cv-05478) (“Templeton”), USAA Mutual Funds Trust, et al.

20-cv-05478);

USAA Mutual Funds Trust, et al.

Valeant Pharmaceuticals International, Inc., et al., (Case No.

20-cv-07462) (“USAA”), and GIC Private Ltd.

20-cv-07462);

and GIC Private Ltd.

Valeant Pharmaceuticals International, Inc., (Case No.

20-cv-07460) (“GIC”).

20-cv-07460).

Sixteen of the thirty-seven opt-out actions have been dismissed;

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The allegations in the complaints are similar to those made by plaintiffs in the putative class action.

Motions to dismiss have been filed and in most cases decided in many of these individual actions.

To date, the Court has dismissed state law claims including New Jersey Racketeer Influenced and Corrupt Organizations Act, common law fraud, and negligent misrepresentation claims in certain cases.

On January 7, 2019, the Court entered a stipulation of voluntary dismissal in the Senzar Healthcare Master Fund LP v.

Valeant Pharmaceuticals International, Inc.

18-cv-02286) opt-out action, closing the case.

On September 10, 2019, the Court granted defendants’ motion to dismiss all claims in the Bahaa Aly v.

Valeant Pharmaceuticals International, Inc.

(“Aly”) (Case No.

18-cv-17393) opt-out action.

Motions to dismiss were filed in many of these individual actions and the Court has dismissed state law claims including New Jersey Racketeer Influenced and Corrupt Organizations Act, common law fraud, and negligent misrepresentation claims in certain cases.

On January 7, 2019, the Court entered a stipulation of voluntary dismissal in the Senzar opt-out action, closing the case.

On September 10, 2019, the Court granted defendants’ motion to dismiss all claims in the Aly opt-out action.

On October 9, 2019, the Aly Plaintiffs filed a notice of appeal to the United States Court of Appeals for the Third Circuit.

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On July 20, 2021, the Court entered a stipulation of voluntary dismissal in the Janus action.

Discovery in the opt-out actions has concluded.

Motions for summary judgment were filed on August 1, 2022.

Trial dates have not been set in any of the opt-out actions.

The Company disputes the claims against it in the remaining individual opt-out complaints and intends to defend itself vigorously.

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540-17-011743159, then Court File No.

500-06-000783-163) (Quebec Superior Court) (filed October 26, 2015);

and (f) Rousseau-Godbout v.

500-06-000783-163) (Quebec Superior Court) (filed October 26, 2015) and (f) Rousseau-Godbout v.

Valeant, et al.

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500-06-000770-152) (Quebec Superior Court) (filed October 27, 2015).

The Company is also aware of two additional putative class actions that were filed with the applicable court but which have not been served on the Company.

The Company is also aware of two additional putative class actions that were filed with the applicable court but which have not been served on the Company and the factual allegations made in these actions are substantially similar to those outlined herein.

These actions are captioned:

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Valeant, et al.

S-159991) (Supreme Court of British Columbia) (filed December 2, 2015);

and (ii) Sukenaga v Valeant et al.

(CV-15-540567-00CP) (Ontario

Superior Court) (filed November 16, 2015), and the factual allegations made in these actions are substantially similar to those outlined herein.

S-159991) (Supreme Court of British Columbia) (filed December 2, 2015) and (ii) Sukenaga v Valeant et al.

(CV-15-540567-00CP) (Ontario Superior Court) (filed November 16, 2015).

The actions generally allege violations of Canadian provincial securities legislation on behalf of putative classes of persons who purchased or otherwise acquired securities of the Company for periods commencing as early as January 1, 2013 and ending as late as November 16, 2015.

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After a hearing on November 11, 2019, the court approved a settlement in the Catucci action between the class members and the Company’s auditors and the action was dismissed as against them.

On August 4, 2020, the Company entered into a settlement agreement with the plaintiffs in Catucci, on behalf of the class, pursuant to which it agreed to resolve the Catucci action for the amount of CAD 94 million plus payment of an additional amount to cover notice and settlement administration costs and disbursements.

On August 4, 2020, the Company entered into a settlement agreement with the plaintiffs in Catucci, on behalf of the class, pursuant to which it agreed to resolve the Catucci action for the amount of CAD 94,000,000 plus payment of an additional amount to cover notice and settlement administration costs and disbursements.

As part of the settlement, the Company and the other defendants admitted no liability as to the claims against it and deny all allegations of wrongdoing.

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On December 6, 2021 the Special Master overseeing this litigation issued a report and recommendation recommending final approval of the settlement, and on February 22, 2022 the settlement was approved by the district court.

The time to appeal the district court’s final approval order expired on March 24, 2022, and the settlement has resolved and discharged all claims against the Company in this action.

Insurance Coverage Lawsuit

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Hound Partners Lawsuit

In October 2018, Hound Partners Offshore Fund, LP, Hound Partners Long Master, LP, and Hound Partners Concentrated Master, LP, filed a lawsuit against the Company in the Superior Court of New Jersey Law Division/Mercer County.

This action is captioned Hound Partners Offshore Fund, LP et al., v.

Valeant Pharmaceuticals International, Inc., et al.

MER-L-002185-18).

This suit asserts claims for common law fraud, negligent misrepresentation, and violations of the New Jersey Racketeer Influenced and Corrupt Organizations Act.

In October 2018, Hound Partners Offshore Fund, LP, Hound Partners Long Master, LP and Hound Partners Concentrated Master, LP, filed a lawsuit against the Company in the Superior Court of New Jersey Law Division/Mercer County that asserts claims for common law fraud, negligent misrepresentation, and violations of the New Jersey Racketeer Influenced and Corrupt Organizations Act.

The Company disputes the claims and intends to vigorously defend this matter.

Glumetza Antitrust Litigation

Between August 2019 and July 2020, eight (8) putative antitrust class actions and four (4) non-class complaints naming the Company, Salix Pharmaceuticals, Ltd., Salix Pharmaceuticals, Inc.

and Santarus, Inc.

(for purposes of this subsection, collectively, the “Company”), among other defendants, were filed or transferred to the Northern District of California.

Three (3) of the class actions were filed by plaintiffs seeking to represent a class of direct purchasers.

The purported classes of direct purchasers filed a consolidated first amended complaint and a motion for class certification in April 2020.

The court certified a direct purchaser class in August 2020.

The putative class action complaints filed by end payer purchasers have all been voluntarily dismissed.

Three (3) of the non-class complaints were filed by direct purchasers.

The fourth non-class complaint, asserting claims based on both direct and indirect purchases, was filed by an insurer plaintiff in July 2020 and subsequently amended in September 2020.

In December 2020, the court denied the Company’s motion to dismiss as to the insurer plaintiff’s direct claims but dismissed the insurer plaintiff’s indirect claims.

On February 2, 2021, the insurer plaintiff’s motion for leave to amend its complaint was denied.

These actions were consolidated and coordinated in In re Glumetza Antitrust Litigation , Case No.

3:19-cv-05822-WHA (the “ In re Glumetza Antitrust Litigation ”).

The lawsuits alleged that a 2012 settlement of a patent litigation regarding Glumetza ® delayed generic entry in exchange for an agreement not to launch an authorized generic of Glumetza ® or grant any other company a license to do so.

The complaints alleged that the settlement agreement resulted in higher prices for Glumetza ® and its generic equivalent both prior to and after generic entry.

Both the class and non-class plaintiffs sought damages under federal antitrust laws for claims based on direct purchases.

On February 8, 2021, the insurer plaintiff filed an action asserting its indirect (state law) claims in the Superior Court of Alameda County, California against the Company and others (the “State Court Action”) (discussed in further detail below, see Glumetza State-Law Insurer Litigations ).

On July 26, 2021, the Company reached an agreement in principle and, thereafter, on September 14, 2021, executed a final settlement agreement to resolve the class plaintiffs’ claims for $ 300 million, subject to court approval.

On August 1, 2021, the Company also reached an agreement in principle to resolve the non-class direct purchaser plaintiffs’ claims, described above, for additional consideration.

A final settlement agreement with the non-class direct purchaser plaintiffs was executed on August 6, 2021.

As part of the settlements, the Company admitted no liability as to the claims against it and denied all allegations of wrongdoing.

On September 20, 2021, the insurer plaintiff voluntarily dismissed its claims in the consolidated federal action.

By stipulation, the insurer plaintiff has asserted its direct opt-out claims in the State Court Action, resulting in the consolidation of all of its opt-out claims in the State Court Action.

On September 22, 2021, the court granted preliminary approval of the class settlement agreement and vacated the October 2021 trial date and all other pre-trial deadlines in the consolidated actions.

On February 3, 2022, the court granted final approval of the class settlement and ordered dismissal of the class plaintiffs’ claims.

The deadline to appeal the final approval of the class settlement has now passed, and the settlements have resolved and discharged all asserted class and direct purchaser non-class claims against the Company in the In re Glumetza Antitrust Litigation .

Generic Pricing Antitrust Litigation

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(formerly Valeant Pharmaceuticals International) (“Bausch Health Americas”) (for the purposes of this paragraph, collectively, the “Company”), are defendants in multidistrict antitrust litigation (“MDL”) entitled In re:

Generic Pharmaceuticals Pricing

Antitrust Litigation , pending in the United States District Court for the Eastern District of Pennsylvania (MDL No.

2724, 16-MD-2724).

Generic Pharmaceuticals Pricing Antitrust Litigation, pending in the United States District Court for the Eastern District of Pennsylvania (MDL 2724, 16- MD-2724).

The lawsuits seek damages under federal and state antitrust laws, state consumer protection and unjust enrichment laws and allege that the Company’s subsidiaries entered into a conspiracy to fix, stabilize, and raise prices, rig bids and engage in market and customer allocation for generic pharmaceuticals.

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There are cases pending in the Court of Common Pleas of Philadelphia County against the Company and other defendants related to the multidistrict litigation, but no complaint has been filed in the cases.

The cases have been put in deferred status.

The cases have been placed in deferred status.

The Company disputes the claims against it and continues to defend itself vigorously.

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in the Federal Court in Toronto, Ontario, Canada (Court File No.

The plaintiff seeks to certify a proposed class action on behalf of persons in Canada who purchased generic drugs in the private sector, alleging that the Company and other defendants violated the Competition Act by conspiring to allocate the market, fix prices, and maintain the supply of generic drugs, and seeking damages under federal law.

plaintiff seeks to certify a proposed class action on behalf of persons in Canada who purchased generic drugs in the private sector, alleging that the Company and other defendants violated the Competition Act by conspiring to allocate the market, fix prices, and maintain the supply of generic drugs, and seeking damages under federal law.

The proposed class action contains similar allegations to the In re:

Generic Pharmaceuticals Pricing Antitrust Litigation pending in the United States Court for the Eastern District of Pennsylvania.

The Company disputes the claims against it and will defend itself vigorously.

Glumetza State-Law Insurer Litigation

The Company disputes the claims against it and intends to defend itself vigorously.

These lawsuits cover products of both Bausch + Lomb and the Company’s businesses.

It is anticipated that Bausch + Lomb and the Company will split the fees and expenses associated with defending these claims, as well as any potential damages or other liabilities awarded in or otherwise arising from these claims, in the manner set forth in the Master Separation Agreement between Bausch Health and Bausch + Lomb.

Glumetza State-Law Insurer Litigations

On February 8, 2021, the insurer plaintiff from the federal In re Glumetza Antitrust Litigation , Case No.

3:19-cv-05822- WHA (N.D.

Cal.) (the “ In re Glumetza Antitrust Litigation ”) (discussed in further detail below) filed an action asserting its indirect (state law) claims in the Superior Court of Alameda County, California against the Company and others (the “State Court Action”).

Cal.) (the “ In re Glumetza Antitrust Litigation ”) (discussed in further detail above), Humana Inc.

(“Humana”), filed an action asserting its indirect (state law) claims in the Superior Court of Alameda County, California against the Company and others (the “State Court Action”).

The State Court Action alleges that a 2012 settlement of a patent litigation regarding Glumetza ® delayed generic entry in exchange for an agreement not to launch an authorized generic of Glumetza ® or grant any other company a license to do so.

The State Court Action alleges that the settlement agreement resulted in higher prices for Glumetza ® and its generic equivalent both prior to and after generic entry.

On September 20, 2021, the parties stipulated that the insurer plaintiff’s direct opt-out claims from In re Glumetza Antitrust Litigation , discussed below, were deemed asserted in the State Court Action.

On September 20, 2021, the parties stipulated that Humana’s direct opt-out claims from In re Glumetza Antitrust Litigation , discussed above, were deemed asserted in the State Court Action.

Defendants’ demurrer in the State Court Action was heard on September 22, 2021.

On November 29, 2021, the court denied the motion in part and granted it in part as to certain state law claims, with leave to amend.

The insurer plaintiff did not amend the complaint.

Humana did not amend the complaint.

Defendants’ answers were filed on February 3, 2022.

The Company disputes the claims and intends to vigorously defend this matter.

On April 5, 2022, Health Care Service Corporation filed an action with similar substantive allegations and similar indirect (state law) claims in the Superior Court of Alameda County, California against the Company and others.

Defendants’ answers were filed on June 17, 2022.

On November 28, 2022, the Court consolidated this action with the State Court Action for trial and pretrial purposes (the “Consolidated State Case”).

Trial is currently scheduled to start in January 2024 in the Consolidated State Case.

The Company disputes the claims and intends to vigorously defend these matters.

Intellectual Property

Patent Litigation/Paragraph IV Matters

From time to time, the Company (and/or certain of its affiliates) is also party to certain patent infringement proceedings in the United States and Canada, including as arising from claims filed by the Company (or that the Company anticipates filing within the required time periods) in connection with Notices of Paragraph IV Certification (in the United States) and Notices of Allegation (in Canada) received from third-party generic manufacturers respecting their pending applications for generic versions of certain products sold by or on behalf of the Company, including Xifaxan ® 550mg, Bryhali ® , Duobrii ® , Trulance ® , Lumify ® and Relistor ® Injection in the United States, and Jublia ® in Canada or other similar suits.

From time to time, the Company (and/or certain of its affiliates) is also party to certain intellectual property litigation proceedings in the United States and Canada, including as arising from claims filed against the Company or by the Company (or that the Company anticipates filing within the required time periods) related to certain products sold by or on behalf of the Company, which may be in connection with Notices of Paragraph IV Certification (in the United States) and Notices of Allegation (in Canada) received from third-party generic manufacturers, where such products include Xifaxan ® 200 mg and 550 mg, Arazlo ® , Colazal ® , Duobrii ® , Lumify ® , Nuvessa ® and Trulance ® in the United States and Jublia ® in Canada.

Xifaxan ® Paragraph IV Proceedings

On February 17, 2020, the Company and Alfasigma S.p.A.

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Xifaxan ® is protected by 27 patents covering the composition of matter and the use of Xifaxan ® listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book.

A 3-day bench trial is scheduled to begin March 21, 2022.

remains confident in the strength of the Xifaxan ® patents and will continue to vigorously pursue this matter and defend its intellectual property.

Trial in this matter was held in March 2022.

The court issued a final judgment on August

10, 2022, (the “Norwich Legal Decision”), finding that the U.S.

Patents protecting the use of Xifaxan ® (rifaximin) 550 mg tablets for the reduction in risk of hepatic encephalopathy (“HE”) recurrence valid and infringed and the U.S.

Patents protecting the composition, and use of Xifaxan ® for treating IBS-D invalid.

The Norwich Legal Decision prevents FDA approval of Norwich’s 550 mg ANDA until October 2029.

The Company appealed the Norwich Legal Decision to the U.S.

Court of Appeals for the Federal Circuit on August 16, 2022.

Following the Company’s appeal, Norwich claimed to have removed the HE indication from its existing ANDA and then filed a motion in the District Court requesting modification of the Norwich Legal Decision to permit the FDA to approve their ANDA before October 2029.

The Company opposed this motion and awaits a decision on the motion from the District Court.

The Company remains confident in the strength of the Xifaxan ® patents and intends to vigorously defend its intellectual property.

Duobrii ® Paragraph IV Proceedings

On July 23, 2020, the Company received a Notice of Paragraph IV Certification from Perrigo Israel Pharmaceuticals, Ltd.

(now Padagis LLC) (“Padagis”), in which Padagis asserted that certain U.S.

patents, each of which is listed in the FDA's Orange Book for Duobrii ® (halobetasol propionate and tazarotine) lotion, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Padagis’ generic lotion, for which an ANDA has been filed by Padagis.

patents, each of which is listed in the FDA’s Orange Book for Duobrii ® (halobetasol propionate and tazarotene) lotion, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Padagis’ generic lotion, for which an ANDA has been filed by Padagis.

On August 28, 2020, the Company filed suit against Padagis pursuant to the Hatch-Waxman Act, alleging infringement by Padagis of one or more claims of the Duobrii ® Patents, thereby triggering a 30 -month stay of the approval of the Padagis ANDA.

On September 3, 2020, this action was consolidated with the action between the Company and Padagis described below, regarding Padagis’ ANDA for generic Bryhali ® (halobetasol propionate) lotion.

The Company remains confident in the strength of the Duobrii ® related patents and will vigorously defend its intellectual property.

Following a three-day trial in October 2022, on December 1, 2022, the District Court issued a final decision in favor of Bausch, finding the Bryhali ® and Duobrii ® patents valid and infringed by Padagis.

The District Court dismissed the lawsuit on February 3, 2023.

In June 2022, the Company received a Notice of Paragraph IV Certification from Taro Pharmaceuticals Inc.

(“Taro”), in which Taro asserted that certain U.S.

patents, each of which is listed in the FDA’s Orange Book for Duobrii ® (halobetasol propionate and tazarotene) lotion, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale, offer for sale, or importation of Taro’s generic lotion, for which an ANDA has been filed by Taro.

On July 21, 2022, the Company filed suit against Taro pursuant to the Hatch-Waxman Act, alleging infringement by Taro of one or more claims of the Duobrii ® Patents and triggering a 30 -month stay of the approval of the Taro ANDA.

The Company remains confident in the strength of the Duobrii ® patents and intends to vigorously defend its intellectual property.

Bryhali ® Paragraph IV Proceedings

On March 20, 2020, the Company received a Notice of Paragraph IV Certification from Padagis, in which Padagis asserted that certain U.S.

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On May 1, 2020, the Company filed suit against Padagis pursuant to the Hatch-Waxman Act, alleging infringement by Padagis of one or more claims of the Bryhali ® patents, thereby triggering a 30 -month stay of the approval of the Padagis ANDA for halobetasol propionate lotion.

On September 3, 2020, this action was consolidated with the action between the Company and Padagis described above, regarding Padagis’ ANDA for generic Duobrii ® (halobetasol propionate and tazarotine) lotion.

The Company remains confident in the strength of the Bryhali ® Patents and intends to vigorously pursue this matter and defend its intellectual property.

The District Court dismissed the lawsuit on February 3, 2023.

Trulance ® Paragraph IV Proceedings

In April 2021, the Company commenced litigation against MSN Laboratories Private Ltd.

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This suit had been filed following receipt of a Notice of Paragraph IV Certification from each of MSN and Mylan, in which they had each asserted that the U.S.

patents listed in the FDA's Orange Book for the Company’s Trulance ® tablets, 3 mg, were either invalid, unenforceable and/or would not be infringed by the commercial manufacture, use or sale of their respective generic plecanatide tablets, 3 mg.

patents listed in the FDA’s Orange Book for the Company’s Trulance ® tablets, 3 mg, were invalid, unenforceable and/or would not be infringed by the commercial manufacture, use or sale of their respective generic plecanatide tablets, 3 mg.

The filing of these suits triggered a 30 -month stay of the approval of the MSN and Mylan ANDAs for plecanatide tablets.

In January 2023, the Company commenced litigation against Aurobindo Pharma Limited (“Auro”) alleging patent infringement by Auro’s filing of their ANDA for generic Trulance ® (plecanatide) 3mg tablets.

This suit had been filed following receipt of a Notice of Paragraph IV Certification from Auro, in which it asserted that the U.S.

patent listed in the

FDA’s Orange Book for the Company’s Trulance ® tablets, 3 mg, were invalid, unenforceable and/or would not be infringed by the commercial manufacture, use or sale of Auro’s generic plecanatide tablets, 3 mg.

The filing of this suit triggered a 30 -month stay of the approval of the Auro ANDA for plecanatide tablets.

The Company remains confident in the strength of the Trulance ® patents and intends to vigorously pursue this matter and defend its intellectual property.

In September 2021, the Company commenced litigation against Slayback Pharma LLC and Slayback Pharma India LLP (together, “Slayback”) alleging patent infringement by Slayback Pharma LLC’s filing of its ANDA No.

216361, referencing Lumify ® (0.025% brimonidine tartrate ophthalmic solution).

This suit had been filed following receipt of a Notice of Paragraph IV Certification from Slayback Pharma LLC, in which it had asserted that the U.S.

patents listed in the FDA's Orange Book for the Company’s Lumify ® brimonidine tartrate ophthalmic solution, were either invalid, unenforceable and/or would not be infringed by the commercial manufacture, use or sale of its generic brimonidine tartrate solution.

The filing of this suit triggered a 30 -month stay of the approval of the Slayback ANDA for its brimonidine tartrate solution.

The Company remains confident in the strength of the Lumify ® patents and intends to vigorously defend its intellectual property.

On February 2, 2022 the Company commenced litigation against Lupin Pharmaceuticals, Inc.

(“Lupin”) alleging patent infringement by Lupin’s filing of its ANDA No.

216716, referencing Lumify ® (0.025% brimonidine tartrate ophthalmic solution).

This suit had been filed following receipt of a Notice of Paragraph IV Certification from Lupin, in which it had asserted that the U.S.

The filing of this suit triggered a 30 -month stay of the approval of the Lupin ANDA for its brimonidine tartrate solution.

The Company remains confident in the strength of the Lumify ® patents and will continue to vigorously pursue this matter and defend its intellectual property.

Jublia Patent Litigation

PreserVision ® AREDS Patent Litigation

PreserVision ® AREDS and PreserVision ® AREDS 2 are over the counter eye vitamin formulas for those with moderate-to-advanced age-related degeneration (“AMD”).

The PreserVision ® U.S.

formulation patent expired in March 2021, but a patent covering methods of using the formulation remains in force into 2026.

Bausch & Lomb Incorporated (“B&L Inc.”) has filed patent infringement proceedings against 19 named defendants in 16 proceedings, claiming infringement of these patents and, in certain circumstances, related unfair competition and false advertising causes of action.

Twelve of these proceedings were subsequently settled;

two resulted in a default.

As of the date of this filing, there are two ongoing actions:

(1) Bausch & Lomb Inc.

& PF Consumer Healthcare 1 LLC v.

ZeaVision LLC, C.A.

6:20-cv-06452-CJS (W.D.N.Y.);

and (2) Bausch & Lomb Inc.

& PF Consumer Healthcare 1 LLC v.

SBH Holdings LLC, C.A.

20-cv-01463-VAC-CJB (D.

Bausch + Lomb remains confident in the strength of these patents and B&L Inc.

intends to continue to vigorously pursue these matters and defend its intellectual property.

Patent Litigation against Certain Ocuvite and PreserVision

On June 22, 2021, ZeaVision, LLC (“ZeaVision”) filed a complaint for patent infringement against certain of the Ocuvite ® and PreserVision ® products in the Eastern District of Missouri (Case No.

4:21-cv-00739-RWS).

On June 29, 2021, ZeaVision amended its complaint to assert a second patent against certain of the Ocuvite ® and PreserVision ® products.

On November 16, 2021, ZeaVision filed an additional complaint for patent infringement to assert a third patent against certain of the PreserVision ® products (Case No.

4:21-cv-01352-RWS).

On March 1, 2022, the cases were consolidated.

On March 10, 2022, the court granted Bausch + Lomb’s motion to stay all proceedings pending inter partes review.

On July 1, 2022, ZeaVision filed a motion to partially lift the stay to allow Case No.

4:21-cv-01352-RWS to proceed, and this motion was denied.

The Company disputes the claims and intends to vigorously defend this matter.

Lumify ® Paragraph IV Proceedings

On August 16, 2021, B&L Inc.

received a Notice of Paragraph IV Certification from Slayback Pharma LLC (“Slayback”), in which Slayback asserted that certain U.S.

patents, each of which is listed in the FDA’s Orange Book for Lumify ® (brimonidine tartrate solution) drops (the “Lumify Patents”), are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Slayback’s generic drops, for which an ANDA has been filed by Slayback.

B&L Inc., through its affiliate Bausch + Lomb Ireland Limited, exclusively licenses the Lumify Patents from Eye Therapies, LLC (“Eye Therapies”).

On September 10, 2021, B&L Inc., Bausch + Lomb Ireland Limited and Eye Therapies filed suit against Slayback pursuant to the Hatch-Waxman Act, alleging infringement by Slayback of one or more claims of the Lumify Patents, thereby triggering a 30 -month stay of the approval of the Slayback ANDA.

On January 20, 2022, B&L Inc.

received a Notice of Paragraph IV Certification from Lupin Ltd.

(“Lupin”), in which Lupin asserted that certain U.S.

patents, each of which is listed in the FDA’s Orange Book for Lumify ® (brimonidine tartrate solution) drops (the “Lumify Patents”), are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Lupin’s generic brimonidine tartrate solution, for which its ANDA No.

216716 has been filed by Lupin.

On February 2, 2022, B&L Inc., Bausch + Lomb Ireland Limited and Eye Therapies filed suit against Lupin pursuant to the Hatch-Waxman Act, alleging patent infringement by Lupin of one or more claims of the Lumify Patents, thereby triggering a 30 -month stay of the approval of the Lupin ANDA.

remains confident in the strength of the Lumify ® related patents and B&L Inc.

intends to vigorously defend its intellectual property.

Inter Partes Review Proceedings at the U.S.

Patent and Trademark Office

In addition, patents covering the Company’s branded pharmaceutical products may be challenged in proceedings other than court proceedings, including inter partes review (“IPR”) at the U.S.

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IPR challenges have been brought against patents covering the Company’s branded pharmaceutical products.

For example, following Acrux DDS’s IPR petition, the U.S.

Following Acrux DDS’s IPR petition, the U.S.

Patent and Trial Appeal Board (“PTAB”), in May 2017, instituted inter partes review for an Orange Book-listed patent covering Jublia ® (U.S.

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The ‘506 Patent, therefore, remains valid and enforceable and expires in 2026.

Jublia ® is covered by fourteen Orange Book-listed patents owned by the Company or its licensor, which expire in the years 2028 through 2035.

In August and September 2018, the Company received notices of the filing of a number of ANDAs with paragraph IV certification, and has timely filed patent infringement suits against these ANDA filers, and, in addition, the Company has also commenced certain patent infringement proceedings in Canada against four separate defendants.

Jublia ® is covered by sixteen Orange Book-listed patents owned by the Company or its licensor, which expire in the years 2028 through 2035.

All cases in the U.S.

regarding Jublia ® have been settled.

In Canada, two lawsuits remain pending against Apotex Inc.

Three lawsuits are pending in Canada regarding Jublia ® against Apotex Inc.

and Pharmascience Inc.

Mylan and MSN have filed IPR petitions for certain U.S.

patents listed in the FDA Orange Book for Trulance ® (plecanatide).

On March 21, 2022, Mylan filed a petition for IPR of U.S.

On October 12, 2022, MSN also filed a petition for IPR of U.S.

7,041,786 and the PTAB then issued a decision on December 14, 2022, instituting MSN’s IPR and joining it with Mylan’s IPR.

On June 10, 2022, Mylan filed petitions for IPR of U.S.

9,610,321, 9,616,097, 9,919,024 and 9,925,231.

In the Company’s favor, the PTAB issued decisions on Jan.

4, 2022, denying Mylan’s petitions.

The Company remains confident in the strength of these patents and intends to vigorously defend its intellectual property.

Product Liability

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Since 2016, the Company has been named in a number of product liability lawsuits involving the Shower to Shower ® body powder product acquired in September 2012 from Johnson & Johnson;

due to dismissals, twenty-nine ( 29 ) of such product liability suits currently remain pending.

due to dismissals, twenty-six ( 26 ) of such product liability suits currently remain pending.

In three (3) cases pending in the Atlantic County, New Jersey Multi-County Litigation, agreed stipulations of dismissal have been entered by the Court, thus dismissing the Company from those cases.

Potential liability (including its attorneys’ fees and costs) arising out of these remaining suits is subject to full indemnification obligations of Johnson & Johnson owed to the Company and its affiliates, and legal fees and costs will be paid by Johnson & Johnson.

Twenty-eight ( 28 ) of these lawsuits filed by individual plaintiffs allege that the use of Shower to Shower ® caused the plaintiffs to develop ovarian cancer, mesothelioma or breast cancer.

Twenty-five ( 25 ) of these lawsuits filed by individual plaintiffs allege that the use of Shower to Shower ® caused the plaintiffs to develop ovarian cancer, mesothelioma or breast cancer.

The allegations in these cases include failure to warn, design defect, manufacturing defect, negligence, gross negligence, breach of express and implied warranties, civil conspiracy concert in action, negligent misrepresentation, wrongful death, loss of consortium and/or punitive damages.

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LTL Management, LLC (“LTL”), the resulting entity of the divisional merger, assumed JJCI’s talc liabilities and thereafter filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Western District of North Carolina.

Pursuant to a court order, the case was transferred to the United States District Court for the District of New Jersey.

Pursuant to court orders entered in November 2021, the case was transferred to the United States District Court for the District of New Jersey (the “Bankruptcy Court”), and substantially all cases related to Johnson & Johnson’s talc liability were stayed for a period of sixty ( 60 ) days pursuant to a preliminary injunction.

Notwithstanding the divisional merger and LTL’s bankruptcy case, the Company and its affiliates continue to have indemnification claims and rights against Johnson & Johnson and LTL pursuant to the terms of the indemnification agreement entered into between JJCI and its affiliates and the Company and its affiliates, which indemnification agreement remains in effect.

As a result, it is the Company’s current expectation that it will not incur any material impairments with respect to its indemnification claims as a result of the divisional merger or the bankruptcy.

Substantially all cases subject to the indemnification agreement related to Johnson & Johnson’s talc liability are stayed through February 28, 2022, pursuant to a preliminary injunction issued by the bankruptcy court.

Motions to dismiss the LTL bankruptcy, as well as extend the stay beyond February 28, 2022, were argued in the bankruptcy court in February 2022.

A decision of the court is pending.

To the extent that any cases subject to the indemnification agreement proceed during the pendency of the bankruptcy case, it is the Company's expectation that Johnson & Johnson, in accordance with the indemnification agreement, will continue to vigorously defend the Company in each of the remaining actions.

In December 2021, certain talc claimants filed motions to dismiss the bankruptcy case.

Shortly thereafter, LTL

filed a motion in the Bankruptcy Court to extend the 60 -day preliminary injunction.

On February 25, 2022, the Bankruptcy Court entered orders denying the motions to dismiss and extending the preliminary injunction staying substantially all cases subject to the indemnification agreement related to Johnson & Johnson’s talc liability through at least June 29, 2022, which it later extended indefinitely.

The order denying the motions to dismiss and the order extending the preliminary injunction were subject to appeal and the Bankruptcy Court certified their appeals directly to the United States Court of Appeals for the Third Circuit.

On May 11, 2022, the Third Circuit granted authorization for the parties to proceed with their direct appeals.

Oral argument before the Third Circuit was held on September 19, 2022.

On January 30, 2023, a unanimous three-judge Third Circuit Court of Appeals panel issued its decision directing the Bankruptcy Court to dismiss LTL’s bankruptcy case, concluding that LTL was not in financial distress and could not file a bankruptcy case in good faith.

LTL has filed a petition for rehearing en banc from the Third Circuit.

If the bankruptcy case is ultimately dismissed, the Company’s position vis a vis J&J would return to the status quo prior to the filing.

The litigation against the Company and other defendants will no longer be stayed, and LTL and J&J will continue to have indemnification obligations running to the Company and its affiliates for Shower-to-Shower related product liability litigation.

During the pendency of the appeal, the Bankruptcy Court was considering competing motions by Debtor LTL to extend its exclusive period to file a chapter 11 plan and the talc claimants to terminate LTL’s exclusivity.

In light of the Third Circuit’s decision, on January 31, 2023, the Bankruptcy Court adjourned any hearing on the exclusivity motions to March 20, 2023.

To the extent that any cases proceed during the pendency of the bankruptcy case, or if the case is ultimately dismissed, it is the Company’s expectation that Johnson & Johnson, in accordance with the indemnification agreement, will continue to vigorously defend the Company in each of the remaining actions.

General Civil Actions

Securities Litigation - New Jersey Declaratory Judgment Lawsu it

On March 24, 2022, the Company and Bausch + Lomb were named in a declaratory judgment action in the Superior Court of New Jersey, Somerset County, Chancery Division, brought by certain individual investors in the Company’s common shares and debt securities who are also maintaining individual securities fraud claims against the Company and certain current or former officers and directors as part of the U.S.

Securities Litigation.

This action seeks a declaratory judgment that alleged transfers of certain Company assets to Bausch + Lomb would constitute a voidable transfer under the New Jersey Voidable Transactions Act and that Bausch + Lomb would be liable for damages, if any, awarded against the Company in the individual opt-out actions.

The declaratory judgment action alleges that the future potential separation of Bausch + Lomb from the Company by distribution of Bausch + Lomb stock to the Company’s shareholders would leave the Company with inadequate financial resources to satisfy these plaintiffs’ alleged securities fraud damages in the underlying individual opt-out actions.

None of the plaintiffs in this declaratory judgment action have obtained a judgment against the Company in the underlying individual opt-out actions and the Company disputes the claims against it in those underlying actions.

The underlying individual opt-out actions assert claims under Sections 10(b) and 20(a) of the Exchange Act, and certain actions assert claims under Section 18 of the Exchange Act.

The allegations in those underlying individual opt out actions are made against the Company and several of its former officers and directors only and relate to, among other things, allegedly false and misleading statements made during the 2013-2016 time period by the Company and/or failures to disclose information about the Company’s business and prospects including relating to drug pricing and the use of specialty pharmacies.

On March 31, 2022, the Company and Bausch + Lomb removed the action to the U.S.

District Court for the District of New Jersey.

On April 29, 2022, Plaintiffs filed a motion to remand.

On November 29, 2022, the District Court granted Plaintiffs’ remand motion and the case was remanded to the Superior Court.

On December 8, 2022, Plaintiffs filed a proposed Order to Show Cause and motion for a preliminary injunction, and sought interim relief including expedited discovery.

On December 13, 2022, the Court denied Plaintiffs’ proposed Order to Show Cause and stayed discovery pending the resolution of the Company and Bausch + Lomb’s forthcoming motions to dismiss, while instructing the Company to provide certain notice to Plaintiffs of the intended completion of the distribution referenced above under certain circumstances.

On December 22, 2022, Plaintiffs filed an amended complaint.

On January 11, 2023, the Company and Bausch + Lomb moved to dismiss the amended complaint.

That motion is pending.

Both the Company and Bausch + Lomb dispute the claims in this declaratory judgment action and intend to vigorously defend this matter.

California Proposition 65 Related Matter

On June 19, 2019, plaintiffs filed a proposed class action in California state court against Bausch Health US and Johnson & Johnson (Gutierrez, et al.

Johnson & Johnson, et al.

37-2019-00025810-CU-NP-CTL), asserting claims for

purported violations of the California Consumer Legal Remedies Act, False Advertising Law and Unfair Competition Law in connection with their sale of talcum powder products that the plaintiffs allege violated Proposition 65 and/or the California Safe Cosmetics Act.

Johnson & Johnson, et al., Case No.

37-2019-00025810-CU-NP-CTL), asserting claims for purported violations of the California Consumer Legal Remedies Act, False Advertising Law and Unfair Competition Law in connection with their sale of talcum powder products that the plaintiffs allege violated Proposition 65 and/or the

California Safe Cosmetics Act.

This lawsuit was served on Bausch Health US in June 2019 and was subsequently removed to the United States District Court for the Southern District of California, where it is currently pending.

Plaintiffs seek damages, disgorgement of profits, injunctive relief, and reimbursement/restitution.

The Company filed a motion to dismiss Plaintiffs’ claims, which was granted in April 2020 without prejudice.

Bausch Health US filed a motion to dismiss Plaintiffs’ claims, which was granted in April 2020 without prejudice.

In May 2020, Plaintiffs filed an amended complaint and in June 2020, filed a motion for leave to amend the complaint further, which was granted.

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This stay included Appellants’ reply brief deadline, which was previously due to be filed on or before December 2, 2021.

On March 9, 2022, the Ninth Circuit issued an order extending the stay through July 29, 2022.

On July 29, 2022, Johnson & Johnson filed a status report in the Gutierrez appeal, outlining the developments since the last status report and the imposition of the stay.

Johnson & Johnson noted that following a July 26, 2022, hearing, the Bankruptcy Court left the preliminary injunction in place, and asked the Ninth Circuit to continue to stay this action while the bankruptcy preliminary injunction remained in place.

On January 20, 2023, the Ninth Circuit extended the stay until February 17, 2023.

On February 17, 2023, Johnson & Johnson requested the court afford it sixty ( 60 ) days – until April 18, 2023, or seven ( 7 ) days following any lifting of the LTL Bankruptcy Court’s preliminary injunction – whichever comes earliest – to provide an additional status report about the bankruptcy proceeding and the Third Circuit dismissal for which LTL has requested a rehearing.

The Company and Bausch Health US dispute the claims against them and intend to defend this lawsuit vigorously.

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Johnson & Johnson, et al., Civil Action No.

D-101-CV-2020-00013, filed on January 2, 2020), alleging consumer protection claims against Johnson & Johnson and Johnson & Johnson Consumer Companies, Inc., the Company and Bausch Health US related to Shower to Shower ® and its alleged causal link to mesothelioma and other cancers.

D-101-CV-2020-00013, filed on January 2, 2020), alleging consumer protection claims against Johnson & Johnson and Johnson & Johnson Consumer, Inc., the Company and Bausch Health US related to Shower to Shower ® and its alleged causal link to mesothelioma and other cancers.

In April 2020, Bausch Health US filed a motion to dismiss, which in September 2020, the Court granted in part as to the New Mexico Medicaid Fraud Act and New Mexico Fraud Against Taxpayers Act claims and denied as to all other claims.

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On December 30, 2020 Johnson & Johnson filed a Motion for Partial Judgment on the Pleadings and on January 4, 2021, Bausch Health US filed a joinder to that motion, which was denied on March 8, 2021.

Trial is scheduled to begin on January 18, 2023.

Trial is scheduled to begin on May 30, 2023.

On July 14, 2022, LTL filed an adversary proceeding in the Bankruptcy Court (Case No.

21-30589, Adv.

22-01231) against the State of New Mexico ex rel.

Balderas, Attorney General, and a motion seeking an injunction barring the New Mexico Attorney General from continuing to prosecute the action while the bankruptcy case is pending.

A hearing was held on September 14, 2022, and on October 4, 2022, the Bankruptcy Court entered an order granting the injunction.

The New Mexico and Mississippi Attorneys General appealed the order granting the preliminary injunction and sought direct appeal to the Third Circuit.

The Bankruptcy Court certified the matter for direct appeal to the Third Circuit Court of Appeals.

The Company and Bausch Health US dispute the claims against them and intend to defend this lawsuit vigorously.

Other General Civil Actions

Doctors Allergy Formula Lawsuit

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The motion remains pending.

Bausch Health Americas disputes the claims against it and will continue to defend itself vigorously.

Bausch Health Americas disputes the claims against it and intends to continue to defend itself vigorously.

Litigation with Former Salix CEO

On January 28, 2019, former Salix Ltd.

CEO and director Carolyn Logan filed a lawsuit in the Delaware Court of Chancery, Case No.

2019-0059, asserting claims for breach of contract and declaratory relief.

CEO and director Carolyn Logan filed a lawsuit in the Delaware Court of Chancery, asserting claims for breach of contract and declaratory relief.

On November 19, 2021, Logan amended her complaint to add a claim for breach of the implied covenant of good faith and fair dealing.

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On June 20, 2019, the Court entered an order staying the claim for declaratory relief pending the final resolution of the breach of contract claim.

Trial is scheduled to commence on September 6, 2022.

The Company disputes the claims and intends to vigorously defend the matter.

Completed or Inactive Matters

The following matters have concluded, have settled, are the subject of an agreement to settle or have otherwise been closed since January 1, 2021, have been inactive from the Company’s perspective for several quarters or the Company anticipates that no further material activity will take place with respect thereto.

Due to the closure, settlement, inactivity or change in status of the matters referenced below, these matters will no longer appear in the Company's next public reports and disclosures, unless required.

With respect to inactive matters, to the extent material activity takes place in subsequent quarters with respect thereto, the Company will provide updates as required or as deemed appropriate.

Glumetza Antitrust Litigation

Between August 2019 and July 2020, eight ( 8 ) putative antitrust class actions and four ( 4 ) non-class complaints naming Bausch Health Companies Inc., Salix Pharmaceuticals, Ltd., Salix Pharmaceuticals, Inc., and Santarus, Inc.

(for purposes of this subsection, collectively, the “Company”), among other defendants, were filed or transferred to the Northern District of California.

Three ( 3 ) of the class actions were filed by plaintiffs seeking to represent a class of direct purchasers.

The purported classes of direct purchasers filed a consolidated first amended complaint and a motion for class certification in April 2020.

The court certified a direct purchaser class in August 2020.

The putative class action complaints filed by end payer purchasers have all been voluntarily dismissed.

Three ( 3 ) of the non-class complaints were filed by direct purchasers.

The fourth non-class complaint, asserting claims based on both direct and indirect purchases, was filed by an insurer plaintiff in July 2020 and subsequently amended in September 2020.

In December 2020, the court denied the Company’s motion to dismiss as to the insurer plaintiff’s direct claims but dismissed the insurer plaintiff’s indirect claims.

On February 2, 2021, the insurer plaintiff’s motion for leave to amend its complaint was denied.

These actions were consolidated and coordinated in In re Glumetza Antitrust Litigation , Case No.

3:19-cv-05822-WHA (N.D.

Cal.) (the “ In re Glumetza Antitrust Litigation ”).