What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 465 added, 328 removed, 1268 unchanged (38% of the section changed)

3 unchanged sentences

(in millions, except share amounts)

September 30,

2023 December 31,

23 unchanged sentences

Commitments and contingencies (Note 17)

Common shares, no par value, unlimited shares authorized, 364,063,514 and 361,898,846 issued and outstanding at June 30, 2023 and December 31, 2022, respectively

(Deficit) Equity

Common shares, no par value, unlimited shares authorized, 365,043,317 and 361,898,846 issued and outstanding at September 30, 2023 and December 31, 2022, respectively

10,420 10,391

5 unchanged sentences

Noncontrolling interest 945 952

Total equity 271 260

Total liabilities and equity $ 25,503 $ 25,686

Total (deficit) equity ( 235 ) 260

Total liabilities and (deficit) equity $ 27,064 $ 25,686

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

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

12 unchanged sentences

Restructuring, integration, separation and IPO costs 14 10 40 58

Other (income) expense, net ( 83 ) — ( 60 ) 2

Other expense, net 60 4 — 6

2,224 1,802 5,748 5,241

4 unchanged sentences

Foreign exchange and other ( 7 ) 7 ( 38 ) 4

Income (loss) before income taxes 79 ( 129 ) ( 57 ) ( 211 )

(Provision for) benefit from income taxes ( 52 ) ( 10 ) ( 125 ) 6

Net income (loss) 27 ( 139 ) ( 182 ) ( 205 )

Net (income) loss attributable to noncontrolling interest ( 1 ) ( 6 ) 7 ( 9 )

Net income (loss) attributable to Bausch Health Companies Inc.

(Loss) income before income taxes ( 326 ) 439 ( 383 ) 228

Provision for income taxes ( 56 ) ( 36 ) ( 181 ) ( 30 )

Net (loss) income ( 382 ) 403 ( 564 ) 198

Net loss (income) attributable to noncontrolling interest 4 ( 4 ) 11 ( 13 )

Net (loss) income attributable to Bausch Health Companies Inc.

$ ( 378 ) $ 399 $ ( 553 ) $ 185

Earnings (loss) per share attributable to Bausch Health Companies Inc.

(Loss) earnings per share attributable to Bausch Health Companies Inc.

Basic $ ( 1.03 ) $ 1.10 $ ( 1.52 ) $ 0.51

5 unchanged sentences

BAUSCH HEALTH COMPANIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in millions)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss) $ 27 $ ( 139 ) $ ( 182 ) $ ( 205 )

Other comprehensive income (loss)

Net (loss) income $ ( 382 ) $ 403 $ ( 564 ) $ 198

Other comprehensive (loss) income

Foreign currency translation adjustment ( 134 ) ( 243 ) — ( 465 )

Pension and postretirement benefit plan adjustments, net of income taxes ( 2 ) ( 1 ) ( 2 ) 6

Other comprehensive income (loss) 69 ( 165 ) 134 ( 215 )

Comprehensive income (loss) 96 ( 304 ) ( 48 ) ( 420 )

Comprehensive loss (income) attributable to noncontrolling interest 17 ( 6 ) 27 ( 9 )

Comprehensive income (loss) attributable to Bausch Health Companies Inc.

Other comprehensive loss ( 136 ) ( 244 ) ( 2 ) ( 459 )

Comprehensive (loss) income ( 518 ) 159 ( 566 ) ( 261 )

Comprehensive (income) loss attributable to noncontrolling interest ( 9 ) ( 23 ) 18 ( 32 )

Comprehensive (loss) income attributable to Bausch Health Companies Inc.

$ ( 527 ) $ 136 $ ( 548 ) $ ( 293 )

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BAUSCH HEALTH COMPANIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) EQUITY

(in millions)

Bausch Health Companies Inc.

Shareholders’ Equity

Shareholders’ (Deficit) Equity

Common Shares Additional

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Shareholders’

Interest Total

Interest Total (Deficit)

Shares Amount

Three Months Ended June 30, 2023

Balances, April 1, 2023 363.6 $ 10,405 $ 171 $ ( 9,387 ) $ ( 1,989 ) $ ( 800 ) $ 945 $ 145

Three Months Ended September 30, 2023

Balances, July 1, 2023 364.0 $ 10,412 $ 188 $ ( 9,361 ) $ ( 1,902 ) $ ( 663 ) $ 934 $ 271

Common shares issued under share-based compensation plans 1.0 8 ( 8 ) — — — — —

2 unchanged sentences

Vesting of B+L equity compensation — — ( 11 ) — — ( 11 ) 11 —

Net income — — — 26 — 26 1 27

Other comprehensive income (loss) — — — — 87 87 ( 18 ) 69

Balances, June 30, 2023 364.0 $ 10,412 $ 188 $ ( 9,361 ) $ ( 1,902 ) $ ( 663 ) $ 934 $ 271

Three Months Ended June 30, 2022

Balances, April 1, 2022 361.3 $ 10,373 $ 415 $ ( 9,030 ) $ ( 1,974 ) $ ( 216 ) $ 75 $ ( 141 )

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

Noncontrolling interest distributions — — — — — — ( 9 ) ( 9 )

Net loss — — ( 378 ) — ( 378 ) ( 4 ) ( 382 )

Other comprehensive (loss) income — — — ( 149 ) ( 149 ) 13 ( 136 )

Balances, September 30, 2023 365.0 $ 10,420 $ 190 $ ( 9,739 ) $ ( 2,051 ) $ ( 1,180 ) $ 945 $ ( 235 )

Three Months Ended September 30, 2022

Balances, July 1, 2022 361.6 $ 10,380 $ 104 $ ( 9,175 ) $ ( 2,002 ) $ ( 693 ) $ 946 $ 253

Common shares issued under share-based compensation plans 0.2 7 ( 7 ) — — — — —

1 unchanged sentence

Employee withholding taxes related to share-based awards — — ( 1 ) — — ( 1 ) — ( 1 )

Net (loss) income — — — ( 145 ) — ( 145 ) 6 ( 139 )

Other comprehensive loss — — — — ( 165 ) ( 165 ) — ( 165 )

Balances, June 30, 2022 361.6 $ 10,380 $ 104 $ ( 9,175 ) $ ( 2,002 ) $ ( 693 ) $ 946 $ 253

Six Months Ended June 30, 2023

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

Net income — — — 399 — 399 4 403

Other comprehensive (loss) income — — — — ( 263 ) ( 263 ) 19 ( 244 )

Balances, September 30, 2022 361.8 $ 10,387 $ 129 $ ( 8,776 ) $ ( 2,265 ) $ ( 525 ) $ 958 $ 433

Nine Months Ended September 30, 2023

Balances, January 1, 2023 361.9 $ 10,391 $ 159 $ ( 9,186 ) $ ( 2,056 ) $ ( 692 ) $ 952 $ 260

3 unchanged sentences

Vesting of B+L equity compensation — — ( 20 ) — — ( 20 ) 20 —

Noncontrolling interest distributions — — — — — — ( 9 ) ( 9 )

Net loss — — — ( 553 ) — ( 553 ) ( 11 ) ( 564 )

Other comprehensive income (loss) — — — — 5 5 ( 7 ) ( 2 )

Balances, June 30, 2023 364.0 $ 10,412 $ 188 $ ( 9,361 ) $ ( 1,902 ) $ ( 663 ) $ 934 $ 271

Six Months Ended June 30, 2022

Balances, September 30, 2023 365.0 $ 10,420 $ 190 $ ( 9,739 ) $ ( 2,051 ) $ ( 1,180 ) $ 945 $ ( 235 )

Nine Months Ended September 30, 2022

Balances, January 1, 2022 359.4 $ 10,317 $ 462 $ ( 8,961 ) $ ( 1,924 ) $ ( 106 ) $ 72 $ ( 34 )

3 unchanged sentences

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

Net (loss) income — — — ( 214 ) — ( 214 ) 9 ( 205 )

Other comprehensive loss — — — — ( 215 ) ( 215 ) — ( 215 )

Balances, June 30, 2022 361.6 $ 10,380 $ 104 $ ( 9,175 ) $ ( 2,002 ) $ ( 693 ) $ 946 $ 253

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

Net income — — — 185 — 185 13 198

Other comprehensive (loss) income — — — — ( 478 ) ( 478 ) 19 ( 459 )

Balances, September 30, 2022 361.8 $ 10,387 $ 129 $ ( 8,776 ) $ ( 2,265 ) $ ( 525 ) $ 958 $ 433

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

2 unchanged sentences

(in millions)

Six Months Ended

Nine Months Ended

September 30,

Cash Flows From Operating Activities

Net loss $ ( 182 ) $ ( 205 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Net (loss) income $ ( 564 ) $ 198

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization of intangible assets 935 1,034

5 unchanged sentences

Deferred income taxes ( 33 ) ( 195 )

Net loss (gain) on sale of assets 1 ( 3 )

Net gain on sale of assets ( 4 ) ( 3 )

Adjustments to accrued legal settlements 24 7

1 unchanged sentence

Share-based compensation 103 91

Foreign exchange loss 15 —

Foreign exchange loss (gain) 23 ( 1 )

Gain excluded from hedge effectiveness ( 10 ) ( 3 )

2 unchanged sentences

Payments of contingent consideration adjustments, including accretion ( 4 ) ( 1 )

Other ( 1 ) ( 11 )

Changes in operating assets and liabilities:

3 unchanged sentences

Accounts payable, accrued and other liabilities 61 ( 122 )

Net cash provided by operating activities 360 60

Net cash provided by (used in) operating activities 642 ( 1,203 )

Cash Flows From Investing Activities

14 unchanged sentences

Payments of financing costs ( 36 ) ( 71 )

Net cash used in financing activities ( 262 ) ( 162 )

Other ( 8 ) ( 10 )

Net cash provided by (used in) financing activities 1,554 ( 198 )

Effect of exchange rate changes on cash, cash equivalents and other ( 10 ) ( 54 )

Net decrease in cash, cash equivalents, restricted cash and other settlement deposits ( 3 ) ( 240 )

Net increase (decrease) in cash, cash equivalents, restricted cash and other settlement deposits 189 ( 1,622 )

Cash, cash equivalents, restricted cash and other settlement deposits, beginning of period 591 2,119

29 unchanged sentences

On May 10, 2022, a wholly owned subsidiary of Bausch Health sold 35,000,000 common shares of B+L pursuant to the B+L IPO.

Upon the closing of the B+L IPO and after giving effect to the subsequent partial exercise of the over-allotment option by the underwriters, Bausch Health indirectly holds 310,449,643 common shares of Bausch + Lomb, which represents approximately 89 % of B+L’s outstanding common shares as of June 30, 2023.

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 completion of the full B+L Separation, which includes the transfer of all or a portion of BHC’s remaining direct or indirect equity interest in Bausch + Lomb to its shareholders (the “Distribution”), 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 relevant 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 17, “LEGAL PROCEEDINGS”) on the B+L Separation.

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In preparing the unaudited Condensed Consolidated Financial Statements, management is required to make estimates and assumptions.

The estimates and assumptions used by the Company affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements, and the reported amounts of revenue and expenses during the reporting periods.

the reported amounts of revenue and expenses during the reporting periods.

Actual results could differ from these estimates and the differences could be material.

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The Company applies this method consistently for contracts with similar characteristics.

The following tables present the activity and ending balances of the Company’s variable consideration provisions for the six months ended June 30, 2023 and 2022.

Six Months Ended June 30, 2023

The following tables present the activity and ending balances of the Company’s variable consideration provisions for the nine months ended September 30, 2023 and 2022.

Nine Months Ended September 30, 2023

(in millions) Discounts

3 unchanged sentences

Payments and credits ( 462 ) ( 147 ) ( 2,017 ) ( 1,501 ) ( 171 ) ( 4,298 )

Reserve balances, June 30, 2023

Reserve balances, September 30, 2023

$ 183 $ 383 $ 1,077 $ 209 $ 95 $ 1,947

Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $ 55 million and $ 40 million as of June 30, 2023 and January 1, 2023, respectively, which are reflected as a reduction of Trade receivables, net in the Condensed Consolidated Balance Sheets.

There were no price appreciation credits during the six months ended June 30, 2023.

Six Months Ended June 30, 2022

Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $ 47 million and $ 40 million as of September 30, 2023 and January 1, 2023, respectively, which are reflected as a reduction of Trade receivables, net in the Condensed Consolidated Balance Sheets.

There were no price appreciation credits during the nine months ended September 30, 2023.

Nine Months Ended September 30, 2022

(in millions) Discounts

3 unchanged sentences

Payments and credits ( 452 ) ( 145 ) ( 1,847 ) ( 1,532 ) ( 88 ) ( 4,064 )

Reserve balances, June 30, 2022

Reserve balances, September 30, 2022

$ 197 $ 421 $ 1,008 $ 196 $ 122 $ 1,944

Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $ 48 million and $ 36 million as of June 30, 2022 and January 1, 2022, respectively, which are reflected as a reduction of Trade receivables, net in the Condensed Consolidated Balance Sheets.

There were no price appreciation credits during the six months ended June 30, 2022.

Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $ 43 million and $ 36 million as of September 30, 2022 and January 1, 2022, respectively, which are reflected as a reduction of Trade receivables, net in the Condensed Consolidated Balance Sheets.

There were no price appreciation credits during the nine months ended September 30, 2022.

Contract Assets and Contract Liabilities

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Trade receivables, net are stated net of certain sales provisions and the allowance for credit losses.

The activity in the allowance for credit losses for trade receivables for the six months ended June 30, 2023 and 2022 is as follows.

The activity in the allowance for credit losses for trade receivables for the nine months ended September 30, 2023 and 2022 is as follows.

(in millions) 2023 2022

14 unchanged sentences

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.

Acquisition of XIIDRA ®

On June 30, 2023, a wholly owned subsidiary of Bausch + Lomb, Bausch + Lomb Ireland Limited, entered into a Stock and Asset Purchase Agreement with Novartis Pharma AG and Novartis Finance Corporation (together with Novartis Pharma AG, “Novartis”) to acquire XIIDRA ® (lifitegrast ophthalmic solution) and certain other ophthalmology assets.

This acquisition is intended to complement and grow Bausch + Lomb’s existing dry eye franchise.

Under the terms of the agreement, Bausch + Lomb, through its affiliate, has agreed to acquire XIIDRA ® and certain other ophthalmology assets from Novartis for an upfront cash payment, at closing, of $ 1,750 million, with potential milestone obligations of up to $ 750 million, in part, payable upon the achievement of specified commercialization and sales milestones for certain pipeline products to be acquired as part of the transaction and, in part, upon the achievement of specified sales milestones for XIIDRA ® .

The transaction is expected to close by the end of 2023, subject to receipt of regulatory approval and other customary closing conditions.

Bausch + Lomb has obtained debt financing commitments for purposes of this transaction and intends to finance the $ 1,750 million upfront cash payment with new debt prior to the closing of the transaction.

Bausch + Lomb Acquisition of XIIDRA ®

On June 30, 2023, a wholly owned subsidiary of Bausch + Lomb, Bausch + Lomb Ireland Limited, entered into a Stock and Asset Purchase Agreement (the “Acquisition Agreement”) with Novartis Pharma AG and Novartis Finance Corporation (together with Novartis Pharma AG, “Novartis”) and, solely for purposes of guaranteeing certain obligations of the acquiring entity under the Acquisition Agreement, Bausch + Lomb, to acquire XIIDRA ® (lifitegrast ophthalmic solution) and certain other ophthalmology assets (the “XIIDRA Acquisition”).

On September 29, 2023, under the terms of the Acquisition Agreement, Bausch + Lomb, through its affiliate, consummated the XIIDRA Acquisition for:

(i) an upfront cash payment of $ 1,750 million, (ii) the assumption of certain pre-existing milestone payments and (iii) potential future milestone obligations of up to $ 750 million, as discussed below.

The strategic XIIDRA Acquisition is expected to complement Bausch + Lomb’s existing dry eye franchise that includes eye and contact lens drops from Bausch + Lomb’s consumer brand franchises and novel treatments within its pharmaceutical business such as MIEBO ™ (perfluorohexyloctane ophthalmic solution).

The assets acquired and liabilities assumed are included within Bausch + Lomb’s Pharmaceuticals business.

The XIIDRA Acquisition has been accounted for as a business combination under the acquisition method of accounting.

The estimated aggregate acquisition consideration of approximately $ 1,753 million is calculated as follows:

(in millions)

Cash consideration paid to Novartis at closing, per the Acquisition Agreement $ 1,750

Estimated fair value of contingent consideration 3

Preliminary aggregate purchase consideration $ 1,753

The upfront cash payment of $ 1,750 million was paid on September 29, 2023, using the proceeds received from the issuance of the B+L October 2028 Secured Notes and the establishment of the B+L September 2028 Term Facility, each as defined and further discussed in Note 10, “FINANCING ARRANGEMENTS”.

Contingent consideration included as part of the consideration relates to potential future milestone obligations of up to $ 750 million, including:

(i) up to $ 475 million in cash payable upon the achievement of specified commercialization and sales milestones for certain pipeline products and (ii) up to $ 275 million in cash payable upon the achievement of specified sales milestones for XIIDRA ® .

The fair value of the contingent consideration recognized on the acquisition date of $ 3 million was estimated by using the inputs disclosed in Note 6, “FAIR VALUE MEASUREMENTS”.

Bausch + Lomb reassesses its acquisition-related contingent consideration liabilities each quarter for changes in fair value.

Assets Acquired and Liabilities Assumed

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

(in millions)

Intangible assets, net $ 1,595

Prepaid expenses and other current assets 167

Accrued and other current liabilities ( 1 )

Other non-current liabilities ( 31 )

Total identifiable net assets 1,730

Total fair value of consideration transferred $ 1,753

The fair value of the identifiable intangible assets is determined primarily using the “income approach,” which requires a forecast of the expected future cash flows.

The intangible assets acquired, as well as their fair values and estimated useful life consist of the following:

(in millions) Fair Value Estimated Useful

Life (In Years)

Product brands $ 1,590 8.75

Acquired in-process research and development intangible asset 5 N/A

Total Intangible assets, net $ 1,595

Prepaid expenses and other current assets associated with the XIIDRA Acquisition represent the terms of an interim contract to purchase inventory, as embedded within the agreements associated with the XIIDRA Acquisition.

The favorable contract will be released to Cost of goods sold (excluding amortization and impairments of intangible assets) as Bausch + Lomb acquires inventory from Novartis.

The balance of this favorable contract will be fully released to the Condensed Consolidated Statements of Operations over an assumed inventory turnover cycle of approximately two years .

Other non-current liabilities associated with the XIIDRA Acquisition represent the fair value of the historical contingent consideration liability assumed from Novartis by Bausch + Lomb as a part of the acquisition.

The fair value of the assumed contingent consideration recognized on the acquisition date was $ 31 million and was estimated by using a discount rate of 11 %.

Goodwill associated with the XIIDRA Acquisition represents the workforce acquired as well as future operating efficiencies and cost savings.

Substantially all of the goodwill associated with the XIIDRA Acquisition is deductible for income tax purposes.

The valuation of assets acquired and liabilities assumed, as part of the XIIDRA Acquisition, has not been finalized as of September 30, 2023.

The fair value estimates for the assets acquired and liabilities assumed were based upon preliminary valuations.

The primary areas that could be subject to change relate to the finalization of the valuation of intangible assets, prepaid expenses and other current assets, other non-current liabilities and Goodwill.

Bausch + Lomb will finalize these amounts no later than one year from the acquisition date.

Revenue and Operating Results

Revenues and operating results associated with the XIIDRA Acquisition from the date of acquisition through September 30, 2023 were not material.

Pro Forma Financial Information

The following table presents the unaudited pro forma condensed combined results of the Company and the acquired assets for the three and nine months ended September 30, 2023 and 2022 as if the XIIDRA Acquisition, and the related financing had occurred on January 1, 2022:

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 2023 2022

Revenues $ 2,302 $ 2,155 $ 6,598 $ 6,273

Net (loss) income $ ( 466 ) $ 355 $ ( 783 ) $ ( 42 )

Net (loss) income attributable to Bausch Health Companies Inc.

$ ( 448 ) $ 332 $ ( 732 ) $ ( 49 )

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of the Company and the acquired assets.

In order to reflect the occurrence of the acquisition on January 1, 2022 as required, the unaudited pro forma financial information includes adjustments to reflect incremental amortization expense to be incurred based on (i) the current preliminary fair values of the identifiable intangible assets acquired, (ii) the incremental cost of products sold related to the fair value adjustments associated with the terms of an interim contract to purchase inventory, as embedded within the agreements associated with the XIIDRA Acquisition, (iii) the elimination of historical impairments and accretion expenses related to historical contingent considerations recorded by Novartis, (iv) the recording of new/assumed contingent consideration accretion expense, (v) the additional interest expense associated with the issuance of debt to finance the acquisition and (vi) the tax impact of each of the aforementioned adjustments.

Included in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 are:

(i) acquisition-related transaction costs, included within Other expense, net, of $ 14 million, which are directly related to the XIIDRA Acquisition, and include expenditures for representation and warranty insurance premiums, legal, valuation, accounting and other similar professional services and (ii) acquisition-related financing costs, included within Interest expense, of $ 16 million, which are directly related to the XIIDRA Acquisition, and include expenditures for certain upfront financing commitment costs related to debt financing commitments in place prior to the XIIDRA Acquisition, the issuance of the B+L October 2028 Secured Notes and the establishment of the B+L September 2028 Term Facility, each as defined and further discussed in Note 10, “FINANCING ARRANGEMENTS”.

These acquisition-related transaction and financing costs are reflected in pro forma Net (loss) income attributable to Bausch Health Companies Inc., in the table above, for the nine months ended September 30, 2022.

The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been, had the XIIDRA Acquisition been completed on January 1, 2022.

In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition.

Acquisition of Blink ® Product Line

On July 6, 2023, Bausch + Lomb announced that it had consummated a transaction with Johnson & Johnson Vision, pursuant to which Bausch + Lomb, through an affiliate, acquired the Blink ® product line of eye and contact lens drops, which consists of Blink ® Tears Lubricating Eye Drops, Blink ® Tears Preservative Free Lubricating Eye Drops, Blink GelTears ® Lubricating Eye Drops, Blink ® Triple Care Lubricating Eye Drops, Blink Contacts ® Lubricating Eye Drops and Blink-N-Clean ® Lens Drops.

This acquisition was made by Bausch + Lomb to continue to grow its global over-the-counter business.

Under the terms of the purchase agreement, Bausch + Lomb, through an affiliate, acquired the Blink ® product line of eye and contact lens drops for an upfront cash payment of $ 107 million, which was paid on the closing of the transaction in early July 2023.

The acquired assets are included within Bausch + Lomb's Vision Care business.

Bausch + Lomb accounted for the transaction as an asset acquisition.

The acquired assets consist of inventory and intangible assets.

The intangible assets acquired, their fair values and estimated useful lives consist of the following:

(in millions) Fair Value Estimated Useful

Life (In Years)

Corporate brands $ 72 12

Product brands 12 10

Technology and other 6 9

Total Intangible assets, net $ 90

Acquisition of AcuFocus

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Additional contingent payments may be payable upon achievement of future sales milestones.

Bausch + Lomb recorded an initial acquisition-related contingent consideration liability of $ 5 million.

Bausch + Lomb recorded an initial acquisition-related contingent consideration liability of approximately $ 5 million.

As a result of this transaction, recorded within the Condensed Consolidated Balance Sheets are Intangibles, net of $ 28 million, Goodwill of $ 8 million, other assets of $ 9 million and liabilities of $ 6 million.

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(i) reducing headcount, (ii) eliminating real estate costs associated with unused or under-utilized facilities and (iii) implementing contribution margin improvement and other cost reduction initiatives.

The Company incurred $ 25 million of restructuring and integration costs during each of the six months ended June 30, 2023 and 2022.

The Company incurred $ 37 million and $ 28 million of restructuring and integration costs during the nine months ended September 30, 2023 and 2022, respectively.

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

5 unchanged sentences

(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 six months ended June 30, 2023 and 2022 are separation and IPO costs of $ 1 million and $ 23 million, respectively.

Included in Restructuring, integration, separation and IPO costs for the nine months ended September 30, 2023 and 2022 are separation and IPO costs of $ 3 million and $ 30 million, respectively.

The Company has incurred, and expects to continue to incur, incremental costs with respect to the B+L Separation.

1 unchanged sentence

These separation-related and IPO-related costs include, 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.

Included in Selling, general and administrative for the six months ended June 30, 2023 and 2022 are separation-related and IPO-related costs of $ 13 million and $ 64 million, respectively.

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

Included in Selling, general and administrative expenses for the nine months ended September 30, 2023 and 2022 are separation-related and IPO-related costs of $ 18 million and $ 84 million, respectively.

The extent and timing of future charges of these costs to complete the B+L Separation cannot be reasonably estimated at this time and could be material.

7 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(in millions) Carrying

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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 Condensed Consolidated Balance Sheets at carrying value, which approximates fair value due to their short-term nature.

Cash, cash equivalents and restricted cash as presented in the Condensed Consolidated Balance Sheet as of June 30, 2023 includes $ 392 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 operating, 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.

There were no transfers into or out of Level 3 assets or liabilities during the six months ended June 30, 2023.

Cash, cash equivalents and restricted cash as presented in the Condensed Consolidated Balance Sheet as of September 30, 2023 includes $ 360 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 operating, investing and financing activities of Bausch + Lomb is expected to be retained by Bausch + Lomb entities and is 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.

There were no transfers into or out of Level 3 assets or liabilities during the nine months ended September 30, 2023.

Cross-currency Swaps

During the third quarter of 2022, Bausch + Lomb entered into 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 Condensed 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.

Bausch + Lomb’s cross-currency swaps qualify for and have been designated as a 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 assets and liabilities associated with Bausch + Lomb’s cross-currency swaps as included in the Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 are as follows:

(in millions) June 30,

The assets and liabilities associated with Bausch + Lomb’s cross-currency swaps as included in the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 are as follows:

(in millions) September 30,

2023 December 31,

2 unchanged sentences

Net fair value $ 44 $ 39

The following table presents the effect of hedging instruments on the Condensed Consolidated Statements of Comprehensive Income (loss) and the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2023 2022 2023 2022

Loss recognized in Other comprehensive loss $ 17 $ — $ 23 $ —

Gain (loss) recognized in Other comprehensive loss $ 21 $ 11 $ ( 2 ) $ 11

Gain excluded from assessment of hedge effectiveness $ 3 $ 3 $ 10 $ 3

Location of gain of excluded component Interest Expense Interest Expense

No portion of the cross-currency swaps were ineffective for the six months ended June 30, 2023.

During the six months ended June 30, 2023 and 2022, the Company received $ 6 million and $ 0 , respectively, in interest settlements, which are reported as investing activities in the Condensed Consolidated Statements of Cash Flows.

No portion of the cross-currency swaps were ineffective for the nine months ended September 30, 2023.

During the nine months ended September 30, 2023 and 2022, the Company received $ 13 million and $ 0 , respectively, in interest settlements, which are reported as investing activities in the Condensed Consolidated Statements of Cash Flows.

Foreign Currency Exchange Contracts

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The Company’s foreign currency exchange contracts are economically hedging the foreign exchange exposure on certain of the Company’s intercompany balances.

As of June 30, 2023, the Company’s outstanding foreign currency exchange contracts had an aggregate notional amount of $ 494 million.

The assets and liabilities associated with the Company’s foreign exchange contracts as included in the Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 are as follows:

(in millions) June 30,

As of September 30, 2023, the Company’s outstanding foreign currency exchange contracts had an aggregate notional amount of $ 429 million.

The assets and liabilities associated with the Company’s foreign exchange contracts as included in the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 are as follows:

(in millions) September 30,

2023 December 31,

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Net fair value $ 1 $ 2

The following table presents the effect of the Company’s foreign exchange contracts on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2023 2022 2023 2022

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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 June 30, 2023, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 6 % to 28 %, and a weighted average risk-adjusted discount rate of 7 %.

The weighted average risk-adjusted discount rate was calculated by weighting each contract’s relative fair value at June 30, 2023.

The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2023 and 2022:

At September 30, 2023, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 6 % to 28 %, and a weighted average risk-adjusted discount rate of 9 %.

The weighted average risk-adjusted discount rate was calculated by weighting each contract’s relative fair value at September 30, 2023.

The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2023 and 2022:

September 30,

(in millions) 2023 2022

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Acquisition-related contingent consideration 40 2

Acquisition of AcuFocus, Inc.

Acquisitions 39 —

Payments/Settlements ( 22 ) ( 19 )

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Fair Value of Long-term Debt

The fair value of long-term debt as of June 30, 2023 and December 31, 2022 was $ 13,737 million and $ 14,011 million, respectively, and was estimated using the quoted market prices for the same or similar debt issuances (Level 2) .

The fair value of long-term debt as of September 30, 2023 and December 31, 2022 was $ 15,661 million and $ 14,011 million, respectively, and was estimated using the quoted market prices for the same or similar debt issuances (Level 2) .

Inventories, net consist of:

(in millions) June 30,

(in millions) September 30,

2023 December 31,

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The major components of intangible assets consist of:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(in millions) Gross

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Total finite-lived intangible assets 27,189 ( 22,164 ) 5,025 25,436 ( 21,334 ) 4,102

Acquired IPR&D 5 — 5 — — —

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

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

Asset impairments for the three and six months ended June 30, 2023, were $ 37 million and $ 50 million, respectively.

Asset impairments for the three months ended June 30, 2023, primarily related to the Company’s Uceris ® Foam product, as discussed below.

Asset impairments for the six months ended June 30, 2023, also include impairments of $ 8 million, in aggregate, attributable to certain trade names no longer in use and $ 5 million related to the discontinuance of a certain product line.

Asset impairments for the three and nine months ended September 30, 2023, were $ 4 million and $ 54 million, respectively.

Asset impairments for the nine months ended September 30, 2023, primarily related to:

(i) $ 37 million related to the Company’s Uceris ® Foam product, as discussed below, (ii) $ 8 million, in aggregate, attributable to certain trade names no longer in use and (iii) $ 9 million related to the discontinuance of certain product lines.

In the second quarter of 2023, the U.S.

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As of June 30, 2023, the remaining carrying value of the Uceris ® Foam product related intangible assets was not material.

Asset impairments for the three and six months ended June 30, 2022, were $ 6 million and $ 14 million, respectively, primarily related to discontinuances and decreases in the forecasted sales of certain product lines.

Xifaxan ® intangible assets included in the unaudited Condensed Consolidated Balance Sheets had a carrying value of $ 2,424 million and an estimated remaining useful life of 54 months as of June 30, 2023.

Asset impairments for the three and nine months ended September 30, 2022, were $ 1 million and $ 15 million, respectively, primarily related to discontinuances and decreases in the forecasted sales of certain product lines.

Xifaxan ® intangible assets included in the unaudited Condensed Consolidated Balance Sheets had a carrying value of $ 2,289 million and an estimated remaining useful life of 51 months as of September 30, 2023.

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

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

From September 30, 2022 through the second quarter of 2023 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 June 30, 2023.

From September 30, 2022 through the third quarter of 2023 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 September 30, 2023.

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

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Amortization $ 281 $ 1,072 $ 993 $ 868 $ 830 $ 233 $ 748 $ 5,025

The changes in the carrying amounts of goodwill during the six months ended June 30, 2023 and the year ended December 31, 2022 were as follows:

The changes in the carrying amounts of goodwill during the nine months ended September 30, 2023 and the year ended December 31, 2022 were as follows:

(in millions) Bausch + Lomb Salix International Dermatology Solta Medical Diversified Total

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Additions 31 — — — — — 31

Impairments — — — — — ( 402 ) ( 402 )

Foreign exchange and other ( 15 ) — 22 — — 4 11

Balance, June 30, 2023 $ 5,279 $ 3,159 $ 844 $ — $ 115 $ 2,231 $ 11,628

Balance, September 30, 2023 $ 5,262 $ 3,159 $ 811 $ — $ 115 $ 1,840 $ 11,187

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

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The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants.

The Company estimates the fair value of a reporting unit using a discounted cash flow model

which utilizes Level 3 unobservable inputs.

The Company estimates the fair value of a reporting unit using a discounted cash flow model which utilizes Level 3 unobservable inputs.

The 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.

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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 Pharmaceuticals reporting units of the Bausch + Lomb segment.

The Company’s annual goodwill impairment test as of October 1, 2022, included performing separate quantitative fair value tests for the Neurology reporting unit and the Vision Care, Surgical and Pharmaceuticals 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.

The Neurology 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 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 fair value test for the Neurology 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.

As a result of the revisions to its long-term expectations for these and other factors, goodwill for the Neurology 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 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 reporting unit had remaining goodwill of $ 1,439 million.

Bausch + Lomb Reporting Units

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2023 Interim Assessment

During the six months ended June 30, 2023, the Company continued to monitor the market conditions and trends in business performance for all its reporting units, particularly as they pertain to the Dermatology, Neurology and Other and Salix reporting units, and determined that no events occurred, or circumstances changed, that would indicate that it is more likely than not 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 any such charges could be material.

Accumulated goodwill impairment charges through June 30, 2023 were $ 5,004 million.

Through the nine months ended September 30, 2023, the Dermatology reporting unit performed largely in line with the forecast used in its last quantitative fair value test (September 30, 2022).

During the third quarter of 2023, as a result of lower realized pricing attributable to shifts in the coverage mix for certain products, discontinuation of certain products as a result of the impact of recent legislation, and revised expectations of future selling, advertising, and promotion costs required to mitigate further revenue erosion, the Company’s preliminary assessment of future business performance indicated that the reporting unit’s future financial results were expected to be below the assumptions used in the last quantitative fair value test.

After considering the limited headroom as a result of the impairment to goodwill of the Dermatology reporting unit when last tested (September 30, 2022), the Company determined that these changes in facts and circumstances, as well as increases in market interest rates during the three months ended September 30, 2023, suggested that the fair value of the Dermatology 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 Dermatology reporting unit as revised in the third quarter of 2023 which reflected current market conditions and current trends in business performance.

The quantitative fair value test utilized a long-term growth rate of 0.0 % and a discount rate of 10.75 %.

Based on the quantitative fair value test, the carrying value of the Dermatology reporting unit exceeded its fair value at September 30, 2023, and the Company recognized a goodwill impairment of $ 151 million for the three months ended September 30, 2023.

As of September 30, 2023, the Dermatology reporting unit had remaining goodwill of $ 329 million.

Through the nine months ended September 30, 2023, the Neurology reporting unit performed largely in line with the forecast used in its last quantitative fair value test (October 1, 2022).

During the third quarter of 2023, as a result of actions taken by management in response to changing market dynamics driven by recent legislation, changes to the future expected commercial insurance coverage for certain key products, and a projected shift in the channels of business, the Company’s preliminary assessment of future business performance indicated that the reporting unit’s future financial results were expected to be below the assumptions used in the last quantitative fair value test.

After considering the limited headroom as a result of the impairment to goodwill of the Neurology reporting unit when last tested (October 1, 2022), the Company determined that these changes in facts and circumstances, as well as increases in market interest rates during the three months ended September 30, 2023, suggested that the fair value of the Neurology 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 for the Neurology reporting unit utilized the most recent cash flow projections for the Neurology reporting unit as revised in the third quarter of 2023 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 10.50 %.

Based on the quantitative fair value test, the carrying value of the Neurology reporting unit exceeded its fair value at September 30, 2023, and the Company recognized a goodwill impairment of $ 251 million for the three months ended September 30, 2023.

As of September 30, 2023, the Neurology reporting unit had remaining goodwill of $ 1,192 million.

Other Reporting Units

No other events occurred or circumstances changed during the period of October 1, 2022 (the last time goodwill was tested for all other reporting units) through September 30, 2023 that would indicate that the fair value of any reporting unit, other than the Dermatology and Neurology reporting units, might be below its carrying value.

Accumulated goodwill impairment charges through September 30, 2023 were $ 5,406 million.

ACCRUED AND OTHER CURRENT LIABILITIES

Accrued and other current liabilities consist of:

(in millions) June 30,

(in millions) September 30,

2023 December 31,

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Principal amounts of debt obligations and principal amounts of debt obligations net of premiums, discounts and issuance costs consist of the following:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(in millions) Maturity Principal Amount Net of Premiums, Discounts and Issuance Costs Principal Amount Net of Premiums, Discounts and Issuance Costs

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B+L Revolving Credit Facility May 2027 175 175 — —

B+L Term Facility May 2027 2,475 2,433 2,488 2,439

B+L May 2027 Term Loan B Facility May 2027 2,469 2,429 2,488 2,439

B+L September 2028 Term Loan B Facility September 2028 500 488 — —

Senior Secured Notes:

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October 2030 352 687 352 711

B+L Senior Secured Notes:

B+L 8.375 % Secured Notes

October 2028 1,400 1,376 — —

9.00 % Intermediate Holdco Secured Notes

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and engage in transactions with affiliates.

As of June 30, 2023, the amount available for restricted payments under the “builder basket” in the Company’s most restrictive indentures (as defined by those indentures) was approximately $ 9,800 million (although such availability is subject to the Company’s compliance with a 2.00 :1.00 fixed

charge coverage ratio).

As of September 30, 2023, the amount available for restricted payments under the “builder basket” in the Company’s most restrictive indentures (as defined by those indentures) was approximately $ 9,900 million (although such availability is subject to the Company’s compliance with a 2.00 :1.00 fixed charge coverage ratio).

The 2027 Revolving Credit Facility (as defined below) also contains a financial maintenance covenant that, requires the Company to maintain a first lien net leverage ratio of not greater than 4.00 :1.00.

The financial maintenance covenant may be waived or amended without the consent of the term loan facility lenders and contains a customary term loan facility standstill.

As of June 30, 2023, the Company was in compliance with its financial maintenance covenant related to its debt obligations.

As of September 30, 2023, the Company was in compliance with its financial maintenance covenant related to its debt obligations.

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.

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(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.

(“Intermediate Holdco”), an existing indirect wholly-owned unrestricted subsidiary of the Company that held 38.5 % of the issued and outstanding common shares of Bausch + Lomb as of September 30, 2023.

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.

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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 Condensed Consolidated Balance Sheets .

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.

During the three and six months ended June 30, 2023, the Company made contractual interest payments of $ 27 million and $ 155 million, respectively, related to the New Secured Notes, of which $ 23 million and $ 134 million, respectively, was recorded as a reduction of the premium.

During the three and nine months ended September 30, 2023, the Company made contractual interest payments of $ 45 million and $ 200 million, respectively, related to the New Secured Notes, of which $ 40 million and $ 174 million, respectively, was recorded as a reduction of the premium.

Senior Secured Credit Facilities

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”).

Amendment to the Restated Credit Agreement, dated as of November 27, 2018 (the “2018 Restated Credit Agreement”).

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 (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.

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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 June 30, 2023, the Company had drawn $ 245 million and had $ 23 million of issued and outstanding letters of credit on the 2027 Revolving Credit Facility.

As of September 30, 2023, the Company had no outstanding borrowings and had $ 23 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:

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

As of June 30, 2023, the remaining mandatory quarterly amortization payments for the 2027 Term Loan B Facility were $ 438 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.

As of September 30, 2023, the remaining mandatory quarterly amortization payments for the 2027 Term Loan B Facility were $ 406 million through December 2026.

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.

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Accounts Receivable Credit Facility

On June 30, 2023, certain subsidiaries of the Company entered into a Credit and Security Agreement (the “AR Facility Agreement”) with certain third-party lenders, providing for a non-recourse financing facility collateralized by certain accounts receivable originated by a wholly-owned subsidiary of the Company (the “AR Credit Facility”).

On June 30, 2023, certain subsidiaries of the Company entered into a Credit and Security Agreement (as amended, the “AR Facility Agreement”) with certain third-party lenders, providing for a non-recourse financing facility collateralized by certain accounts receivable originated by a wholly-owned subsidiary of the Company (the “AR Credit Facility”).

The AR Facility Agreement provides for an up to $ 600 million facility, subject to certain borrowing base tests.

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The AR Credit Facility matures on January 28, 2028.

As of June 30, 2023, there were no outstanding borrowings under the AR Credit Facility.

As of September 30, 2023, there were $ 350 million of outstanding borrowings under the AR Credit Facility at an all-in interest rate of 11.98 %.

Fees incurred with the lenders, their affiliates and other third parties of approximately $ 20 million associated with the AR Credit Facility were capitalized as deferred financing costs and will be amortized as Interest expense over the term of the AR Facility Agreement.

See Note 19, “SUBSEQUENT EVENTS” for further details on subsequent borrowings under the AR Credit Facility.

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 will be made available in U.S.

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”).

Prior to the September 2023 Credit Facility Amendment (as defined below), the Credit Agreement provided for a term loan of $ 2,500 million with a five-year term to maturity (the “B+L May 2027 Term Loan B Facility”) and a five-year revolving credit facility of $ 500 million (the “B+L Revolving Credit Facility”).

On September 29, 2023, Bausch + Lomb entered into an incremental term loan facility secured on a pari passu basis with its existing B+L May 2027 Term Loan B Facility.

This incremental term loan facility was entered into in the form of an incremental amendment (the “September 2023 Credit Facility Amendment”) to Bausch + Lomb’s existing Credit Agreement (the Credit Agreement, as amended by the September 2023 Credit Facility Amendment, the “B+L Amended Credit Agreement”) and consisted of borrowings of $ 500 million in new term B loans with a five-year term to maturity (the “B+L September 2028 Term Loan B Facility”) and, together with the B+L May 2027 Term Loan B Facility and the B+L Revolving Credit Facility, the “B+L Senior Secured Credit Facilities”).

A portion of the proceeds from the B+L September 2028 Term Loan B Facility and B+L October 2028 Secured Notes (as defined below) were used to finance the $ 1,750 million upfront payment related to the XIIDRA Acquisition (as discussed further in Note 4, “LICENSING AGREEMENTS AND ACQUISITIONS”) and related acquisition and financing costs.

The B+L Senior Secured 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 B+L May 2027 Term Loan B Facility and B+L September 2028 Term Loan B Facility are denominated in U.S.

dollars, and borrowings under the B+L Revolving Credit Facility may be made available in U.S.

dollars, euros, pounds sterling and Canadian dollars.

As of June 30, 2023, the B+L Revolving Credit Facility had $ 200 million of outstanding borrowings, $ 25 million of issued and outstanding letters of credit and remaining availability of $ 275 million.

As of September 30, 2023, the B+L Revolving Credit Facility had $ 175 million of outstanding borrowings, $ 25 million of issued and outstanding letters of credit and $ 300 million of remaining availability.

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 any other subsidiaries of Bausch Health.

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 any other subsidiaries of Bausch Health.

Borrowings under the B+L Revolving Credit Facility in:

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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 %.

Term SOFR-based borrowings under the Revolving Credit Facility 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:

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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 Standard & Poor’s, 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.

(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 Standard & Poor’s, Moody’s and Fitch and (y) the B+L May 2027 Term Loan B Facility and B+L September 2028 Term Loan B Facility have 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.

The stated rate of interest for borrowings under the Revolving Credit Facility at September 30, 2023 ranges from 7.67 % to 7.68 % per annum.

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, thereafter, 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.

Borrowings under the B+L May 2027 Term Loan B 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.

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Term SOFR-based loans are subject to a credit spread adjustment of 0.10 %.

The stated rate of interest under the Term Facility at June 30, 2023 was 8.59 % 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).

The stated rate of interest under the B+L May 2027 Term Loan B Facility at September 30, 2023 was 8.76 % per annum.

Borrowings under the B+L September 2028 Term Loan B 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 4.00 %, or (ii) a U.S.

dollar base rate, plus an applicable margin of 3.00 % (provided, however, that the term SOFR-based rate shall be no less than 0.00 % per annum at any time and the U.S.

dollar base rate shall not be lower than 1.00 % per annum at any time).

Term SOFR-based borrowings under

the B+L September 2028 Term Facility are not subject to any credit spread adjustment.

The stated rate of interest under the B+L September 2028 Term Loan B Facility as of September 30, 2023 was 9.32 % per annum.

Subject to certain exceptions and customary baskets set forth in the B+L Amended Credit Agreement, Bausch + Lomb is required to make mandatory prepayments of the loans under the B+L May 2027 Term Loan B Facility and B+L September 2028 Term Loan B 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 Amended Credit Agreement), (iii) 50 % of Excess Cash Flow (as defined in the B+L 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, 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 quarterly installment was paid on September 30, 2022.

The amortization rate for the B+L May 2027 Term Loan B Facility is 1.00 % per annum, or $ 25 million, payable in quarterly installments.

Bausch + Lomb may direct that prepayments be applied to such amortization payments in order of maturity.

As of June 30, 2023, the remaining mandatory quarterly amortization payments for the B+L Term Facility were $ 94 million through March 2027, with the remaining term loan balance being due in May 2027.

As of September 30, 2023, the remaining mandatory quarterly amortization payments for the B+L May 2027 Term Loan B Facility were $ 88 million through March 2027, with the remaining term loan balance being due in May 2027.

The amortization rate for the B+L September 2028 Term Loan B Facility is 1.00 % per annum, or $ 5 million, payable in quarterly installments.

Bausch + Lomb may direct that prepayments be applied to such amortization payments in order of maturity.

As of September 30, 2023, the remaining mandatory quarterly amortization payments for the B+L September 2028 Term Loan B Facility were $ 24 million through June 2028, with the remaining term loan balance being due in September 2028.

Senior Secured Notes

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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.

The Senior Secured Notes and the guarantees related thereto are effectively pari

passu with the Company’s and the Note Guarantors’ respective existing and future indebtedness secured by a first priority lien on the collateral securing the Senior Secured Notes and effectively senior to the Company’s and the Note Guarantors’ respective existing and future indebtedness that is unsecured, including the existing Senior Unsecured Notes, or that is secured by junior liens, in each case to the extent of the value of the collateral.

The Senior Secured Notes and the guarantees related thereto are effectively pari passu with the Company’s and the Note Guarantors’ respective existing and future indebtedness secured by a first priority lien on the collateral securing the Senior Secured Notes and effectively senior to the Company’s and the Note Guarantors’ respective existing and future indebtedness that is unsecured, including the existing Senior Unsecured Notes, or that is secured by junior liens, in each case to the extent of the value of the collateral.

In addition, the Senior Secured Notes are structurally subordinated to:

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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.

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”

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.

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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 June 30, 2023 were comprised of 38.6 % of the issued and outstanding common shares of Bausch + Lomb.

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 September 30, 2023 were comprised of 38.5 % of the issued and outstanding common shares of Bausch + Lomb.

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.

B+L 8.375 % Senior Secured Notes due 2028 - September 2023 Financing

On September 29, 2023, Bausch + Lomb issued $ 1,400 million aggregate principal amount of 8.375 % Senior Secured Notes due October 2028 (the “B+L October 2028 Secured Notes”).

A portion of the proceeds from the B+L October 2028 Secured Notes, along with the proceeds of September 2028 Term Loan B Facility, were used to finance the $ 1,750 million upfront payment related to the acquisition of XIIDRA ® and certain other ophthalmology assets from Novartis (as discussed further in Note 4, “LICENSING AGREEMENTS AND ACQUISITIONS”) and related acquisition and financing costs.

The B+L October 2028 Secured Notes accrue interest at a rate of 8.375 % per year, payable semi-annually in arrears on each April 1 and October 1, commencing on April 1, 2024.

The B+L October 2028 Secured Notes are guaranteed by each of Bausch + Lomb’s subsidiaries that is a guarantor under the B+L Amended Credit Agreement (the “Note Guarantors”).

The B+L October 2028 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 Bausch + Lomb’s obligations under the B+L Amended Credit Agreement under the terms of the indentures governing the B+L October 2028 Secured Notes.

The B+L October 2028 Secured Notes and the guarantees related thereto rank equally in right of repayment with all of Bausch + Lomb’s and Note Guarantors’ respective existing and future unsubordinated indebtedness and senior to Bausch + Lomb’s and Note Guarantors’ respective future subordinated indebtedness.

The Senior Secured Notes and the guarantees related thereto are effectively pari passu with Bausch + Lomb’s and the Note Guarantors’ respective existing and future indebtedness secured by a first priority lien on the collateral securing the B+L October 2028 Secured Notes and effectively senior to Bausch + Lomb’s and the Note Guarantors’ respective existing and future indebtedness that is unsecured, or that is secured by junior liens, in each case to the extent of the value of the collateral.

In addition, the B+L October 2028 Secured Notes are structurally subordinated to:

(i) all liabilities of any of Bausch + Lomb’s subsidiaries that do not guarantee the B+L Senior Secured Notes and (ii) any of Bausch + Lomb’s debt that is secured by assets that are not collateral.

Upon the occurrence of a change in control (as defined in the indentures governing the B+L October 2028 Secured Notes), unless Bausch + Lomb has exercised its right to redeem all of the notes of a series, holders of the B+L October 2028 Secured Notes may require Bausch + Lomb to repurchase such holder’s notes, in whole or in part, at a purchase price equal to 101 % of the principal amount thereof plus accrued and unpaid interest, but not including, the date of purchase.

The B+L October 2028 Secured Notes are redeemable at the option of Bausch + Lomb, in whole or in part, at any time on or after October 1, 2025, at the redemption prices set forth in the indenture.

Prior to October 1, 2025, Bausch + Lomb may redeem the B+L October 2028 Secured Notes in whole or in part at a redemption price equal to the principal amount of the Notes redeemed plus a make-whole premium.

Prior to October 1, 2025, Bausch + Lomb may, on any one or more occasions redeem up to 40 % of the aggregate principal amount of the October 2028 Secured Notes at a redemption price of 108.375 % of the principal amount thereof, redeemed plus accrued and unpaid interest to, but not including, the date of redemption with the proceeds of one of more equity offerings.

Senior Unsecured Notes

The Senior Unsecured Notes issued by the Company are the Company’s senior unsecured obligations and are jointly and severally guaranteed on a senior unsecured basis by each of its subsidiaries that is a guarantor under the Senior Secured

Credit Facilities.

The Senior Unsecured Notes issued by BHA are senior unsecured obligations of BHA and are jointly and severally guaranteed on a senior unsecured basis by the Company and each of its subsidiaries (other than BHA) that is a guarantor under the Senior Secured Credit Facilities.

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Weighted Average Stated Rate of Interest

The weighted average stated rate of interest for the Company’s outstanding debt obligations as of June 30, 2023 and December 31, 2022 was 7.91 % and 7.74 %, respectively.

The weighted average stated rate of interest for the Company’s outstanding debt obligations as of September 30, 2023 and December 31, 2022 was 8.05 % and 7.74 %, respectively.

Due to the accounting treatment for the New Secured Notes, interest expense in the Company’s financial statements for 2023 and in future periods will not be representative of the weighted average stated rate of interest.

Gain (Loss) on Extinguishment of Debt

During the three months ended June 30, 2022, the Company repurchased and retired outstanding Senior Unsecured Notes with an aggregate par value of $ 481 million in the open market, for an aggregate cost of $ 300 million.

In September 2022, the Company completed the Exchange Offer and recorded a net gain of $ 570 million as described above.

In June 2022, the Company repurchased and retired outstanding Senior Unsecured Notes with an aggregate par value of $ 481 million in the open market, for an aggregate cost of $ 300 million.

In connection with these repurchases, the Company recognized a gain of $ 176 million on extinguishment of debt which represents the differences between the amounts paid to settle the extinguished debt and its carrying value.

During the three months ended June 30, 2022, in connection with the (i) repayment of the June 2025 Term Loan B Facility, the November 2025 Term Loan B Facility and the 2023 Revolving Credit Facility and (ii) redemption of April 2025 Unsecured Notes, the Company incurred a loss on extinguishment of debt of $ 63 million, representing the difference between the amount paid to settle the extinguished debt and the extinguished debt’s carrying value.

In June 2022, in connection with the (i) repayment of the June 2025 Term Loan B Facility, the November 2025 Term Loan B Facility and the 2023 Revolving Credit Facility and (ii) redemption of April 2025 Unsecured Notes, the Company incurred a loss on extinguishment of debt of $ 63 million, representing the difference between the amount paid to settle the extinguished debt and the extinguished debt’s carrying value.

The Company may, from time to time, purchase outstanding debt for cash in open market purchases or privately negotiated transactions.

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Such amendment and restatement increased the number of common shares authorized for issuance under the Amended and Restated 2014 Plan by an additional 7,500,000 common shares, among other things.

Approximately 16,712,000 common shares were available for future grants under the Amended and Restated 2014 Plan as of June 30, 2023.

Approximately 18,238,000 common shares were available for future grants under the Amended and Restated 2014 Plan as of September 30, 2023.

The Company uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans.

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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 were originally authorized under the B+L Plan.

28,000,000 common shares of Bausch + Lomb were originally authorized under the B+L Plan.

Effective April 24, 2023, the shareholders of Bausch + Lomb approved an amendment and restatement of the B+L Plan to increase the number of shares authorized for issuance thereunder by an additional 10,000,000 common shares, resulting in an aggregate of 38,000,000 common shares of Bausch + Lomb authorized for issuance under the Plan (the “Plan Amendment”).

2 unchanged sentences

Generally, stock options have a term of ten years and a three-year vesting period, subject to limited exceptions.

Approximately 18,600,000 Bausch + Lomb common shares were available for future grants as of June 30, 2023.

Approximately 18,900,000 Bausch + Lomb common shares were available for future grants as of September 30, 2023.

Bausch + Lomb uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans.

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The PSUs vest on the four th anniversary from grant date based on Bausch + Lomb’s achievement of absolute share price hurdles, or upon achievement of absolute and relative TSR hurdles in relation to the S&P 500 Index during the four-year performance period.

The following table summarizes the components and classification of the Company’s share-based compensation expenses related to stock options and RSUs for the three and six months ended June 30, 2023 and 2022:

The following table summarizes the components and classification of the Company’s share-based compensation expenses related to stock options and RSUs for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2023 2022 2023 2022

5 unchanged sentences

$ 29 $ 33 $ 103 $ 91

Share-based awards granted for the six months ended June 30, 2023 and 2022 consist of:

Share-based awards granted for the nine months ended September 30, 2023 and 2022 consist of:

Bausch Health Share-Based Awards

25 unchanged sentences

Weighted-average grant date fair value $ 17.96 $ —

As of June 30, 2023, the remaining unrecognized compensation expenses related to all outstanding non-vested stock options, time-based RSUs and performance-based RSUs amounted to $ 196 million, which will be amortized over a weighted-average period of 2.11 years.

As of June 30, 2023, the remaining unrecognized compensation expenses related to all outstanding non-vested stock options, time-based RSUs and performance-based RSUs under the B+L Plan amounted to $ 111 million, which will be amortized over a weighted-average period of 2.30 years.

As of September 30, 2023, the remaining unrecognized compensation expenses related to all outstanding non-vested stock options, time-based RSUs and performance-based RSUs amounted to $ 166 million, which will be amortized over a weighted-average period of 2.03 years.

As of September 30, 2023, the remaining unrecognized compensation expenses related to all outstanding non-vested stock options, time-based RSUs and performance-based RSUs under the B+L Plan amounted to $ 101 million, which will be amortized over a weighted-average period of 2.23 years.

ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss consists of:

(in millions) June 30,

(in millions) September 30,

2023 December 31,

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2023 2022 2023 2022

2 unchanged sentences

$ 153 $ 133 $ 452 $ 387

OTHER (INCOME) EXPENSE, NET

Other (income) expense, net consists of:

OTHER EXPENSE, NET

Other expense, net consists of:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2023 2022 2023 2022

1 unchanged sentence

Acquisition-related contingent consideration 26 4 40 2

Loss (Gain) on sale of assets, net 1 ( 3 ) 1 ( 3 )

Gain on sale of assets, net ( 5 ) — ( 4 ) ( 3 )

Acquired in-process research and development costs — — — 1

2 unchanged sentences

$ 60 $ 4 $ — $ 6

For the three and six months ended June 30, 2023, Litigation and other matters primarily related to insurance recoveries regarding certain litigation matters.

Acquisition-related contingent consideration for the six months ended June 30, 2023, reflects adjustments for changes in estimates in the timing and amounts of the future royalty and milestone payments related to certain branded products.

For the nine months ended September 30, 2023, Litigation and other matters primarily related to insurance recoveries regarding certain litigation matters.

Acquisition-related contingent consideration for the nine months ended September 30, 2023, reflects adjustments for changes in estimates in the timing and amounts of the future royalty and milestone payments related to certain branded products.

Acquisition-related transaction costs for the nine months ended September 30, 2023, primarily related to transaction costs attributable to the acquisitions of XIIDRA ® and the Blink ® Product line by Bausch + Lomb.

For interim financial statement purposes, U.S.

3 unchanged sentences

The Company’s estimated annual effective income tax rate may be revised, if necessary, in each interim period.

Provision for income taxes for the six months ended June 30, 2023 was $ 125 million and included:

(i) $ 39 million of income tax provision for the Company’s ordinary loss for the six months ended June 30, 2023 and (ii) $ 86 million of net income tax provision for discrete items, which includes:

(a) $ 41 million of net income tax expense related to final and potential settlements of various tax audits in the six months ended June 30, 2023, (b) $ 21 million of income tax expense related to changes in uncertain tax positions, (c) $ 18 million of income tax expense associated with the establishment of a valuation allowance against deferred tax assets of B+L’s Canadian parent and (d) $ 7 million of income tax expense associated with stock compensation.

Benefit from income taxes for the six months ended June 30, 2022 was $ 6 million and included:

(i) $ 16 million of income tax expense for the Company’s ordinary loss for the six months ended June 30, 2022 and (ii) $ 22 million of net income tax benefit for discrete items, which includes:

(a) $ 39 million of net income tax benefit recognized for changes in uncertain tax positions and (b) a $ 16 million tax provision associated with filing certain tax returns.

Provision for income taxes for the nine months ended September 30, 2023 was $ 181 million and included:

(i) $ 90 million of income tax provision for the Company’s ordinary loss for the nine months ended September 30, 2023 and (ii) $ 91 million of net income tax provision for discrete items, which includes:

(a) $ 41 million of net income tax expense related to final and potential settlements of various tax audits in the nine months ended September 30, 2023, (b) $ 27 million of income tax expense related to changes in uncertain tax positions, (c) $ 18 million of income tax expense associated with the establishment of a valuation allowance against deferred tax assets of B+L’s Canadian parent and (d) $ 7 million of income tax expense associated with stock compensation.

Provision for income taxes for the nine months ended September 30, 2022 was $ 30 million and included:

(i) $ 42 million of income tax expense for the Company’s ordinary income for the nine months ended September 30, 2022 and (ii) $ 9 million of

net income tax benefit for discrete items, which includes:

(a) $ 37 million of net income tax benefit recognized for changes in uncertain tax positions, (b) a $ 22 million tax provision associated with filing certain tax returns and (c) a $ 5 million tax provision associated with stock compensation.

The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized.

When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made.

The valuation allowance against deferred tax assets was approximately $ 2,200 million as of June 30, 2023 and December 31, 2022.

The valuation allowance against deferred tax assets was approximately $ 2,200 million as of September 30, 2023 and December 31, 2022.

The Company will continue to assess the need for valuation allowances on an ongoing basis.

As of June 30, 2023 and December 31, 2022, the Company had $ 901 million and $ 881 million, respectively, of unrecognized tax benefits, which included $ 43 million and $ 32 million of interest and penalties, respectively.

Of the total unrecognized tax benefits as of June 30, 2023, $ 402 million would reduce the Company’s effective tax rate, if recognized.

The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits at June 30, 2023 could decrease by approximately $ 4 million in the next 12 months as a result of the resolution of certain tax audits and other events.

The Company continues to be under examination by the Canada Revenue Agency.

As of September 30, 2023 and December 31, 2022, the Company had $ 924 million and $ 881 million, respectively, of unrecognized tax benefits, which included $ 48 million and $ 32 million of interest and penalties, respectively.

Of the total unrecognized tax benefits as of September 30, 2023, $ 409 million would reduce the Company’s effective tax rate, if recognized.

The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits at September 30, 2023 could decrease by approximately $ 4 million in the next 12 months as a result of the resolution of certain tax audits and other events.

The Company continues to be under examination by the Canada Revenue Agency (“CRA”).

In the first quarter of 2023, the Company recorded income tax expense related to prior year withholding tax returns.

During October 2023, the Company received a notice of proposed adjustment for the 2017-2018 taxation years from the CRA associated with its Canadian distribution entity.

The Company believes its current reserves are adequate for the eventual resolution of this notice.

On April 19, 2021, the Canadian federal government delivered its 2021 budget which contained proposed measures related to limitations on interest deductibility and changes in relation to international taxation.

Draft legislative proposals pertaining to interest deductibility were initially released for public comment on February 4, 2022, with revised legislative proposals subsequently released on November 3, 2022.

The proposed rules on interest deductibility are expected to be effective no earlier than January 1, 2024.

The proposed rules and their application are complex and could have a material adverse impact on the Company’s consolidated effective tax rate and financial results in future years if enacted as drafted.

On August 4, 2023, the Canadian Department of Finance released an updated version of the draft legislation to implement the excessive interest and financing expenses limitation (EIFEL) rules.

For tax years beginning after October 1, 2023, new rules on interest deductibility will be effective.

The rules are not expected to have a material adverse impact on the Company’s consolidated effective tax rate or financial results in future years.

This legislation does not change the Company’s position that its tax carryforwards in Canada are not expected to be realized.

The Internal Revenue Service (the “IRS”) previously completed its examinations of the Company’s U.S.

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This tentative settlement is subject to further review and approvals before it is finalized.

In anticipation of the finalization of this settlement agreement the Company has recorded an estimate for the impact of the settlement during the first quarter of 2023.

In anticipation of the finalization of this settlement agreement the Company recorded an estimate for the impact of the settlement during the first quarter of 2023.

The Company’s U.S.

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The Company’s subsidiaries in Germany are under audit for tax years 2014 through 2019.

At this time, the Company does not expect that proposed adjustments, if any, would be material to the Company’s Condensed Consolidated Financial Statements.

During the three months ended September 30, 2023, the Company received a preliminary assessment from the German taxing authority that would disallow certain transfer pricing adjustments.

The Company intends to contest this alleged tax deficiency through the appropriate appeals process, and if necessary, intends to continue to contest any alleged tax deficiency through appropriate litigation.

Accordingly, no income tax provision has been recorded as of September 30, 2023.

On November 8, 2022 the Company’s affiliate in the Netherlands received an assessment from the Luxembourg Tax Authorities as successor in interest to its affiliate in Luxembourg for tax years 2018 – 2019 for € 272 million.

2 unchanged sentences

At this time, the Company does not expect that proposed adjustments, if any, would be material to the Company’s Condensed Consolidated Financial Statements.

EARNINGS (LOSS) PER SHARE

Earnings (loss) per share attributable to Bausch Health Companies Inc.

(LOSS) EARNINGS PER SHARE

(Loss) earnings per share attributable to Bausch Health Companies Inc.

is calculated as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions, except per share amounts) 2023 2022 2023 2022

Net income (loss) attributable to Bausch Health Companies Inc.

Net (loss) income attributable to Bausch Health Companies Inc.

$ ( 378 ) $ 399 $ ( 553 ) $ 185

2 unchanged sentences

Diluted weighted-average common shares outstanding $ 365.4 $ 363.4 $ 364.5 $ 363.7

Earnings (loss) per share attributable to Bausch Health Companies Inc.

(Loss) earnings per share attributable to Bausch Health Companies Inc.

Basic $ ( 1.03 ) $ 1.10 $ ( 1.52 ) $ 0.51

Diluted $ ( 1.03 ) $ 1.10 $ ( 1.52 ) $ 0.51

During the six months ended June 30, 2023 and during the three and six months ended June 30, 2022, all potential common shares issuable for stock options and RSUs were excluded from the calculation of diluted loss per share, as the effect of including them would have been anti-dilutive.

The dilutive effect of potential common shares issuable for stock options and RSUs on the weighted-average number of common shares outstanding would have been approximately 1,184,000 common shares for the three months ended June 30, 2022, and approximately 2,859,000 and 2,392,000 common shares for the six months ended June 30, 2023 and 2022, respectively.

During the three and six months ended June 30, 2023, time-based RSUs, performance-based RSUs and stock options to purchase approximately 16,308,000 and 17,613,000 common shares, 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 the three and six months ended June 30, 2022, time-based RSUs, performance-based RSUs and stock options to purchase approximately 15,372,000 and 13,771,000 common shares, 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 each of the three and six months ended June 30, 2023, an additional 90,000 , performance-based RSUs were not included in the computation of diluted earnings per share as the required performance conditions had not been met.

During the three months ended June 30, 2022, 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 the three and nine months ended September 30, 2023, all potential common shares issuable for stock options and RSUs were excluded from the calculation of diluted loss per share, as the effect of including them would have been anti-dilutive.

The dilutive effect of potential common shares issuable for stock options and RSUs on the weighted-average number of common shares outstanding would have been approximately 3,075,000 and 2,931,000 common shares for the three and nine months ended September 30, 2023, respectively.

During the three and nine months ended September 30, 2023, time-based RSUs, performance-based RSUs and stock options to purchase approximately 12,905,000 and 13,024,000 common shares, 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 the three and nine months ended September 30, 2022, time-based RSUs, performance-based RSUs and stock options to purchase approximately 16,008,000 and 15,392,000 common shares, 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 the three and nine months ended September 30, 2022, 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.

LEGAL PROCEEDINGS

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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 June 30, 2023, the Company’s Condensed Consolidated Balance Sheets includes accrued current loss contingencies of $ 326 million related to matters which are both probable and reasonably estimable.

As of September 30, 2023, the Company’s Condensed Consolidated Balance Sheets includes accrued current loss contingencies of $ 348 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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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 Class Actions and Related Matters

Securities Litigation - Opt-Out Litigation

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15-cv-07658) (the “Securities Class Action Settlement”).

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.

As part of the settlement, the Company and the other settling defendants admitted no liability as to the claims against them and denied all allegations of wrongdoing.

On January 31, 2021, the District Court issued an order granting final approval of this settlement.

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and the total number of remaining opt-out actions pending in the District of New Jersey is twenty-one actions.

These individual shareholder actions assert claims under Sections 10(b) and 20(a) of the Exchange Act.

These individual shareholder actions assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Certain of these individual actions assert additional claims, including claims under Section 18 of the Exchange Act, Sections 11, 12(a)(2) and 15 of the Securities Act, common law fraud, negligent misrepresentation and claims under the New Jersey Racketeer Influenced and Corrupt Organizations Act.

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The Company disputes the claims against it and intends to defend itself vigorously.

Derivative Lawsuit – Powers Complaint

On October 2, 2023, a derivative lawsuit captioned Powers v.

Papa, et al .

159699/2023) was filed in the Supreme Court of the State of New York, County of New York by an alleged stockholder of the Company.

The action purports to assert derivative claims on behalf of the Company against the Company’s Board of Directors and certain of its current or former officers and directors.

The action asserts claims for, inter alia, breach of fiduciary duty and waste of corporate assets and alleges that the Defendants breached their fiduciary duties of loyalty and good faith by causing the Company to issue false and/or misleading statements regarding the Company’s proposed spin-off of Bausch + Lomb.

Canadian Securities Litigation

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500-11-055722-181).

The allegations in the proceeding are similar to those made by the plaintiffs in the Catucci class action and in the BlackRock opt-out proceedings.

The allegations in the proceeding are similar to those made by the

plaintiffs in the Catucci class action and in the BlackRock opt-out proceedings.

On that same date, CalSTRS also served the Company with proceedings (Court File No.

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In each case, the Company intends to defend itself vigorously.

Other Securities and RICO Class Actions and Related Matters

Other Securities and RICO Related Matters

Insurance Coverage Lawsuit

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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.

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.

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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.

Trial is currently scheduled to start in December 2024 in the Consolidated State Case.

The Company disputes the claims and intends to vigorously defend these matters.

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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 2724, 16-

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.

The lawsuits, which have been brought as putative class actions by direct purchasers, end payers, and indirect resellers, and as direct actions by direct purchasers, end payers, insurers, hospitals, pharmacies, States, and various Counties, Cities, and Towns, have been or will be consolidated into the MDL.

There are also additional, separate complaints which have been consolidated in the same MDL that do not name the Company or any of its subsidiaries as a defendant.

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 placed in deferred status.

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Patent Litigation/Paragraph IV Matters

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 ® , Duobrii ® , Lumify ® , Nuvessa ® and Trulance ® in the United States and Jublia ® in Canada

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 ® , Duobrii ® , Lotemax ® SM, Lumify ® , Nuvessa ® , Trulance ® and Vyzulta ® in the United States.

Xifaxan ® Paragraph IV Proceedings

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Court of Appeals for the Federal Circuit on May 19, 2023.

The Company’s and Norwich’s appeals are now consolidated.

The Company’s and Norwich’s appeals are now consolidated (the “Norwich Appeal”).

The Norwich Appeal has been fully briefed.

No oral argument date has been set.

In a letter to Norwich on June 2, 2023, the FDA granted tentative approval to Norwich’s ANDA, but confirmed that it is enjoined from granting final approval until October 2029.

On June 5, 2023, Norwich brought a lawsuit against the FDA in the U.S.

District Court for the District of Columbia, alleging that the FDA acted improperly by only granting tentative approval to Norwich’s ANDA rather than final approval (the “Norwich DC Lawsuit”).

District Court for the District of Columbia (the “DC District Court”), alleging that the FDA acted improperly by only granting tentative approval to Norwich’s ANDA rather than final approval (the “Norwich DC Lawsuit”).

In June 2023, the Company intervened in the Norwich DC Lawsuit.

A hearing was held on October 6, 2023.

On November 1, 2023, the DC District Court granted the Company’s and FDA’s motions for summary judgment, thereby ending the lawsuit.

In January 2023, the U.S.

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The filing of this suit triggered a 30 -month stay of the approval of the Auro ANDA for plecanatide tablets.

On October 30, 2023, the litigation with Auro was dismissed in accordance with a settlement between the Company and Auro.

The Company remains confident in the strength of the Trulance ® patents and intends to vigorously pursue this matter and defend its intellectual property.

Xifaxan ® Litigation with Curia IP Holdings, LLC

Curia IP Holdings, LLC (“Curia”) filed a lawsuit against the Company on October 25, 2021, alleging that Xifaxan ® 200 mg and 550 mg tablets infringe certain patents owned by Curia (U.S.

10,745,415, and 10,961,257 (the “Curia Patents”)).

Each of the Curia Patents was filed years after the Company’s launches of Xifaxan ® 200 mg and 550 mg tablets.

On August 17, 2022, the U.S.

District Court for the District of New Jersey dismissed the complaint,

without prejudice.

Curia then filed an amended complaint on September 16, 2022, realleging infringement of its patents.

On August 31, 2023, Curia filed a second lawsuit against the Company alleging that Xifaxan ® 200 mg and 550 mg tablets infringe U.S.

11,739,099 (the “’099 Patent”).

The ‘099 Patent is related to the Curia Patents and was also filed years after the Company’s launches of Xifaxan 200 mg and 550 mg tablets.

The first and second lawsuits filed by Curia are now consolidated.

The Company disputes Curia’s infringement claims against Xifaxan ® 200 mg and 550 mg tablets and will continue to defend this matter.

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”).

PreserVision ® AREDS and PreserVision ® AREDS 2 are OTC eye vitamin formulas for those with moderate-to-advanced age-related degeneration (“AMD”).

The PreserVision ® U.S.

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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;

Thirteen of these proceedings were subsequently settled;

two resulted in a default.

As of the date of this filing, there are two ongoing actions:

As of the date of this filing, there is one ongoing action:

Bausch & Lomb Inc.

& PF Consumer Healthcare 1 LLC v.

ZeaVision LLC, C.A.

4:22-cv-00914-AGF (E.D.

Mo.) and (2) Bausch & Lomb Inc.

& PF Consumer Healthcare 1 LLC v.

SBH Holdings LLC, C.A.

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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.

will 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.

In June and November, 2021, ZeaVision, LLC (“ZeaVision”) filed complaints for patent infringement (asserting three patents) 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 8, 2022, ZeaVision filed a motion to partially lift the stay to allow Case No.

4:21-cv-00739-RWS to proceed, and this motion was denied.

On April 18, 2023, the Court ordered all proceedings stayed pending inter partes review of the patents-in-suit.

The Company disputes the claims and intends to vigorously defend this matter.

The cases were subsequently consolidated.

On August 14, 2023, the parties entered into a settlement agreement resolving all claims in this action.

Shortly thereafter, the court dismissed the case with prejudice.

Lumify ® Paragraph IV Proceedings

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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.

Since then, U.S.

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Those cases have been consolidated and are ongoing in the District of New Jersey, with no trial date set.

remains confident in the strength of the Lumify ® related patents and B&L Inc.

intends to vigorously defend its intellectual property.

The lawsuit against Slayback and its and its licensee, Dr.

Reddy’s Laboratories S.A.

Reddy’s Laboratories, Inc., is ongoing in the District of New Jersey, with no trial date set.

Bausch + Lomb remains confident in the strength of the Lumify ® related patents and intends to vigorously defend its intellectual property.

A Notice of Paragraph IV Certification was received from Lupin Ltd.

(“Lupin”) in January 2022 making similar assertions against the Lumify Patents, in connection with Lupin’s generic brimonidine tartrate solution for which ANDA No.

216716 had been filed by Lupin.

Subsequently, in February 2022, B&L Inc., Bausch + Lomb Ireland Limited and Eye Therapies filed suit against Lupin pursuant to the Hatch-Waxman Act, alleging patent infringement of one or more of the Lumify Patents.

On September 27, 2023, the Parties entered into a settlement agreement, pursuant to which all claims against Lupin were voluntarily dismissed by Bausch + Lomb.

Shortly thereafter, on October 2, 2023, the court signed and entered the stipulated dismissal with respect to Lupin.

In addition to the intellectual property matters described above, in connection with the Vyzulta ® and Lotemax ® SM products, Bausch + Lomb has commenced ongoing infringement proceedings against potential generic competitors in the U.S.

Inter Partes Review Proceedings at the U.S.

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IPR challenges have been brought against patents covering the Company’s branded pharmaceutical products.

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.

7,214,506 (the “‘506 Patent”)) and, on June 6, 2018, issued a written determination invalidating such patent.

An appeal of this decision was filed on August 7, 2018.

On March 13, 2020, the Court of Appeals for the Federal Circuit reversed this decision and remanded the matter back to the PTAB for further proceedings.

As a result of a settlement, a joint motion to terminate the proceedings was filed on November 12, 2020 and, on January 8, 2021, the PTAB granted this motion.

The ‘506 Patent, therefore, remains valid and enforceable and expires in 2026.

Jublia ® is covered by seventeen Orange Book-listed patents owned by the Company or its licensor, which expire in the years 2026 through 2035.

In 2018, the Company received notices of the filing of a number of ANDAs with paragraph IV certification, and timely filed patent infringement suits against these ANDA filers, and, in addition, the Company has also commenced certain patent infringement proceedings in Canada.

All cases in the U.S.

regarding Jublia ® have been settled.

One lawsuit is pending in Canada regarding Jublia ® against Pharmascience Inc.

Mylan and MSN have filed IPR petitions for certain U.S.

patents listed in the FDA Orange Book for Trulance ® (plecanatide).

patents listed in the FDA’s Orange Book for Trulance ® (plecanatide).

On March 21, 2022, Mylan filed a petition for IPR of U.S.

7,041,786, which was then instituted on September 14,

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 against the ‘321, ‘097, ‘024, and ‘231 patents.

7,041,786 (the “’786 Patent”), which was then instituted on September 14, 2022.

On October 12, 2022, MSN also filed a petition for IPR of the ’786 Patent and the PTAB then issued a decision on December 14, 2022, instituting MSN’s IPR and joining it with Mylan’s IPR.

On September 8, 2023, the PTAB issued as decision finding that Mylan and MSN had not shown that the ’786 Patent is unpatentable.

On September 28, 2023, Mylan appealed the PTAB’s September 8th decision to the U.S.

Court of Appeals for the Federal Circuit.

On June 21, 2023, Padagis filed an IPR petition against U.S.

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Plaintiffs also seek pre- and post-judgment interest, exemplary and punitive damages, and attorneys’ fees.

Additionally, two proposed class actions have been filed in Canada against the Company and various Johnson & Johnson entities ( one in the Supreme Court of British Columbia and one in the Superior Court of Quebec), on behalf of persons who have purchased or used Johnson & Johnson’s Baby Powder or Shower to Shower ® .

Additionally, two proposed class actions were filed in Canada against the Company and various Johnson & Johnson entities ( one in the Supreme Court of British Columbia and one in the Superior Court of Quebec), on behalf of persons who have purchased or used Johnson & Johnson’s Baby Powder or Shower to Shower ® .

The class actions allege the use of the product increases certain health risks (British Columbia) or negligence in failing to properly test, failing to warn of health risks, and failing to remove the products from the market in a timely manner (Quebec).

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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 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 60 days pursuant to a preliminary injunction.

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”).

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.

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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 requested a rehearing and on March 22, 2023, the Third Circuit denied LTL’s rehearing request.

Thereafter LTL moved for a stay of the mandate of the Third Circuit’s dismissal decision while LTL sought review by the Supreme Court.

On March 31, 2023, the Third Circuit denied LTL’s stay motion.

At that juncture, the Bankruptcy Court determined it appropriate to discontinue the

proceedings pending there, and on April 4, 2023, entered orders dismissing the bankruptcy case and related adversary proceedings and terminating the preliminary injunction.

However, on April 4, 2023, LTL re-filed for chapter 11 in the Bankruptcy Court and again commenced an adversary proceeding seeking a preliminary injunction enjoining substantially all cases subject to the indemnification agreement.

The Bankruptcy Court granted a temporary restraining order enjoining litigation against the “Protected Parties” including the Bausch entities.

The Bankruptcy Court held a hearing on April 18, 2023, to consider the preliminary injunction, and on April 20, 2023, the Bankruptcy Court ordered a preliminary injunction solely on a limited basis to enjoin the commencement or continuation of any trial against any Protected Party (including the Bausch entities), which the Bankruptcy Court extended to August 22, 2023.

The injunction did not enjoin the commencement of a new suit or any discovery or pre-trial activity in pending suits.

The Bankruptcy Court denied the talc claimants’ motion to have the injunction decision certified for direct appeal to the Third Circuit.

On February 25, 2022, the Bankruptcy Court entered orders denying the motions to dismiss.

The order denying the motions to dismiss was subject to appeal and the Bankruptcy Court certified directly to the United States Court of Appeals for the Third Circuit.

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.

On April 4, 2023, the Bankruptcy Court entered orders dismissing the bankruptcy case and related adversary proceedings.

However, on April 4, 2023, shortly after the issuance of the dismissal order, LTL re-filed for Chapter 11 bankruptcy protection in the Bankruptcy Court.

On or around April 24, 2023, multiple motions to dismiss the newly filed Chapter 11 case were filed and a hearing on the motions to dismiss was held the week of June 27, 2023.

On July 28, 2023, the Bankruptcy Court granted the motions to dismiss LTL’s bankruptcy case and directed the parties to prepare and propose a form of Order consistent with the Court’s dismissal.

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.

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.

On July 28, 2023, the Bankruptcy Court granted the motions to dismiss, and on August 11, 2023, entered the order dismissing the second Chapter 11 case.

On August 24, 2023, LTL and certain supporting creditors and tort claimants filed notices of appeal of the dismissal order.

On September 20, 2023, the Bankruptcy Court granted the motion and certified the appeals to the Third Circuit.

On October 20, 2023, the Third Circuit accepted the appeal, and a briefing schedule is pending.

During the pendency of LTL’s bankruptcy cases, the Bankruptcy Court extended a preliminary injunction that had stayed substantially all cases subject to the indemnification agreement related to Johnson & Johnson’s talc liability, which injunction was terminated in connection with the bankruptcy case dismissal.

After the dismissal of the Chapter 11 case, the Company’s position vis a vis Johnson & Johnson returned to the status quo prior to the filing.

The litigation against the Company and other defendants is no longer stayed, and LTL and Johnson & Johnson continue to have indemnification obligations running to the Company and its affiliates for Shower to Shower ® related product liability litigation.

General Civil Actions

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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 also 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.

The declaratory judgment action also alleges that the potential future 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 underlying individual opt-out actions assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (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.

On March 31, 2022, the Company and Bausch + Lomb removed the declaratory judgment action to the U.S.

District Court for the District of New Jersey.

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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.

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.

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Following the entry of a preliminary injunction applicable to this case, which was extended until August 26, 2023, the Ninth Circuit extended the stay to June 15, 2023.

On June 22, 2023, Johnson & Johnson and LTL filed a status report requesting the stay be extended to August 26, 2023, consistent with the extension of the preliminary injunction by the bankruptcy court.

The Ninth Circuit has not yet acted on that request.

The Company and Bausch Health US dispute the claims against them and intend to defend this lawsuit vigorously.

On June 22, 2023, J&J/ LTL filed a status report requesting the stay be extended to August 26, 2023, consistent with the extension of the preliminary injunction by the bankruptcy court.

On August 15, 2023, J&J filed a supplemental status report notifying the Ninth Circuit that the second bankruptcy proceeding was dismissed on August 11, 2023, so the stay could be lifted and briefing could proceed to conclusion and setting of oral argument.

On September 13, 2023, the Ninth Circuit lifted the stay and indicated the matter would be placed back on calendar at some point in the future, but no remaining briefing schedule or oral argument date has been issued yet.

The Ninth Circuit issued a notice related to potential oral argument dates in February and March 2024, but no date has been set yet.

Bausch Health US disputes the claims in this lawsuit and will defend it vigorously.

New Mexico Attorney General Consumer Protection Action

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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.

Following the Third Circuit’s decision requiring dismissal of the main bankruptcy proceeding, and its subsequent denials of LTL’s requests for a rehearing or a stay pending disposition by the Supreme Court, on April 4, 2023, the Bankruptcy Court entered orders dismissing the bankruptcy case and related adversary proceedings.

However, also on April 4, 2023, LTL re-filed for chapter 11 in the Bankruptcy Court and again sought a preliminary injunction, though it does not currently include

this lawsuit.

The Bankruptcy Court did not grant the broad preliminary injunction requested and, instead, issued a preliminary injunction solely on a limited basis to enjoin the commencement or continuation of any trial against any Protected Party.

However, this action remains stayed due to a separate September 13, 2022, stay order from the New Mexico Supreme Court in a pending appeal from a Motion to Compel filed by Johnson & Johnson.

Accordingly, at this time this matter remains stayed pending the outcome of that appeal.

However, also on April 4, 2023, LTL re-filed for Chapter 11 bankruptcy protection in the Bankruptcy Court and again sought a preliminary injunction, though it did not include this lawsuit.

The Bankruptcy Court ultimately dismissed LTL’s second bankruptcy case.

Accordingly, this suit has returned to its status quo prior to LTL’s filing.

The Company and Bausch Health US dispute the claims against them, and this lawsuit will be defended vigorously.

Other General Civil Actions

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, asserting claims for breach of contract and declaratory relief.

On January 28, 2019, former Salix Pharmaceuticals, Ltd.

(“Salix Ltd.”) 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.

The lawsuit arises out of the contractual termination of approximately $ 30 million in unvested equity awards following the determination by the Salix Ltd.

The lawsuit arose out of the contractual termination of approximately $ 30 million in unvested equity awards following the determination by the Salix Ltd.

Board of Directors that Logan intentionally engaged in wrongdoing that resulted, or would reasonably be expected to result, in material harm to Salix Ltd., or to the business or reputation of Salix Ltd.

Logan seeks the restoration of the unvested equity awards and a declaration regarding certain rights related to indemnification.

Logan sought the restoration of the unvested equity awards and a declaration regarding certain rights related to indemnification.

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 11, 2023.

The Company disputes the claims against it and intends to defend itself vigorously.

On September 8, 2023, Salix Ltd.

and Bausch Health Americas reached an agreement in principle, subject to a final settlement agreement, to resolve the matter, which includes no admission of wrongdoing or liability as to the claims asserted.

Doctors Allergy Formula Lawsuit

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On June 14, 2023, Bausch Health Americas filed a Notice of Appeal as to the Decision and Order.

Bausch Health Americas disputes the claims against it and intends to continue to defend itself vigorously.

Bausch Health Americas disputes the claims against it and this lawsuit will be defended vigorously.

Apriso ® Qui Tam Litigation

In 2018, a qui tam complaint, captioned United States ex rel.

Silbersher v.

Valeant Pharmaceuticals Int’l, Inc., et al.

4:18-cv-01496), was filed in the U.S.

District Court for the Northern District of California against the Company, certain of its subsidiaries (collectively, the “Company”), and a third party, claiming that their alleged misrepresentations before the U.S.

Patent Office ultimately resulted in false claims for payment being made to federal and state healthcare payors for Apriso ® .

The complaint asserts claims seeking, inter alia , damages, civil penalties and attorneys’ fees under the federal False Claims Act and the false claims acts of several states.

In May 2020, the District Court granted defendants’ motion to dismiss, holding that Plaintiff-relator’s qui tam action was precluded by the False Claims Act’s public disclosure bar.

Plaintiff-relator appealed to the U.S.

Court of Appeals for the Ninth Circuit.

In August 2023, the Court of Appeals reversed the District Court’s order and remanded to the District Court for further proceedings.

In September 2023, the Company filed a petition for rehearing or rehearing en banc with the Court of Appeals, which is currently pending.

The Company disputes the claims against it and intends to defend itself vigorously, including if the action is remanded to the District Court.

SEGMENT INFORMATION

17 unchanged sentences

Segment revenues and profits were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 2023 2022

17 unchanged sentences

Restructuring, integration, separation and IPO costs ( 14 ) ( 10 ) ( 40 ) ( 58 )

Other income (expense), net 83 — 60 ( 2 )

Other expense, net ( 60 ) ( 4 ) — ( 6 )

Operating income 14 244 601 690

3 unchanged sentences

Foreign exchange and other ( 7 ) 7 ( 38 ) 4

Income (loss) before income taxes $ 79 $ ( 129 ) $ ( 57 ) $ ( 211 )

(Loss) income before income taxes $ ( 326 ) $ 439 $ ( 383 ) $ 228

Revenues by Segment and Product Category

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(in millions) Salix International Solta Medical Diversified Bausch + Lomb Total

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Pharmaceuticals $ 613 $ 63 $ — $ 210 $ 113 $ 999

4 unchanged sentences

$ 614 $ 275 $ 83 $ 259 $ 1,007 $ 2,238

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Pharmaceuticals $ 543 $ 68 $ — $ 206 $ 118 $ 935

4 unchanged sentences

$ 544 $ 250 $ 72 $ 238 $ 942 $ 2,046

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Pharmaceuticals $ 1,668 $ 178 $ — $ 567 $ 355 $ 2,768

4 unchanged sentences

$ 1,667 $ 781 $ 244 $ 684 $ 2,973 $ 6,349

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Pharmaceuticals $ 1,508 $ 192 $ — $ 608 $ 339 $ 2,647

4 unchanged sentences

$ 1,509 $ 727 $ 201 $ 722 $ 2,772 $ 5,931

The top ten products for the six months ended June 30, 2023 and 2022 represented 47 % and 48 % of total revenues for the six months ended June 30, 2023 and 2022, respectively.

The top ten products for the nine months ended September 30, 2023 and 2022 represented 48 % of total revenues for each of the nine months ended September 30, 2023 and 2022, respectively.

Geographic Information

Revenues are attributed to a geographic region based on the location of the customer and were as follows:

Three Months Ended June 30, Six Months Ended June 30, 2023

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 2023 2022

6 unchanged sentences

Japan 47 47 145 148

Russia 35 59 105 122

Germany 34 32 119 112

United Kingdom 32 28 92 85

Russia 36 38 70 63

South Korea 24 19 69 58

Spain 20 17 67 61

Italy 20 17 64 60

South Korea 23 20 45 39

Other 242 221 732 647

2 unchanged sentences

Customers that accounted for 10% or more of total revenues were as follows:

Six Months Ended June 30, 2023

Nine Months Ended September 30,

AmerisourceBergen Corporation 19 % 16 %

1 unchanged sentence

Cardinal Health, Inc.

SUBSEQUENT EVENTS

Acquisition of Blink ® Product Line

In July 2023, Bausch + Lomb entered into a purchase agreement with Johnson & Johnson Vision to acquire its Blink ® product line of eye and contact lens drops.

This acquisition was made by Bausch + Lomb to continue to grow its global over-the-counter business.

Under the terms of the agreement, Bausch + Lomb, through its affiliate, agreed to acquire the Blink ® product line of eye and contact lens drops for an upfront cash payment of $ 107 million.

As this transaction closed during July 2023, Bausch + Lomb is still finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed.

Accounts Receivable Credit Facility

During the period July 1, 2023 through August 3, 2023, the Company has drawn $ 350 million, in the aggregate, of borrowings under its AR Credit Facility.

2027 Revolving Credit Facility

During July 2023, the Company repaid the outstanding amount under its 2027 Revolving Credit Facility.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements