What changed in this filing

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Item 9A. Controls and Procedures

2025-02-20 compared with 2024-02-22 · 832 added, 761 removed, 2313 unchanged (41% of the section changed)

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Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2024 based on the framework described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on that evaluation, management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2023.

In accordance with SEC staff guidance, which allows companies to exclude acquisitions from management’s report on internal control over financial reporting for the first year after acquisition, management’s evaluation and conclusion of internal control over financial reporting, as of December 31, 2023, did not include the internal controls related to the XIIDRA Acquisition, which was acquired during September 2023.

Total assets and revenues attributable to the XIIDRA Acquisition, represented approximately 1% of the Company’s consolidated assets and revenues, respectively, as of, and for the year ended December 31, 2023.

Based on that evaluation,

management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2024.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

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Other Information

On November 6, 2023 , Ms.

Seana Carson , Executive Vice President, General Counsel of the Company, adopted a trading arrangement for the sale of securities of the Company’s common stock (a “Rule 10b5-1 Trading Plan”) that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c).

Carson’s Rule 10b5-1 Trading Plan, which is scheduled to expire on December 31, 2024, provides for the sale of up to 30% of the number of shares of Company common stock that she will receive after the tax withholding obligations due upon vesting.

The total number of shares of Company common stock subject to Ms.

Carson’s Rule 10b5-1 Trading Plan before withholding taxes is 43,303 sha res.

On February 13, 2025, in accordance with the delegation provided by the Board of Directors (the “Board”) of Bausch Health Companies Inc.

(the “Company”), the Talent and Compensation Committee of the Board (the” Committee”) approved a change to the compensation of Thomas J.

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

Appio’s performance.

The Committee increased Mr.

Appio’s target annual cash bonus opportunity to 150% of his base salary commencing with the annual incentive program for 2025.

Also, on February 13, 2025, the Committee approved changes to the compensation of Mr.

Jean-Jacques Charhon, Executive Vice President and Chief Financial Officer, and Ms.

Seana Carson, Executive Vice President and General Counsel based on a review of market data and Mr.

Charhon’s and Ms.

Carson’s performance.

The Committee increased Mr.

Charhon’s target annual cash bonus opportunity to 75% of his base salary commencing with the annual incentive program for 2025 and increased Ms.

Carson’s annual base salary to $650,000 effective March 24, 2025, and her target annual cash bonus opportunity to 75% of her base salary commencing with the annual incentive program for 2025 (which, for Ms.

Carson, will be converted into and paid in Canadian dollars).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Information required under this Item is incorporated herein by reference from information included in the 2025 Proxy Statement.

Code of Ethics

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

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We intend to satisfy the SEC disclosure requirements regarding amendments to, or waivers from, any provisions of our Code of Conduct on our website.

Insider Trading Policies

We have adopted an Insider Trading Policy and a Blackout Policy that govern the purchase, sale and/or other dispositions of our securities by us and by our directors, officers and employees, as well as their immediate family members and entities owned or controlled by them, and that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable exchange listing standards.

Copies of our Insider Trading Policy and our Blackout Policy are filed as Exhibits 19.1 and 19.2, respectively, to this Form 10-K.

Executive Compensation

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

10.2 Bausch Health Companies Inc.

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

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

10.3 Bausch Health Companies Inc.

2014 Omnibus Incentive Plan (As Amended and Restated, Effective as of May 16, 2023), originally filed as Exhibit B to the Company’s definitive proxy statement (File No.

001-14956) filed on April 6, 2023, which is incorporated by reference herein.

10.4 Bausch Health Companies Inc.

2014 Omnibus Incentive Plan (as Amended and Restated, Effective as of May 14, 2024), originally filed as Exhibit B to the Company’s definitive proxy statement (File No.

001-14956) filed on April 4, 2024, which is incorporated by reference herein.†

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

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10.9 Form of Stock Option Grant Agreement (Nonstatutory Stock Options), under the Amended and Restated 2014 Omnibus Incentive Plan, originally filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed on March 1, 2017, which is incorporated by reference herein.†

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

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

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

10.12 Form of 2021 Share Unit Grant Agreement (Performance Vesting) (Performance Restricted Share Units), under the Amended and Restated 2014 Omnibus Incentive Plan, originally filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed on May 4, 2021, which is incorporated by reference herein.†

10.13 Form of 2021 Share Unit Grant Agreement (TSR Performance Restricted Share Units), under the Amended and Restated 2014 Omnibus Incentive Plan, originally filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed on November 2, 2021, which is incorporated by reference herein.†

10.14 Form of PSU Award Agreement, originally filed as Exhibit 10.1 to the Company’s Current Report on Form 10-Q filed on May 4, 2023, which is incorporated by reference herein.

10.15 Valeant Pharmaceuticals International, Inc.

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

10.15 Bausch Health Companies Inc.

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

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

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

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

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

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

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

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

10.25 Offer Letter regarding Appointment of John Barresi as Interim Chief Financial Officer, dated as of September 26, 2023, originally filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 filed on May 2, 2024, which is incorporated by reference herein.†

10.26 Letter dated as of July 18, 2024, amending the offer letter to John Barresi, dated as of September 30, 2023, originally filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 filed on October 30, 2024, which is incorporated by reference herein.†

10.27 Employment Agreement, dated as of July 15, 2024 between Bausch health Companies Inc.

and Jean-Jacques Charhon, originally filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 filed on October 30, 2024, which is incorporated by reference herein.†

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

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

10.47 Amended and Restated Employee Matters Agreement dated as of July 31, 2024, by and between Bausch Health Companies Inc.

and Bausch + Lomb Corporation, originally filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed on August 1, 2024, which is incorporated by reference herein.

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

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10.57 Credit and Security Agreement, dated June 30, 2023, by and among Bausch Receivables Funding LP, as Borrower, Bausch Receivables Funding GP ULC, Bausch Health US, LLC, as the Master Servicer, GLAS USA LLC, as Administrative Agent, GLAS Americas LLC, as Collateral Agent, KKR Capital Markets LLC, as Left Lead Arranger, KKR Credit Advisors (US) LLC, as Structuring Advisor, and the Lenders from time to time party thereto, originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 7, 2023, which is incorporated by reference herein.

10.55 First Amendment to Credit and Security Agreement, dated as of August 9, 2023, amending the Credit and Security Agreement, dated June 30, 2023, by and among Bausch Receivables Funding LP, as Borrower, Bausch Receivables Funding GP ULC, Bausch Health US, LLC, as the Master Servicer, GLAS USA LLC, as Administrative Agent, GLAS Americas LLC, as Collateral Agent, KKR Capital Markets LLC, as Left Lead Arranger, KKR Credit Advisors (US) LLC, as Structuring Advisor, and the Lenders from time to time party thereto.*

10.58 First Amendment to Credit and Security Agreement, dated as of August 9, 2023, amending the Credit and Security Agreement, dated June 30, 2023, by and among Bausch Receivables Funding LP, as Borrower, Bausch Receivables Funding GP ULC, Bausch Health US, LLC, as the Master Servicer, GLAS USA LLC, as Administrative Agent, GLAS Americas LLC, as Collateral Agent, KKR Capital Markets LLC, as Left Lead Arranger, KKR Credit Advisors (US) LLC, as Structuring Advisor, and the Lenders from time to time party thereto, originally filed as Exhibit 10.55 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 22, 2024 and incorporated by reference herein.

10.59 Second Amendment to Credit and Security Agreement, dated as of March 28, 2024, amending the Credit and Security Agreement, dated June 30, 2023, by and among Bausch Receivables Funding LP, as Borrower, Bausch Receivables Funding GP ULC, Bausch Health US, LLC, as the Master Servicer, GLAS USA LLC, as Administrative Agent, GLAS Americas LLC, as Collateral Agent, KKR Capital Markets LLC, as Left Lead Arranger, KKR Credit Advisors (US) LLC, as Structuring Advisor, and the Lenders from time to time party thereto, originally filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 filed on May 2, 2024, which is incorporated by reference herein.

10.60 Credit Agreement, dated as of May 10, 2022, as amended by the First Incremental Amendment, dated as of September 29, 2023, by and among Bausch + Lomb Corporation, certain subsidiaries of Bausch + Lomb Corporation as subsidiary guarantors, the lenders party thereto, Citibank, N.A., as collateral agent thereto, Goldman Sachs Bank USA, as term facility administrative agent thereto and JPMorgan Chase Bank, N.A., as first incremental term facility administrative agent thereto, originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 29, 2023, which is incorporated by reference herein.

10.61 Credit Agreement, dated as of May 10, 2022, as amended by the Second Incremental Amendment, dated as of November 1, 2022, by and among Bausch + Lomb Corporation, certain subsidiaries of Bausch + Lomb Corporation as subsidiary guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as second incremental term facility administrative agent, originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 1, 2024, which is incorporated by reference herein.

19.1* Bausch Health Companies Inc.

2014 Omnibus Incentive Plan (As Amended and Restated, Effective as of May 16, 2023), originally filed as Exhibit B to the Company’s definitive proxy statement (File No.

001-14956) filed on April 6, 2023, which is incorporated by reference herein.

Blackout Policy.

19.2* Bausch Health Companies Inc.

Insider Trading Policy.

21.1* Subsidiaries of Bausch Health Companies Inc.

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97 Bausch Health Companies Inc.

Compensation Recoupment Policy dated as of July 20, 2023*†

Compensation Recoupment Policy dated as of July 20, 2023, originally filed as Exhibit 97 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 22, 2024, which is incorporated by reference herein.

101.INS* Inline XBRL Instance Document

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Chief Executive Officer and Director February 19, 2025

Senior Vice President, Controller, and Chief Accounting Officer

Interim Chief Financial Officer

(Principal Financial and Accounting Officer) February 22, 2024

/s/ JEAN-JACQUES CHARHON

Jean-Jacques Charhon

Executive Vice President, Chief Financial Officer (Principal Financial Officer) February 19, 2025

Senior Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) February 19, 2025

Chairperson of the Board, Director February 19, 2025

/s/ BRETT ICAHN

/s/ CHRISTIAN A.

Director February 19, 2025

/s/ STEVEN D.

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Director February 19, 2025

/s/ RUSSEL C.

Director February 19, 2025

/s/ THOMAS W.

Director February 22, 2024

BAUSCH HEALTH COMPANIES INC.

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, management has excluded the XIIDRA Acquisition (“XIIDRA”) from its assessment of internal control over financial reporting as of December 31, 2023, because it was acquired by the Company in a purchase business combination during 2023.

We have also excluded XIIDRA from our audit of internal control over financial reporting.

XIIDRA is a wholly-owned business whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 1% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

Emphasis of Matter

As discussed in Note 10 to the consolidated financial statements, the Company has $1,680 million of principal debt obligations due on November 1, 2025, $535 million due in December 2025 as well as $602 million in April 2026 and has entered into a Bridge Facility.

Management’s evaluation of, and plans with respect to, these maturities are described in Note 10 under the headings “Maturities and Mandatory Payments” and “Bridge Facility”.

Definition and Limitations of Internal Control over Financial Reporting

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Medicaid Rebates and Sales Returns Allowances

As described in Note 2 to the consolidated financial statements, gross product sales are subject to a variety of deductions in arriving at reported net product sales.

A s described in Note 2 to the consolidated financial statements, gross product sales are subject to a variety of deductions in arriving at reported net product sales.

The transaction price for product sales is typically adjusted for variable consideration, which may be in the form of cash discounts, allowances, returns, rebates, chargebacks and distribution fees paid to customers.

The provisions for these deductions are recorded concurrently with the recognition of gross product sales revenue as a reduction in revenue.

Provisions for these deductions are recorded concurrently with the recognition of gross product sales revenue as a reduction in revenue.

The variable consideration provisions, either recognized within accrued and other current liabilities or as a reduction of trade receivables, included $372 million related to returns allowances and $1,421 million related to rebates, including Medicaid rebates, as of December 31, 2024.

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

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

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

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

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

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

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

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

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

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

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

Goodwill Impairment Assessments – Dermatology, Neurology, Generics, Vision Care, Pharmaceuticals, and Surgical Reporting Units

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $11,183 million as of December 31, 2023, and the goodwill associated with the Dermatology reporting unit, the Neurology reporting unit, the Generics reporting unit, and the Bausch + Lomb segment was $329 million, $1,177 million, $227 million and $5,314 million, respectively.

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

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

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

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

Goodwill Impairment Assessments – Dermatology and Generics Reporting Units

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $11,087 million as of December 31, 2024, and the goodwill associated with the Dermatology and Generics reporting units was $329 million and $227 million, respectively.

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

Management performs its annual impairment test by first assessing qualitative factors.

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

Goodwill impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value.

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

During the third quarter of 2023, as a result of lower realized pricing, discontinuation of certain products as a result of impact of recent legislation, revised expectations of future selling, advertising, and promotion costs to mitigate further revenue erosion, and increases in market interest rates, management determined that the fair value of the Dermatology reporting unit could be less than its carrying value, and therefore, a quantitative fair value test was performed, resulting in the recognition of a goodwill impairment of $151 million.

In addition, during the same quarter, as a result of changing market dynamics driven by recent legislation, changes to the future expected commercial insurance coverage for certain key products, a projected shift in the channels of business, and increases in market interest rates, management determined 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, resulting in the recognition of a goodwill impairment of $251 million.

During the annual goodwill impairment test as of October 1, 2023, management performed separate quantitative fair value tests for the Generics, Vision Care, Pharmaceuticals, and Surgical reporting units.

As a result of revisions to long-term forecasts to reflect shifting market dynamics that management expects to intensify in the future, including increased competition with respect to generic pharmaceuticals which impacts both pricing and potential market share, the carrying value of the Generics reporting unit exceeded its fair value and the Company recognized a goodwill impairment of $91 million for the Generics reporting unit.

For the Vision Care, Surgical, and Pharmaceuticals reporting units, the fair value exceeded the carrying value and therefore, management determined there was no impairment to goodwill.

During the annual goodwill impairment test as of October 1, 2024, management performed separate quantitative fair value tests for the Dermatology and Generics reporting units.

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

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

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, discount rates, and terminal growth rates for the Dermatology, Neurology, Generics, and Surgical reporting units and revenue growth rates and discount rates for the Vision Care and Pharmaceuticals reporting units;

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments of the Dermatology and Generics reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Dermatology and Generics reporting units;

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

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

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

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

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units;

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Dermatology and Generics reporting units;

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

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

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

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

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

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

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

XIIDRA Acquisition - Valuation of a Product Brand

As described in Note 3 to the consolidated financial statements, on September 29, 2023, the Company consummated the XIIDRA acquisition for an aggregate consideration of approximately $1,753 million.

Of the intangible assets acquired, $1,595 million of product brand was recorded.

The fair value of the identifiable intangible asset was determined using the income

approach, which requires a forecast of the expected future cash flows, including revenue growth rates, cost of goods sold, operating expenses, and discount rate.

The principal considerations for our determination that performing procedures relating to the valuation of the product brand acquired in the XIIDRA acquisition is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the acquired product brand;

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

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

These procedures included testing the effectiveness of controls relating to acquisition accounting, including controls over management’s valuation of the product brand.

These procedures also included, among others, (i) reading the stock and asset purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the product brand;

(iii) evaluating the appropriateness of the income approach used by management;

(iv) testing the completeness and accuracy of the underlying data used by management in the income approach;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, cost of goods sold, operating expenses, and discount rate.

Evaluating management’s assumptions related to revenue growth rates, cost of goods sold, and operating expenses involved considering (i) the current and past performance of XIIDRA;

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

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

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

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

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income approach and (ii) the reasonableness of the discount rate assumption.

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

/s/ PricewaterhouseCoopers LLP

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Cash and cash equivalents $ 1,181 $ 947

Restricted cash and other settlement deposits 15 27

Restricted cash 20 15

Trade receivables, net 2,140 1,998

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Commitments and contingencies (Notes 20 and 21)

(Deficit) Equity

Common shares, no par value, unlimited shares authorized, 365,238,917 and 361,898,846 issued and outstanding at December 31, 2023 and 2022, respectively

Common shares, no par value, unlimited shares authorized, 367,843,058 and 365,238,917

issued and outstanding at December 31, 2024 and 2023, respectively

10,490 10,423

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Noncontrolling interest 957 940

Total (deficit) equity ( 82 ) 260

Total liabilities and (deficit) equity $ 27,350 $ 25,686

Total deficit ( 322 ) ( 82 )

Total liabilities and deficit $ 26,523 $ 27,350

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

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Goodwill impairments — 493 824

Asset impairments, including loss on assets held for sale 54 15 234

Asset impairments 29 54 15

Restructuring, integration, separation and IPO costs 32 62 63

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Interest expense ( 1,388 ) ( 1,328 ) ( 1,464 )

Gain (loss) on extinguishment of debt 1 875 ( 62 )

Gain on extinguishment of debt 23 1 875

Foreign exchange and other ( 47 ) ( 52 ) ( 8 )

Loss before income taxes ( 390 ) ( 129 ) ( 1,024 )

(Provision for) benefit from income taxes ( 221 ) ( 83 ) 87

Income (loss) before income taxes 167 ( 390 ) ( 129 )

Provision for income taxes ( 239 ) ( 221 ) ( 83 )

Net loss ( 72 ) ( 611 ) ( 212 )

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Amortization or settlement recognition of net loss 2 3 10

Income tax (expense) benefit ( 1 ) ( 3 ) 1

Income tax expense — ( 1 ) ( 3 )

Foreign currency impact — ( 1 ) 1

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Foreign currency translation adjustment ( 283 ) 170 ( 257 )

Other comprehensive income (loss) 170 ( 256 ) ( 130 )

Other comprehensive (loss) income ( 282 ) 170 ( 256 )

Comprehensive loss ( 354 ) ( 441 ) ( 468 )

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Deficit Noncontrolling

Interest Total

Equity (Deficit)

Interest Total (Deficit)

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

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

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

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

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

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

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Balance, December 31, 2022 361.9 10,391 159 ( 9,186 ) ( 2,056 ) ( 692 ) 952 260

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

Common shares issued under share-based compensation plans 3.3 32 ( 32 ) — — — — —

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Employee withholding taxes related to share-based awards — — ( 24 ) — — ( 24 ) — ( 24 )

Vesting of B+L equity compensation — — ( 21 ) — — ( 21 ) 21 —

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

Net (loss) income — — — ( 225 ) — ( 225 ) 13 ( 212 )

Other comprehensive (loss) income — — — — ( 269 ) ( 269 ) 13 ( 256 )

Net loss — — — ( 592 ) — ( 592 ) ( 19 ) ( 611 )

Other comprehensive income (loss) — — — — 175 175 ( 5 ) 170

Balance, December 31, 2023 365.2 10,423 214 ( 9,778 ) ( 1,881 ) ( 1,022 ) 940 ( 82 )

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Net loss — — — ( 46 ) — ( 46 ) ( 26 ) ( 72 )

Other comprehensive income (loss) — — — — 175 175 ( 5 ) 170

Other comprehensive (loss) income — — — — ( 298 ) ( 298 ) 16 ( 282 )

Balance, December 31, 2024 367.8 $ 10,490 $ 234 $ ( 9,824 ) $ ( 2,179 ) $ ( 1,279 ) $ 957 $ ( 322 )

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Amortization and write-off of debt discounts and debt issuance costs 55 65 99

Asset impairments, including loss on assets held for sale 54 15 234

Asset impairments 29 54 15

Goodwill impairment — 493 824

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Gain on extinguishment of debt ( 23 ) ( 1 ) ( 875 )

Third party fees paid in connection with the Exchange Offer ( 2 ) ( 34 ) —

Third party fees paid in connection with the 2022 Exchange — ( 2 ) ( 34 )

Payments of contingent consideration adjustments, including accretion ( 10 ) ( 10 ) ( 2 )

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Cash Flows From Investing Activities

Acquisition of businesses, net of cash acquired ( 1,890 ) ( 45 ) —

Acquisition of intangible assets and other assets ( 57 ) ( 50 ) ( 14 )

Acquisitions and other investments ( 136 ) ( 1,890 ) ( 45 )

Purchases of property, plant and equipment ( 337 ) ( 215 ) ( 218 )

Acquisition of intangible assets and other assets ( 3 ) ( 57 ) ( 50 )

Purchases of marketable securities ( 12 ) ( 27 ) ( 17 )

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Interest settlements from cross-currency swaps 13 13 —

Net cash (used in) provided by investing activities ( 2,145 ) ( 303 ) 409

Net cash used in investing activities ( 454 ) ( 2,145 ) ( 303 )

Cash Flows From Financing Activities

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Other ( 11 ) ( 11 ) ( 11 )

Net cash provided by (used in) financing activities 1,475 ( 474 ) ( 1,513 )

Net cash (used in) provided by financing activities ( 868 ) 1,475 ( 474 )

Effect of exchange rate changes on cash and cash equivalents ( 36 ) 9 ( 23 )

Net increase (decrease) in cash, cash equivalents, restricted cash and other settlement deposits 239 371 ( 1,528 )

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

Cash, cash equivalents, restricted cash and other settlement deposits, end of period $ 962 $ 591 $ 2,119

Cash, cash equivalents, restricted cash and other settlement deposits, beginning of year 962 591 2,119

Cash, cash equivalents, restricted cash and other settlement deposits, end of year $ 1,201 $ 962 $ 591

Cash and cash equivalents, end of year $ 1,181 $ 947 $ 564

Restricted cash and other settlement deposits, end of year 20 15 27

Cash, cash equivalents, restricted cash and other settlement deposits, end of period $ 962 $ 591 $ 2,119

Cash, cash equivalents and restricted cash, end of year $ 1,201 $ 962 $ 591

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

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Separation of the Bausch + Lomb Eye Health Business

On August 6, 2020, the Company announced its plan to separate its eye health business, consisting of its Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals (formerly known as Ophthalmic Pharmaceuticals) businesses into an independent publicly traded entity, Bausch + Lomb, from the remainder of Bausch Health Companies Inc.

On August 6, 2020, the Company announced its plan to separate its eye health business, consisting of its Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals businesses into an independent publicly traded entity, Bausch + Lomb, from the remainder of Bausch Health Companies Inc.

(the “B+L Separation”).

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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 88 % of Bausch + Lomb’s outstanding common shares as of December 31, 2024.

The completion of the full B+L Separation, which includes the transfer of all or a portion of the Company’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 factors and considerations related to completing the B+L Separation, including the effect of the Norwich Legal Decision (see “ Xifaxan ® Paragraph IV Proceedings ” of Note 20, “LEGAL PROCEEDINGS”) on the B+L Separation.

The completion of the full B+L Separation, which may be accomplished by the transfer of all or a portion of the Company’s remaining direct or indirect equity interest in Bausch + Lomb to its shareholders (the “Distribution”), the monetization of all or a portion of the Company’s ownership interest in Bausch + Lomb, or a combination thereof, is subject to the achievement of targeted debt leverage ratios and the receipt of any 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 Xifaxan ® Generics Litigation (see “Xifaxan ® Paragraph IV Proceedings” of Note 20, “LEGAL PROCEEDINGS”).

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

(i) a diversified pharmaceutical company comprised of the Salix, International, Diversified (dentistry, neurology, dermatology and generics pharmaceutical), and Solta Medical aesthetic medical device businesses and (ii) a fully integrated eye health company which consists of the Bausch + Lomb Vision Care, Surgical and Pharmaceuticals businesses.

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

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

Suspended Initial Public Offering of Solta Medical Business

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

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

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

Use of Estimates

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This includes estimates and assumptions regarding the nature, timing and extent of certain global macroeconomic conditions, including, but not limited to, those related to inflation and supply chain, will have on its operations and cash flows.

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 financial statements and the reported amounts of revenues and expenses during the reporting periods.

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 financial statements and the reported amounts of revenues and expenses during the reporting periods.

Significant estimates made by management include:

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reporting unit fair values for testing goodwill for impairment and allocating goodwill to new reporting unit structures on a relative fair value basis;

acquisition-related contingent consideration liabilities;

provisions for loss contingencies;

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If the acquired net assets do not constitute a business, the transaction is accounted for as an asset acquisition and no goodwill is recognized.

In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is charged to Other expense at the acquisition date and any future contingent consideration is not recorded until it becomes probable.

In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is charged to Other expense at the acquisition date and any contingent consideration is not recorded until it becomes probable.

Fair Value of Financial Instruments

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

comprehensive loss until either the sale or complete, or substantially complete, liquidation of the subsidiary.

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

No portion of the cross-currency swaps was ineffective.

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wholesaler customers accounted for approximately 45 % of net trade receivables.

In addition, as of December 31, 2023 and 2022, the Company’s net trade receivable balance from Algeria, Argentina, Belarus, Brazil, Greece, Iran, Russia, Serbia, South Africa, Turkey, Ukraine and Venezuela amounted to $ 144 million and $ 136 million, respectively, the majority of which is current or less than 90 days past due.

The portion of the net trade receivable from these countries that is past due more than 90 days amounted to $ 2 million, as of December 31, 2023, a portion of which is comprised of public hospitals.

In addition, as of December 31, 2024 and 2023, the Company’s net trade receivable balance from Algeria, Argentina, Belarus, Brazil, Greece, Iran, Russia, Serbia, South Africa, Turkey, Ukraine and Venezuela amounted to approximately $ 144 million in each period, the majority of which is current or less than 90 days past due.

The portion of the net trade receivable from these countries that is past due more than 90 days amounted to less than $ 1 million as of December 31, 2024, a portion of which is comprised of public hospitals.

Based on an analysis of credit risk, including an analysis of bad debt experience and assessment of historical payment patterns for such customers, the Company has established a reserve covering more than half of the balance past due more than 90 days for such countries.

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The Company estimates the current expected credit loss on its receivables based on various factors, including historical credit loss experience, customer credit worthiness, value of collaterals (if any), and any relevant current and reasonably supportable future economic factors.

Additionally, the Company generally estimates the expected credit loss on a pool basis when customers are deemed to have similar risk characteristics.

Additionally, the

Company generally estimates the expected credit loss on a pool basis when customers are deemed to have similar risk characteristics.

Trade receivable balances are written off against the allowance when it is deemed probable that the trade receivable will not be collected.

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(in millions) 2024 2023 2022

Balance, beginning of period $ 33 $ 35 $ 39

Balance, beginning of year $ 34 $ 33 $ 35

Provision for expected credit losses 4 5 5

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( 7 ) ( 2 ) ( 3 )

Balance, end of period $ 34 $ 33 $ 35

Balance, end of year $ 30 $ 34 $ 33

Inventories comprise raw materials, work in process and finished goods, which are valued at the lower of cost or net realizable value, on a first-in, first-out basis.

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Debt Discounts and Premiums, Issuance Costs and Deferred Financing Costs

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

Deferred financing costs associated with

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

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

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

The Company accounts for exchanges of debt in accordance with Accounting Standards Codifications 470-60 which has resulted in certain debt being carried at a premium relative to its principal amount as well as a portion of contractual interest cost being recorded as a reduction of that premium rather than as interest expense.

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Revenue Recognition

The Company’s revenues are primarily generated from product sales, primarily in the therapeutic areas of eye health, gastroenterology (“GI”) and dermatology that consist of:

(i) branded pharmaceuticals, (ii) generic and branded generic pharmaceuticals, (iii) OTC products and (iv) medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment and aesthetics devices).

Other revenues include alliance and service revenue from the licensing and co-promotion of products and contract service revenue primarily in the areas of dermatology and topical medication.

Contract service revenue is derived primarily from contract manufacturing for third parties and is not material.

See Note 22, “SEGMENT INFORMATION” for the disaggregation of revenues which depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by the economic factors of each category of customer contracts.

The Company’s revenues are primarily generated from product sales, primarily in the therapeutic areas of GI, hepatology, neurology, dermatology and eye health, that consist of:

Other revenues include alliance and service revenue from the licensing and co-promotion of products and contract service revenue which is derived primarily from contract manufacturing for third parties and which is not material.

See Note 22, “SEGMENT INFORMATION” for the disaggregation of revenue which depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by the economic factors of each category of customer contracts.

The Company recognizes revenue when the customer obtains control of promised goods or services and in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those goods or services.

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Provisions for variable consideration are established to reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract.

The amount of variable consideration included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in the future period.

Provisions for these deductions are recorded concurrently with the recognition of gross product sales revenue and include cash discounts and allowances, chargebacks, and distribution fees, which are paid to direct customers, as well as rebates and returns, which can be paid to direct and indirect customers.

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All other provisions related to direct customers are included in Trade receivables, net, while provision balances related to indirect customers are included in Accrued and other current liabilities.

The following table presents the activity and ending balances of the Company’s variable consideration provisions for the years 2023 and 2022.

The Company continually monitors its variable consideration provisions and evaluates the estimates used as additional information becomes available.

Adjustments will be made to these provisions periodically to reflect new facts and circumstances that may indicate that historical experience may not be indicative of current and/or future results.

The Company is required to make subjective judgments based primarily on its evaluation of current market conditions and trade inventory levels related to the Company’s products.

These judgments include the potential impact of macroeconomic factors on, among other things, unemployment and related changes in customer health insurance levels and government

stimulus bills that focus on ensuring availability and access to lifesaving drugs during a public health crisis.

This evaluation may result in an increase or decrease in the experience rate that is applied to current and future sales, or require an adjustment related to past sales, or both.

If the trend in actual amounts of variable consideration varies from the Company’s prior estimates, the Company adjusts these estimates when such trend is believed to be sustainable.

At that time, the Company would record the necessary adjustments which would affect net product revenue and earnings reported in the current period.

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

The following describes the major sources of variable consideration in the Company’s customer arrangements and the methodology, estimates and judgments applied to estimate each type of variable consideration.

The following table presents the activity and ending balances of the Company’s variable consideration provisions for 2024 and 2023.

(in millions) Discounts

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Reserve balance, January 1, 2023

$ 188 $ 427 $ 1,023 $ 196 $ 76 $ 1,910

Current period provision 619 146 2,980 2,050 242 6,037

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Reserve balance, December 31, 2023

191 380 1,108 216 44 1,939

Current period provision 675 160 3,744 1,935 293 6,807

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Reserve balance, December 31, 2024

Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $ 39 million and $ 40 million as of December 31, 2023 and 2022, respectively, which are reflected as a reduction of Trade accounts receivable, net in the Consolidated Balance Sheets.

The Company continually monitors its variable consideration provisions and evaluates the estimates used as additional information becomes available.

Adjustments will be made to these provisions periodically to reflect new facts and circumstances that may indicate that historical experience may not be indicative of current and/or future results.

The Company is required to make subjective judgments based primarily on its evaluation of current market conditions and trade inventory levels related to the Company’s products.

These judgments include the potential impact of macroeconomic factors on, among other things, unemployment and related changes in customer health insurance levels, customer behaviors during the COVID-19 pandemic and government stimulus bills that focus on ensuring availability and access to lifesaving drugs during a public health crisis.

This evaluation may result in an increase or decrease in the experience rate that is applied to current and future sales, or require an adjustment related to past sales, or both.

If the trend in actual amounts of variable consideration varies from the Company’s prior estimates, the Company adjusts these estimates when such trend is believed to be sustainable.

At that time, the Company would record the necessary adjustments which would affect net product revenue and earnings reported in the current period.

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

$ 170 $ 372 $ 1,421 $ 189 $ 85 $ 2,237

Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $ 36 million and $ 39 million as of December 31, 2024 and 2023, respectively, which are reflected as a reduction of Trade receivables, net in the Consolidated Balance Sheets.

Cash Discounts and Allowances

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Factors that suggest increases in wholesaler inventory levels are temporary include:

(i) recently implemented or announced price increases for certain products, (ii) new product launches or expanded indications for existing products and (iii) timing of purchases by wholesale customers.

(i) recently implemented or announced price increases for certain products, (ii) new product launches or expanded indications for

existing products and (iii) timing of purchases by wholesale customers.

Conversely, factors that suggest increases in wholesaler inventory levels are other-than-temporary include:

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Patient Co-Pay Assistance programs, Consumer Rebates and Loyalty Programs are rebates offered on many of the Company’s products.

Patient Co-Pay Assistance Programs are patient discount programs offered in the form of coupon

cards or point of sale discounts, with which patients receive certain discounts off their prescription at participating pharmacies, as defined by the specific product program.

Patient Co-Pay Assistance Programs are patient discount programs offered in the form of coupon cards or point of sale discounts, with which patients receive certain discounts off their prescription at participating pharmacies, as defined by the specific product program.

An accrual for these programs is established, equal to management’s estimate of the discount, rebate and loyalty incentives attributable to a sale.

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The Company sells products primarily to wholesalers, and in some instances to large pharmacy chains such as CVS and Walmart.

The Company has Distribution Services Agreements (“DSAs”) with several large wholesale customers such as McKesson Corporation, Cencora Inc.

(formerly AmerisourceBergen Corporation), Cardinal Health, Inc.

The Company has Distribution Services Agreements (“DSAs”) with several large wholesale customers such as McKesson Corporation, Cencora Inc., Cardinal Health, Inc.

and McKesson Specialty.

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(i) imputed interest during the period on the lease liability determined using the effective interest rate method plus (ii) amortization of the right-of-use asset for that period.

Amortization of the right-

of-use asset during the period is calculated as the difference between the straight-line expense and the imputed interest on the lease liability for that period.

Amortization of the right-of-use asset during the period is calculated as the difference between the straight-line expense and the imputed interest on the lease liability for that period.

Variable lease expense is recognized when the achievement of the specific target is considered probable.

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Income taxes are accounted for under the liability method.

Deferred tax assets and liabilities are recognized for the temporary differences between the financial statement and income tax bases of assets and liabilities, and for operating losses and tax credit carryforwards.

Deferred tax assets and liabilities are recognized for the temporary differences between the financial statement and income tax bases of assets and liabilities, and for operating

losses and tax credit carryforwards.

A valuation allowance is provided for the portion of deferred tax assets that is more likely than not to remain unrealized.

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Comprehensive loss

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

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

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

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

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

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

New Accounting Standards

There were no new accounting standards adopted during 2023.

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires disclosures of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

Recently Issued Accounting Standards, Adopted as of December 31, 2024

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

The ASU is effective for the Company’s Annual Report on Form 10-K for the year

ended December 31, 2024, and subsequent interim periods.

The adoption of this guidance expanded the segment disclosures as required by this ASU.

See Note 22, “SEGMENT INFORMATION” for application of this standard.

Recently Issued Accounting Standards, Not Adopted as of December 31, 2024

I n November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation (Subtopic 220-40):

Disaggregation of Income Statement Expense (“ASU 2024-03”), which requires public companies to disclose, in interim and annual reporting periods, additional information about specific expenses in the financial statements.

The amendments in ASU 2024-03 are effective for the Company beginning with its 2027 annual report, and its interim periods beginning in 2028.

Early adoption is permitted and is effective on either a prospective basis or retrospective basis.

The Company is evaluating the impact of adoption on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires disclosures of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies certain other income tax-related disclosures.

The enhanced income tax related disclosures required by ASU 2023-09 are effective for the Company beginning with its 2025 annual report.

Early adoption is permitted.

The Company is evaluating the impact of adoption of this guidance on its disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

The amendments in ASU 2023-07 are effective for the Company beginning with its 2024 annual report, and its interim periods beginning in 2025.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this ASU on its disclosures.

ACQUISITIONS, LICENSING AGREEMENTS AND DIVESTITURE

ACQUISITIONS AND LICENSING AGREEMENTS

Licensing Agreements

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2024 Bausch + Lomb Acquisitions

Acquisition of Elios Vision

During December 2024, Bausch + Lomb, through an affiliate, acquired Elios Vision, Inc.

(“Elios Vision”) for (i) a cash payment of approximately $ 99 million and (ii) potential future milestone obligations as discussed below.

Elios Vision, a privately held company, is the developer of the ELIOS ® procedure, the first clinically validated, minimally invasive glaucoma surgery procedure using an excimer laser.

This acquisition is expected to bolster Bausch + Lomb’s glaucoma treatment portfolio.

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

The total aggregate acquisition consideration of approximately $ 188 million is calculated as follows:

(in millions)

Cash consideration paid $ 99

Estimated fair value of contingent consideration 89

Aggregate purchase consideration $ 188

Contingent consideration included as part of the aggregate purchase consideration relates to potential future milestone obligations, including (i) regulatory approval milestones, ranging from $ 50 million and up to an aggregate of $ 145 million, depending on the timing of regulatory approval and (ii) sales-based milestones ranging from $ 75 million and up to an aggregate of $ 375 million, related to the achievement of annual net sales targets.

The estimated fair value of the contingent consideration recognized on the acquisition date related to the above noted potential future milestone obligations was $ 89 million, of which $ 11 million was recorded as a current liability.

The estimated fair value of the contingent consideration was estimated by using the inputs disclosed in Note 5, “FAIR VALUE MEASUREMENTS”.

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

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

(in millions)

Intangible assets, net $ 177

Trade receivables, net 2

Inventories, net 4

Property, plant and equipment, net 7

Other non-current assets 1

Accrued and other current liabilities ( 7 )

Other non-current liabilities ( 23 )

Total identifiable net assets 161

Total fair value of consideration transferred $ 188

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 (including revenue growth rates, cost of goods sold, operating expenses and discount rates).

The intangible assets acquired related to the acquisition of Elios Vision, as well as their fair values and estimated useful life consist of the following:

(in millions) Fair Value Estimated Useful Life (In Years)

Acquired in-process research and development intangible asset $ 95 N/A

Product brands 63 13

Corporate brands 17 10

Total Intangible assets, net $ 177

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

Goodwill associated with the Elios Vision acquisition represents deferred taxes as well as an acquired workforce and potential future synergies.

Goodwill associated with the Elios Vision acquisition is not deductible for income tax purposes.

The valuation of the assets acquired and liabilities assumed, as part of the Elios Vision acquisition, has not been finalized as of December 31, 2024.

The areas that could be subject to change primarily relate to income tax matters.

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

Revenues and operating results associated with Elios Vision during the period from December 10, 2024 through December 31, 2024 were not material.

Pro forma revenues and operating results for the years 2024 and 2023 were not material.

Acquisition of Trukera Medical

In July 2024, Bausch + Lomb, through an affiliate, acquired TearLab Corporation, d/b/a Trukera Medical from its private equity owner, AccelMed Partners, and other shareholders.

Trukera Medical, a U.S.-based privately held ophthalmic medical diagnostic company, commercializes ScoutPro ® , a point-of-care portable device for precisely measuring osmolarity, the salt content of a person’s tears.

This acquisition is expected to expand Bausch + Lomb’s presence in the dry eye market.

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

As of the acquisition date (July 19, 2024), Bausch + Lomb allocated the aggregate purchase consideration of approximately $ 24 million based on estimated fair values, which included recording $ 16 million of identifiable intangible assets, $ 6 million of other net assets and $ 2 million of goodwill.

The intangible assets acquired related to the acquisition of Trukera Medical, as well as their fair values and estimated useful life consist of the following:

(in millions) Fair Value Estimated Useful Life (In Years)

Product Brand $ 14 10

Customer Relationships 2 7

Total Intangible assets, net $ 16

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

Revenues and operating results associated with Trukera Medical during the period from July 19, 2024 through December 31, 2024 were not material.

Pro-forma revenues and operating results for 2024 and 2023 were not material.

2023 Bausch + Lomb Acquisitions

Acquisition of XIIDRA ®

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The fair value of the contingent consideration recognized on the acquisition date of $ 3 million was estimated by using the inputs disclosed in Note 5, “FAIR VALUE MEASUREMENTS”.

The Company reassesses its acquisition-related contingent consideration liabilities each quarter for changes in fair value.

Assets Acquired and Liabilities Assumed

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The balance of this interim contract will be released to Cost of goods sold (excluding amortization and impairments of intangible assets) as Bausch + Lomb sells the acquired inventory over an assumed inventory turnover cycle of approximately two years .

Cost of goods sold for 2023 includes $ 20 million related to the release of this interim contract.

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.

Cost of goods sold for 2024 and 2023 includes approximately $ 81 million and $ 20 million, respectively, related to the release of this interim contract.

Other non-current liabilities associated with the XIIDRA Acquisition represent the fair value of the 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 %.

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

The valuation of the assets acquired and liabilities assumed as part of the XIIDRA Acquisition has not been finalized as of December 31, 2023.

The areas that could be subject to change primarily related to income tax matters.

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

Revenue and Operating Results

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(i) acquisition-related transaction costs, included within Other expense, net, of $ 20 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 2022.

These acquisition-related transaction and financing costs are reflected in pro forma Net loss attributable to Bausch Health Companies Inc., in the table above, for 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.

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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.

This acquisition was made by Bausch + Lomb to continue to grow its global OTC 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.

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 are included within Bausch + Lomb’s Vision Care business.

The acquired assets consist of inventory and intangible assets.

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Acquisition of AcuFocus

On January 17, 2023, Bausch + Lomb acquired AcuFocus, Inc., an ophthalmic medical device company, for an upfront payment of $ 35 million, $ 31 million of which was paid in January 2023, with the remaining purchase price to be paid within 18 months following the date of the transaction, less any amounts that are the subject of any indemnification claims .

On January 17, 2023, Bausch + Lomb acquired AcuFocus, Inc., an ophthalmic medical device company, for an upfront payment of $ 35 million, $ 31 million of which was paid in January 2023, with the remaining purchase price paid during the 18 months following the date of the transaction .

The acquisition was made to acquire certain small aperture intraocular technology for the treatment of certain cataract conditions.

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

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

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

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

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

Acquisition of Paragon BioTeck, Inc.

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There are no future sales milestones associated with this transaction.

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

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

The Amoun Sale closed on July 26, 2021.

As part of the Amoun Sale, cash generated by Amoun during the period from the locked-box date of January 1, 2021 through closing was for the benefit of the purchasing entity, subject to working capital during such period.

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

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

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

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

2025 Bausch + Lomb Acquisition

Acquisition of Whitecap Biosciences

During January 2025, Bausch + Lomb, through its affiliate, acquired Whitecap Biosciences, LLC, (“Whitecap Biosciences”) for an upfront payment of approximately $ 28 million and potential future milestone and royalty payments.

The acquisition is expected to expand Bausch + Lomb’s clinical-stage pipeline as Whitecap Biosciences is currently developing two innovative therapies for potential use in glaucoma and geographic atrophy.

As this transaction closed during January 2025, the Company is still finalizing the valuation and related purchase accounting.

RESTRUCTURING, INTEGRATION, SEPARATION AND IPO COSTS

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

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

During 2022, the Company incurred costs associated with activities relating to the Solta IPO, which was suspended in June 2022.

These B+L Separation and Solta IPO activities include:

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(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 2023, 2022 and 2021 are Separation and IPO costs of $ 4 million, $ 33 million and $ 32 million, respectively.

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

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

Included in Selling, general and administrative for 2023, 2022 and 2021 are Separation-related and IPO-related costs of $ 22 million, $ 94 million and $ 132 million, respectively.

The extent and timing of future charges for these costs cannot be reasonably estimated at this time and could be material.

Separation costs included in Restructuring, integration, separation and IPO

costs for 2024 and 2023 are not material.

Separation and IPO costs included in Restructuring, integration, separation and IPO costs for 2022 were $ 33 million.

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

These separation-related costs include, but are not limited to, rebranding costs, advisory fees and costs associated with facility relocation and/or modification.

Included in Selling, general and administrative for 2024 and 2023 are Separation-related costs of $ 13 million and $ 22 million, respectively, and for 2022, Separation-related and IPO-related costs of $ 94 million.

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

FAIR VALUE MEASUREMENTS

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Cash equivalents $ 567 $ 557 $ 10 $ — $ 425 $ 417 $ 8 $ —

Restricted cash and other settlement deposits $ 15 $ 15 $ — $ — $ 27 $ 27 $ — $ —

Restricted cash $ 20 $ 20 $ — $ — $ 15 $ 15 $ — $ —

Foreign currency exchange contracts $ 10 $ — $ 10 $ — $ 3 $ — $ 3 $ —

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

Cash, cash equivalents and restricted cash and other settlements as presented in the Consolidated Balance Sheet as of December 31, 2023 includes $ 334 million of cash, cash equivalents and restricted cash held by legal entities of Bausch + Lomb.

Cash, cash equivalents and restricted cash as presented in the Consolidated Balance Sheet as of December 31, 2024 includes $ 316 million of cash, cash equivalents and restricted cash held by legal entities of Bausch + Lomb.

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

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Cross-currency Swaps

During 2019, the Company entered into cross-currency swaps, with aggregate notional amounts of $ 1,250 million, to mitigate fluctuation in the value of a portion of its euro-denominated net investment in its consolidated financial statements from adverse movements in exchange rates.

The euro-denominated net investment being hedged was the Company’s investment in certain euro-denominated subsidiaries.

During November 2021, the Company entered into a transaction to unwind its cross-currency swaps and received net proceeds of $ 4 million, which included interest income of $ 6 million, offset by the amount owed by the Company upon the unwinding of $ 2 million.

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

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

In 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 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.

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(in millions) 2024 2023

Loss recognized in Other comprehensive loss $ 45 $ 45

Gain (loss) recognized in Other comprehensive loss $ 50 $ ( 45 )

Gain excluded from assessment of hedge effectiveness $ 13 $ 13

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No portion of the cross-currency swaps were ineffective for 2024 and 2023.

For 2023 and 2022, the Company received $ 13 million and $ 0 , respectively, in settlements of its 2022 Cross-Currency Swaps which are reported as Investing activities in the Consolidated Statements of Cash Flows.

For each of the years 2024 and 2023, the Company received $ 13 million in interest settlements, which are reported as Investing activities in the Consolidated Statements of Cash Flows.

Foreign Currency Exchange Contracts

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(in millions) 2024 2023

(Loss) Gain related to changes in fair value $ ( 5 ) $ 2

Gain (loss) related to settlements $ 6 $ ( 20 )

Gain (loss) related to changes in fair value $ 8 $ ( 5 )

Gain related to settlements $ 2 $ 6

Acquisition-related Contingent Consideration Obligations

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Product rights/patents 4 3,255 ( 3,224 ) 31 3,323 ( 3,270 ) 53

Partner relationships 0 161 ( 161 ) — 149 ( 149 ) —

Technology and other 7 214 ( 202 ) 12 201 ( 196 ) 5

Partner relationships, technology and other 6 370 ( 355 ) 15 375 ( 363 ) 12

Total finite-lived intangible assets 27,059 ( 23,306 ) 3,753 27,262 ( 22,509 ) 4,753

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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 in 2024 were $ 24 million, and primarily related to lower forecasted sales and the discontinuance of certain product brands.

Asset impairments in 2023 were $ 54 million, and primarily related to:

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As a result, the Company recognized an impairment of $ 37 million to reduce the carrying value of the Uceris ® Foam product related intangible assets to their estimated fair value.

The remaining carrying value of the Uceris ® Foam product related intangible assets is not material.

The Uceris ® Foam product related intangible assets had no remaining carrying value as of December 31, 2023.

Asset impairments in 2022 were $ 15 million and included:

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Xifaxan ® intangible assets had a carrying value of $ 1,616 million and an estimated remaining useful life of 36 months as of December 31, 2024.

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

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

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

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

As the ultimate outcome of the Norwich Legal Decision and other potential future related developments, including a competitor’s ability to launch a successful generic version to Xifaxan ® , could impact the timing and extent of future revenues and cash flows associated with Xifaxan ® , the Company determined, in the third quarter of 2022, that the ruling in the Norwich Legal Decision constituted an event requiring assessment of the Xifaxan ® intangible assets for potential impairment using different scenarios representing a range of different outcomes which address, among other things, the timing of when a competitor or competitors will be able to successfully launch a generic version to Xifaxan ® , if they are able to launch one at all.

The Company has filed lawsuits against third-party generic manufacturers that have sent the Company Notices of Paragraph IV Certification for Xifaxan ® .

See “Xifaxan ® Paragraph IV Proceedings” of Note 20, “LEGAL PROCEEDINGS” for details of the Norwich Legal Decision and the Xifaxan ® Generics Litigation.

The Xifaxan ® intangible assets were quantitatively tested for potential impairment during the third quarter of 2022.

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 end 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 December 31, 2023.

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

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

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

During the period September 30, 2022 through December 31, 2024.

there were no material adverse changes to the facts and circumstances of the Xifaxan ® Generics Litigation or to actual or expected business performance for Xifaxan ® .

Based on these factors, no impairment to the carrying value of the Xifaxan ®

finite-lived intangible assets was identified as of December 31, 2024.

It is possible that the Xifaxan ® Generics Litigation and other potential future developments:

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

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

Asset impairments, including loss on assets held for sale in 2021 were $ 234 million and included:

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

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

The other impairments and adjustments to finite-lived intangible assets were measured as the difference of the historical carrying value of these finite-lived assets as compared to the estimated fair value as determined using a discounted cash flow analysis using Level 3 unobservable inputs.

The other impairments and adjustments to finite-lived intangible assets are measured as the difference of the historical carrying value of these finite-lived assets as compared to the estimated fair value as determined using a discounted cash flow analysis using Level 3 unobservable inputs.

Periodically, the Company’s products face the expiration of their patent or regulatory exclusivity.

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The changes in the carrying amounts of goodwill during the years ended December 31, 2024 and 2023 were as follows:

(in millions) Bausch +

Lomb Salix International Dermatology Solta Medical Diversified Total

(in millions) Salix International Solta Medical Diversified Bausch +

Balance, January 1, 2023

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

3,159 789 115 2,238 5,246 11,547

Additions — — — — 31 31

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Balance, December 31, 2023

3,159 862 115 1,733 5,314 11,183

Additions — — — — 29 29

Impairment — — — — — ( 493 ) ( 493 )

Foreign exchange and other — ( 70 ) — 26 ( 81 ) ( 125 )

Balance, December 31, 2024

$ 3,159 $ 792 $ 115 $ 1,759 $ 5,262 $ 11,087

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

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To estimate fair value, the Company discounts the forecasted cash flows of each reporting unit.

The discount rate the Company uses represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in its reporting unit operations and the rate of return a market participant would expect to earn.

The discount rate the Company uses represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in its

reporting unit operations and the rate of return a market participant would expect to earn.

The quantitative fair value test is performed utilizing long-term growth rates and discount rates applied to the estimated cash flows in estimation of fair value.

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

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

The Bausch + Lomb segment consisted of the:

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

The Salix segment consisted of the Salix reporting unit.

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

The Dermatology segment consisted of the:

(i) Dermatology and (ii) Global Solta reporting units.

The Diversified segment consisted of the:

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

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

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

Bausch + Lomb reporting unit.

As a result of this realignment, goodwill was reassigned to each of the aforementioned reporting units using a relative fair value approach.

Goodwill previously reported in the former International reporting unit was reassigned to the International Bausch + Lomb and International Rx reporting units, and a portion of goodwill previously reported in the former Generics reporting unit was reassigned to the U.S.

Bausch + Lomb reporting unit.

Immediately prior to the change in reporting units, the Company performed a qualitative fair value assessment for its former:

(i) International and (ii) Generics reporting units.

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

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

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

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

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

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

After completing the testing, the fair value of each of these reporting units exceeded its carrying value by more than 40 %, and, therefore, there was no impairment to goodwill.

In addition, as the U.S.

Bausch + Lomb reporting unit had a change in composition of its net assets related to certain products historically included in the Generics reporting unit now being included in the U.S.

Bausch + Lomb reporting unit, the Company performed a qualitative assessment of this reporting unit.

Based on the qualitative fair value assessment performed, management believed that it was more likely than not that the carrying value of its current U.S.

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

March 31, 2021 Impairment

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

and offices of health care professionals could reopen.

In addition, insurance coverage pressures within the U.S.

continued to persist limiting patient access to topical acne and psoriasis products.

In light of these developments, during the first quarter of 2021, the Company began taking steps to:

(i) redirect its R&D spend to eliminate projects it has identified as high cost and high risk, (ii) redirect a portion of its marketing and product development outside the U.S.

to geographies where there is better patient access and (iii) reduce its cost structure to be more competitive.

As a result, during the three months ended March 31, 2021, the Company revised its long-term forecasts for the Dermatology reporting unit.

Management believed that these events were indicators that there is less headroom as of March 31, 2021 as compared to the headroom calculated on the date goodwill was last tested for impairment (October 1, 2020).

Therefore, a quantitative fair value test for the Dermatology reporting unit was performed.

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

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

Second Quarter 2021 - Realignment of Bausch + Lomb Reporting Units

Commencing in the second quarter of 2021, the Company changed the way it reviews the financial information of its Bausch + Lomb segment.

Beginning in the second quarter of 2021, management no longer reviews the financial information of its Bausch + Lomb segment on a geographic basis, but instead reviews this financial information on a business line basis.

This change created a change in the reporting units of the Bausch + Lomb segment.

After the change, under its business line view, the Bausch + Lomb segment consists of the global:

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

Prior to the second quarter of 2021, under the geographic view, the Bausch + Lomb segment consisted of the former:

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

As a result of this realignment, goodwill was reassigned to each of the aforementioned reporting units using a relative fair value approach.

The change in Bausch + Lomb reporting units does not impact the reported revenues and segment profits of the Bausch + Lomb segment for any prior periods.

Immediately prior to the change in its Bausch + Lomb reporting units, the Company performed a qualitative fair value assessment for its former reporting units.

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

Bausch + Lomb and (ii) International Bausch + Lomb

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

As a result of the change in composition of net assets, the Company performed a quantitative fair value test of its new:

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

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

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

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

June 30, 2021 and September 30, 2021 Interim Assessment

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

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

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

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

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

2021 Annual Impairment Test

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

Based on its qualitative assessment as of October 1, 2021, management believed that, with the exception of the Dermatology reporting unit, it was more likely than not that the carrying amounts of its 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.

As part of its qualitative assessment of the Dermatology reporting unit as of October 1, 2021, the Company considered, among other matters, the limited headroom as a result of the impairment to the goodwill of the Dermatology reporting unit when last tested (March 31, 2021) and macroeconomic factors such as higher than expected inflation for many commodities, volatility in many of the equity markets and pressures on market interest rates.

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

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

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

Based on the quantitative fair value test, the fair value of the Dermatology reporting unit was approximately 10.0 % greater than its carrying value and as a result there was no impairment to the goodwill of the reporting unit.

First Quarter 2022 - Realignment of Segments

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

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

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

The Salix segment consists of the Salix reporting unit.

The International segment consists of the International reporting unit.

The Solta Medical segment consists of the Solta reporting unit.

The Diversified segment consists of the:

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

The Solta Medical segment consists of the Solta reporting unit.

The Bausch + Lomb segment consists of the:

(i) Vision Care, (ii) Pharmaceuticals and (iii) Surgical reporting units.

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

March 31, 2022 Interim Assessment

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Given the limited headroom of the Dermatology reporting unit as calculated on October 1, 2021, the Company believed that these facts and circumstances suggested 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 as revised in the fourth quarter of 2022 which reflected current market conditions and current trends in business performance.

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

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

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

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

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

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

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

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

The Company has filed lawsuits against third-party generic manufacturers that have sent the Company Notices of Paragraph IV Certification for Xifaxan ® .

See “Xifaxan ® Paragraph IV Proceedings” of Note 20, “LEGAL PROCEEDINGS” for details of the Norwich Legal Decision and Xifaxan ® Generics Litigation.

Xifaxan ® revenues currently represent approximately 85 % of the Salix reporting unit’s revenue.

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

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

However, as the Company’s probability-weighted discount valuation includes certain scenarios under which the Company does not retain market exclusivity for Xifaxan ® through January 2028, these probability-weighted fair values of the Salix reporting unit exceeded its carrying value by less than 5.0 %.

However, as the Company’s probability-weighted discount valuation included certain scenarios under which the Company does not retain market exclusivity for Xifaxan ® through January 2028, these probability-weighted fair values of the Salix reporting unit exceeded its carrying value by less than 5.0 %.

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

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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.

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 Neurology reporting unit operates in the United States, where shifting market dynamics, including changes in payer demands, health care legislation, and other regulations contribute 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:

As a result, the Company took 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 reporting unit to reflect these developments.

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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 and December 31, 2023, the Dermatology reporting unit had remaining goodwill of $ 329 million.

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.

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 and December 31, 2023, the Neurology reporting unit had remaining goodwill of $ 1,192 million and $ 1,177 million, respectively.

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

During 2024, no facts or circumstances were identified which would indicate that additional fair value quantitative testing was necessary.

2023 Annual Impairment Test

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The Generics reporting unit operates in the United States, where shifting market dynamics have led to increased competition with respect to generic pharmaceuticals which impacts both pricing and potential market share.

The Company expects these dynamics to intensify in the future, and as such has revised its long-term forecasts, including for the sale of Company branded products when they reach loss of exclusivity in the future to reflect these developments.

The Company expected these dynamics to intensify in the future, and as such revised its long-term forecasts, including for the sale of Company branded products when they reach loss of exclusivity in the future to reflect these developments.

The quantitative fair value test for the Generics reporting unit utilized the most recent cash flow projections for the reporting unit as revised in the fourth quarter of 2023 to reflect current market conditions and current trends in business performance.

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During the period October 1, 2023 through December 31, 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 Generics reporting units, and determined that, no events occurred, or circumstances changed that would indicate that the fair value of any reporting unit might be below its carrying value.

2024 Interim Impairment Testing

During the period January 1, 2024 through September 30, 2024, the Company continued to monitor the market conditions and trends in business performance for all its reporting units and determined that no events occurred, or circumstances changed that would indicate that the fair value of any reporting unit might be below its carrying value.

2024 Annual Impairment Test

The Company performed its annual goodwill impairment test as of October 1, 2024.

Given the current market conditions and trends in business performance of the Generics and Dermatology reporting units and there being no headroom resulting from the previous quantitative assessments for these reporting units, the Company elected to perform separate quantitative fair value tests.

For the Company’s remaining reporting units, the Company conducted its annual goodwill impairment test as of October 1, 2024, by first assessing qualitative factors.

Based on its qualitative assessment as of October 1, 2024, 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 the remaining reporting units was not required.

The quantitative fair value test for the Generics reporting unit utilized the most recent cash flow projections for the reporting unit as revised in the fourth quarter of 2024 to reflect current market conditions and current trends in business performance.

The quantitative assessment utilized a long-term growth rate of 1.0 % and a discount rate of 8.50 % in the estimation of the reporting unit’s fair value.

After completing the testing, the fair value of the Generics reporting unit exceeded its carrying value by approximately 50 %, and therefore, there was no impairment to goodwill.

As of December 31, 2024, the Generics reporting unit had remaining goodwill of $ 227 million.

The quantitative fair value test for the Dermatology reporting unit utilized the most recent cash flow projections for the reporting unit as revised in the fourth quarter of 2024 to reflect current market conditions and current trends in business performance.

The quantitative assessment utilized a long-term growth rate of 0 % and a discount rate of 9.50 % in the estimation of the reporting unit’s fair value.

After completing the testing, the fair value of the Dermatology reporting unit exceeded its carrying value by more than 50 %, and, therefore, there was no impairment to goodwill.

As of December 31, 2024, the Dermatology reporting unit had remaining goodwill of $ 329 million.

December 31, 2024

During the period October 1, 2024 through December 31, 2024, the Company continued to monitor the market conditions and trends in business performance for all its reporting units and determined that no events occurred, or circumstances changed that would indicate that the fair value of any reporting unit might be below its carrying value.

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

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B+L May 2027 Term Loan B Facility May 2027 2,437 2,412 2,462 2,426

B+L May 2027 Incremental Term Loan B Facility May 2027 400 396 — —

B+L September 2028 Term Loan B Facility September 2028 494 486 499 487

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

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

These affirmative and

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

incur or guarantee additional indebtedness;

create or permit liens

create or permit liens on assets;

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

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

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

Exchange Offer

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

The secured notes issued in the Exchange Offer consist of:

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

2022 Exchange

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

The secured notes issued in the 2022 Exchange consist of:

(“Intermediate Holdco”), an existing indirect wholly-owned unrestricted subsidiary of the Company that held 38.3 % of the issued and outstanding common shares of Bausch + Lomb as of December 31, 2024.

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

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

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

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

In connection with the Exchange Offer during 2022, the Company recorded a gain of $ 570 million, net of third party fees of $ 25 million.

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 2023, the Company made contractual interest payments of $ 321 million related to the New Secured Notes, of which $ 282 million was recorded as a reduction of the premium .

The Company performed an assessment of the 2022 Exchange and determined that it met the criteria to be accounted for as a troubled debt restructuring under Accounting Standards Codification 470-60.

For each series of the Existing Unsecured Senior Notes exchanged, the undiscounted cash flows associated with the 2022 Secured Notes issued were compared to the carrying value of the Existing Unsecured Senior Notes exchanged for such 2022 Secured Notes and the applicable exchange was accounted for as follows:

(i) to the extent the undiscounted cash flows of the 2022 Secured Notes in question were lower than the carrying value of the applicable Existing Unsecured Senior Notes exchanged, the carrying value of the applicable 2022 Secured Notes was established at the total of these undiscounted cash flows, with a gain recorded for the remaining difference between this value and the carrying value of the applicable Existing Senior Unsecured Notes (as such, no interest expense will be recorded for the applicable 2022 Secured Notes prospectively) and (ii) to the extent the undiscounted cash flows of the 2022 Secured Notes in question exceeded the carrying value of the applicable Existing Unsecured Senior Notes exchanged, the carrying value of the applicable 2022 Secured Notes was established at the carrying value of the applicable Existing Senior Unsecured Notes, and the Company established new effective interest rates based on the carrying value of the applicable Existing Unsecured Senior Notes prior to the 2022 Exchange.

The difference between the principal amount of the 2022 Secured Notes and their carrying value was recorded as a premium and is included in long-term debt on the Company’s Consolidated Balance Sheet.

In connection with the 2022 Exchange during 2022, the Company recorded a gain of $ 570 million, net of third party fees of $ 25 million.

The premium recorded on the 2022 Secured Notes was $ 1,835 million, which will be reduced as contractual interest payments are made on the 2022 Secured Notes.

During 2024 and 2023, the Company made contractual interest payments of $ 334 million and $ 321 million, respectively related to the 2022 Secured Notes, of which $ 295 million and $ 282 million, respectively was recorded as a reduction of the premium .

Senior Secured Credit Facilities

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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”).

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

(“BHA”) in an aggregate principal amount in excess of $ 1,000 million (the “2023 Revolving Credit Facility”) and term loan facilities of original principal amounts of $ 4,565 million and $ 1,500 million, maturing in June 2025 (the “June 2025 Term Loan B Facility”) and November 2025 (the “November 2025 Term Loan B Facility”), respectively.

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.

Senior Secured Credit Facilities under the 2022 Amended Credit Agreement

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

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

(“BHA”) in an aggregate principal amount in excess of $ 1,000 million.

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

dollars, Canadian dollars or Euros.

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

As of December 31, 2024, the Company had no outstanding borrowings and had $ 25 million of issued and outstanding letters of credit on the 2027 Revolving Credit Facility.

On June 28, 2024, the Company entered into a suspension of rights agreement (the “Suspension of Rights Agreement”) with respect to the 2022 Amended Credit Agreement, pursuant to which Canadian Dollar Offered Rate (“CDOR”) loans ceased to be available from June 28, 2024 until such date as the parties enter into a customary amendment of the 2022 Amendment Credit Agreement (a “CDOR Replacement Amendment”) to replace the CDOR with the replacement benchmark applicable to Canadian dollar-denominated loans.

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

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

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

dollar base rate, (ii) Canadian dollars will bear interest at a rate per annum equal to, either:

(a) a Canadian dollar prime rate or (b) when available pursuant to the Suspension of Rights Agreement and the effectiveness of a CDOR Replacement Amendment, a rate to be agreed by the parties and (iii) euros bear interest at a rate per annum equal to a term benchmark rate determined by reference to the cost of funds for euro deposits (“EURIBOR”) for the interest period relevant to such borrowings (subject to a floor of 0.00 % per annum), in each case, plus an applicable margin.

Term SOFR rate loans are subject to a credit spread adjustment ranging from 0.10 %- 0.25 %.

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dollar base rate loans.

The applicable interest rate margin for borrowings under the 2027 Revolving Credit Facility ranges from 4.75 % to 5.25 % for term SOFR rate loans, BA rate loans and EURIBOR loans and 3.75 % to 4.25 % for U.S.

The applicable interest rate margin for borrowings under the 2027 Revolving Credit Facility ranges from 4.75 % to 5.25 % for term SOFR rate loans and EURIBOR loans and 3.75 % to 4.25 % for U.S.

dollar base rate loans and Canadian prime rate loans.

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The Company also is required to pay:

(i) letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on term SOFR rate borrowings under the 2027 Revolving Credit Facility on a per annum basis, payable quarterly in arrears, (ii) customary fronting fees for the issuance of letters of credit and (iii) agency fees.

(i) letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount

equal to the applicable margin on term SOFR rate borrowings under the 2027 Revolving Credit Facility on a per annum basis, payable quarterly in arrears, (ii) customary fronting fees for the issuance of letters of credit and (iii) agency fees.

Subject to certain exceptions and customary baskets set forth in the 2022 Amended Credit Agreement, the Company is required to make mandatory prepayments of the loans under the Senior Secured Credit Facilities under certain circumstances, including from:

(i) 100 % of the net cash proceeds of insurance and condemnation proceeds for property or

asset losses (subject to reinvestment rights and net proceeds thresholds), (ii) 100 % of the net cash proceeds from the incurrence of debt (other than permitted debt as described in the 2022 Amended Credit Agreement), (iii) 50 % of Excess Cash Flow (as defined in the 2022 Amended Credit Agreement) subject to decrease based on leverage ratios and subject to a threshold amount and (iv) 100 % of net cash proceeds from asset sales (subject to reinvestment rights and net proceeds thresholds).

(i) 100 % of the net cash proceeds of insurance and condemnation proceeds for property or asset losses (subject to reinvestment rights and net proceeds thresholds), (ii) 100 % of the net cash proceeds from the incurrence of debt (other than permitted debt as described in the 2022 Amended Credit Agreement), (iii) 50 % of Excess Cash Flow (as defined in the 2022 Amended Credit Agreement) subject to decrease based on leverage ratios and subject to a threshold amount and (iv) 100 % of net cash proceeds from asset sales (subject to reinvestment rights and net proceeds thresholds).

These mandatory prepayments may be used to satisfy future amortization.

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The 2022 Amended Credit Agreement permits the incurrence of incremental credit facility borrowings up to the greater of $ 1,000 million and 40 % of Consolidated Adjusted EBITDA (non-GAAP) (as defined in the 2022 Amended Credit Agreement), subject to customary terms and conditions, as well as the incurrence of additional incremental credit facility borrowings subject to, in the case of secured debt, a secured leverage ratio of not greater than 3.50 :1.00, and, in the case of unsecured debt, either a total leverage ratio of not greater than 6.50 :1.00 or an interest coverage ratio of not less than 2.00 :1.00.

The 2022 Amended Credit Agreement provides that Bausch + Lomb shall initially be a “restricted” subsidiary subject to the terms of the 2022 Amended Credit Agreement covenants, but does not require Bausch + Lomb to guarantee the obligations under the 2022 Amended Credit Agreement.

The 2022 Amended Credit Agreement permits the Company to designate Bausch + Lomb as an “unrestricted” subsidiary under the 2022 Amended Credit Agreement and no longer subject to the terms of the covenants thereunder provided that no event of default is continuing or will result from such designation and the total leverage ratio of Remainco (as defined in the 2022 Amended Credit Agreement) will not be greater than 7.60 :1.00 on a pro forma basis.

The 2022 Amended Credit Agreement provided that Bausch + Lomb was initially a “restricted” subsidiary subject to the terms of the 2022 Amended Credit Agreement covenants, but does not require Bausch + Lomb to guarantee the obligations under the 2022 Amended Credit Agreement.

The 2022 Amended Credit Agreement permitted the Company to designate Bausch + Lomb as an “unrestricted” subsidiary under the 2022 Amended Credit Agreement and no longer subject to the terms of the covenants thereunder provided that no event of default was continuing or would result from such designation and the total leverage ratio of Remainco (as defined in the 2022 Amended Credit Agreement) would not be greater than 7.60 :1.00 on a pro forma basis.

The Credit Agreement Refinancing contains provisions that were designed to facilitate the B+L Separation.

As of December 31, 2023, 1261229 B.C.

Ltd., directly or indirectly held approximately 88 % of the issued and outstanding shares of Bausch + Lomb, as an unrestricted subsidiary of the Company in accordance with the terms of the Company’s debt documents.

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

Ltd as an unrestricted subsidiary of the Company in accordance with the terms of the Company’s debt documents.

In connection therewith, all of the subsidiaries of 1261229 B.C.

Ltd., including Bausch + Lomb and its subsidiaries, are unrestricted subsidiaries of the Company and, as a result, are not subject to the covenants under the Bausch Health debt documents, and the earnings and net debt of Bausch + Lomb, as defined in the relevant debt documents, are also not included in the calculation of the Company’s financial maintenance covenant.

As of December 31, 2024, 1261229 B.C.

Ltd., directly or indirectly, held approximately 88 % of the issued and outstanding shares of Bausch + Lomb.

Accounts Receivable Credit Facility

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The AR Facility Agreement contains customary events of default, representations and warranties and affirmative and negative covenants primarily applicable to the borrower thereunder, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, dividends and other distributions, and engaging in any business other than as set forth in the AR Facility Agreement.

Upon the occurrence and during the continuance of an Amortization Event (as defined in the AR Facility Agreement), including the occurrence of an Event of Default (under and as defined in the 2022 Amended Credit Agreement), and subsequent demand by the Administrative Agent (acting at the direction of the Lenders), the outstanding advances and all other obligations under the AR Facility Agreement will be due and payable.

advances and all other obligations under the AR Facility Agreement will be due and payable.

The AR Credit Facility matures on January 28, 2028.

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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 3, “ACQUISITIONS, LICENSING AGREEMENTS AND DIVESTITURE”) and related acquisition and financing costs.

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 Original Credit Agreement (the Original Credit Agreement, as amended by the September 2023 Credit Facility Amendment, the “Initial 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”).

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 3, “ACQUISITIONS AND LICENSING AGREEMENTS”) and related acquisition and financing costs.

On April 19, 2024, Bausch + Lomb entered into a suspension of rights agreement (the “B+L Suspension of Rights Agreement”) with respect to the Initial B+L Amended Credit Agreement, pursuant to which Canadian dollar-denominated loans ceased to be available from June 28, 2024, until such date as the parties enter into an amendment of the Initial B+L Amended Credit Agreement to replace the Canadian Dollar Offered Rate with the replacement benchmark applicable to Canadian dollar-denominated loans.

On November 1, 2024, Bausch + Lomb entered into an additional incremental term loan facility secured on a pari passu basis with its existing B+L May 2027 Term Loan B Facility and B+L September 2028 Term Loan B Facility.

This incremental term loan facility was entered into in the form of an incremental amendment (the “November 2024 Credit Facility Amendment”) to the Initial B+L Amended Credit Agreement (the Initial B+L Amended Credit Agreement, as amended by the November 2024 Credit Facility Amendment, the “B+L Second Amended Credit Agreement”) and consisted of borrowing $ 400 million of new term loans with a maturity of May 2027 (the “B+L May 2027 Incremental Term Loan B Facility” and, together with the B+L September 2028 Term Loan B Facility and the B+L May 2027 Term Loan B Facility, the “B+L Term Facilities,”;

the B+L Term Facilities, together with the B+L Revolving Credit Facility, the “B+L Senior Secured Credit Facilities”).

The proceeds from the B+L May 2027 Incremental Term Loan B Facility were used to repay revolving loans outstanding under the B+L Amended Credit Agreement and for general corporate purposes.

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 the B+L September 2028 Term Loan B Facility are denominated in U.S.

The B+L Term Facilities 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.

dollars, euros, pounds sterling (and, subject to the B+L Suspension of Rights Agreement, Canadian dollars).

As of December 31, 2024, the B+L Revolving Credit Facility had $ 110 million of outstanding borrowings, $ 32 million of issued and outstanding letters of credit and $ 358 million of remaining availability.

5 unchanged sentences

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

(a) a Canadian Dollar Offered Rate (“CDOR”) or (b) a Canadian dollar prime rate, (iii) euros bear interest at a rate per annum equal to EURIBOR and (iv) pounds sterling bear interest at a rate per annum equal to Sterling Overnight Index Average (“SONIA”) (provided, however, that the term SOFR-based rate, CDOR, EURIBOR and SONIA shall be no less than 0.00 % per annum at any time and the U.S.

dollar base rate and the Canadian dollar prime rate shall be no less than 1.00 % per annum at any time), in each case, plus an applicable margin.

(a) CDOR or (b) a Canadian dollar prime rate, (iii) euros bear interest at a rate per annum equal to EURIBOR and (iv) pounds sterling bear interest at a rate per annum equal to Sterling Overnight Index Average (“SONIA”) (provided, however, that the term SOFR-based rate, CDOR, EURIBOR and SONIA shall be no less than 0.00 % per annum at any time and the U.S.

dollar base rate

and the Canadian dollar prime rate shall be no less than 1.00 % per annum at any time), in each case, plus an applicable margin.

Term SOFR-based borrowings under the Revolving Credit Facility are subject to a credit spread adjustment of 0.10 %.

1 unchanged sentence

(i) between 0.75 % to 1.75 % with respect to U.S.

dollar base rate or Canadian dollar prime rate borrowings and between 1.75 % to 2.75 % with respect to SOFR, EURIBOR, SONIA or CDOR borrowings based on Bausch + Lomb’s total net leverage ratio and (ii) after:

(x) Bausch + Lomb’s senior unsecured non-credit-enhanced long term indebtedness for borrowed money receives an investment grade rating from at least two of Standard & Poor’s, Moody’s and Fitch and (y) the B+L May 2027 Term Loan B Facility and the 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.

The stated rate of interest for borrowings under the Revolving Credit Facility at December 31, 2023 ranges from 8.19 % to 8.21 % per annum.

dollar base rate borrowings and between 1.75 % to 2.75 % with respect to SOFR, EURIBOR or SONIA 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 Facilities have been repaid in full in cash (the “IG Trigger”), between 0.015 % to 0.475 % with respect to U.S.

dollar base rate borrowings and between 1.015 % to 1.475 % with respect to SOFR, EURIBOR or SONIA borrowings based on Bausch + Lomb’s debt rating.

The stated rate of interest for borrowings under the Revolving Credit Facility at December 31, 2024 was 7.29 % 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.

12 unchanged sentences

The stated rate of interest under the B+L September 2028 Term Loan B Facility as of December 31, 2024 was 8.33 % 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 the B+L September 2028 Term Loan B Facility under certain circumstances, including from:

Borrowings under the B+L May 2027 Incremental 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 0.00 % 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 May 2027 Incremental Term Facility are subject to a credit spread adjustment of 0.10 %.

The stated rate of interest under the B+L May 2027 Incremental Term Loan B Facility at December 31, 2024 was 7.71 % 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 Term Facilities under certain circumstances, including from:

(i) 100 % of the net cash proceeds of insurance and condemnation proceeds for property or asset losses (subject to reinvestment rights, decrease based on leverage ratios and net proceeds threshold), (ii) 100 % of the net cash proceeds from the incurrence of debt (other than permitted debt as described in the 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).

5 unchanged sentences

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

As of December 31, 2023, the remaining mandatory quarterly amortization payments for the B+L September 2028 Term Loan B Facility were $ 23 million through June 2028, with the remaining term loan balance being due in September 2028.

As of December 31, 2024, the remaining mandatory quarterly amortization payments for the B+L September 2028

Term Loan B Facility were $ 18 million through June 2028, with the remaining term loan balance being due in September 2028.

The amortization rate for the B+L May 2027 Incremental Term Loan B Facility is:

(i) for the eight quarters commencing with the quarter ending March 31, 2025, 2.50 % per annum, or $ 10 million and (ii) thereafter, 7.50 % per annum, or $ 30 million, in each case, payable in quarterly installments.

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

As of December 31, 2024, the remaining mandatory quarterly amortization payments for the B+L May 2027 Incremental Term Loan B Facility were $ 20 million through December 2026, with an additional amortization payment of approximately $ 8 million due in March 2027 and the remaining term loan balance being due in May 2027.

Senior Secured Notes

7 unchanged sentences

Upon the occurrence of a change in control (as defined in the indentures governing the Senior Secured Notes), unless the Company has exercised its right to redeem all of the notes of a series, holders of the Senior Secured Notes may require the Company 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.

6.500 % Senior Secured Notes due 2022 and 7.00 % Senior Secured Notes due 2024

In March 2017, the Company issued $ 2,000 million aggregate principal amount of 7.000 % senior secured notes due March 15, 2024 (the “March 2024 Secured Notes”), in a private placement.

Interest on these notes is payable semi-annually in arrears on each March 15 and September 15.

The March 2024 Secured Notes were repaid in full during 2021 with cash on hand and as part of the June 2021 Refinancing Transactions (as defined below).

5.500 % Senior Secured Notes due 2025

1 unchanged sentence

Interest on the November 2025 Secured Notes is payable semi-annually in arrears on each May 1 and November 1.

The November 2025 Secured Notes are redeemable at the option of the Company, in whole or in part, at any time, at the redemption prices set forth in the indenture.

The November 2025 Secured Notes are redeemable at the option of the Company, in whole or in part, at any time, at the redemption prices set forth in the indenture, plus accrued and unpaid interest to, but not including, the date of the redemption.

5.750 % Senior Secured Notes due 2027

3 unchanged sentences

The August 2027 Secured Notes are redeemable at the option of the Company, in whole or in part, at the redemption prices set forth in the indenture, plus accrued and unpaid interest to the date of redemption.

4.875 % Senior Secured Notes due 2028 - June 2021 Refinancing Transactions

4.875 % Senior Secured Notes due 2028

On June 8, 2021, the Company issued $ 1,600 million aggregate principal amount of 4.875 % Senior Secured Notes due June 2028 (the “June 2028 Secured Notes”) in a private placement.

The proceeds and cash on hand were used to:

(i) repurchase a portion and redeem the remainder of $ 1,600 million of the March 2024 Secured Notes, representing the remaining outstanding principal balance of the March 2024 Secured Notes and (ii) pay all fees and expenses associated with these transactions (collectively, the “June 2021 Refinancing Transactions”).

The June 2021 Refinancing Transactions were accounted for as an extinguishment of debt and the Company incurred a loss on extinguishment of debt of $ 38 million representing the difference between the amount paid to settle the extinguished debt and the extinguished debt’s carrying value.

Interest on the June 2028 Secured Notes is payable semi-annually in arrears on each June 1 and December 1.

The June 2028 Secured Notes are redeemable at the option of the Company, in whole or in part, at any time on or after June 1, 2024, at the redemption prices set forth in the June 2028 Secured Notes indenture.

The Company may redeem some or all of the June 2028 Secured Notes prior to June 1, 2024 at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but not including, the date of the redemption plus a “make-whole” premium.

In addition, at any time prior to June 1, 2024, the Company may redeem up to 40 % of the aggregate principal amount of the June 2028 Secured Notes using the net proceeds of certain equity offerings at the redemption price set forth in the June 2028 Secured Notes indenture.

The June 2028 Secured Notes are redeemable at the option of the Company, in whole or in part, at the redemption prices set forth in the June 2028 Secured Notes indenture, plus accrued and unpaid interest to, but not including, the date of the redemption.

6.125 % Senior Secured Notes due 2027 - February 2022 Financing

2 unchanged sentences

The February 2027 Secured Notes accrue interest at a rate of 6.125 % per year, payable semi-annually in arrears on each February and August.

The February 2027 Secured Notes are redeemable at the option of the Company, in whole or in part, at any time on or after February 2024, at the redemption prices set forth in the indenture.

The Company may redeem some or all of the February 2027 Secured Notes prior to February 2024 at a price equal to 100 % of the principal amount thereof plus a “make-whole” premium.

Prior to February 2024, the Company may redeem up to 40 % of the aggregate principal amount of the February 2027 Secured Notes using the proceeds of certain equity offerings at the redemption price set forth in the indenture.

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, plus accrued and unpaid interest to, but not including, the date of the redemption.

New BHC Secured Notes

7 unchanged sentences

The 9.00 % Intermediate Holdco Secured Notes mature on January 30, 2028, and have a stated interest of 9.00 % per year that is payable semi-annually in arrears on each January 30 and July 30.

The 9.00 % Intermediate Holdco Secured Notes are redeemable at the option of Intermediate Holdco, in whole or in part, at any time, at the redemption prices set forth in the 9.00 % Intermediate Holdco Secured Notes indenture.

The 9.00 % Intermediate Holdco Secured Notes are redeemable at the option of Intermediate Holdco, in whole or in part, at any time, at par, plus accrued and unpaid interest to, but not including, the date of the redemption.

The 9.00 % Intermediate Holdco Secured Notes are general senior secured obligations of Intermediate Holdco and secured by first priority liens (subject to permitted liens and certain other exceptions) on substantially all of the assets of Intermediate Holdco, which as of December 31, 2024 were comprised of 38.3 % ( 135,099,643 shares) of the issued and outstanding common shares of Bausch + Lomb.

3 unchanged sentences

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 the 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 in Note 3, “ACQUISITIONS, LICENSING AGREEMENTS AND DIVESTITURE”) and related acquisition and financing costs.

A portion of the proceeds from the B+L October 2028 Secured Notes, along with the proceeds of the 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 in Note 3, “ACQUISITIONS AND LICENSING AGREEMENTS”) 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.

5 unchanged sentences

(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.

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.

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, plus accrued and unpaid interest to, but not including, the date of the redemption.

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

24 unchanged sentences

The Company may redeem all or a portion of the December 2025 Unsecured Notes, at the applicable redemption prices set forth in the December 2025 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

On September 30, 2022, $ 541 million in aggregate principal balance of the December 2025 Unsecured Notes were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

On September 30, 2022, $ 541 million in aggregate principal balance of the December 2025 Unsecured Notes were validly tendered and accepted by the Company in connection with the 2022 Exchange noted above.

In December 2023, $ 4 million in aggregate principal balance of the December 2025 Unsecured Notes were purchased in the open market and retired.

In January 2024 and May 2024, $ 420 million in aggregate principal balance were purchased in the open market and in privately negotiated transaction and retired.

9.250 % Senior Unsecured Notes due 2026

3 unchanged sentences

BHA may redeem all or a portion of the April 2026 Unsecured Notes at the applicable redemption prices set forth in the April 2026 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

On September 30, 2022, $ 752 million in aggregate principal balance of the April 2026 Unsecured Notes were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

On September 30, 2022, $ 752 million in aggregate principal balance of the April 2026 Unsecured Notes were validly tendered and accepted by the Company in connection with the 2022 Exchange noted above.

In December 2023, $ 4 million in aggregate principal balance of the April 2026 Unsecured Notes were purchased in the open market and retired.

In January 2024, $ 135 million in aggregate principal balance were purchased in the open market and retired.

8.500 % Senior Unsecured Notes due 2027

4 unchanged sentences

BHA may redeem all or a portion of the January 2027 Unsecured Notes at the applicable redemption prices set forth in the January 2027 Unsecured Notes indenture, plus accrued and unpaid interest to the date of redemption.

On September 30, 2022, $ 1,099 million in aggregate principal balance of the 8.500 % January 2027 Unsecured Notes were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

7.000 % Senior Unsecured Notes due 2028 and 7.250 % Senior Unsecured Notes due 2029

3 unchanged sentences

Interest on the May 2029 Unsecured Notes is payable semi-annually in arrears on each May 30 and November 30.

The 7.000 % January 2028 Unsecured Notes are redeemable at the option of the Company, in whole or in part, at any time and the May 2029 Unsecured Notes are redeemable at the option of the Company, in whole or in part, at any time on or after May 30, 2024, at the redemption prices set forth in the respective indentures.

The Company may redeem some or all of the May 2029 Unsecured Notes prior to May 30, 2024, at a price equal to 100 % of the principal amount thereof plus a “make-whole” premium.

On September 30, 2022, $ 540 million and $ 373 million in aggregate principal balance of the 7.000 % January 2028 Unsecured Notes and 7.250 % May 2029 Unsecured Notes, respectively, were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

The 7.000 % January 2028 Unsecured Notes and the May 2029 Unsecured Notes are redeemable at the option of the Company, in whole or in part, at any time, at the redemption prices set forth in the respective indentures, plus accrued and unpaid interest to, but not including, the date of the redemption.

5.000 % Senior Unsecured Notes due 2028 and 5.250 % Senior Unsecured Notes due 2030

4 unchanged sentences

Interest on the January 2030 Unsecured Notes is payable semi-annually in arrears on each January 30 and July 30.

The 5.000 % January 2028 Unsecured Notes are redeemable at the option of the Company, in whole or in part, at any time and the January 2030 Unsecured Notes are redeemable at the option of the Company, in whole or in part, at any time on or after

January 30, 2025, at the redemption prices set forth in the respective indentures.

The Company may redeem some or all of the January 2030 Unsecured Notes prior to January 30, 2025 at a price equal to 100 % of the principal amount thereof plus a “make-whole” premium.

On September 30, 2022, $ 710 million and $ 332 million in aggregate principal balance of the 5.000 % January 2028 Unsecured Notes and the January 2030 Unsecured Notes, respectively, were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

The 5.000 % January 2028 Unsecured Notes and the January 2030 Unsecured Notes are redeemable at the option of the Company, in whole or in part, at any time, at the redemption prices set forth in the respective indentures, plus accrued and unpaid interest to, but not including, the date of the redemption.

6.250 % Senior Unsecured Notes due 2029

2 unchanged sentences

(i) repurchase $ 1,250 million aggregate principal amount of the outstanding March 2022 Secured Notes, (ii) prepay $ 303 million of mandatory amortization scheduled for payment in 2022 under the Company’s June 2025 and November 2025 Term Loan B Facilities and (iii) pay all fees and expenses associated with these transactions, The 6.250 % February 2029 Unsecured Notes accrue interest at the rate of 6.250 % per year, payable semi-annually in arrears on each of February 15 and August 15.

The Company may redeem all or a portion of the 6.250 % February 2029 Unsecured Notes at any time prior to February 15, 2024, at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium.

On or after February 15, 2024, the Company may redeem all or a portion of the 6.250 % February 2029 Unsecured Notes at the applicable redemption prices set forth in the 6.250 % February 2029 Unsecured Notes indenture, plus accrued and unpaid interest to, but not including, the date of redemption.

On September 30, 2022, $ 540 million in aggregate principal balance of the 6.250 % February 2029 Unsecured Notes were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

The Company may redeem all or a portion of the 6.250 % February 2029 Unsecured Notes at the applicable redemption prices set forth in the 6.250 % February 2029 Unsecured Notes indenture, plus accrued and unpaid interest to, but not including, the date of redemption.

5.000 % Senior Unsecured Notes due 2029 and 5.250 % Senior Unsecured Notes due 2031

6 unchanged sentences

The Company may redeem all or a portion of the February 2031 Unsecured Notes at any time prior to February 15, 2026, at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium.

In addition, at any time prior to February 15, 2024, the Company may redeem up to 40 % of the aggregate principal amount of the outstanding February 2031 Unsecured Notes with the net proceeds of certain equity offerings at the redemption price set forth in the February 2031 Unsecured Notes indenture.

On or after February 15, 2026, the Company may redeem all or a portion of the February 2031 Unsecured Notes at the applicable redemption prices set forth in the February 2031 Unsecured Notes indenture, plus accrued and unpaid interest to, but not including, the date of redemption.

On September 30, 2022, $ 371 million and $ 336 million in aggregate principal balance of the 5.000 % February 2029 Unsecured Notes and 5.250 % February 2031 Unsecured Notes, respectively, were validly tendered and accepted by the Company in connection with the Exchange Offer noted above.

Weighted Average Stated Rate of Interest

The weighted average stated rate of interest for the Company’s outstanding debt obligations as of December 31, 2024 and 2023 was 7.72 % and 8.05 %, respectively.

Due to the accounting treatment for the New Secured Notes, interest expense in the Company’s financial statements for 2023 and 2022, and in future periods will not be representative of the weighted average stated rate of interest.

Gain (Loss) on Extinguishment of Debt

Due to the accounting treatment for the 2022 Secured Notes, interest expense in the Company’s financial statements for 2024 and 2023, and in future periods will not be representative of the weighted average stated rate of interest.

Gain on Extinguishment of Debt

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

Such repurchases or exchanges, if any, will depend on prevailing market conditions, future liquidity requirements, contractual restrictions and other factors.

In January 2024 and May 2024, the Company repurchased and retired a portion of the December 2025 Unsecured Notes and the April 2026 Unsecured Notes with an aggregate par value of approximately $ 555 million, for an aggregate cost of approximately $ 530 million.

In connection with these repurchases, the Company recognized a net gain of approximately $ 23 million on extinguishment of debt which represents the difference between the amounts paid to settle the extinguished debt and its carrying value.

In December 2023, the Company, through a series of transactions repurchased and retired outstanding senior unsecured notes with an aggregate par value of $ 8 million in the open market, for an aggregate cost of $ 7 million and recognized a net gain of approximately $ 1 million.

1 unchanged sentence

In connection with these repurchases, the Company recognized a gain of $ 369 million, net of write-offs of debt premiums, discounts and deferred issuance costs, on extinguishment of debt which represents the differences between the amounts paid to settle the extinguished debt and its carrying value.

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

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

In connection with (i) the repayment of the June 2025 Term Loan B Facility, November 2025 Term Loan B Facility and 2023 Revolving Credit Facility and (ii) the redemption of April 2025 Unsecured Notes, the Company incurred a loss on extinguishment of debt of $ 64 million representing the difference between the amount paid to settle the extinguished debt and the extinguished debt’s carrying value.

Maturities and Mandatory Payments

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

Such repurchases or exchanges, if any, will depend on prevailing market conditions, future liquidity requirements, contractual restrictions and other factors.

Maturities and mandatory payments of debt obligations for the five succeeding years ending December 31 and thereafter are as follows:

4 unchanged sentences

Total long-term debt and other $ 21,616

The Company regularly evaluates market conditions, its liquidity profile and available financing alternatives, and may consider executing opportunistic financing transactions, including but not limited to, refinancing or restructuring consolidated indebtedness, issuing new debt instruments, divesting of assets or businesses and issuing equity or equity-linked securities (including secondary offerings of a portion of its holdings of common shares of Bausch + Lomb), as deemed appropriate, to manage its debt maturities and improve its capital structure and liquidity.

The principal value of debt obligations due in 2025 includes $ 1,680 million of 5.50 % Senior Secured Notes due on November 1, 2025 and the $ 535 million of 9.00 % Senior Unsecured Notes due on December 15, 2025.

The principal value of the debt obligations due in 2026 includes $ 602 million of 9.25 % Senior Unsecured Notes due on April 1, 2026.

The Company believes that its existing sources of liquidity, including current cash balances, cash generated from operations, and availability under its Revolving Credit Facility, AR Credit Facility and Bridge Facility (as discussed below) will be sufficient to meet these debt obligations at or prior to their maturity.

The Company’s ability to satisfy its remaining debt obligations will depend upon its future operating performance, as well as its continuing efforts to improve its balance sheet, including raising new capital, refinancing debt, and/or monetizing a portion of the Company’s holdings of common shares of Bausch + Lomb.

The Company’s ability to raise new capital or refinance its debt or monetize a portion of its holdings of common shares of Bausch + Lomb, will depend on the capital markets and its financial condition at such times.

The Company’s financing initiatives will also depend upon factors including prevailing economic conditions and financial, business and other factors, many of which are beyond its control.

If the Company is unable to refinance on terms acceptable to the Company, whether because of the condition of the capital markets or the Company’s own financial condition, it may be unable to raise new capital or to restructure or refinance its debt, or to do so on terms that are favorable to the Company.

Under the 2022 Amended Credit Agreement, there is no Excess Cash Flow payment due for 2024.

Bridge Facility

On February 11, 2025, 1261229 B.C.

Ltd., entered into a commitment with a third-party lender to provide a senior secured bridge loan facility in an aggregate principal amount of up to $ 700 million, subject to limitations based on the value of the collateral (the “Bridge Facility”).

The obligations to fund the Bridge Facility terminate after September 9, 2025, and are subject to customary terms and conditions.

If funded, collateral for the Bridge Facility would include a portion of the Bausch + Lomb shares owned by the Company.

The Bridge Facility, if funded, will mature 364 days from the date of funding and is expected to bear interest at the Company’s option, at either:

(a) the term SOFR rate subject to a floor of 0.50 % per annum plus 475 basis points per annum or (b) the Alternate Base Rate plus 375 basis points per annum, in each case subject to customary step ups prior to maturity.

In the event the Bridge Facility is funded, the sole recourse of any Bridge Facility lender would be limited to 1261229 B.C.

and the collateral granted by it.

PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS

18 unchanged sentences

The Company recognizes in its Consolidated Balance Sheets an asset or liability equal to the over- or under-funded benefit obligation of each defined benefit pension plan and postretirement benefit plan.

Actuarial gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost are recognized, net of tax, as a component of Other comprehensive income (loss).

Actuarial gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic cost (benefit) are recognized, net of tax, as a component of Other comprehensive income (loss).

The amounts included in Accumulated other comprehensive loss as of December 31, 2024 and 2023 were as follows:

5 unchanged sentences

Unrecognized prior service credits $ — $ — $ 21 $ 23 $ 1 $ 3

Net Periodic (Benefit) Cost

The table below provides the components of net periodic (benefit) cost for the Company’s defined benefit pension plans and postretirement benefit plan in 2023, 2022 and 2021:

Net Periodic Cost (Benefit)

The table below provides the components of net periodic cost (benefit) for the Company’s defined benefit pension plans and postretirement benefit plan in 2024, 2023 and 2022:

Pension Benefit Plans U.S.

8 unchanged sentences

Settlement loss recognized — — 1 1 2 8 — — —

Net periodic (benefit) cost $ 3 $ ( 3 ) $ ( 6 ) $ 5 $ 12 $ 11 $ ( 1 ) $ ( 1 ) $ ( 2 )

Net periodic cost (benefit) $ 1 $ 3 $ ( 3 ) $ 4 $ 5 $ 12 $ ( 1 ) $ ( 1 ) $ ( 1 )

Benefit Obligation, Change in Plan Assets and Funded Status

10 unchanged sentences

Benefits paid ( 15 ) ( 16 ) ( 5 ) ( 4 ) ( 2 ) ( 3 )

Actuarial loss (gain) 3 ( 36 ) 8 ( 54 ) — ( 5 )

Actuarial (gain) loss ( 3 ) 3 1 8 ( 1 ) —

Currency translation adjustments — — ( 10 ) 4 — —

23 unchanged sentences

These contributions are determined based upon recommendations made by the actuary under accepted actuarial principles.

In 2024, the Company expects to contribute $ 4 million, $ 4 million and $ 3 million to the U.S.

In 2025, the Company expects to contribute $ 0 , $ 3 million and $ 3 million to the U.S.

pension benefit plan, the non-U.S.

14 unchanged sentences

2024 2023 2022 2024 2023 2022

For Determining Net Periodic (Benefit) Cost

For Determining Net Periodic Cost (Benefit)

Discount rate 5.11 % 5.41 % 2.69 % 5.08 % 5.39 % 2.57 %

121 unchanged sentences

The Company transferred the common shares available under the 2011 Plan to the 2014 Plan.

The maximum number of common shares that may be issued to participants under the 2014 Plan was initially equal to 18,000,000 common shares, plus the number of common shares under the 2011 Plan reserved but unissued and not underlying outstanding awards and the number of common shares becoming available for reuse after awards are terminated, forfeited, cancelled, exchanged or surrendered under the 2011 Plan and the Company’s 2007 Equity Compensation Plan.

The 2014 Plan was amended and restated effective April 30, 2018, April 28, 2020 and June 21, 2022 to, among other things, increase the number of common shares authorized for issuance under the 2014 Plan.

The maximum number of common shares that may be issued to participants under the 2014 Plan was initially 18,000,000 common shares, plus the number of common shares under the 2011 Plan reserved but unissued and not underlying outstanding awards and the number of common shares becoming available for reuse after awards are terminated, forfeited, cancelled, exchanged or surrendered under the 2011 Plan and the Company’s 2007 Equity Compensation Plan.

The 2014 Plan was amended and restated effective April 30, 2018, April 28, 2020, June 21, 2022 and May 16, 2023 to, among other things, increase the number of common shares authorized for issuance under the 2014 Plan.

Effective May 14, 2024, Bausch Health further amended and restated the 2014 Plan, as subsequently amended and restated (the “Amended and Restated 2014 Plan”).

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

Such amendment and restatement increased the number of common shares authorized for issuance under the Amended and Restated 2014 Plan by an additional 20,000,000 common shares.

Approximately 33,170,000 common shares were available for future grants as of December 31, 2024.

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

Bausch Health has a long-term incentive program with the objective of aligning the share-based awards granted to senior management with the Company’s focus on generating operating cash flow while maintaining focus on improving total shareholder return over the long-term.

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

The share-based awards granted under this long-term incentive program consist of time-based stock options, time-based RSUs and performance-based RSUs.

Performance-based RSUs are comprised of:

(i) awards that vest upon achievement of certain share price appreciation conditions that are based on total shareholder return (“TSR”), (ii) awards that vest upon attainment of certain performance targets that are based on the Company’s return on tangible capital (“ROTC”), (iii) awards that vest upon the attainment of certain targets that are based on the Company’s adjusted operating cash flow (“Adjusted Operating Cash Flow”) with a total shareholder return modifier and (iv) awards that vest fully or partially upon attainment of certain goals that are linked to the B+L Separation.

In order to retain and incentivize certain members of Bausch Health’s senior leadership team, on September 5, 2022, the Talent and Compensation Committee of the Board of Directors approved a retention program for certain executive officers and other members of leadership.

Under the retention program, certain executive officers and other members of leadership were granted a one-time award of restricted stock units (the “Retention RSU Grant”) under the Amended and Restated 2014 Plan.

The Retention RSU Grants will generally vest in 1/3 installments on each of the first three anniversaries of the grant date based on continuous employment with Bausch Health.

The following table summarizes the components and classification of the Company’s share-based compensation expense related to stock options and RSUs for the years 2023, 2022 and 2021 were as follows:

Performance-based RSUs are

comprised of awards that vest upon the attainment of certain targets that are based on the Company’s adjusted operating cash flow (“Adjusted Operating Cash Flow”) with a TSR modifier.

The following table summarizes the components and classification of the Company’s share-based compensation expense related to stock options and RSUs for the years 2024, 2023 and 2022:

(in millions) 2024 2023 2022

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Stock options generally vest 33 % and 25 % each year over a three-year and four-year period, respectively, on the anniversary of the date of grant.

There were no stock options granted in 2024.

The fair values of all stock options granted for the years 2023 and 2022 were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

2024 2023 2022

Expected stock option life (years) 3.0 3.0 3.0

Expected volatility 76.1 % 37.8 % 50.2 %

Risk-free interest rate 4.8 % 1.8 % 0.4 %

Expected dividend yield — % — % — %

Expected stock option life (years) N/A 3.0 3.0

Expected volatility N/A 76.1 % 37.8 %

Risk-free interest rate N/A 4.8 % 1.8 %

Expected dividend yield N/A — % — %

The expected stock option life was determined based on historical exercise and forfeiture patterns.

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Outstanding, December 31, 2024

8.1 $ 22.96 3.8 $ —

Vested and expected to vest, December 31, 2024

7.9 $ 23.07 3.8 $ —

Vested and exercisable, December 31, 2024

7.0 $ 23.75 3.3 $ —

The weighted-average fair values of all stock options granted in 2024, 2023 and 2022 were $ 0 , $ 4.87 and $ 6.60 , respectively.

The total intrinsic values of stock options exercised in 2023, 2022 and 2021 were $ 0 , $ 1 million and $ 15 million, respectively.

Proceeds received on the exercise of stock options in 2023, 2022 and 2021 were $ 0 , $ 3 million and $ 22 million, respectively.

The total intrinsic values of stock options exercised in 2024, 2023 and 2022 were $ 0 , $ 0 and $ 1 million, respectively.

Proceeds received on the exercise of stock options in 2024, 2023 and 2022 were $ 0 , $ 0 and $ 3 million, respectively.

As of December 31, 2024, the total remaining unrecognized compensation expense related to non-vested stock options amounted to $ 1 million, which will be amortized over the weighted-average remaining requisite service period of approximately 0.9 years.

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The fair value of each Adjusted Operating Cash Flow performance-based RSU and TSR performance-based RSU granted during 2024 and 2023, respectively, was estimated using a Monte Carlo Simulation model, which utilizes multiple input variables to estimate the probability that the performance condition will be achieved.

For the ROTC performance-based RSUs granted in 2022 and 2021, the fair value was estimated based on the trading price of the Company’s common shares on the date of grant.

For the ROTC performance-based RSUs granted in 2022, the fair value was estimated based on the trading price of the Company’s common shares on the date of grant.

Expense recognized for the performance-based RSUs in each reporting period reflects the Company’s latest estimate of the number of performance-based RSUs that are expected to vest.

If the performance-based RSUs do not ultimately vest due to the targets not being met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

There were no TSR performance-based RSUs granted in 2022.

The fair values of TSR performance-based RSUs granted during 2023 and 2021 were estimated with the following assumptions:

There were no performance-based RSUs granted in 2022.

The fair values of performance-based RSUs granted during 2024 and 2023 were estimated with the following assumptions:

2024 2023 2022

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Granted 1.3 $ 9.60

Vested ( 1.4 ) $ 30.06

Forfeited ( 0.1 ) $ 10.25

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A maximum of approximately 3,356,000 common shares could be issued upon vesting of the performance-based RSUs outstanding as of December 31, 2024.

The total fair value of performance-based RSUs vested in 2023 was $ 43 million.

Bausch + Lomb Long-Term Incentive Plan

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

At Bausch + Lomb’s annual meeting of shareholders held on May 29, 2024, Bausch + Lomb’s shareholders approved a further amendment and restatement of the B+L Plan to increase the number of shares authorized for issuance thereunder by an additional 14,000,000 common shares, resulting in an aggregate

52,000,000 common shares of Bausch + Lomb authorized for issuance under the B+L Plan.

The B+L Plan provides for the grant of various types of awards, including RSUs, restricted stock, stock appreciation rights, stock options, performance-based awards and cash awards.

Under the B+L Plan,

the exercise price of awards, if any, is set on the grant date and may not be less than the fair market value per share on that date.

Under the B+L Plan, the exercise price of awards, if any, is set on the grant date and may not be less than the fair market value per share on that date.

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

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The share-based awards granted under this long-term incentive program consist of time-based stock options, time-based RSUs and performance-based RSUs (“PSUs”).

The stock options and RSUs also include awards granted in connection with the B+L IPO (the “IPO Founder Grants”), for which the time-based vesting conditions were linked to the completion of the Separation.

The PSUs are comprised of awards that vest upon:

(i) achievement of certain share price appreciation conditions, including absolute and relative total shareholder return (“TSR”) (the “TSR PSUs”) and (ii) attainment of certain performance targets that are based on Bausch + Lomb’s Organic Revenue Growth (the “Organic Revenue Growth PSUs”).

(i) achievement of certain share price appreciation conditions, including absolute and relative total shareholder return (“TSR”) (the “TSR PSUs”), (ii) attainment of certain performance targets that are based on Bausch + Lomb’s Organic Revenue Growth (the “Organic Revenue Growth PSUs”) and (iii) outperformance of performance goals, based on the level of achievement of:

(a) a revenue metric (measured for fiscal year 2026) and (b) relative TSR metric (if applicable) (“OPG PSU”).

If Bausch + Lomb’s performance is below a specified performance level, no common shares will be paid.

Each vested PSU represents the right of a holder to receive a number of Bausch + Lomb’s common shares up to a specified maximum.

On May 5, 2022, in connection with the B+L IPO, Bausch + Lomb granted certain awards to certain eligible recipients (the “IPO Founder Grants”).

Eligible recipients are individuals employed by Bausch + Lomb or employed by an affiliate of Bausch + Lomb.

Approximately 3,900,000 IPO Founder Grants were issued to Bausch + Lomb executive officers and were awarded 50 % in the form of stock options and 50 % in the form of RSUs.

Additionally, Bausch + Lomb granted approximately 5,700,000 stock options and RSUs to non-executive eligible recipients, of which approximately 4,300,000 were B+L IPO Founder Grants.

The IPO Founder grants in the form of stock options have a three-year graded vesting period and the IPO Founder RSUs vest 50 % in the second year and 50 % in the third year after the grant.

As discussed below, vesting of the IPO Founder Grants are linked to the completion of the B+L Separation and expense recognition will begin near the time of the B+L Separation.

During the third quarter of 2022, the Talent and Compensation Committee of the Bausch + Lomb Board of Directors approved a retention program that includes Bausch + Lomb’s named executive officers (other than the CEO) and certain other employees.

This program provides these Executive Officers (other than the CEO), for among other benefits, pro-rata vesting of the IPO Founder Grants previously issued to these named executives, subject to certain restrictions, in the event of an involuntary termination of employment by Bausch + Lomb without “cause” or the employee’s resignation for “good reason”, in each case within the one-year anniversary of Bausch + Lomb’s appointment of the successor to the CEO (pro-rated based on the period of service relative to the original three-year vesting period associated with such grants).

However, the IPO Founder Grants in the form of RSUs (while settled in connection with the termination of employment) will not be transferrable until, and the IPO Founder Grants in the form of stock options will not be exercisable until, the earliest to occur of:

(i) the date the spinoff distribution is completed, (ii) a “change in control” (as defined in the applicable retention award letter), (iii) the date the Board of Directors of the Company determines that it will no longer pursue the spinoff distribution and (iv) the two-year anniversary of the executive’s termination of employment and the IPO Founder Grants in the form of stock options will be exercisable for two years following the later of this date and the termination date Additionally, these named executive officers (other than the CEO) and certain other employees were granted a one-time award of approximately 850,000 RSUs in the aggregate under the retention program pursuant to Bausch + Lomb’s 2022 Omnibus Incentive Plan.

The retention grant will generally vest in 1/3 installments on each of the first three anniversaries of the grant date based on continuous employment with Bausch + Lomb.

On February 15, 2023, Bausch + Lomb announced the appointment of Brent Saunders as its Chief Executive Officer and Chair of the Board of Directors of Bausch + Lomb, effective March 6, 2023.

Pursuant to Mr.

Saunders’ employment agreement, on February 23, 2023, Mr.

Saunders was granted the following equity grants under the B+L Plan:

750,000 PSUs, 1,318,681 stock options and 375,000 RSUs.

The RSUs are scheduled to vest 50 % on the second anniversary of the grant date and the remaining 50 % on the third anniversary of the grant date.

The stock options are scheduled to vest in equal one-third installments on each of the first three anniversaries of the grant date.

The PSUs vest on the four th anniversary of the 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 Talent and Compensation Committee of the B+L Board of Directors approved a PSU award for a limited number of key B+L senior leaders (the “B+L Executives”), effective as of February 28, 2024, including each of B+L’s current named executive officers.

This OPG PSU award is designed to reward the B+L Executives for achieving significant outperformance of performance goals that Bausch + Lomb believes would ultimately deliver substantial value to shareholders if achieved.

The OPG PSUs may be earned between 0 % and 300 % based on the level of achievement of:

(i) a revenue metric (measured for fiscal year 2026) and (ii) a relative TSR metric for B+L (if applicable).

Any OPG PSUs that are earned will vest on February 28, 2027, subject generally to the B+L Executive’s continued employment through such date, except in limited circumstances set forth in the applicable award agreement.

During July 2024, the Talent and Compensation Committee of the B+L Board of Directors approved certain amendments to:

(i) the TSR performance metric of certain PSU awards, including the previously granted OPG PSU and (ii) the time-based vesting conditions of the IPO Founder Grants.

The Company began accounting for these modifications during the quarter ended September 30, 2024.

These modifications did not have a material impact on the Consolidated Financial Statements during the year 2024.

Approximately 20,700,000 Bausch + Lomb common shares were available for future grants as of December 31, 2024 under the B+L Plan.

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Stock options granted under the B+L Plan generally expire on the ten th anniversary of the grant date.

The exercise price of any stock option granted under the B+L Plan will not be less than the closing price per common share preceding the date of grant.

The exercise price of any stock option granted under the B+L Plan will not be less than the closing price per common share on the date of grant.

Stock options generally vest 33 % each year over a three-year period, on the anniversary of the date of grant.

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Bausch + Lomb will continue to leverage the Company’s historical stock option experience and peer company data until it has sufficient experience with its own equity awards and market data.

The risk-free interest rate was determined based on the rate at the time of grant for zero-coupon U.S.

The risk-free interest rate was determined based on the rate at the

time of grant for zero-coupon U.S.

government bonds with maturity dates equal to the expected life of the stock option.

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Outstanding, December 31, 2024

9.0 $ 17.90 6.9 $ 2.3

Vested and expected to vest, December 31, 2024

8.4 $ 17.90 6.3 $ 2.1

Vested and exercisable, December 31, 2024

1.1 $ 18.15 7.3 $ 0.1

The weighted-average fair values of stock options granted to Bausch + Lomb employees in 2024 and 2023 were $ 4.94 and $ 5.33 , respectively.

There were no stock options exercised in 2023 or 2022.

The stock options exercised in 2024 were not material.

There were no stock options exercised in 2023.

As of December 31, 2024, the total remaining unrecognized compensation expense related to non-vested stock options amounted to $ 17 million, which will be amortized over the weighted-average remaining requisite service period of approximately 1.5 years.

Unrecognized compensation does not include IPO Founder Grants as they are linked to the completion of the Separation and expense recognition will begin near the time of the separation.

Time-Based RSUs

RSUs under the Bausch + Lomb Corporation Omnibus Plan generally vest 33 % a year over a three-year period with the exception of IPO Founder RSUs and the RSUs granted to Mr.

Saunders in connection with his appointment, which vest in two equal installments, such that 50 % vest on the second anniversary and 50 % vest on the third anniversary of the grant date.

RSUs under the Bausch + Lomb Corporation Plan generally vest 33 % a year over a three-year period with the exception of the RSUs granted pursuant to the IPO Founder Grants and the RSUs granted to B+L’s Chief Executive Officer in connection with his appointment, which vest in two equal installments, such that 50 % vest on the second anniversary and 50 % vest on the third anniversary of the grant date.

RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on Bausch + Lomb’s common shares.

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To the extent provided for in a RSU agreement, Bausch + Lomb may, in lieu of all or a portion of the common shares which would otherwise be provided to a holder, elect to pay a cash amount equivalent to the market price of Bausch + Lomb’s common shares on the vesting date for each vested RSU.

The amount of cash payment will be determined based on

the average market price of Bausch + Lomb’s common shares on the vesting date.

The amount of cash payment will be determined based on the average market price of Bausch + Lomb’s common shares on the vesting date.

Bausch + Lomb’s current intent is to settle vested RSUs through the issuance of common shares.

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The following table summarizes non-vested RSU activity under Bausch + Lomb’s Plan during 2024:

(in millions, except per share amounts) Restricted Stock Units (RSUs) Weighted-Average

(in millions, except per share amounts) RSUs Weighted-Average

Fair Value Per Share

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As of December 31, 2024, the total remaining unrecognized compensation expense related to non-vested RSUs amounted to $ 60 million, which will be amortized over the weighted-average remaining requisite service period of approximately 1.5 years.

Unrecognized compensation does not include IPO Founder Grants as they are linked to the completion of the Separation and expense recognition will begin near the time of the separation.

The total fair value of RSUs vested in 2023 was $ 27 million.

The total fair value of RSUs vested in 2022 was no t material.

The total fair value of RSUs vested in 2024 and 2023 was $ 41 million and $ 27 million, respectively.

Performance-Based RSUs

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The performance-based PSUs are comprised of awards that vest upon:

(i) achievement of certain share price appreciation conditions, including absolute and relative total shareholder return and (ii) attainment of certain performance targets that are based on Bausch + Lomb’s Organic Revenue Growth.

(i) achievement of certain share price appreciation conditions, including absolute and relative total shareholder return, (ii) attainment of certain performance targets that are based on Bausch + Lomb’s Organic Revenue Growth and (iii) level of achievement of:

(a) a revenue metric (measured for fiscal year 2026) and (b) a relative TSR metric (if applicable).

If Bausch + Lomb’s performance is below a specified performance level, no common shares will be paid.

The maximum level of achievement of the performance goals is 200 % - 300 % of the target.

The fair value of each TSR PSU granted during 2023 was estimated using a Monte Carlo Simulation model, which utilizes multiple input variables to estimate the probability that the performance condition will be achieved.

The fair value of the TSR PSUs granted during 2024 and 2023 and the OPG PSUs granted during 2024 were estimated using a Monte Carlo Simulation model, which utilizes multiple input variables to estimate the probability that the performance condition will be achieved.

The fair value of the Organic Revenue Growth PSUs is estimated based on the trading price of Bausch + Lomb’s common shares on the date of grant.

Expense recognized for the Organic Revenue Growth PSUs in each reporting period reflects Bausch + Lomb’s latest estimate of Organic Revenue Growth in determining the number of PSUs that are expected to vest.

If the Organic Revenue Growth PSUs do not ultimately vest due to the Organic Revenue Growth targets not being met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

There were no TSR PSUs granted in 2022 and 2021.

The fair values of TSR PSUs granted during 2023 were estimated with the following assumptions:

Expense recognized for the OPG PSUs in each reporting period reflects the latest probability of Bausch + Lomb’s achieving certain revenue targets in determining the number of PSUs that are expected to vest.

If the Organic Revenue Growth PSUs do not ultimately vest due to the Organic Revenue Growth not being met and/or the OPG PSUs do not ultimately vest due to certain revenue targets not being met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

There were no TSR PSUs granted in 2022.

The fair values of TSR PSUs granted during 2024 and 2023 were estimated with the following assumptions:

Contractual term (years) 3.0 3.6

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During 2024, Bausch + Lomb granted approximately 3,000,000 performance-based RSUs, consisting of:

(i) approximately 1,200,000 TSR PSUs with an average grant date fair value of $ 27.65 per RSU and (ii) approximately 100,000 Organic Revenue Growth PSUs with a weighted-average grant date fair value of $ 17.96 per RSU.

As of December 31, 2023, the total remaining unrecognized compensation expense related to non-vested performance-based RSUs amounted to $ 26 million, which will be amortized over the weighted-average remaining requisite service period of approximately 2.8 years.

(i) approximately 1,800,000 OPG PSUs with a weighted-average grant date fair value of $ 17.20 per RSU, (ii) approximately 800,000 TSR PSUs with an average grant date fair value of $ 21.21 per RSU and (iii) approximately 400,000 Organic Revenue Growth PSUs with a weighted-average grant date fair value of $ 16.09 per RSU.

As of December 31, 2024, the total remaining unrecognized compensation expense related to non-vested performance-based RSUs under the Company’s 2014 Plan amounted to $ 60 million, which will be amortized over the weighted-average remaining requisite service period of approximately 2.1 years.

A maximum of approximately 10,800,000 common shares could be issued upon vesting of the performance-based RSUs outstanding as of December 31, 2024.

There were no performance-based RSUs that vested during 2023.

There were no performance-based RSUs that vested during 2024 and 2023.

In addition, while Bausch + Lomb did not grant performance-based RSUs during 2022, certain Bausch + Lomb employees continued to participate in the Company’s performance-based RSUs granted prior to May 5, 2022.

As of December 31, 2023, the total remaining unrecognized compensation expense related to the Company’s non-vested performance-based RSUs was $ 0 .

As of December 31, 2024, there is no remaining unrecognized compensation expense related to the Company’s non-vested performance-based RSUs.

ACCUMULATED OTHER COMPREHENSIVE LOSS

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dollar, except to the extent of translation adjustments related to the Company’s retained earnings for foreign jurisdictions in which the Company is not considered to be permanently reinvested.

As a result of the change in the Company’s ownership interest in Bausch + Lomb during 2022, the carrying amount of accumulated other comprehensive income was adjusted to reflect the change in the ownership interest in Bausch + Lomb through a corresponding credit of $ 137 million to equity attributable to the Company.

RESEARCH AND DEVELOPMENT

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Other expense, net $ 247 $ 28 $ 35

In 2023, Litigation and other matters primarily related to insurance recoveries regarding certain litigation matters, Acquisition-related contingent consideration reflects adjustments for changes in estimates in the timing and amounts of the future royalty and milestone payments related to certain branded products and Acquisition-related transaction costs primarily related to transaction costs attributable to the acquisition of XIIDRA ® by Bausch + Lomb.

In 2021, Litigation and other matters of $ 356 million included adjustments related to the Glumetza Antitrust Litigation, partially offset by insurance recoveries related to certain litigation matters and Net gain on sales of assets included $ 25 million related to the achievement of a milestone related to a certain product and a $ 26 million loss upon completion of the Amoun Sale.

The components of Loss before income taxes for 2023, 2022 and 2021 consist of:

For 2024, Litigation and other matters primarily relates to adjustments to provisions for certain legal matters.

For 2023, Litigation and other matters is primarily related to insurance recoveries regarding certain litigation matters.

Acquisition-related contingent consideration for 2024 and 2023 reflects adjustments for changes in estimates in the timing and amounts of the expected future royalty and milestone payments and in 2024, includes other adjustments of $ 18 million related to certain branded products.

Acquisition-related transaction costs are related to transaction costs incurred in connection with certain Bausch + Lomb acquisitions.

The components of Income (loss) before income taxes for 2024, 2023 and 2022 consist of:

(in millions) 2024 2023 2022

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$ 167 $ ( 390 ) $ ( 129 )

The components of (Provision for) benefit from income taxes for 2023, 2022 and 2021 consist of:

The components of Provision for income taxes for 2024, 2023 and 2022 consist of:

(in millions) 2024 2023 2022

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( 69 ) ( 6 ) 188

The (Provision for) benefit from income taxes differs from the expected amount calculated by applying the Company’s Canadian statutory rate of 26.9 % to Loss before income taxes for 2023, 2022 and 2021 as follows:

$ ( 239 ) $ ( 221 ) $ ( 83 )

The Provision for income taxes differs from the expected amount calculated by applying the Company’s Canadian statutory federal plus provincial rate of 26.9 % to Income (loss) before income taxes for 2024, 2023 and 2022 as follows:

(in millions) 2024 2023 2022

Loss before income taxes $ ( 390 ) $ ( 129 ) $ ( 1,024 )

(Provision for) benefit from income taxes

Expected benefit from income taxes at Canadian statutory rate $ 105 $ 35 $ 275

Income (loss) before income taxes $ 167 $ ( 390 ) $ ( 129 )

Provision for income taxes

Expected (provision for) benefit from income taxes at Canadian statutory rate $ ( 45 ) $ 105 $ 35

Non-deductible amount of share-based compensation ( 19 ) ( 19 ) ( 19 )

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Change in valuation allowance related to foreign tax credits and NOLs

( 21 ) ( 6 ) 100

Change in valuation allowance on Canadian deferred tax assets and tax rate changes

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$ ( 239 ) $ ( 221 ) $ ( 83 )

As a Canadian domiciled company, the Company’s applicable tax rate is the Canadian combined tax rate for its federal and provincial filings.

Other consists adjustments affecting the tax provision such as those related to the filing of tax returns which are not material.

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Debt discounts and deferred financing costs 282 342

Restricted interest and financing expenses 148 —

Research and development tax credits 69 97

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interest expense is subject to limitation rules which limit U.S.

interest expense to 30% of adjusted taxable income, defined similar to EBITDA through 2021 and EBIT thereafter.

interest expense to 30% of adjusted taxable income, defined similar to EBIT.

Disallowed interest can be carried forward indefinitely and any unused interest deduction assessed for recoverability.

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A valuation allowance has been provided for the portion of the deferred tax assets that the Company determined is more likely than not to remain unrealized based on estimated future taxable income and tax planning strategies.

In 2024, the valuation allowance increased $ 30 million primarily due to an increase for state tax losses expected to be unusable in the United States.

In 2023, the valuation allowance increased $ 231 million primarily due to book taxable loss in Canada and an increase for state tax losses expected to be unusable in the United States.

In 2022, the valuation allowance decreased by $ 199 million primarily due to book taxable income in Canada and the expiration of tax losses in the United States.

As of December 31, 2024 and 2023, the Company had accumulated taxable losses available to offset future years’ federal and provincial taxable income in Canada of approximately $ 6,341 million and $ 6,579 million, respectively.

1 unchanged sentence

In addition, as of December 31, 2024 and 2023, pooled SR&ED expenditures available to offset against future taxable income in Canada were approximately $ 150 million and $ 192 million, respectively, which may be carried forward indefinitely.

As of December 31, 2023, a full valuation allowance against the net Canadian deferred tax assets on the parent company (BHCI) and the Bausch + Lomb parent company (B+L Corporate Canada) has been provided of $ 2,045 million and as of December 31, 2022, on BHCI of $ 1,869 million.

As of both the years December 31, 2024 and 2023, a full valuation allowance against the net Canadian deferred tax assets on the parent company (BHCI) and the Bausch + Lomb parent company (B+L Corporate Canada) has been provided of $ 2,045 million.

As of December 31, 2024 and 2023, the Company had accumulated taxable losses available to offset future years’ federal taxable income in the U.S.

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The Company provides for income taxes on the unremitted earnings of its direct foreign affiliates except for its direct U.S.

subsidiaries.

subsidiaries of its parent company.

The Company continues to assert that the unremitted earnings of its U.S.

subsidiaries will be permanently reinvested and not repatriated.

As of December 31, 2023, the Company estimates that there will be no tax liability attributable to unremitted earnings of its U.S.

As of December 31, 2024, the Company estimates that there will be no tax liability attributable to unremitted earnings of its BHC U.S.

subsidiaries.

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withholding tax.

Income Taxes are accrued on the Solta U.S.

subsidiaries in accordance with the US-Canada tax treaty.

As of December 31, 2024 and 2023, unrecognized tax benefits (including interest and penalties) were $ 924 million and $ 918 million, of which $ 405 million and $ 414 million would affect the effective income tax rate, respectively.

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In 2024 and 2023, the Company recognized net increases to unrecognized tax benefits for current year tax positions of $ 61 million and $ 6 million, respectively.

The Company recognized a net increase

of $ 31 million during 2023 and a net reduction of $ 203 million during 2022 in the unrecognized tax benefits related to tax positions taken in the prior years.

The Company recognized a net decrease

of $ 55 million during 2024 and a net increase of $ 31 million during 2023 in the unrecognized tax benefits related to tax positions taken in the prior years.

The Company provides for interest and penalties related to unrecognized tax benefits in the provision for income taxes.

As of December 31, 2024 and 2023, accrued interest and penalties related to unrecognized tax benefits were approximately $ 68 million and $ 51 million, respectively.

In 2023, the Company recognized a net increase of approximately $ 19 million and, in 2022, recognized a decrease of $ 9 million of interest and penalties, respectively.

The Company and one or more of its subsidiaries file federal income tax returns in Canada, the U.S., and other foreign jurisdictions, as well as various provinces and states in Canada and the U.S.

In 2024, the Company recognized a net increase of approximately $ 17 million and, in 2023, recognized an increase of $ 19 million of interest and penalties, respectively.

The Company and one or more of its subsidiaries file federal income tax returns in Canada, the U.S.

and other foreign jurisdictions, as well as various provinces and states in Canada and the U.S.

The Company and its subsidiaries have open tax years, primarily from 2012 to 2023, with significant taxing jurisdictions, respectively, including Canada and the U.S.

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In January 2023, as part of an alternative dispute resolution process with the IRS, the Company has reached a tentative settlement on the 2017 Capital Loss.

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

The Company expects that the tentative settlement, if finalized without further modification, will affect the Company’s 2024 income tax provision, and while such settlement may be material to the Company’s results of operations or cash flows in the quarter in which it is recorded, will not be material to its results of operations or cash flows for the year ended December 31, 2024.

In February 2025, the Company received notice from the IRS that the required approvals for the tentative settlement had been received, and that the administrative process of concluding the settlement and related audits had commenced.

The Company expects any impact to the Company’s tax provision will be recorded in the period in which the administrative process concludes.

While such settlement may be material to the Company’s results of operations in the quarter in which it is recorded, it will not be material to its results of operations for the year, and will not impact the Company’s cash flows.

The Company is currently under examination by the Canada Revenue Agency (“CRA”) for five separate cycles:

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In December 2023, the Company settled certain transfer pricing matters related to 2017 and 2018 tax years resulting in a reduction of NOLs of approximately CAD 26 million for 2017 and CAD 15 million for 2018.

During 2024, the Company received various assessments by the CRA for its 2011 through 2018 tax years totaling CAD 355 million which the company has filed or will file Notice of Objections against.

In the first quarter of 2024, the Company finalized a settlement with the CRA related to prior year withholding tax returns which was paid in the second quarter of 2024.

The Company’s subsidiaries in Germany are under audit for tax years 2014 through 2022.

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

January 2023, the German tax authorities opened an audit of the Company’s subsidiaries in Germany for tax years 2017 through 2019.

In June 2024, the Company reached a preliminary settlement with the German taxing authority related to certain transfer pricing adjustments.

The preliminary settlement resulted in the accrual of an immaterial tax cost and will close out the 2014 to 2016 audit period.

On November 8, 2022, the Company’s affiliate in Netherlands received an assessment from the Luxembourg Tax Authorities as successor in interest to its affiliate in Luxembourg for tax years 2018 – 2019 for € 271.7 million.

The Company is vigorously defending its position and no reserves have been recorded.

The Company’s subsidiaries in Australia were under audit by the Australian Tax Office for various years beginning in 2010.

On August 8, 2017, the Australian Taxation Office (“ATO”) issued a notice of assessment for the tax years 2011 through 2017 in the aggregate amount of $ 117 million, which includes penalties and interest.

On April 13, 2022, the Company and the ATO entered into a settlement agreement resulting in an immaterial income tax provision.

On January 9, 2025, the Company’s affiliate in Switzerland received a decision by the Tax Chamber of the Administrative Court of the Canton of Zug denying the affiliate’s objection to certain transfer pricing adjustments proposed by the Swiss Tax Authorities for its 2018 tax year.

The Company is preparing to pursue the resolution of this dispute through the mutual agreement procedure and is expecting the impact of the decision to be immaterial.

The Company’s U.S.

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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 3,142,000 , 2,719,000 and 1,851,000 common shares for 2024, 2023 and 2022, respectively.

Additionally, in 2023, 2022 and 2021, stock options, time-based RSUs and performance-based RSUs to purchase approximately 14,461,000 , 14,396,000 and 3,428,000 common shares of the Company, respectively, were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive under the treasury stock method.

During 2022 and 2021, an additional 156,000 performance-based RSUs were not included in the computation of diluted earnings per share as the required performance conditions had not been met.

During 2024, 2023 and 2022, time-based RSUs, performance-based RSUs and stock options to purchase approximately 8,031,000 , 13,864,000 and 14,396,000 common shares of the Company, respectively, were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive under the treasury stock method.

During 2023 and 2022, an additional 596,000 and 156,000 performance-based RSUs respectively, were not included in the computation of diluted earnings per share as the required performance conditions had not been met.

SUPPLEMENTAL CASH FLOW DISCLOSURES

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An adverse outcome in certain of these proceedings could have a material adverse effect on the Company’s business, financial condition and results of operations, and could cause the market value of its common shares and/or debt securities to decline.

Governmental and Regulatory Inquiries

Investigation by the U.S.

Attorney’s Office for the Northern District of Iowa – re OrthoDerm

The Company received a Civil Investigative Demand in May 2021 from the Civil Division of the United States Department of Justice and the United States Attorney’s Office for the Northern District of Iowa, requesting documents and other information concerning the sales and marketing of Bryhali ® , Duobrii ® , Jublia ® and Siliq ® .

The Company is cooperating with this investigation.

The Company cannot predict the outcome or the duration of this investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of this investigation.

Securities Class Actions and Related Matters

Securities Litigation - Opt-Out Litigation

On December 16, 2019, the Company announced that it had agreed to settle, subject to final court approval, the consolidated securities class action filed in the U.S.

District Court for the District of New Jersey (In re Valeant Pharmaceuticals International, Inc.

In October 2015, four putative securities class actions were filed in the U.S.

District Court for the District of New Jersey against the Company and certain current or former officers and directors.

The allegations related to, among other things, allegedly false and misleading statements and/or failures to disclose information about the Company’s business and prospects, including relating to drug pricing, the Company’s use of specialty pharmacies, and the Company’s relationship with Philidor Rx Services LLC.

On May 31, 2016, the Court entered an order consolidating the four actions under the caption In re Valeant Pharmaceuticals International, Inc.

Securities Litigation, Case No.

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

3:15-cv-07658.

On December 16, 2019, the Company announced that it had agreed to settle, subject to final court approval, the consolidated securities class action (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 them and denied all allegations of wrongdoing.

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BlueMountain Foinaven Master Fund, L.P.

Pharmaceuticals International, Inc.

Valeant Pharmaceuticals International, Inc.

16-cv-7328) (“BlueMountain”);

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VALIC Company I v.

Valeant Pharmaceuticals International, Inc.

Valeant Pharmaceuticals International,

Janus Aspen Series v.

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Valeant Pharmaceuticals International Inc., et al., (Case No.

17-cv-7636) (“Boeing”);

State Board of Administration of Florida v.

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Valeant Pharmaceuticals International, Inc.

18-cv-0089) (“GMO Trust”);

Första AP Fonden v.

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Valeant Pharmaceuticals International, Inc.

18-cv-0343) (“Blackrock”);

Colonial First State Investments Limited As Responsible Entity for Commonwealth Global Shares Fund 1 v.

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Valeant Pharmaceuticals International, Inc.

18-cv-08595);

18-cv-08595) (“2012 Dynasty”);

Catalyst Dynamic Alpha Fund v.

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Valeant Pharmaceuticals International, Inc.

18-cv-15286);

18-cv-15286) (“Northwestern”);

Bahaa Aly, et al.

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Valeant Pharmaceuticals International, Inc.

20-cv-02190);

20-cv-02190) (“Maverick”);

Valeant Pharmaceuticals International, Inc.

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20-cv-07460).

Sixteen of the thirty-seven opt-out actions have been dismissed;

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

Twenty-one of the thirty-seven opt-out actions have been dismissed;

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

In addition, in January 2025, the Company reached a confidential settlement in principle, which remains subject to further documentation, of the Blackrock action and the Blackrock Canadian Claims, as defined in the Canadian Securities Litigation – Opt-Out Litigation description, below.

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”).

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On July 20, 2021, the Court entered a stipulation of voluntary dismissal in the Janus action.

On December 13, 2024, the Court entered a stipulation of voluntary dismissal in the GMO Trust action.

On February 14, 2025, the Court entered stipulations of voluntary dismissal in the Boeing, 2012 Dynasty, Northwestern and Maverick actions.

Discovery in the opt-out actions has concluded.

Motions for summary judgment were filed on August 1, 2022.

On May 22, 2023, the Special Master overseeing the opt-out litigation issued reports and recommendations on all pending summary judgment motions.

On May 22, 2023, the Special Master overseeing the opt-out litigation issued reports and recommendations on all pending summary

judgment motions.

The Special Master recommended denying Plaintiffs’ motions in their entirety, denying all motions filed by the Company and granting in part certain other defendants’ motions for summary judgment on subparts of their defenses.

On June 26, 2023, the Parties filed motions to adopt and objections to the Special Master’s May 22, 2023 reports and recommendations.

On January 2, 2024, the District Court issued decisions affirming in part and overruling in part the

Special Master’s recommendations and granting partial summary judgment in favor of defendants on additional subparts of their defenses.

On January 2, 2024, the District Court issued decisions affirming in part and overruling in part the Special Master’s recommendations and granting partial summary judgment in favor of defendants on additional subparts of their defenses.

On January 16, 2024, Plaintiffs filed a motion requesting that the Court reconsider a portion of its January 2, 2024 decisions.

That motion to reconsider was denied by the Court on May 3, 2024.

No defendants have been fully dismissed from the opt-out actions as a result of the District Court’s decisions.

Trial dates have not been set in any of the opt-out actions.

The Company disputes the claims against it in the remaining individual opt-out complaints and intends to defend itself vigorously.

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The amended complaint also alleges that defendants made various misrepresentations and omissions regarding the strength of the Company’s patents protecting its product, Xifaxan ® , from generic competitors.

Pursuant to the operative scheduling order, defendants will move to dismiss the amended complaint by March 20, 2024.

Defendants moved to dismiss the amended complaint on March 20, 2024.

On February 12, 2025, the District Court granted Defendants’ motion to dismiss the amended complaint in full without prejudice.

The Court has given Plaintiffs leave until March 13, 2025, to file a second amended complaint.

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

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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.

On January 23, 2024, the Court entered a stipulation and order staying this action until the resolution of the forthcoming motion to dismiss in the Kelk action referenced above.

Canadian Securities Litigation

On January 23, 2024, the Court entered a stipulation and order staying this action.

Canadian Securities Litigation – Opt-Out Litigation

In 2015, six putative class actions were filed and served against the Company and certain current or former officers and directors in Canada in the provinces of British Columbia, Ontario and Quebec.

These actions are captioned:

(a) Alladina v.

Valeant, et al.

S-1594B6) (Supreme Court of British Columbia) (filed November 17, 2015);

(b) Kowalyshyn v.

Valeant, et al.

(CV-15-540593-00CP) (Ontario Superior Court) (filed November 16, 2015);

Valeant, et al.

(CV-15-541082-00CP) (Ontario Superior Court) (filed November 23, 2015);

(d) O’Brien v.

Valeant et al.

(CV-15-543678-00CP) (Ontario Superior Court) (filed December 30, 2015);

(e) Catucci v.

The Company is also aware of two additional putative class actions that were filed with the applicable court but which were not served on the Company and the factual allegations made in these actions were substantially similar to those outlined herein.

The actions generally alleged violations of Canadian provincial securities legislation on behalf of putative classes of persons who purchased or otherwise acquired securities of the Company for periods commencing as early as January 1, 2013 and ending as late as November 16, 2015.

The alleged violations related to the same matters described in the U.S.

Securities Litigation description above.

Each of these putative class actions, other than the action captioned Catucci v.

Valeant, et al.

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540-17-011743159, then Court File No.

500-06-000783-163) (Quebec Superior Court) (filed October 26, 2015) and (f) Rousseau-Godbout v.

Valeant, et al.

(Court File No.

500-06-000770-152) (Quebec Superior Court) (filed October 27, 2015).

The Company is also aware of two additional putative class actions that were filed with the applicable court but which have not been served on the Company and the factual allegations made in these actions are substantially similar to those outlined herein.

These actions are captioned:

(i) Okeley v.

Valeant, et al.

S-159991) (Supreme Court of British Columbia) (filed December 2, 2015) and (ii) Sukenaga v Valeant et al.

(CV-15-540567-00CP) (Ontario Superior Court) (filed November 16, 2015).

The actions generally allege violations of Canadian provincial securities legislation on behalf of putative classes of persons who purchased or otherwise acquired securities of the Company for periods commencing as early as January 1, 2013 and ending as late as November 16, 2015.

The alleged violations relate to the same matters described in the U.S.

Securities Litigation description above.

Each of these putative class actions, other than the Catucci action in the Quebec Superior Court, was discontinued.

In the Catucci action, on August 29, 2017, the judge granted the plaintiffs leave to proceed with their claims under the Quebec Securities Act and authorized the class proceeding.

On October 26, 2017, the plaintiffs issued their Judicial Application Originating Class Proceedings.

500-06-000783-163) and filed in the Quebec Superior Court, was discontinued.

After a hearing on November 11, 2019, the court approved a settlement in the Catucci action between the class members and the Company’s auditors and the action was dismissed as against the Company’s auditors.

On August 4, 2020, the Company entered into a settlement agreement with the plaintiffs in Catucci, on behalf of the class, pursuant to which it agreed to resolve the Catucci action for the amount of CAD 94,000,000 plus payment of an additional amount to cover notice and settlement administration costs and disbursements.

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

On August 4, 2020, the Company entered into a settlement agreement with the plaintiffs in Catucci, on behalf of the class.

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

Court approval of the settlement was granted after a hearing on November 16, 2020.

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On June 18, 2018, the same BlackRock entities filed an originating application (Court File No.

500-17-103749-183) against the same defendants asserting claims under the Quebec Civil Code in respect of the same alleged misrepresentations.

500-17-103749-183) against the same defendants asserting claims under the Quebec Civil Code in respect of the same alleged misrepresentations (collectively, the “Blackrock Canadian Claims”).

In January 2025, the Company reached a confidential settlement in principle, which remains subject to further documentation, of the Blackrock Canadian Claims and the U.S.

Blackrock action as defined in the U.S.

Securities Litigation description above.

The Company is aware that certain other members of the Catucci class exercised their opt-out rights prior to the June 19, 2018 deadline.

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On June 16, 2020, the Quebec Court of Appeal granted the defendants leave to appeal that decision.

The appeal was heard on September 29, 2021 and, by judgment dated October 29, 2021, the appeals were dismissed.

By judgment dated October 29, 2021, the appeals were dismissed.

On October 8 and 9, 2020, respectively, CalSTRS amended its proceedings to, among other things, include a new alleged misrepresentation concerning the accounting treatment of “price appreciation credits” in respect of Glumetza ® during the period covered by the claims.

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The allegations in this proceeding are similar to those made by the plaintiffs in the Catucci class action and the plaintiffs in the opt-out actions described above.

The Company believes that it has viable defenses in each of these actions.

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

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

Canadian Securities Litigation – Ren Statement of Claim

On December 23, 2024, a putative class action Statement of Claim captioned Ren v.

Bausch Health Companies, Inc., Joseph Papa (“Papa”) and Thomas Appio (“Appio”) (CV-24-00098326-CP) was filed in the Ontario Superior Court of Justice against the Company, Papa and Appio.

The claim generally alleges violations of Ontario securities legislation and common law on behalf of putative classes of persons who purchased or otherwise acquired securities of the Company between April 2, 2020 and May 2, 2024.

The alleged violations relate to the Company’s disclosures regarding the US and Canadian Securities Opt-Out Litigation described above.

On January 17, 2025, the Company was served with a Notice of Motion seeking leave to pursue the proposed action under the relevant provisions of the Ontario Securities Act.

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

Other Securities and RICO Related Matters

Insurance Coverage Lawsuit

On December 7, 2017, the Company filed a lawsuit against its insurance companies that issued insurance policies covering claims made against the Company, its subsidiaries, and its directors and officers during two distinct policy periods, (i) 2013-14 and (ii) 2015-16.

The lawsuit was brought in the United States District Court for the District of New Jersey (Valeant Pharmaceuticals International, Inc., et al.

AIG Insurance Company of Canada, et al.;

3:18-CV-00493).

In the lawsuit, the Company seeks coverage for:

(i) the costs of defending and resolving claims brought by former shareholders and debtholders of Allergan, Inc.

in In re Allergan, Inc.

Proxy Violation Securities Litigation and Timber Hill LLC, individually and on behalf of all others similarly situated v.

Pershing Square Capital Management, L.P., et al.

(the “Allergan Securities Litigation”) (under the 2013-2014 coverage period) and (ii) costs incurred and to be incurred in connection with, inter alia , In re Valeant Pharmaceutical International, Inc.

Securities Litigation , the Securities Class Action Settlement, the U.S.

Securities Litigation – Opt-Out Litigation, and the Canadian Securities Litigation described in this section (collectively, “the Securities Matters”) (under the 2015-2016 coverage period).

On July 20, 2021, the Company entered into settlement agreements with the insurers in the 2015-2016 coverage period in which the Company agreed to resolve its claims for insurance coverage in connection with the Securities Matters, and with two insurers in the 2013-2014 coverage period to resolve its claims against those two insurers for insurance coverage in connection with the Allergan Securities Litigation.

As of June 30, 2023, the Company has entered into settlement agreements with the remaining insurers in the 2013-2014 coverage period in which the Company agreed to resolve its remaining claims for insurance coverage in connection with the Allergan Securities Litigation.

As a result of all of the settlement agreements entered into with the insurers through June 30, 2023, the Company has received an aggregate sum of $ 313 million for its claims in the 2013-2014 and 2015-2016 coverage periods.

This matter has now concluded.

Hound Partners Lawsuit

In October 2018, Hound Partners Offshore Fund, LP, Hound Partners Long Master, LP and Hound Partners Concentrated Master, LP, filed a lawsuit against the Company in the Superior Court of New Jersey Law Division/Mercer County that asserts claims for common law fraud, negligent misrepresentation, and violations of the New Jersey Racketeer Influenced and Corrupt Organizations Act.

Valeant Pharmaceuticals International, Inc., et al.

MER-L-002185-18)) that asserts claims for common law fraud, negligent misrepresentation, and violations of the New Jersey Racketeer Influenced

and Corrupt Organizations Act.

The allegations in the complaint are similar to those made in the Hound Partners opt-out case in the U.S.

District Court for the District of New Jersey, referenced above.

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

Glumetza Antitrust Litigation

Between August 2019 and July 2020, eight ( 8 ) putative antitrust class actions and four ( 4 ) non-class complaints naming the Company, Salix Pharmaceuticals, Ltd., Salix Pharmaceuticals, Inc.

and Santarus, Inc.

(for purposes of this subsection, collectively, the “Company”), among other defendants, were filed or transferred to the Northern District of California.

Three ( 3 ) of the class actions were filed by plaintiffs seeking to represent a class of direct purchasers.

The purported classes of direct purchasers filed a consolidated first amended complaint and a motion for class certification in April 2020.

The court certified a direct purchaser class in August 2020.

The putative class action complaints filed by end payer purchasers have all been voluntarily dismissed.

Three ( 3 ) of the non-class complaints were filed by direct purchasers.

The fourth non-class complaint, asserting claims based on both direct and indirect purchases, was filed by an insurer plaintiff in July 2020 and subsequently amended in September 2020.

In December 2020, the court denied the Company’s motion to dismiss as to the insurer plaintiff’s direct claims but dismissed the insurer plaintiff’s indirect claims.

On February 2, 2021, the insurer plaintiff’s motion for leave to amend its complaint was denied.

These actions were consolidated and coordinated in In re Glumetza Antitrust Litigation , Case No.

3:19-cv-05822-WHA (the “ In re Glumetza Antitrust Litigation ”).

The lawsuits alleged that a 2012 settlement of a patent litigation regarding Glumetza ® delayed generic entry in exchange for an agreement not to launch an authorized generic of Glumetza ® or grant any other company a license to do so.

The complaints alleged that the settlement agreement resulted in higher prices for Glumetza ® and its generic equivalent both prior to and after generic entry.

Both the class and non-class plaintiffs sought damages under federal antitrust laws for claims based on direct purchases.

On February 8, 2021, the insurer plaintiff filed an action asserting its indirect (state law) claims in the Superior Court of Alameda County, California against the Company and others (the “State Court Action”) (discussed in further detail below, see Glumetza State-Law Insurer Litigations ).

On July 26, 2021, the Company reached an agreement in principle and, thereafter, on September 14, 2021, executed a final settlement agreement to resolve the class plaintiffs’ claims for $ 300 million, subject to court approval.

On August 1, 2021, the Company also reached an agreement in principle to resolve the non-class direct purchaser plaintiffs’ claims, described above, for additional consideration.

A final settlement agreement with the non-class direct purchaser plaintiffs was executed on August 6, 2021.

As part of the settlements, the Company admitted no liability as to the claims against it and denied all allegations of wrongdoing.

On September 20, 2021, the insurer plaintiff voluntarily dismissed its claims in the consolidated federal action.

By stipulation, the insurer plaintiff has asserted its direct opt-out claims in the State Court Action, resulting in the consolidation of all of its opt-out claims in the State Court Action.

On September 22, 2021, the court granted preliminary approval of the class settlement agreement and vacated the October 2021 trial date and all other pre-trial deadlines in the consolidated actions.

On February 3, 2022, the court granted final approval of the class settlement and ordered dismissal of the class plaintiffs’ claims.

The deadline to appeal the final approval of the class settlement has now passed, and the settlements have resolved and discharged all asserted class and direct purchaser non-class claims against the Company in the In re Glumetza Antitrust Litigation .

Glumetza State-Law Insurer Litigations

On February 8, 2021, the insurer plaintiff from the federal In re Glumetza Antitrust Litigation, Case No.

3:19-cv-05822- WHA (N.D.

Cal.) (the “In re Glumetza Antitrust Litigation”) (discussed in further detail above), Humana Inc.

filed an action asserting its indirect (state law) claims in the Superior Court of Alameda County, California against the Company and others (the “State Court Action”).

The State Court Action alleges that a 2012 settlement of a patent litigation regarding Glumetza ® delayed generic entry in exchange for an agreement not to launch an authorized generic of Glumetza ® or grant any other company a license to do so.

The State Court Action alleges that the settlement agreement resulted in higher prices for Glumetza ® and its generic equivalent both prior to and after generic entry.

On September 20, 2021, the parties stipulated that Humana’s direct opt-out claims from In re Glumetza Antitrust Litigation, discussed above, were deemed asserted in the State Court Action.

Defendants’ demurrer in the State Court Action was heard on September 22, 2021.

On November 29, 2021, the court denied the motion in part and granted it in part as to certain state law claims, with leave to amend.

Humana did not amend the complaint.

Defendants’ answers were filed on February 3, 2022.

On April 5, 2022, Health Care Service Corporation filed an action with similar substantive allegations and similar indirect (state law) claims in the Superior Court of Alameda County, California against the Company and others.

Defendants’ answers were filed on June 17, 2022.

On November 28, 2022, the Court consolidated this action with the State Court Action for trial and pretrial purposes (the “Consolidated State Case”).

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

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

Generic Pricing Antitrust Litigation

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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 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.

On January 31, 2024, the United States Judicial Panel on Multidistrict Litigation entered a Remand Order remanding to the District of Connecticut, among other cases, State of Connecticut, et al.

The lawsuits, which are 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, and various Counties, Cities, and Towns, are consolidated into the MDL.

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

State of Connecticut, et al.

Sandoz, Inc., et al., C.A.

2:20-03539 (D.

3:20-00802), in which the Company is 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 these cases.

The cases have been placed in deferred status.

3:20-00802), in which Bausch Health US and Bausch Health Americas are defendants, has been remanded to and is pending in the United States District Court for the District of Connecticut.

There are cases pending in the Court of Common Pleas of Philadelphia County against the Company and other defendants related to the multidistrict litigation.

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

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Patent Litigation/Paragraph IV Matters

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 ® , Trulance ® and Vyzulta ® in the United States.

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, Cabtreo ® (anticipated), Lotemax ® SM, Lumify ® , Trulance ® and Vyzulta ® in the United States and Zaxine ® (anticipated) in Canada.

Xifaxan ® Paragraph IV Proceedings

The Company has filed lawsuits against Norwich Pharmaceuticals Inc.

(“Norwich”), Amneal Pharmaceuticals of New York LLC, Zydus Pharmaceuticals (USA) Inc.

(“Zydus”), Cipla USA, Inc.

(“Cipla”) and Carnegie Pharmaceuticals LLC (“Carnegie”), and anticipates filing a lawsuit against Mylan Pharmaceuticals Inc.

(“Mylan”), concerning the Company’s Xifaxan ® (rifaximin) 550 mg tablets.

The foregoing lawsuits and related litigation are referred to collectively as the “Xifaxan ® Generics Litigation”.

The Norwich I Xifaxan ® Litigation

On February 17, 2020, the Company and Alfasigma S.p.A.

(“Alfasigma”) received a Notice of Paragraph IV Certification from Norwich Pharmaceuticals Inc.

(“Norwich”), in which Norwich asserted that the U.S.

patents listed in the FDA’s Orange Book for the Company’s Xifaxan ® tablets, 550 mg, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Norwich’s generic rifaximin tablets, 550 mg, for which an ANDA has been filed by Norwich.

(“Alfasigma”) received a Notice of Paragraph IV Certification from Norwich, in which Norwich asserted that the U.S.

patents listed in the FDA’s Orange Book for the Company’s Xifaxan ® tablets, 550 mg, are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Norwich’s generic rifaximin tablets, 550 mg, for which Norwich filed an ANDA (the “Norwich First ANDA”).

The Company, through its subsidiaries Salix Pharmaceuticals, Inc.

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District Court for the District of Delaware (Case No.

20-cv-00430) pursuant to the Hatch-Waxman Act, alleging infringement by Norwich of one or more claims of the Xifaxan ® Patents, thereby triggering a 30 -month stay of the approval of Norwich’s ANDA for rifaximin tablets, 550 mg.

Xifaxan ® is protected by 28 patents covering the composition of matter and the use of Xifaxan ® listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book.

20-cv-00430) pursuant to the Hatch-Waxman Act, alleging infringement by Norwich of one or more claims of the Xifaxan ® patents, thereby triggering a 30 -month stay of the approval of the Norwich First ANDA for rifaximin tablets, 550 mg.

Trial in this matter was held in March 2022.

The court issued a final judgment on August 10, 2022 (the “Norwich Legal Decision”), finding that the U.S.

Patents protecting the use of Xifaxan ® (rifaximin) 550 mg tablets for the reduction in risk of hepatic encephalopathy (“HE”) recurrence valid and infringed and the U.S.

Patents protecting the use of Xifaxan ® (rifaximin) 550 mg tablets for the reduction in risk of HE recurrence valid and infringed and the U.S.

patents protecting the composition, and use of Xifaxan ® for treating IBS-D invalid.

The Norwich Legal Decision prevents FDA approval of Norwich’s 550 mg ANDA until October 2029.

The Norwich Legal Decision prevents FDA approval of the Norwich First ANDA until October 2029.

The Company appealed the Norwich Legal Decision to the U.S.

Court of Appeals for the Federal Circuit on August 16, 2022.

Following the Company’s appeal, Norwich claimed to have removed the HE indication from its existing ANDA and then filed a motion in the District Court requesting modification of the Norwich Legal Decision to permit the FDA to approve their ANDA before October 2029.

Following the Company’s appeal, Norwich claimed to have removed the HE indication from the Norwich First ANDA and then filed a motion in the District Court requesting modification of the Norwich Legal Decision to permit the FDA to approve the Norwich First ANDA before October 2029.

The Company opposed the motion.

On May 17, 2023, the District Court denied Norwich’s motion and confirmed that the FDA remained enjoined from granting final approval to Norwich’s ANDA until October 2029.

On May 17, 2023, the District Court denied Norwich’s motion and confirmed that the FDA remained enjoined from granting final approval to the Norwich First ANDA until October 2029.

Norwich filed its appeal to the U.S.

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

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

The Norwich Appeal has been fully briefed and the Federal Circuit heard oral arguments on January 8, 2024.

The Company awaits a decision from the Federal Circuit.

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.

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

The Federal Circuit heard oral arguments on January 8, 2024 in the Norwich Appeal.

On April 11, 2024, the Federal Circuit issued an opinion affirming the Norwich Legal Decision and the District Court’s denial of Norwich’s motion requesting modification of the Norwich Legal Decision (the “Norwich Appeal Decision”).

In May 2024, both the Company and Norwich petitioned for panel and en banc rehearing of the Norwich Appeal Decision.

The Federal Circuit denied the Company’s and Norwich’s rehearing petitions on June 13, 2024 and issued its mandate to the District Court on June 20, 2024.

Under the Norwich Appeal Decision, the FDA remains enjoined from approving the Norwich First ANDA until October 2029.

On September 11, 2024, the Company and Norwich filed petitions for writ of certiorari with the United States Supreme Court appealing certain aspects of the Norwich Appeal Decision.

The Supreme Court denied Norwich’s and the Company’s petitions for writ of certiorari on November 18, 2024 and December 16, 2024, respectively.

In a letter to Norwich on June 2, 2023, the FDA granted tentative approval to the Norwich First 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 (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.

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

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

A hearing was held on October 6, 2023.

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In December 2023, Norwich appealed the DC District Court’s November 1st decision to the U.S.

Court of Appeals for the District of Columbia Circuit.

In December 2023, Norwich appealed the DC District Court’s November 1st decision to the U.S.

Court of Appeals for the District of Columbia Circuit (the “DC Circuit”).

On February 2, 2024, the DC Circuit decided to hold the appeal in abeyance pending a decision from the Federal Circuit in the Norwich Appeal.

In January 2023 and October 2023, the U.S.

Patent Office issued U.S.

11,564,912 (the “’912 Patent”) and 11,779,571 (the “’571 Patent”) directed to IBS-D, which were then listed in the FDA’s Orange Book for Xifaxan ® .

The Company received new Notices of Paragraph IV Certification from Norwich asserting that claims of the ‘912 and ‘571 Patents are invalid, unenforceable, and/or will not be infringed by the commercial manufacture, use, or sale of Norwich’s generic rifaximin tablets, 550 mg, under the existing Norwich ANDA.

Any suit brought against the existing Norwich ANDA under the ‘912 or ‘571 Patent is not believed to result in a new 30 -month stay of approval.

Although the DC Circuit held the appeal in abeyance on February 2, 2024, the DC circuit returned the case to the court’s active docket on December 17, 2024.

The Norwich II Xifaxan ® Litigation

The Company received a Notice of Paragraph IV Certification from Norwich, dated May 10, 2024, in which Norwich asserted that certain U.S.

Patents listed in the FDA’s Orange Book for the Company’s Xifaxan ® tablets, 550 mg, are invalid, unenforceable and/or will not be infringed by the manufacture, use, or sale of Norwich’s generic rifaximin tablets, 550 mg, for which Norwich filed an amended ANDA (the “Norwich Second ANDA”).

On June 20, 2024, the Company filed suit against Norwich in the U.S.

District Court for the District of New Jersey pursuant to the Hatch-Waxman Act, alleging infringement by Norwich of one or more claims of U.S.

11,564,912 (the “’912 Patent”) and 11,779,571 (the “’571 Patent”).

In a letter to Norwich on January 10, 2025, FDA granted tentative approval to the Norwich Second ANDA.

In the January 10 letter, FDA confirmed that the first ANDA applicant for rifaximin 550 mg tablets is eligible for 180-day exclusivity.

The 180-day exclusivity precludes FDA from granting final approval to the Norwich Second ANDA.

On January 13, 2025, Norwich brought a lawsuit against the FDA in the DC District Court, alleging that the FDA acted improperly by only granting tentative approval to the Norwich Second ANDA rather than final approval (the “Second Norwich DC Lawsuit”).

In the Second Norwich DC Lawsuit, Norwich asserts (1) that the Norwich Second ANDA is not subject to a 30-month stay of approval;

and (2) that the first ANDA applicant for rifaximin 550 mg tablets forfeited their 180-day exclusivity.

Teva Pharmaceuticals USA, Inc.

and Salix intervened in the Second Norwich DC Lawsuit as defendants.

The Amneal Xifaxan ® Litigation

On February 28, 2024, the Company received a Notice of Paragraph IV Certification from Amneal Pharmaceuticals of New York, LLC, U.S.

Agent for Amneal EU, Limited (collectively “Amneal”), in which Amneal asserted that certain U.S.

Patents listed in the FDA’s Orange Book for the Company’s Xifaxan ® tablets, 550 mg, are invalid, unenforceable and/or will not be infringed by the manufacture, use, sale, offer for sale, and/or importation of Amneal’s generic rifaximin tablets, 550 mg, for which Amneal filed an ANDA.

On April 5, 2024, the Company and Alfasigma filed suit against Amneal in the U.S.

District Court for the District of New Jersey pursuant to the Hatch-Waxman Act, alleging infringement by Amneal of one or more claims of the Xifaxan ® patents, thereby triggering a 30 -month stay of the approval of Amneal’s ANDA for rifaximin tablets, 550 mg.

Although enjoined from granting final approval, FDA granted tentative approval to Amneal’s ANDA on January 16, 2025.

The Zydus Xifaxan ® Litigation

The Company received a Notice of Paragraph IV Certification from Zydus, dated August 15, 2024, in which Zydus asserted that certain U.S.

Patents listed in the FDA’s Orange Book for the Company’s Xifaxan ® tablets, 550 mg, are invalid, unenforceable and/or will not be infringed by the manufacture, use, sale, offer for sale, and/or importation of Zydus’s generic rifaximin tablets, 550 mg, for which Zydus filed an ANDA.

On September 27, 2024, the Company and Alfasigma filed suit against Zydus in the U.S.

District Court for the District of New Jersey pursuant to the Hatch-Waxman Act, alleging infringement by Zydus of one or more claims of the Xifaxan ® patents, thereby triggering a 30 -month stay of the approval of Zydus’s ANDA for rifaximin tablets, 550 mg.

The Cipla Xifaxan ® Litigation

The Company received a Notice of Paragraph IV Certification from Cipla USA, Inc., U.S.

Agent for Cipla Limited (collectively “Cipla”), dated September 18, 2024, in which Cipla asserted that certain U.S.

Patents listed in the FDA’s Orange Book for the Company’s Xifaxan ® tablets, 550 mg, are invalid, unenforceable and/or will not be infringed by the manufacture, use, sale, offer for sale, and/or importation of Cipla’s generic rifaximin tablets, 550 mg, for which Cipla filed an ANDA.

On November 1, 2024, the Company filed suit against Cipla pursuant to the Hatch-Waxman Act, alleging infringement by Cipla of one or more claims of the Xifaxan ® patents, thereby triggering a 30 -month stay of the approval of Cipla’s ANDA for rifaximin tablets, 550 mg.

The Carnegie Xifaxan ® Litigation

The Company received a Notice of Paragraph IV Certification from Carnegie, dated October 1, 2024, in which Carnegie asserted that certain U.S.

Patents listed in the FDA’s Orange Book for the Company’s Xifaxan ® tablets, 550 mg, are invalid, unenforceable and/or will not be infringed by the manufacture, use, sale, offer for sale, and/or importation of Carnegie’s generic rifaximin tablets, 550 mg, for which Carnegie filed an ANDA.

On November 7, 2024, the Company filed suit against Carnegie pursuant to the Hatch-Waxman Act, alleging infringement by Carnegie of one or more claims of the Xifaxan ® patents, thereby triggering a 30 -month stay of the approval of Carnegie’s ANDA for rifaximin tablets, 550 mg.

The Mylan Anticipated Xifaxan ® Litigation

The Company received a Notice of Paragraph IV Certification from Mylan, dated February 11, 2025, in which Mylan asserted that certain U.S.

Patents listed in the FDA’s Orange Book for the Company’s Xifaxan ® tablets, 550 mg, are invalid, unenforceable and/or will not be infringed by the manufacture, use, sale, offer for sale, and/or importation of Mylan’s generic rifaximin tablets, 550 mg, for which Mylan filed an ANDA.

The Company intends to file suit against Mylan pursuant to the Hatch-Waxman Act, alleging infringement by Mylan of one or more claims of the Xifaxan ® patents, thereby triggering a 30 -month stay of the approval of Mylan’s ANDA for rifaximin tablets, 550 mg.

The Company remains confident in the strength of the Xifaxan ® patents and intends to vigorously defend its intellectual property.

Duobrii ® Paragraph IV Proceedings

In June 2022, the Company received a Notice of Paragraph IV Certification from Taro Pharmaceuticals Inc.

(“Taro”), in which Taro asserted that certain U.S.

patents, each of which is listed in the FDA’s Orange Book for Duobrii ® (halobetasol propionate and tazarotene) lotion, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale, offer for sale, or importation of Taro’s generic lotion, for which an ANDA has been filed by Taro.

On July 21, 2022, the Company filed suit against Taro pursuant to the Hatch-Waxman Act, alleging infringement by Taro of one or more claims of the Duobrii ® Patents and triggering a 30 -month stay of the approval of the Taro ANDA.

The Company remains confident in the strength of the Duobrii ® patents and intends to vigorously defend its intellectual property.

Trulance ® Paragraph IV Proceedings

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(“MSN”) and Mylan Pharmaceuticals Inc., (“Mylan”) alleging patent infringement by MSN’s and Mylan’s filing of their ANDA for generic Trulance ® (plecanatide) 3 mg tablets.

This suit had been filed following receipt of a Notice of Paragraph IV Certification from each of MSN and Mylan, in which they had each asserted that the U.S.

These suits had been filed following receipt of a Notice of Paragraph IV Certification from each of MSN and Mylan, in which they had each asserted that the U.S.

patents listed in the FDA’s Orange Book for the Company’s Trulance ® tablets, 3 mg, were invalid, unenforceable and/or would not be infringed by the commercial manufacture, use or sale of their respective generic plecanatide tablets, 3 mg.

The filing of these suits triggered a 30 -month stay of the approval of the MSN and Mylan ANDAs for plecanatide tablets.

In January 2023, the Company commenced litigation against Aurobindo Pharma Limited (“Auro”) alleging patent infringement by Auro’s filing of their ANDA for generic Trulance ® (plecanatide) 3 mg tablets.

This suit had been filed following receipt of a Notice of Paragraph IV Certification from Auro, in which it asserted that the U.S.

patent listed in the FDA’s Orange Book for the Company’s Trulance ® tablets, 3 mg, were invalid, unenforceable and/or would not be infringed by the commercial manufacture, use or sale of Auro’s generic plecanatide tablets, 3 mg.

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

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.

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

The Anticipated Cabtreo ® Paragraph IV Proceedings

The Company received a Notice of Paragraph IV Certification from Taro Pharmaceuticals Inc.

(“Taro”), dated February 5, 2025, in which Taro asserted that U.S.

Patents listed in the FDA’s Orange Book for the Company’s Cabtreo ® (clindamycin phosphate, adapalene, benzoyl peroxide) gel, 1.2%/0.15%/3.1%, are invalid, unenforceable and/or will not be infringed by the manufacture, use, sale, offer for sale, and/or importation of Taro’s generic clindamycin phosphate/adapalene/benzoyl peroxide gel, 1.2%/0.15%/3.1%, for which Taro filed an ANDA.

The Company intends to file suit against Taro pursuant to the Hatch-Waxman Act, alleging infringement by Taro of one or more claims of the Cabtreo ® patents, thereby triggering a 30 -month stay of the approval of Taro’s ANDA for clindamycin phosphate/adapalene/benzoyl peroxide gel, 1.2%/0.15%/3.1%.

The Company remains confident in the strength of the Cabtreo ® patents and intends to vigorously defend its intellectual property.

Xifaxan ® Litigation with Curia IP Holdings, LLC

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On February 14, 2024, the court issued an order administratively terminating the case pending completion of mediation on or before April 14, 2024.

Mediation was held on April 11, 2024, but no agreement was reached.

On April 22, 2024, the court reopened the case.

On May 1, 2024, the Court entered a stipulation and order of non-infringement for U.S.

10,556,915, 10,745,415, and 10,961,257.

On September 20, 2024, the Court entered a stipulation and order of non-infringement for the ‘099 Patent.

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

Zaxine ® Notice of Allegation in Canada

The Company received a Notice of Allegation in Canada, dated January 14, 2025, from Sandoz Canada Inc.

(“Sandoz Canada”) concerning Zaxine ® (rifaximin) 550 mg tablets.

Under the Patented Medicines (Notice of Compliance) (“PM(NOC)”) Regulations, the Company has 45 days from service of the Notice of Allegation to file a lawsuit and preserve a 24-month period in which Health Canada is prohibited from issuing a Notice of Compliance to Sandoz Canada.

The Company is considering all options in response to the Notice of Allegation.

PreserVision ® AREDS Patent Litigation

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Bausch & Lomb Incorporated (“B&L Inc.”) has filed patent infringement proceedings against 20 named defendants in 17 proceedings claiming infringement of these patents and, in certain circumstances, related unfair competition and false advertising causes of action.

Thirteen of these proceedings were subsequently settled;

Fourteen of these proceedings were subsequently settled;

two resulted in a default.

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20-cv-01463-GBW-CJB (D.

Del.) (the “SBH matter”).

In the SBH matter, cross-motions for summary judgment are pending and a jury trial is scheduled to begin on April 21, 2025.

Bausch + Lomb remains confident in the strength of these patents and B&L Inc.

will continue to vigorously pursue this matter and defend its intellectual property.

Lumify ® Paragraph IV Proceedings

Lumify ® Paragraph IV Proceedings - DRL

On August 16, 2021, B&L Inc.

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patents, each of which is listed in the FDA’s Orange Book for Lumify ® (brimonidine tartrate solution) drops (the “Lumify Patents”), are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Slayback’s generic drops, for which an ANDA has been filed by Slayback.

B&L Inc., through its affiliate Bausch + Lomb Ireland Limited, exclusively licenses the Lumify Patents from Eye Therapies, LLC (“Eye Therapies”).

B&L Inc., through its affiliate Bausch + Lomb Ireland Limited, exclusively licenses the Lumify Patents from Eye

Therapies, LLC (“Eye Therapies”).

On September 10, 2021, B&L Inc., Bausch + Lomb Ireland Limited and Eye Therapies filed suit against Slayback pursuant to the Hatch-Waxman Act, alleging infringement by Slayback of one or more claims of the Lumify Patents, thereby triggering a 30 -month stay of the approval of the Slayback ANDA.

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9,259,425 has been dismissed from the case.

On May 15, 2023, the United States Patent & Trademark Office’s Patent Trial and Appeal Board issued a Final Written Decision, finding all claims of U.S.

On May 15, 2023, the United States Patent & Trademark Office’s Patent Trial and Appeal Board (“PTAB”) issued a Final Written Decision, finding all claims of U.S.

8,293,742 unpatentable.

This decision has been appealed to the United States Court of Appeals for the Federal Circuit and the appeal is ongoing.

Furthermore, two additional patents (US.

Furthermore, two additional patents (U.S.

11,596,600 and 11,833,245) have issued and been listed in the Orange Book as related to Lumify ® .

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(collectively, “DRL”).

Subsequently, on December 15, 2023, B&L Inc., Bausch + Lomb Ireland Limited, and Eye Therapies filed a Motion for a Preliminary Injunction requesting the court to enjoin any infringing activities by DRL.

On December 15, 2023, B&L Inc., Bausch + Lomb Ireland Limited, and Eye Therapies filed a Motion for a Preliminary Injunction requesting the court to enjoin any infringing activities by DRL and a hearing was held in January 2024.

On May 10, 2024, the Court denied Plaintiffs’ Motion, finding that Plaintiffs had not proven that they would be “irreparably harmed” absent a preliminary injunction.

Additionally, on December 18, 2023, B&L Inc., Bausch + Lomb Ireland Limited, and Eye Therapies amended its complaint to add claims for copyright infringement, as well as claims under the Lanham Act, including trademark and trade dress infringement.

The lawsuit against DRL is ongoing in the District of New Jersey, with no trial date set.

DRL subsequently petitioned for inter partes review (“IPR”) of the U.S.

11,596,600 and 11,833,245;

the PTAB instituted both petitions.

The IPRs are ongoing.

The lawsuit against DRL in the District of New Jersey is currently stayed (with an appeal of the Order granting the stay pending).

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

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

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.

In connection with Vyzulta ® , one matter has been resolved and dismissed, and another matter is ongoing in the District of New Jersey and is in the fact-discovery stage.

In connection with Lotemax ® SM, one matter resulted in a four-day bench trial starting January 13, 2025, and the parties await a decision;

another matter was recently filed in the District of New Jersey, and the complaint has not yet been served.

Inter Partes Review Proceedings at the U.S.

Patent and Trademark Office

In addition, patents covering the Company’s branded pharmaceutical products may be challenged in proceedings other than court proceedings, including inter partes review (“IPR”) at the U.S.

In addition, patents covering the Company’s branded pharmaceutical products may be challenged in proceedings other than court proceedings, including IPR at the U.S.

Patent & Trademark Office.

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Court of Appeals for the Federal Circuit.

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

11,311,482 (the “’482 Patent”), which is Orange Book-listed for Arazlo ® .

In a decision dated January 12, 2024, the PTAB denied institution of an IPR against the ‘482 Patent.

The Company remains confident in the strength of these patents and intends to vigorously defend its intellectual property.

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Shower to Shower ® Products Liability Litigation

Since 2016, the Company has been named in a number of product liability lawsuits involving the Shower to Shower ® body powder product acquired in September 2012 from Johnson & Johnson;

due to dismissals, twenty-seven ( 27 ) of such product liability suits currently remain pending.

Since 2016, the Company and its affiliates, including Bausch + Lomb, have been named in a number of product liability lawsuits involving the Shower to Shower ® body powder product acquired in September 2012 from Johnson & Johnson;

due to dismissals, twenty-five ( 25 ) of such product liability suits currently remain pending.

In three ( 3 ) cases pending in the Atlantic County, New Jersey Multi-County Litigation, agreed stipulations of dismissal have been entered by the Court, thus dismissing the Company from those cases.

Potential liability (including its attorneys’ fees and costs) arising out of these remaining suits is subject to full indemnification obligations of Johnson & Johnson owed to the Company and its affiliates, and legal fees and costs will be paid by Johnson & Johnson.

Twenty-six ( 26 ) of these lawsuits filed by individual plaintiffs allege that the use of Shower to Shower ® caused the plaintiffs to develop ovarian cancer, mesothelioma or breast cancer.

The allegations in these cases include failure to warn, design defect, manufacturing defect, negligence, gross negligence, breach of express and implied warranties, civil conspiracy concert in action, negligent misrepresentation, wrongful death, loss of consortium and/or punitive damages.

One ( 1 ) case was also recently dismissed with prejudice in its entirety for failure of plaintiff to comply with court orders requiring plaintiff fact sheets.

Potential liability (including its attorneys’ fees and costs) arising out of these remaining suits is subject to full indemnification obligations of Johnson & Johnson owed to the Company and its affiliates, including Bausch + Lomb, and legal fees and costs will be paid by Johnson & Johnson.

Twenty-four ( 24 ) of these lawsuits filed by individual plaintiffs allege that the use of Shower to Shower ® caused the plaintiffs to develop ovarian cancer, mesothelioma or breast cancer.

The allegations in these cases include failure to warn,

design defect, manufacturing defect, negligence, gross negligence, breach of express and implied warranties, civil conspiracy concert in action, negligent misrepresentation, wrongful death, loss of consortium and/or punitive damages.

The damages sought include compensatory damages, including medical expenses, lost wages or earning capacity, loss of consortium and/or compensation for pain and suffering, mental anguish anxiety and discomfort, physical impairment and loss of enjoyment of life.

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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).

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).

The plaintiffs in these actions are seeking awards of general, special, compensatory and punitive damages.

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In October 2021, Johnson & Johnson, through one or more subsidiaries, purported to complete a Texas divisional merger with respect to any talc liabilities at Johnson & Johnson Consumer, Inc.

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, which in November 2021 was transferred to the United States District Court for the District of New Jersey (the “Bankruptcy Court”).

The first bankruptcy case was dismissed on April 4, 2023, after a decision by the Third Circuit Court of Appeals, and LTL re-filed a new chapter 11 case in the Bankruptcy Court on the same day.

Several motions to dismiss were again filed, and on August 11, 2023, the Bankruptcy Court dismissed 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 October 20, 2023, the Third Circuit accepted the appeal, which remains 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 and Bausch + Lomb’s position vis a vis Johnson & Johnson returned to the status quo prior to the filing.

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

Notwithstanding the divisional merger and LTL’s bankruptcy cases, the Company and its affiliates continue to have indemnification claims and rights against Johnson & Johnson and LTL pursuant to the terms of the indemnification agreement entered into between JJCI and its affiliates and the Company and its affiliates, which indemnification agreement remains in effect.

As a result, it is the Company’s current expectation that it will not incur any material impairments with respect to its indemnification claims as a result of the divisional merger or the bankruptcy.

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, which in November 2021 was transferred to the United States Bankruptcy Court for the District of New Jersey (the “New Jersey Bankruptcy Court”).

The first bankruptcy case was dismissed on April 4, 2023, after a decision by the Third Circuit Court of Appeals, and LTL re-filed a new Chapter 11 case on the same day.

Several motions to dismiss were again filed, and on August 11, 2023, the second Chapter 11 case was dismissed.

LTL and certain supporting creditors and tort claimants appealed, and on July 25, 2024, the Third Circuit affirmed the dismissal order, and LTL’s second bankruptcy case was closed.

During the pendency of LTL’s bankruptcy cases, the New Jersey 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.

In December 2023, LTL changed its name to LLT Management LLC (“LLT”).

In June and July 2024, LLT solicited votes for a new “pre-packaged” Chapter 11 plan, and after the reported successful solicitation of votes to commence the planned bankruptcy, LLT and certain affiliates underwent another corporate restructuring that resulted in two entities, Red River Talc LLC (“Red River”) and Pecos River Talc LLC (“Pecos River”), assuming the talc liabilities of LLT.

On September 20, 2024, Red River filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas (the “Texas Bankruptcy Court”), seeking to resolve all ovarian cancer related talc claims.

On October 21, 2024, the Texas Bankruptcy Court agreed to enter a temporary restraining order and preliminary injunction staying all ovarian cancer-related talc claims at least through December 2024, which it has since extended through March 15, 2025.

On December 9, 2024, Red River filed a Second Amended Chapter 11 plan incorporating the settlement with the Talc Claimants’ Committee.

A hearing on confirmation of the plan and any objections thereto began on February 18, 2025.

Johnson & Johnson has reported that the entity Pecos River will be responsible for resolving all non-ovarian cancer-related talc claims outside of bankruptcy.

Red River, Pecos River and Johnson & Johnson continue to have indemnification obligations running to the Company and its affiliates, including Bausch + Lomb, for Shower to Shower ® related product liability litigation.

It is our expectation that Johnson & Johnson, in accordance with the applicable indemnification agreement, will continue to vigorously defend the Company and Bausch + Lomb, in each of the remaining actions, and that the Company and Bausch + Lomb will not incur any material impairments with respect to indemnification claims as a result of the divisional merger or the bankruptcy.

General Civil Actions

Securities Litigation - New Jersey Declaratory Judgment Lawsu it

Securities Litigation - New Jersey Declaratory Judgment Lawsuit

On March 24, 2022, the Company and Bausch + Lomb were named in a declaratory judgment action in the Superior Court of New Jersey, Somerset County, Chancery Division, brought by certain individual investors in the Company’s common shares and debt securities who are also maintaining individual securities fraud claims against the Company and certain current or former officers and directors as part of the U.S.

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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 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.

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 Securities Exchange Act of 1934 (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 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.

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On December 22, 2022, Plaintiffs filed an amended complaint which, among other things, added claims seeking injunctive relief.

On January 11, 2023, the Company and Bausch + Lomb moved to dismiss the amended

On January 11, 2023, the Company and Bausch + Lomb moved to dismiss the amended complaint.

Briefing was complete on February 24, 2023, and the motion to dismiss was heard on March 3, 2023.

On April 3, 2023, the Court issued a decision granting in part and denying in part the motion to dismiss.

Discovery is ongoing.

Both the Company and Bausch + Lomb dispute the claims in this declaratory judgment action and intend to vigorously defend this matter.

California Proposition 65 Related Matter

On June 19, 2019, plaintiffs filed a proposed class action in California state court against Bausch Health US and Johnson & Johnson (Gutierrez, et al.

Johnson & Johnson, et al., Case No.

37-2019-00025810-CU-NP-CTL), asserting claims for purported violations of the California Consumer Legal Remedies Act, False Advertising Law and Unfair Competition Law in connection with their sale of talcum powder products that the plaintiffs allege violated Proposition 65 and/or the California Safe Cosmetics Act.

This lawsuit was served on Bausch Health US in June 2019 and was subsequently removed to the United States District Court for the Southern District of California, where it is currently pending.

Plaintiffs seek damages, disgorgement of profits, injunctive relief, and reimbursement/restitution.

Bausch Health US filed a motion to dismiss Plaintiffs’ claims, which was granted in April 2020 without prejudice.

In May 2020, Plaintiffs filed an amended complaint and in June 2020, filed a motion for leave to amend the complaint further, which was granted.

In August 2020, Plaintiffs filed the Fifth Amended Complaint.

On January 22, 2021, the Court granted the motion to dismiss with prejudice.

On February 19, 2021, Plaintiffs filed a Notice of Appeal with the Ninth Circuit Court of Appeals.

On July 1, 2021, Appellants (Plaintiffs) filed their opening brief;

Appellees’ response briefs were filed on October 8, 2021.

This matter was stayed by the Ninth Circuit on December 7, 2021, due to the preliminary injunction entered by the Bankruptcy Court in the LTL bankruptcy proceeding.

This stay included Appellants’ reply brief deadline, which was previously due to be filed on or before December 2, 2021.

On March 9, 2022, the Ninth Circuit issued an order extending the stay through July 29, 2022.

On July 29, 2022, Johnson & Johnson filed a status report in the Gutierrez appeal, outlining the developments since the last status report and the imposition of the stay.

Johnson & Johnson noted that following a July 26, 2022, hearing, the Bankruptcy Court left the preliminary injunction in place, and asked the Ninth Circuit to continue to stay this action while the bankruptcy preliminary injunction remained in place.

On January 20, 2023, the Ninth Circuit extended the stay until February 17, 2023.

On February 17, 2023, Johnson & Johnson requested the court afford it sixty ( 60 ) days – until April 18, 2023, or seven ( 7 ) days following any lifting of the LTL Bankruptcy Court’s preliminary injunction – whichever comes earliest – to provide an additional status report about the bankruptcy proceeding and the Third Circuit dismissal for which LTL has requested a rehearing.

On April 7, 2023, Johnson & Johnson Consumer Inc.

filed a status report regarding the bankruptcy proceeding advising the Court of the dismissal of the prior bankruptcy proceeding and the filing of the second bankruptcy proceeding, as well as the preliminary injunction and stay order, and requesting the stay of the appeal remain in place until May 10, 2023, which was granted.

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/ 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, Johnson & Johnson 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.

On January 28, 2024, the Ninth Circuit issued a notice of oral argument setting the argument for Monday, April 8, 2024.

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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Trial was scheduled to begin on May 30, 2023, until the case was stayed by an interlocutory appeal to the New Mexico Supreme Court by Johnson & Johnson.

That stay was lifted on October 21, 2024 when the New Mexico Supreme Court ruled in favor of Johnson & Johnson and reversed the trial court, remanding the case back for further proceedings.

On July 14, 2022, LTL filed an adversary proceeding in the Bankruptcy Court (Case No.

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Balderas, Attorney General, and obtained an injunction from the Bankruptcy Court barring the New Mexico Attorney General from continuing to prosecute the action while the bankruptcy case was pending.

Because the Bankruptcy Court has ultimately dismissed both LTL’s first and second bankruptcy cases, 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.

California Consumer Protection Action

On October 31, 2023, Plaintiff County of Los Angeles filed an action on behalf of the state of California against the Company and Johnson & Johnson, seeking injunctive relief, restitution and damages in California state court (People of the State of California, by and through County of Los Angeles v.

Johnson & Johnson, et al., Case No.

23STCV27015).

The lawsuit asserts claims for purported violations of the California False Advertising Law, Unfair Competition Law, and public nuisance claims, against multiple manufacturers of talcum powder products, including Shower to Shower ® , that the plaintiffs allege caused or contributed to development of ovarian cancer and mesothelioma in residents of California.

The lawsuit seeks injunctive relief, restitution, statutory penalties and damages.

The Company and its affiliates dispute the claims against them, and this lawsuit will be defended vigorously.

Litigation with Former Salix CEO

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

On September 8, 2023, Salix Ltd.

and Bausch Health Americas reached an agreement in principle and, thereafter, executed, a final settlement agreement effective December 11, 2023, to resolve the matter, which includes no admission of wrongdoing or liability as to the claims asserted.

On December 14, 2023, the parties filed a stipulation dismissing the case, with prejudice.

Because the Bankruptcy Court has ultimately dismissed both LTL’s first and second bankruptcy cases, and a stay was not revived during the newest bankruptcy case of Red River Talc LLC (successor to LTL), filed on September 20, 2024, this suit has returned to its status quo prior to LTL’s filing.

The State has negotiated a settlement of the lawsuit with Johnson & Johnson, in which the Company and its affiliates, including Bausch + Lomb, are released parties.

The entire action will be dismissed once the settlement has been completed following payment.

Pending completion of the settlement, the Company and Bausch Health US dispute the claims against them, and this lawsuit will be defended vigorously.

Rifaximin Breach of Contract Litigation

On September 8, 2022, Lupin filed a lawsuit in the U.S.

District Court for the Southern District of New York against Salix Pharmaceuticals, Inc., and the Company, asserting breach of contract claims relating to a 2009 manufacturing and supply agreement between Lupin and Salix Pharmaceuticals, Inc.

On September 8, 2022, Lupin Ltd.

(“Lupin”) filed a lawsuit in the U.S.

District Court for the Southern District of New York against Salix Pharmaceuticals, Inc.

and the Company, asserting breach of contract claims relating to a 2009 manufacturing and supply agreement between Lupin and Salix Pharmaceuticals, Inc.

concerning rifaximin.

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On October 10, 2023, Salix Pharmaceuticals, Inc.

asserted counterclaims against Lupin for breach of contract.

asserted counterclaims

against Lupin for breach of contract.

No trial date has been set.

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Bausch Health Americas has asserted counterclaims against Doctors Allergy.

Bausch Health Americas filed a motion seeking an order granting Bausch Health Americas summary judgment on its counterclaims against Plaintiff and dismissing Plaintiff’s claims against it.

Bausch Health Americas filed a motion seeking an order granting Bausch Health Americas’ motion for summary judgment on its counterclaims against Doctors Allergy and dismissing Doctors Allergy’s claims against Bausch Health Americas.

The motion was fully briefed as of May 2021.

The Court held a hearing on the motion on January 25, 2022.

On May 12, 2023, the Court issued a Decision and Order denying Bausch Health Americas’ motion.

On May 12, 2023, the Court issued a Decision and Order denying the motion.

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

On March 13, 2024, Bausch Health Americas filed its appellate brief with the Appellate Division of the New York Supreme Court, First Department, appealing the trial court’s denial of Bausch Health Americas’ motion for summary judgment.

Doctors Allergy filed its answering brief on July 26, 2024, and Bausch Health Americas filed its reply brief on September 13, 2024.

The Appellate Division heard oral argument on November 7, 2024.

On December 5, 2024, the Appellate Division denied Bausch Health Americas’ appeal as to Doctors Allergy’s second cause of action (breach of contract) and Bausch Health Americas’ counterclaims, but it granted the appeal as to Doctors Allergy’s third cause of action (breach of the implied duty of good faith and fair dealing) and dismissed that claim.

On December 13, 2024, the Appellate Division remitted this action back to the trial court.

An initial pretrial conference has been scheduled for April 8, 2025.

No trial date has been set.

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

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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

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.

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On January 5, 2024, the Court of Appeals panel denied the petition and issued an amended opinion, still reversing the District Court’s order and remanding the case to the District Court for further proceedings.

On January 26, 2024, the Court of Appeals granted the Company’s motion to stay issuance of the mandate in this case for 90 days.

On April 4, 2024, the Company filed a petition for a writ of certiorari to the Supreme Court, which was denied on October 7, 2024.

Mandate issued and the case returned to the District Court.

On November 27, 2024, Plaintiff-relator filed an amended complaint.

The Company filed a motion to dismiss the amended complaint on February 5, 2025, which remains pending.

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

Completed or Inactive Matters

The following matters have concluded, have settled, are the subject of an agreement to settle or have otherwise been closed since January 1, 2024 or have been inactive from the Company’s perspective for several fiscal quarters or the Company anticipates that no further material activity will take place with respect thereto.

Due to the closure, settlement, inactivity or change in status of the matters referenced below, these matters will no longer appear in the Company’s future public reports and disclosures, unless required or as deemed appropriate.

With respect to inactive matters, to the extent material activity takes place in subsequent quarters with respect thereto, the Company will provide updates as required or as deemed appropriate.

Investigation by the U.S.

Attorney’s Office for the Northern District of Iowa – re OrthoDerm

The Company cooperated with this investigation.

On September 10, 2024, the United States District Court for the Northern District of Iowa unsealed a qui tam complaint captioned United States ex rel.

Bausch Health Companies Inc., et al.

1:19-cv-00139-CJW-MAR) that was filed on December 18, 2019 against Bausch Health Companies Inc., Bausch Health US, LLC, Bausch

Health Americas, Inc., and several individuals.

The complaint asserts claims seeking, inter alia, damages, civil penalties and attorneys’ fees for alleged violations of the federal False Claims Act (“FCA”) and several similar state statutes relating to the sales and marketing of certain dermatology products and retaliation under the FCA.

On September 9, 2024, the United States, as well as all the named states and the District of Columbia declined to intervene and on December 2, 2024, the relator filed a notice of dismissal.

The Court dismissed the action without prejudice on December 11, 2024.