Bausch Health Companies Inc. 10-Q

Item 1. Financial Statements BAUSCH HEALTH COMPANIES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share amounts) (Unaudited) March 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 1,134 $ 1,181 Restricted cash 23 20 Trade receivables, net 2,072 2,140 Inventories, net 1,613 1,595 Prepaid expenses and other current assets 890 838 Total current assets 5,732 5,774 Property, plant and equipment, net 1,882 1,780 Intangible assets, net 5,297 5,551 Goodwill 11,153 11,087 Deferred tax assets, net 1,977 1,968 Other non-current assets 380 363 Total assets $ 26,421 $ 26,523 Liabilities Current liabilities: Accounts payable $ 620 $ 589 Accrued and other current liabilities 3,354 3,489 Current portion of long-term debt 282 2,674 Total current liabilities 4,256 6,752 Acquisition-related contingent consideration 282 310 Non-current portion of long-term debt 21,228 18,942 Deferred tax liabilities, net 134 128 Other non-current liabilities 761 713 Total liabilities 26,661 26,845 Commitments and contingencies (Note 17) Deficit Common shares, no par value, unlimited shares authorized, 369,539,455 and 367,843,058 issued and outstanding at March 31, 2025 and December 31, 2024, respectively 10,508 10,490 Additional paid-in capital 220 234 Accumulated deficit ( 9,882 ) ( 9,824 ) Accumulated other comprehensive loss ( 2,029 ) ( 2,179 ) Total Bausch Health Companies Inc. shareholders’ deficit ( 1,183 ) ( 1,279 ) Noncontrolling interest 943 957 Total deficit ( 240 ) ( 322 ) Total liabilities and deficit $ 26,421 $ 26,523 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 BAUSCH HEALTH COMPANIES INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) (Unaudited) Three Months Ended March 31, 2025 2024 Revenues Product sales $ 2,227 $ 2,129 Other revenues 32 24 2,259 2,153 Expenses Cost of goods sold (excluding amortization and impairments of intangible assets) 683 628 Cost of other revenues 18 12 Selling, general and administrative 867 794 Research and development 143 151 Amortization of intangible assets 256 274 Asset impairments — 1 Restructuring, integration and separation costs 1 12 Other expense, net 15 — 1,983 1,872 Operating income 276 281 Interest income 11 9 Interest expense ( 330 ) ( 355 ) Gain on extinguishment of debt — 11 Foreign exchange and other ( 4 ) ( 15 ) Loss before income taxes ( 47 ) ( 69 ) Provision for income taxes ( 39 ) ( 8 ) Net loss ( 86 ) ( 77 ) Net loss attributable to noncontrolling interest 28 13 Net loss attributable to Bausch Health Companies Inc. $ ( 58 ) $ ( 64 ) Basic and diluted loss per share attributable to Bausch Health Companies Inc. $ ( 0.16 ) $ ( 0.17 ) Basic and diluted weighted-average common shares 369.6 366.8 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 BAUSCH HEALTH COMPANIES INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME( LOSS) (in millions) (Unaudited) Three Months Ended March 31, 2025 2024 Net loss $ ( 86 ) $ ( 77 ) Other comprehensive income (loss) Foreign currency translation adjustment 141 ( 34 ) Other comprehensive income (loss) 141 ( 34 ) Comprehensive income (loss) 55 ( 111 ) Comprehensive loss attributable to noncontrolling interest 37 11 Comprehensive income (loss) attributable to Bausch Health Companies Inc. $ 92 $ ( 100 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 3 BAUSCH HEALTH COMPANIES INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT (in millions) (Unaudited) Bausch Health Companies Inc. Shareholders’ Deficit Common Shares Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Bausch Health Companies Inc. Shareholders’ Deficit Non- controlling Interest Total Deficit Shares Amount Three Months Ended March 31, 2025 Balances, January 1, 2025 367.8 $ 10,490 $ 234 $ ( 9,824 ) $ ( 2,179 ) $ ( 1,279 ) $ 957 $ ( 322 ) Common shares issued under share-based compensation plans 1.7 18 ( 18 ) — — — — — Share-based compensation — — 43 — — 43 — 43 Employee withholding taxes related to share-based awards — — ( 16 ) — — ( 16 ) — ( 16 ) Vesting of B+L equity compensation — — ( 23 ) — — ( 23 ) 23 — Net loss — — — ( 58 ) — ( 58 ) ( 28 ) ( 86 ) Other comprehensive income (loss) — — — — 150 150 ( 9 ) 141 Balances, March 31, 2025 369.5 $ 10,508 $ 220 $ ( 9,882 ) $ ( 2,029 ) $ ( 1,183 ) $ 943 $ ( 240 ) Three Months Ended March 31, 2024 Balances, January 1, 2024 365.2 $ 10,423 $ 214 $ ( 9,778 ) $ ( 1,881 ) $ ( 1,022 ) $ 940 $ ( 82 ) Common shares issued under share-based compensation plans 1.5 57 ( 57 ) — — — — — Share-based compensation — — 33 — — 33 — 33 Employee withholding taxes related to share-based awards — — ( 14 ) — — ( 14 ) — ( 14 ) Vesting of B+L equity compensation — — ( 12 ) — — ( 12 ) 12 — Net loss — — — ( 64 ) — ( 64 ) ( 13 ) ( 77 ) Other comprehensive (loss) income — — — — ( 36 ) ( 36 ) 2 ( 34 ) Balances, March 31, 2024 366.7 $ 10,480 $ 164 $ ( 9,842 ) $ ( 1,917 ) $ ( 1,115 ) $ 941 $ ( 174 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 4 BAUSCH HEALTH COMPANIES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) Three Months Ended March 31, 2025 2024 Cash Flows From Operating Activities Net loss $ ( 86 ) $ ( 77 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization of intangible assets 305 320 Amortization and write-off of debt premiums, discounts and issuance costs 15 14 Asset impairments — 1 Acquisition-related contingent consideration ( 11 ) ( 2 ) Allowances for losses on trade receivable and inventories 26 15 Deferred income taxes ( 9 ) ( 57 ) Net gain on sale of assets — ( 4 ) Adjustments to accrued legal settlements ( 3 ) 6 Payments of accrued legal settlements ( 19 ) ( 3 ) Share-based compensation 43 33 Gain excluded from hedge effectiveness ( 3 ) ( 3 ) Gain on extinguishment of debt — ( 11 ) Payments of contingent consideration adjustments, including accretion ( 2 ) ( 2 ) Amortization of interim contract and inventory step-up resulting from acquisitions 22 20 Foreign exchange and other ( 2 ) ( 4 ) Changes in operating assets and liabilities: Trade receivables 110 ( 63 ) Inventories ( 30 ) ( 144 ) Prepaid expenses and other current assets ( 46 ) 121 Accounts payable, accrued and other liabilities ( 99 ) 51 Net cash provided by operating activities 211 211 Cash Flows From Investing Activities Acquisitions and other investments ( 12 ) — Purchases of property, plant and equipment ( 115 ) ( 82 ) Acquisition of intangible assets and other assets ( 9 ) ( 1 ) Purchases of marketable securities ( 4 ) ( 3 ) Proceeds from sale of marketable securities 4 6 Proceeds from sale of assets and businesses, net of costs to sell — 1 Interest settlements from cross-currency swaps 6 6 Net cash used in investing activities ( 130 ) ( 73 ) Cash Flows From Financing Activities Issuance of long-term debt, net of discounts 50 75 Repayments of long-term debt ( 168 ) ( 390 ) Payments of employee withholding taxes related to share-based awards ( 16 ) ( 14 ) Payments of acquisition-related contingent consideration ( 7 ) ( 7 ) Payments of financing costs ( 5 ) ( 4 ) Net cash used in financing activities ( 146 ) ( 340 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 21 ( 5 ) Net decrease in cash, cash equivalents and restricted cash ( 44 ) ( 207 ) Cash, cash equivalents and restricted cash, beginning of period 1,201 962 Cash, cash equivalents and restricted cash, end of period $ 1,157 $ 755 Cash and cash equivalents $ 1,134 $ 733 Restricted cash 23 22 Cash, cash equivalents and restricted cash, end of period $ 1,157 $ 755 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 BAUSCH HEALTH COMPANIES INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. DESCRIPTION OF BUSINESS Bausch Health Companies Inc. (the “Company” or “Bausch Health”) is a global, diversified specialty pharmaceutical and medical device company that develops, manufactures and markets, primarily in the therapeutic areas of gastroenterology (“GI”), hepatology, neurology and dermatology, a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products and aesthetic medical devices, and, through its approximately 88 % ownership of Bausch + Lomb Corporation (“Bausch + Lomb” or “B+L”), branded, and branded generic pharmaceuticals, OTC products and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment) in the therapeutic areas of eye health. The Company’s products are marketed directly or indirectly in approximately 90 countries. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Use of Estimates The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by the Company in U.S. dollars and in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting, which do not conform in all respects to the requirements of U.S. GAAP for annual financial statements. Accordingly, these notes to the unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements prepared in accordance with U.S. GAAP that are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”) on February 19, 2025. The unaudited Condensed Consolidated Financial Statements have been prepared using accounting policies that are consistent with the policies used in preparing the Company’s audited Consolidated Financial Statements for the year ended December 31, 2024. The unaudited Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations for the interim periods. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. 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 businesses into an independent publicly traded entity, Bausch + Lomb, from the remainder of Bausch Health Companies Inc. (the “B+L Separation”). As part of this plan, in May 2022, a wholly owned subsidiary of Bausch Health sold common shares of Bausch + Lomb pursuant to an initial public offering of Bausch + Lomb (the “B+L IPO”). Following the B+L IPO, Bausch Health indirectly holds 310,449,643 common shares of Bausch + Lomb, which represents approximately 88 % of B+L’s outstanding common shares as of March 31, 2025. 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 17, “LEGAL PROCEEDINGS”). The B+L IPO established two separate companies that include: (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. These unaudited Condensed Consolidated Financial Statements do not include any adjustments to give effect to the B+L Separation. Use of Estimates In preparing the unaudited Condensed Consolidated Financial Statements, management is required to make estimates and assumptions. The estimates and assumptions used by the Company affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates and the differences could be material. On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by 6 management to make these estimates do not reasonably reflect future activity, the Company’s results of operations and financial position could be materially impacted. Principles of Consolidation The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and those of its subsidiaries and any variable interest entities for which the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated. Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. New Accounting Standards There were no new accounting standards adopted during the three months ended March 31, 2025. Recently Issued Accounting Standards, Not Adopted as of March 31, 2025 In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“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. The Company is evaluating the impact of adoption on its consolidated financial statements and related disclosures. 3. REVENUE RECOGNITION 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: (i) branded pharmaceuticals, (ii) generic and branded generic pharmaceuticals, (iii) OTC products and (iv) medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment and aesthetic medical devices). 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 18, “SEGMENT INFORMATION” for the disaggregation of revenue. Product Sales Provisions As is customary in the pharmaceutical industry, 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. 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 a 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. Returns provision balances and volume discounts to direct customers are included in Accrued and other current liabilities. 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 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. 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 7 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 tables present the activity and ending balances of the Company’s variable consideration provisions for the three months ended March 31, 2025 and 2024. Three Months Ended March 31, 2025 (in millions) Discounts and Allowances Returns Rebates Chargebacks Distribution Fees Total Reserve balances, January 1, 2025 $ 170 $ 372 $ 1,421 $ 189 $ 85 $ 2,237 Current period provisions 163 29 992 432 79 1,695 Payments and credits ( 179 ) ( 37 ) ( 1,053 ) ( 459 ) ( 104 ) ( 1,832 ) Reserve balances, March 31, 2025 $ 154 $ 364 $ 1,360 $ 162 $ 60 $ 2,100 Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $ 40 million and $ 36 million as of March 31, 2025 and January 1, 2025, respectively, which are reflected as a reduction of Trade receivables, net in the Condensed Consolidated Balance Sheets. Included as a reduction of current period provisions for Distribution Fees in the table above are price appreciation credits of approximately $ 2 million for the three months ended March 31, 2025. Three Months Ended March 31, 2024 (in millions) Discounts and Allowances Returns Rebates Chargebacks Distribution Fees Total Reserve balances, January 1, 2024 $ 191 $ 380 $ 1,108 $ 216 $ 44 $ 1,939 Current period provisions 155 42 902 523 72 1,694 Payments and credits ( 175 ) ( 45 ) ( 806 ) ( 541 ) ( 22 ) ( 1,589 ) Reserve balances, March 31, 2024 $ 171 $ 377 $ 1,204 $ 198 $ 94 $ 2,044 Included in Rebates in the table above are cooperative advertising credits due to customers of approximately $ 37 million and $ 39 million as of March 31, 2024 and January 1, 2024, respectively, which are reflected as a reduction of Trade receivables, net in the Condensed Consolidated Balance Sheets. There were no price appreciation credits during the three months ended March 31, 2024. Contract Assets and Contract Liabilities There are no contract assets for any period presented. Contract liabilities consist of deferred revenue, the balance of which is not material to any period presented. Allowance for Credit Losses An allowance is maintained for potential credit losses. 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 collateral (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. Trade receivable balances are written off against the allowance when it is deemed probable that the trade receivable will not be collected. Trade receivables, net are stated net of certain sales provisions and the allowance for credit losses. The activity in the allowance for credit losses for trade receivables for the three months ended March 31, 2025 and 2024 is as follows. (in millions) 2025 2024 Balance, beginning of period $ 30 $ 34 Provision for expected credit losses ( 1 ) — Write-offs charged against the allowance — — Recoveries of amounts previously written off — — Foreign exchange and other — — Balance, end of period $ 29 $ 34 8 4. LICENSING AGREEMENTS AND ACQUISITIONS Licensing Agreements In the normal course of business, the Company may enter into select licensing and collaborative agreements for the commercialization and/or development of unique products. These products are sometimes investigational treatments in early stage development that target unique conditions. The ultimate outcome, including whether the product will be: (i) fully developed, (ii) approved by regulatory agencies, (iii) covered by third-party payors or (iv) profitable for distribution, is highly uncertain. The commitment periods under these agreements vary and include customary termination provisions. Expenses arising from commitments, if any, to fund the development and testing of these products and their promotion are recognized as incurred. Royalties due are recognized when earned and milestone payments are accrued when each milestone has been achieved and payment is probable and can be reasonably estimated. 2025 Bausch + Lomb Acquisitions Acquisition of Whitecap Biosciences During January 2025, Bausch + Lomb, through an 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. Bausch + Lomb accounted for the transaction as an asset acquisition and during the three months ended March 31, 2025, Bausch + Lomb expensed the upfront payment of approximately $ 28 million as acquired in-process research and development costs, as included within Other expense, net on the Condensed Consolidated Statements of Operations. 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. Elios Vision, 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 valuation of the assets acquired and liabilities assumed as part of the acquisition of Elios Vision has not been finalized as of March 31, 2025. 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. Acquisition of Trukera Medical During July 2024, Bausch + Lomb, through an affiliate, acquired TearLab Corporation, d/b/a Trukera Medical (“Trukera Medical”). Trukera Medical, a U.S.-based 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. See Note 3, “ACQUISITIONS AND LICENSING AGREEMENTS” to the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC and the CSA on February 19, 2025 for additional information regarding the 2024 Bausch + Lomb acquisitions, including details regarding the assets acquired and liabilities assumed. 5. RESTRUCTURING, INTEGRATION AND SEPARATION COSTS Restructuring and Integration Costs The Company evaluates opportunities to improve its operating results and implement cost savings programs to streamline its operations and eliminate redundant processes and expenses. Restructuring and integration costs are expenses associated with the implementation of these cost savings programs and include expenses associated with: (i) reducing headcount, (ii) eliminating real estate costs associated with unused or under-utilized facilities and (iii) implementing contribution margin improvement and other cost reduction initiatives. The Company incurred $ 1 million and $ 12 million of restructuring and integration costs during the three months ended March 31, 2025 and 2024, respectively. 9 Separation Costs and Separation-related Costs The Company has incurred, and will incur costs associated with activities relating to the B+L Separation. These B+L Separation activities include separating the Bausch + Lomb business from the remainder of the Company. Separation costs are incremental costs directly related to the B+L Separation and include, but are not limited to legal, audit and advisory fees. Separation costs included in Restructuring, integration and separation costs for the three months ended March 31, 2025 and 2024 are not material. 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 expenses for each of the three months ended March 31, 2025 and 2024 are separation-related costs of $ 5 million. The extent and timing of future charges of these costs to complete the B+L Separation cannot be reasonably estimated at this time and could be material. 6. FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS Fair value measurements are estimated based on valuation techniques and inputs categorized as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities; • Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following fair value hierarchy table presents the components and classification of the Company’s financial assets and liabilities measured at fair value on a recurring basis: March 31, 2025 December 31, 2024 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Cash equivalents $ 431 $ 421 $ 10 $ — $ 567 $ 557 $ 10 $ — Restricted cash $ 23 $ 23 $ — $ — $ 20 $ 20 $ — $ — Foreign currency exchange contracts $ 2 $ — $ 2 $ — $ 10 $ — $ 10 $ — Liabilities: Acquisition-related contingent consideration $ 339 $ — $ — $ 339 $ 359 $ — $ — $ 359 Cross-currency swaps $ 73 $ — $ 73 $ — $ 34 $ — $ 34 $ — Foreign currency exchange contracts $ 2 $ — $ 2 $ — $ 5 $ — $ 5 $ — Cash equivalents consist of highly liquid investments, primarily money market funds, with maturities of three months or less when purchased, and are reflected in the Condensed Consolidated Balance Sheets at carrying value, which approximates fair value due to their short-term nature. Cash, cash equivalents and restricted cash as presented in the Condensed Consolidated Balance Sheet as of March 31, 2025 includes $ 215 million of cash, cash equivalents and restricted cash held by legal entities of Bausch + Lomb. Cash held by Bausch + Lomb legal entities and any future cash from the operating, investing and financing activities of Bausch + Lomb is expected to be retained by Bausch + Lomb entities and is generally not available to support the operations, investing and financing activities of other legal entities, including Bausch Health unless paid as a dividend which would be determined by the Board of Directors of Bausch + Lomb and paid pro rata to Bausch + Lomb’s shareholders. There were no transfers into or out of Level 3 assets or liabilities during the three months ended March 31, 2025. 10 Cross-currency Swaps 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 from fluctuation in exchange rates. The euro-denominated net investment being hedged is Bausch + Lomb’s investment in certain Bausch + Lomb euro-denominated subsidiaries. Bausch + Lomb’s cross-currency swaps qualify for and have been designated as a hedge of the foreign currency exposure of a net investment in a foreign operation and are remeasured at each reporting date to reflect changes in their fair values. The assets and liabilities associated with Bausch + Lomb’s cross-currency swaps as included in the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 are as follows: (in millions) March 31, 2025 December 31, 2024 Other non-current liabilities $ ( 76 ) $ ( 40 ) Prepaid expenses and other current assets $ 3 $ 6 Net fair value $ ( 73 ) $ ( 34 ) The following table presents the effect of hedging instruments on the Condensed Consolidated Statements of Comprehensive Income (loss) and the Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, (in millions) 2025 2024 (Loss) gain recognized in Other comprehensive loss $ ( 36 ) $ 20 Gain excluded from assessment of hedge effectiveness $ 3 $ 3 Location of gain of excluded component Interest Expense No portion of the cross-currency swaps were ineffective for the three months ended March 31, 2025 and 2024. During each of the three months ended March 31, 2025 and 2024, the Company received $ 6 million in interest settlements, which are reported as investing activities in the Condensed Consolidated Statements of Cash Flows. Foreign Currency Exchange Contracts The Company’s foreign currency exchange contracts are remeasured at each reporting date to reflect changes in their fair values determined using forward rates, which are observable market inputs, multiplied by the notional amount. The Company’s foreign currency exchange contracts are economically hedging the foreign exchange exposure on certain of the Company’s intercompany balances. As of March 31, 2025, the Company’s outstanding foreign currency exchange contracts had an aggregate notional amount of $ 618 million. The assets and liabilities associated with the Company’s foreign exchange contracts as included in the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 are as follows: (in millions) March 31, 2025 December 31, 2024 Accrued and other current liabilities $ ( 2 ) $ ( 5 ) Prepaid expenses and other current assets $ 2 $ 10 Net fair value $ — $ 5 The following table presents the effect of the Company’s foreign exchange contracts on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024: 11 Three Months Ended March 31, (in millions) 2025 2024 (Loss) gain related to changes in fair value $ ( 5 ) $ 4 (Loss) gain related to settlements $ ( 2 ) $ 1 Acquisition-related Contingent Consideration Obligations The fair value measurement of contingent consideration obligations arising from business combinations is determined via a probability-weighted discounted cash flow analysis, using unobservable (Level 3) inputs. These inputs may include: (i) the estimated amount and timing of projected cash flows, (ii) the probability of the achievement of the factor(s) on which the contingency is based and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases or decreases in any of those inputs in isolation could result in a significantly higher or lower fair value measurement. At March 31, 2025, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 6 % to 28 %, and a weighted average risk-adjusted discount rate of 8 %. The weighted average risk-adjusted discount rate was calculated by weighting each contract’s relative fair value at March 31, 2025. The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2025 and 2024: March 31, (in millions) 2025 2024 Balance, beginning of period $ 359 $ 292 Adjustments to Acquisition-related contingent consideration: Accretion for the time value of money $ 8 $ 5 Fair value adjustments due to changes in estimates of future payments ( 19 ) ( 7 ) Acquisition-related contingent consideration ( 11 ) ( 2 ) Payments/Settlements ( 9 ) ( 9 ) Balance, end of period 339 281 Current portion included in Accrued and other current liabilities 57 56 Non-current portion included in Other non-current liabilities $ 282 $ 225 Fair Value of Long-term Debt The fair value of long-term debt as of March 31, 2025 and December 31, 2024 was $ 18,844 million and $ 18,243 million, respectively, and was estimated using the quoted market prices for the same or similar debt issuances (Level 2). 7. INVENTORIES Inventories, net consist of: (in millions) March 31, 2025 December 31, 2024 Raw materials $ 538 $ 540 Work in process 110 108 Finished goods 965 947 $ 1,613 $ 1,595 12 8. INTANGIBLE ASSETS AND GOODWILL Intangible Assets The major components of intangible assets consist of: March 31, 2025 December 31, 2024 (in millions) Gross Carrying Amount Accumulated Amortization and Impairments Net Carrying Amount Gross Carrying Amount Accumulated Amortization and Impairments Net Carrying Amount Finite-lived intangible assets: Product brands $ 22,483 $ ( 19,293 ) $ 3,190 $ 22,446 $ ( 19,026 ) $ 3,420 Corporate brands 993 ( 724 ) 269 988 ( 701 ) 287 Product rights/patents 3,258 ( 3,232 ) 26 3,255 ( 3,224 ) 31 Partner relationships, technology and other 379 ( 365 ) 14 370 ( 355 ) 15 Total finite-lived intangible assets 27,113 ( 23,614 ) 3,499 27,059 ( 23,306 ) 3,753 Acquired in-process research and development 100 — 100 100 — 100 B&L Trademark 1,698 — 1,698 1,698 — 1,698 $ 28,911 $ ( 23,614 ) $ 5,297 $ 28,857 $ ( 23,306 ) $ 5,551 Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment charges associated with these assets are included in Asset impairments in the Condensed Consolidated Statements of Operations. The Company continues to monitor the recoverability of its finite-lived intangible assets and tests the intangible assets for impairment if indicators of impairment are present. The Company estimates the fair values of long-lived assets with finite lives using an undiscounted cash flow model which utilizes Level 3 unobservable inputs. The undiscounted cash flow model relies on assumptions regarding revenue growth rates, gross profit, selling, general and administrative expenses and research and development expenses. Xifaxan ® intangible assets included in the unaudited Condensed Consolidated Balance Sheets had a carrying value of $ 1,481 million and an estimated remaining useful life of 33 months as of March 31, 2025. 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 17, “LEGAL PROCEEDINGS”). The Xifaxan ® intangible assets were last assessed 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. 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 March 31, 2025 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 March 31, 2025. 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. Estimated amortization expense of finite-lived intangible assets for the remainder of 2025 and each of the five succeeding years ending December 31 and thereafter is as follows: (in millions) Remainder of 2025 2026 2027 2028 2029 2030 Thereafter Total Amortization $ 732 $ 875 $ 837 $ 239 $ 223 $ 218 $ 375 $ 3,499 13 Goodwill The changes in the carrying amounts of goodwill during the three months ended March 31, 2025 and the year ended December 31, 2024 were as follows: (in millions) Salix International Solta Medical Diversified Bausch + Lomb Total Balance, January 1, 2024 $ 3,159 $ 862 $ 115 $ 1,733 $ 5,314 $ 11,183 Additions — — — — 29 29 Foreign exchange and other — ( 70 ) — 26 ( 81 ) ( 125 ) Balance, December 31, 2024 3,159 792 115 1,759 5,262 11,087 Foreign exchange and other — 37 — ( 15 ) 44 66 Balance, March 31, 2025 $ 3,159 $ 829 $ 115 $ 1,744 $ 5,306 $ 11,153 Goodwill is not amortized but is tested for impairment at least annually on October 1st at the reporting unit level. A reporting unit is the same as, or one level below, an operating segment. The Company 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 (Step 1). Interim Assessments No events occurred or circumstances changed during the three months ended March 31, 2025 and 2024 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 any such charges could be material. Accumulated goodwill impairment charges through March 31, 2025 were $ 5,497 million. 9. ACCRUED AND OTHER CURRENT LIABILITIES Accrued and other current liabilities consist of: (in millions) March 31, 2025 December 31, 2024 Product rebates $ 1,320 $ 1,385 Product returns 364 372 Legal matters and related fees 310 332 Employee compensation and benefit costs 280 348 Interest 235 217 Income taxes payable 76 63 Other 769 772 $ 3,354 $ 3,489 14 10. FINANCING ARRANGEMENTS Principal amounts of debt obligations and principal amounts of debt obligations net of premiums, discounts and issuance costs consist of the following: March 31, 2025 December 31, 2024 (in millions) Maturity Principal Amount Net of Premiums, Discounts and Issuance Costs Principal Amount Net of Premiums, Discounts and Issuance Costs Senior Secured Credit Facilities: 2022 Amended Credit Agreement 2027 Revolving Credit Facility February 2027 $ — $ — $ — $ — February 2027 Term Loan B Facility February 2027 2,156 2,138 2,187 2,166 AR Credit Facility January 2028 300 300 300 300 B+L Credit Facilities B+L Revolving Credit Facility May 2027 160 160 110 110 B+L May 2027 Term Loan B Facility May 2027 2,431 2,408 2,437 2,412 B+L May 2027 Incremental Term Loan B Facility May 2027 398 394 400 396 B+L September 2028 Term Loan B Facility September 2028 492 485 494 486 Senior Secured Notes: 5.50 % Secured Notes November 2025 1,680 1,678 1,680 1,678 6.125 % Secured Notes February 2027 1,000 993 1,000 993 5.75 % Secured Notes August 2027 500 498 500 498 4.875 % Secured Notes June 2028 1,600 1,590 1,600 1,589 11.00 % First Lien Secured Notes September 2028 1,774 2,394 1,774 2,481 14.00 % Second Lien Secured Notes October 2030 352 622 352 622 B+L Senior Secured Notes: B+L 8.375 % Secured Notes October 2028 1,400 1,384 1,400 1,382 9.00 % Intermediate Holdco Secured Notes January 2028 999 1,240 999 1,279 Senior Unsecured Notes: 9.00 % December 2025 535 534 535 533 9.25 % April 2026 602 601 602 601 8.50 % January 2027 643 643 643 643 7.00 % January 2028 171 171 171 171 5.00 % January 2028 433 431 433 431 6.25 % February 2029 821 816 821 816 5.00 % February 2029 452 449 452 449 7.25 % May 2029 336 335 336 335 5.25 % January 2030 779 774 779 774 5.25 % February 2031 463 460 463 459 Other Various 12 12 12 12 Total long-term debt and other $ 20,489 21,510 $ 20,480 21,616 Less: Current portion of long-term debt 282 2,674 Non-current portion of long-term debt and other $ 21,228 $ 18,942 Covenant Compliance The Existing Senior Secured Credit Facilities (as defined below), the AR Credit Facility (as defined below), the B+L Credit Facilities (as defined below), the indentures that govern the Existing Senior Secured Notes (as defined below), the indenture that governs the B+L Secured Notes (as defined below), the indenture that governs the 9.00 % Intermediate Holdco Senior Secured Notes (as defined below) and the indentures that govern the Existing Senior Unsecured Notes (as listed above, and, together with the Existing Senior Secured Notes, the “Existing Senior Notes”) contain (or contained) customary affirmative and negative covenants and specified events of default. These affirmative and negative covenants include (or included), 15 among other things, and subject to certain qualifications and exceptions, covenants that restrict the Company’s ability and the ability of certain of its subsidiaries to: incur or guarantee additional indebtedness; create or permit liens on assets; pay dividends on capital stock or redeem, repurchase or retire capital stock or indebtedness; make certain investments and other restricted payments; engage in mergers, acquisitions, consolidations and amalgamations; transfer and sell certain assets; and engage in transactions with affiliates. The 2027 Revolving Credit Facility (as defined below) also contained a financial covenant. In connection with the April 2025 Refinancing Transactions (as defined and described below), the 2027 Revolving Credit Facility was terminated, and the Company is no longer subject to compliance with the financial covenant thereunder as of the date of issuance of these financial statements . As of March 31, 2025, the Company was in compliance with its covenants related to its debt obligations. April 2025 Refinancing Transactions On April 8, 2025, the Company closed a series of transactions (the “April 2025 Refinancing Transactions”) whereby 1261229 B.C. Ltd., a company incorporated under the laws of British Columbia, Canada and an indirect wholly-owned subsidiary of the Company (the “Issuer”): (i) entered into a credit agreement which provides for new senior secured credit facilities (the “2025 Credit Agreement”) consisting of a five-year senior secured revolving credit facility in an amount of $ 500 million due April 8, 2030 (the “2030 Revolving Credit Facility”) and a $ 3,000 million 5.5 -year senior secured term loan B facility due October 8, 2030 (the “2030 Term Loan B Facility” and together with the 2030 Revolving Credit Facility, the “2025 Senior Secured Credit Facilities”) and (ii) issued $ 4,400 million aggregate principal amount of 10.00 % senior secured notes due April 15, 2032 (the “2032 Senior Secured Notes”). The Issuer owns 185,468,421 common shares of Bausch + Lomb, and as of April 8, 2025, is a non-guarantor restricted subsidiary under the indentures that govern the Company’s Existing Senior Notes. The Company and certain of its subsidiaries are guarantors under the 2025 Senior Secured Credit Facilities and the 2032 Senior Secured Notes. Bausch + Lomb and its subsidiaries are unrestricted subsidiaries under the 2025 Senior Secured Credit Facilities, the 2032 Senior Secured Notes and the Existing Senior Secured Notes. The proceeds from the April 2025 Refinancing Transactions were used: (i) to repay in full and terminate the February 2027 Term Loan B Facility (as defined below), (ii) to redeem certain Existing Senior Notes and the secured notes issued by 1375209 B.C. Ltd. (the “9.00% Intermediate Holdco Senior Secured Notes”) listed in the table below (collectively, the “Redeemed Notes”), (iii) to pay related fees, premiums and expenses and (iv) for general corporate purposes. The aggregate principal amounts of the February 2027 Term Loan B Facility repaid in full and terminated and the Redeemed Notes redeemed, in connection with the April 2025 Refinancing Transactions are set forth below: (in millions) February 2027 Term Loan B Facility $ 2,156 5.50 % Senior Secured Notes due 2025 1,680 6.125 % Senior Secured Notes due 2027 1,000 5.75 % Senior Secured Notes due 2027 500 9.00 % Intermediate Holdco Secured Notes due 2028 999 9.00 % Senior Unsecured Notes due 2025 535 Total $ 6,870 The debt retired includes $ 2,394 million, inclusive of premiums and discounts, originally scheduled to come due within one year of March 31, 2025. As the April 2025 Refinancing Transactions were completed prior to the issuance of these Condensed Consolidated Financial Statements and the criteria under Accounting Standards Codification 470-10 has been met, these amounts have been classified as Non-current portion of long-term debt as of March 31, 2025. Bridge Facility On February 11, 2025, the Issuer entered into a commitment whereby a third-party lender agreed to provide a senior secured bridge loan facility in an aggregate principal amount of up to $ 700 million, subject to customary conditions and limitations, including based on the value of the collateral (the “Bridge Facility”). In connection with the April 2025 Refinancing Transactions, on April 8, 2025 the Issuer terminated this Bridge Facility. Credit Facilities 2022 Senior Secured Credit Facilities On June 1, 2018, the Company and certain of its subsidiaries as guarantors entered into a Restatement Agreement to amend its then existing credit agreement pursuant to the Fourth Amended & Restated Credit and Guaranty Agreement, as further 16 amended by the First Incremental Amendment to the Fourth Amended & Restated Credit and Guaranty Agreement, dated as of November 27, 2018. On May 10, 2022, the Company and certain of its subsidiaries as guarantors entered into a Second Amendment to the Fourth Amended & Restated Credit and Guaranty Agreement (the “2022 Amended Credit Agreement”). The 2022 Amended Credit Agreement provided for a revolving credit facility of $ 975 million (the “2027 Revolving Credit Facility”) and term loan facilities of original principal amounts of $ 2,500 million (the “February 2027 Term Loan B Facility” and together with the 2027 Revolving Credit Facility, the “Existing Senior Secured Credit Facilities”). As of March 31, 2025, the Company had no outstanding borrowings and had $ 24 million of issued and outstanding letters of credit on the 2027 Revolving Credit Facility. The February 2027 Term Loan B Facility was repaid, and the Existing Senior Secured Credit Facilities were terminated, in connection with the April 2025 Refinancing Transactions as described above. 2025 Senior Secured Credit Facilities Loans under the 2025 Credit Agreement are: (i) secured, subject to customary limitations, by a first priority lien on substantially all of the assets of the Issuer, including a pledge of 185,468,421 common shares of Bausch + Lomb owned by the Issuer (representing 52.5 % of the outstanding common shares of Bausch + Lomb as of April 8, 2025) (the “Bausch + Lomb Share Collateral”) and (ii) jointly and severally guaranteed by (x) the Company and subsidiaries of the Company that guaranteed the Existing Senior Secured Credit Facilities (the “BHC Existing Credit Agreement Guarantors”), with such guarantees secured by the assets of such guarantors, subject to customary limitations, by a first-priority lien that ranks pari passu with the liens securing the Company’s Existing Senior Secured Notes (as defined below) and the 2032 Senior Secured Notes and (y) certain subsidiaries of the Company that did not guarantee the Company’s Existing Senior Secured Credit Facilities, including 1530065 B.C. Ltd. (“153NumberCo”) and each subsidiary of 153NumberCo other than Bausch + Lomb and its subsidiaries (the “NumberCo Loan Guarantors” and, together with the BHC Existing Credit Agreement Guarantors, the “Loan Guarantors”), with such guarantees secured by the assets of the NumberCo Loan Guarantors, including the assets of the BHC Existing Loan Guarantors, subject to customary limitations, by a first-priority lien that ranks pari passu with the liens securing the 2032 Senior Secured Notes. Borrowings under the 2030 Term Loan B Facility bear interest, with respect to U.S. dollar borrowings, based on the Company’s election of either (1) an alternate base rate equal to the highest of: (i) the prime rate then in effect, (ii) the greater of the federal funds effective rate and the overnight bank funding rate (each subject to a 0 % floor), plus 0.500 % and (iii) the Term SOFR Rate (as defined in the 2025 Credit Agreement) for a one-month interest period, plus 1.000 %, subject to a 1.000 % floor, plus the Applicable Rate (as defined in the 2025 Credit Agreement) or (2) the Term SOFR Rate for the applicable interest period, subject to a 0 % floor, plus the Applicable Rate. The Applicable Rate in connection with a borrowing under the 2030 Term Loan B Facility is 5.25 % per annum for alternate base rate borrowings and 6.25 % per annum for Term SOFR Rate borrowings. The 2030 Revolving Credit Facility will mature on the earlier of April 8, 2030 and the date that is 91 calendar days prior to the scheduled maturity of indebtedness for borrowed money of the Company or the Issuer in an aggregate principal amount in excess of $ 1,000 million. Borrowings under the 2030 Revolving Credit Facility can be made in U.S. dollars, Canadian dollars or Euros. Borrowings under the 2030 Revolving Credit Facility bear interest, with respect to U.S. dollar borrowings, based on the Company’s election of either (1) an alternate base rate equal to the Applicable Rate plus the highest of: (i) the prime rate then in effect, (ii) the greater of the federal funds effective rate and the overnight bank funding rate (each subject to a 0 % floor), plus 0.500 % and (iii) the Adjusted Term SOFR Rate (as defined in the 2025 Credit Agreement) for a one-month interest period (subject to a 0 % floor) plus 1.000 %, plus the Applicable Rate or (2) the Adjusted Term SOFR Rate for the applicable interest period (subject to a 0 % floor), plus the Applicable Rate. Borrowings under the 2030 Revolving Credit Facility bear interest, with respect to Canadian Dollar borrowings, based on the Company’s election of either (1) the Canadian Overnight Repo Rate Average (“Term CORRA”) plus 0.29547 % for a one month interest period or 0.32138 % for a three-month interest period (subject to a 0 % floor), plus the Applicable Rate or (2) a rate equal to the highest of: (i) the Canadian prime rate then in effect and (ii) the annual rate of interest equal to the sum of the (x) Term CORRA rate plus 0.29547 % for a one month interest period and (y) 1.00 % (each subject to a 1.00 % floor), plus the Applicable Rate. Borrowings under the 2030 Revolving Credit Facility bear interest, with respect to Euro borrowings, based on the adjusted EURIBOR Screen Rate, (as defined in the 2025 Credit Agreement), subject to a 0 % floor, for any applicable interest period plus the Applicable Rate. 17 The Applicable Rate in connection with alternate base rate borrowings, Canadian prime rate loans and swingline loans is 3.25 % and in connection with Adjusted Term SOFR Rate loans, Adjusted EURIBOR Rate loans and Adjusted Term CORRA Rate loans is 4.25 %; provided that, in connection with any borrowing, the Applicable Rate is subject to two 0.250 % step-downs subject to compliance with a Blended First Lien Leverage Ratio (as defined in the 2025 Credit Agreement) of equal to or less than 2.6 :1.00 and equal to or less than 2.1 :1.00, respectively. In addition, the Company is required to pay commitment fees of 0.50 % per annum in respect of the unutilized commitments (but in the case of swingline loans, whether utilized or unutilized) under the 2030 Revolving Credit Facility, payable quarterly in arrears, subject to two 0.125 % step-downs subject to compliance with a Blended First Lien Leverage Ratio of equal to or less than 2.6 :1.00 and equal to or less than 2.1 :1.00, respectively. The Company is also required to pay letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the Applicable Rate in connection with Adjusted Term SOFR Rate loans, Adjusted EURIBOR Rate loans and Adjusted Term CORRA Rate loans under the 2030 Revolving Credit Facility on a per annum basis, payable quarterly in arrears, as well as customary fronting fees (not to exceed 0.125 % per annum) for the issuance of letters of credit and agency fees. The Issuer is permitted to voluntarily prepay outstanding loans under the 2030 Term Loan B Facility, in whole or in part, without premium or penalty subject to customary “breakage” costs. The 2030 Term Loan B Facility includes a 100 % net cash proceeds sweep, on a pro rata basis with obligations under the 2032 Senior Secured Notes, in connection with (i) the receipt of net cash proceeds from the sale of Bausch + Lomb Share Collateral, (ii) the receipt of any dividends, distributions or other amounts on account of such Bausch + Lomb Share Collateral, (iii) incurrence of indebtedness that is not otherwise permitted, (iv) certain asset sales or other dispositions of any property of the Company or its restricted subsidiaries and certain casualty or condemnation events (subject to reinvestment rights and with any prepayments to be shared ratably with the 11.00 % First Lien Notes due September 2028, the 2028 Senior Secured Notes and the 2032 Senior Secured Notes) and (v) cash of the Issuer from payments under certain intercompany obligations after funding principal and interest payments (including for the subsequent six months) under the 2025 Credit Agreement and the 2032 Senior Secured Notes. The 2030 Term Loan B Facility will mature October 8, 2030. The amortization rate for the 2030 Term Loan B Facility is 1.00 % per annum, or $ 30 million, payable in quarterly installments beginning on September 30, 2025. The Issuer may direct that prepayments be applied to such amortization payments in order of maturity. The mandatory quarterly amortization payments for the 2030 Term Loan B Facility will be $ 158 million through October 2030. The 2025 Credit Agreement provides for an accordion feature that allows the Issuer, on one or more occasions prior to December 31, 2025, to increase the size of the 2030 Term Loan B Facility, add one or more incremental term loan facilities or incur incremental equivalent debt in an aggregate amount not to exceed $ 1,600 million less the amount of any Drop Down Debt (as defined in the 2025 Credit Agreement) originally incurred (whether or not such Drop Down Debt remains outstanding at the time of such incurrence of incremental term loan facilities or incremental equivalent debt), secured by the collateral on a pari passu basis with the 2030 Term Loan B Facility and the 2030 Revolving Credit Facility. The incurrence of such incremental term loan facilities or incremental equivalent debt is subject to customary conditions, including that a specified amount of Bausch + Lomb shares are added to the Bausch + Lomb Share Collateral based on the amount of such incremental term loan facilities or incremental equivalent debt incurred. In addition, the Issuer and the guarantors shall be able to incur junior lien or unsecured indebtedness in an amount such that after giving effect to the incurrence of any such debt, the Company would be in compliance, on a pro forma basis after giving effect to such incurrence of such indebtedness, with either a (i) Fixed Charge Coverage Ratio that is no less than 2.00 to 1.00 or (ii) Total Leverage Ratio that is no greater than 6.50 to 1.00, in each case, subject to customary terms and conditions, and with such ratios as defined in the 2025 Credit Agreement. The 2030 Revolving Credit Facility, which is part of the 2025 Credit Agreement, also contains financial maintenance covenants, that require the Company to maintain (1) a Blended First Lien Leverage Ratio (as defined in the 2025 Credit Agreement) of not greater than (i) 4.25 :1.00, prior to the Covenant Step Up Date (as defined in the 2025 Credit Agreement) and (ii) 5.75 :1.00 on and after such date and (2) minimum liquidity of not less than $ 400 million on or after the Covenant Step Up Date. Accounts Receivable Credit Facility On June 30, 2023, certain subsidiaries of the Company entered into a Credit and Security Agreement (as amended, the “AR Facility Agreement”) with certain third-party lenders, providing for a non-recourse financing facility collateralized by certain accounts receivable originated by a wholly-owned subsidiary of the Company (the “AR Credit Facility”). The AR Facility Agreement provides for an up to $ 600 million facility, subject to certain borrowing base tests. Under the AR Credit Facility, a special purpose entity (the “Borrower”), as the borrower, purchases accounts receivable originated by a wholly-owned subsidiary of the Company, which collateralize borrowings under the AR Credit Facility. The Borrower is a bankruptcy 18 remote entity that is unrestricted under the Company’s debt covenants, and which is consolidated by the Company. Borrowings under the AR Credit Facility are for general corporate purposes. Borrowings under the AR Credit Facility are in U.S. dollars and bear interest at a rate per annum equal to the sum of the one month term SOFR plus 6.65 %. The Company is required to pay commitment fees of 0.75 % multiplied by the lesser of: (i) the unfunded portion of the lenders’ commitments or (ii) 50 % of the total lenders’ commitments. 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 2025 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. The AR Credit Facility matures on January 28, 2028. As of March 31, 2025, there were $ 300 million of outstanding borrowings under the AR Credit Facility at an all-in interest rate of 10.97 %. Bausch + Lomb Senior Secured Credit Facilities On May 10, 2022, Bausch + Lomb entered into a credit agreement which provided for a term loan of $ 2,500 million (the “B+L May 2027 Term Loan B Facility”) and a five-year revolving credit facility of $ 500 million (the “B+L Revolving Credit Facility”). As of March 31, 2025, the B+L Revolving Credit Facility had $ 160 million of outstanding borrowings, $ 36 million of issued and outstanding letters of credit and $ 304 million of remaining availability, and a stated rate of interest for borrowings ranging from 7.16 % to 7.17 % per annum. As of March 31, 2025, the B+L May 2027 Term Loan B Facility had a stated rate of interest of 7.67 % per annum, and remaining mandatory quarterly amortization payments of $ 50 million through March 2027, with the remaining term loan balance due in May 2027. 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 and consisted of borrowings of $ 500 million in new term B loans (the “B+L September 2028 Term Loan B Facility”). As of March 31, 2025, the B+L September 2028 Term Loan B Facility had a stated rate of interest of 8.32 % per annum, and remaining mandatory quarterly amortization payments of $ 16 million through June 2028, with the remaining term loan balance due in September 2028. 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 and consisted of borrowing $400 million of new term loans (the “B+L May 2027 Incremental Term Loan B Facility”). As of March 31, 2025, the B+L May 2027 Incremental Term Loan B Facility had a stated rate of interest of 7.67 % per annum and remaining mandatory quarterly amortization payments of $ 18 million through December 2026, with an additional amortization payment of $ 8 million due in March 2027 and the remaining term loan balance due in May 2027. The B+L May 2027 Term Loan B Facility, the B+L May 2027 Incremental Term Loan B Facility, the B+L September 2028 Term Loan B Facility and the B+L Revolving Credit Facility (together the “B+L Credit Facilities”) are secured by substantially all of the assets of Bausch + Lomb and its material, wholly-owned Canadian, U.S., Dutch and Irish subsidiaries, subject to certain exceptions. The B+L Revolving Credit Facility is a source of funding for Bausch + Lomb and its subsidiaries only. Absent the payment of a dividend, which would be determined by the Board of Directors of Bausch + Lomb and paid pro rata to Bausch + Lomb’s shareholders, proceeds from the B+L Revolving Credit Facility are not available to fund the operations, investing and financing activities of any other subsidiaries of Bausch Health. Senior Secured Notes 2032 Senior Secured Notes The 2032 Senior Secured Notes are: (i) secured, subject to customary limitations, by a first priority lien on substantially all of the assets of the Issuer, including the Bausch + Lomb Share Collateral and (ii) jointly and severally guaranteed by (x) the Company and subsidiaries of the Company that guarantee the Existing Senior Notes (the “BHC Existing Note Guarantors”), with such guarantees secured by the assets of such guarantors, subject to customary limitations, by a first-priority lien that ranks pari passu with the liens securing the Company’s Existing Senior Secured Notes and the 2025 Credit Agreement and (y) certain subsidiaries of the Company that do not guarantee the Company’s Existing Senior Notes (the “NumberCo Note Guarantors” and, together with the BHC Existing Note Guarantors, the “Note Guarantors”), with such guarantees secured by the assets of the NumberCo Note Guarantors (including the Bausch + Lomb Share Collateral) and the assets of the BHC 19 Existing Note Guarantors, subject to customary limitations, by a first-priority lien that ranks pari passu with the liens securing the 2025 Credit Agreement. The 2032 Senior Secured Notes are redeemable at the option of the Issuer, in whole or in part, at any time on or after April 15, 2028, at the redemption prices set forth in the indenture that governs the 2032 Senior Secured Notes. Prior to April 15, 2028, the Issuer may redeem all or a portion of the 2032 Senior Secured Notes at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but not including, the date of redemption, plus a “make-whole” premium. The 2032 Senior Secured Notes are subject to mandatory redemption upon (i) the receipt of net cash proceeds from the sale of Bausch + Lomb Share Collateral, (ii) the receipt of any dividends, distributions or other amounts on account of such Bausch + Lomb Share Collateral in excess of $ 50 million or (iii) the receipt of funds from any repayment of principal on certain intercompany obligations. Upon the occurrence of a change of control (as defined in the indenture that governs the 2032 Senior Secured Notes), holders of 2032 Senior Secured Notes may require the Issuer to repurchase such holder’s 2032 Senior Secured Notes, in whole or in part, at a purchase price equal to 101 % of the principal amount thereof plus accrued and unpaid interest to, but not including, the purchase date applicable to the 2032 Senior Secured Notes. Existing Senior Secured Notes Senior secured notes issued prior to 2025 (the “Existing Senior Secured Notes”) are guaranteed by all of the Company’s subsidiaries that are BHC Existing Note Guarantors (together, the “BHC Existing Guarantors”). The Issuer and its direct parent, 153NumberCo are non-guarantor restricted subsidiaries with respect to the Company’s Existing Senior Secured Notes. The Existing Senior Secured Notes and the applicable guarantees rank equally in right of repayment with all of the Company’s and the BHC Existing Guarantors’ respective existing and future unsubordinated indebtedness and senior to the Company’s and the BHC Existing Guarantors’ respective future subordinated indebtedness. The Existing Senior Secured Notes and the applicable guarantees related thereto are effectively pari passu with the Company’s and the BHC Existing Guarantors’ respective existing and future indebtedness secured by a first priority lien on the collateral securing the Existing Senior Secured Notes and effectively senior to the Company’s and the BHC Existing Guarantors’ respective existing and future indebtedness that is unsecured, including the existing senior unsecured notes (the “Senior Unsecured Notes”), or that is secured by junior liens, in each case to the extent of the value of the collateral that secures the Existing Senior Secured Notes. In addition, the Existing Senior Secured Notes are structurally subordinated to: (i) all liabilities of any of the Company’s subsidiaries that do not guarantee the Existing Senior Secured Notes (including 153NumberCo and its subsidiaries, including the Issuer) and (ii) any of the Company’s debt that is secured by assets that are not collateral (including the common shares of Bausch + Lomb owned by the Issuer). Upon the occurrence of a change in control (as defined in the indentures that govern the Existing Senior Secured Notes), holders of the Existing Senior Secured Notes may require the Company to repurchase such holder’s Existing Senior Secured Notes, in whole or in part, at a purchase price equal to 101 % of the principal amount thereof plus accrued and unpaid interest to, but not including, the purchase date applicable to the Existing Senior Secured Notes. B+L 8.375 % Senior Secured Notes due 2028 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 Secured Notes”) which are guaranteed by each of Bausch + Lomb’s subsidiaries that is a guarantor under the B+L Amended Credit Agreement (the “B+L Note Guarantors”). The B+L Secured Notes and the guarantees related thereto are senior obligations and are secured, subject to permitted liens and certain other exceptions, by the same first priority liens that secure Bausch + Lomb’s obligations under the B+L Amended Credit Agreement under the terms of the indentures that govern the B+L Secured Notes. The B+L Secured Notes and the guarantees related thereto rank equally in right of repayment with all of Bausch + Lomb’s and B+L Note Guarantors’ respective existing and future unsubordinated indebtedness and senior to Bausch + Lomb’s and B+L Note Guarantors’ respective future subordinated indebtedness. The B+L Senior Secured Notes and the guarantees related thereto are effectively pari passu with Bausch + Lomb’s and the B+L Note Guarantors’ respective existing and future indebtedness secured by a first priority lien on the collateral securing the B+L Secured Notes and effectively senior to Bausch + Lomb’s and the B+L Note Guarantors’ respective existing and future indebtedness that is unsecured, or that is secured by junior liens, in each case to the extent of the value of the collateral. In addition, the B+L Secured Notes are structurally subordinated to: (i) all liabilities of any of Bausch + Lomb’s subsidiaries that do not guarantee the B+L Secured Notes and (ii) any of Bausch + Lomb’s debt that is secured by assets that are not collateral. 20 Upon the occurrence of a change in control (as defined in the indentures that govern the B+L Secured Notes), unless Bausch + Lomb has exercised its right to redeem all of the notes of a series, holders of the B+L Secured Notes may require Bausch + Lomb to repurchase such holders’ 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 Secured Notes are redeemable at the option of Bausch + Lomb, in whole or in part, at any time on or after October 1, 2025, at the redemption prices set forth in the indenture. Prior to October 1, 2025, Bausch + Lomb may redeem the B+L 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 B+L 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 or more equity offerings. Senior Unsecured Notes The Senior Unsecured Notes issued by the Company are the Company’s senior unsecured obligations and are jointly and severally guaranteed on a senior unsecured basis by each of its subsidiaries that is a guarantor under the Existing Senior Secured Notes. The Senior Unsecured Notes issued by Bausch Health Americas, Inc. (“BHA”) are senior unsecured obligations of BHA and are jointly and severally guaranteed on a senior unsecured basis by the Company and each of its subsidiaries (other than BHA) that is a guarantor under the Existing Senior Secured Notes. Future subsidiaries of the Company and BHA, if any, may be required to guarantee the Senior Unsecured Notes. The Issuer and 153NumberCo are non-guarantor restricted subsidiaries with respect to the Senior Unsecured Notes. Upon the occurrence of a change in control (as defined in the indentures that govern the Senior Unsecured Notes), holders of the Senior Unsecured Notes may require the Company or BHA, as applicable, to repurchase such holder’s Senior Unsecured Notes, in whole or in part, at a purchase price equal to 101 % of the principal amount thereof, plus accrued and unpaid interest to, but not including, the purchase date applicable to the Senior Unsecured Notes. 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 for $ 3,125 million (the “2022 Secured Notes”) in aggregate principal balance of newly issued secured notes, a reduction of outstanding principal of $ 2,469 million. 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. As a result of the application of this accounting, 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. As of March 31, 2025, the remaining premium on the 2022 Secured Notes was $ 890 million, which is being reduced as contractual interest payments are made on the 2022 Secured Notes. During the three months ended March 31, 2025 and 2024, the Company made contractual interest payments of $ 143 million and $ 45 million, respectively, related to the 2022 Secured Notes, of which $ 127 million and $ 39 million, respectively, was recorded as a reduction of the premium. On April 8, 2025 in connection with the April 2025 Refinancing Transactions, the Company repaid in full and terminated the 9.00 % Intermediate Holdco Senior Secured Notes. Weighted Average Stated Rate of Interest The weighted average stated rate of interest for the Company’s outstanding debt obligations as of March 31, 2025 and December 31, 2024 was 7.71 % and 7.72 %, respectively. Due to the accounting treatment for the 2022 Secured Notes, interest expense in the Company’s financial statements 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 9.00 % Senior Unsecured Notes due December 2025 and the 9.25 % Senior Unsecured Notes due April 2026 with an aggregate par value of approximately $ 555 million, for an aggregate cost of approximately $ 530 million. In connection with these repurchases, the Company 21 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. Maturities As a result of the April 2025 Refinancing Transactions, the maturities of the Company’s principal balances of debt obligations as of April 8, 2025 were as follows: (in millions) Remainder of 2025 2026 2027 2028 2029 2030 2031 and 2032 Total Total debt obligations $ 45 $ 672 $ 3,675 $ 6,199 $ 1,640 $ 3,995 $ 4,863 $ 21,089 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 or other monetization 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. See Note 10, “FINANCING ARRANGEMENTS” to the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC and the CSA on February 19, 2025, for further details. 11. SHARE-BASED COMPENSATION Bausch Health’s Long-Term Incentive Plan In May 2014, shareholders approved Bausch Health’s 2014 Omnibus Incentive Plan (the “2014 Plan”) which has been amended from time to time 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 20,000,000 common shares. Approximately 24,603,000 common shares were available for future grants as of March 31, 2025. The Company uses reserved and unissued common shares to satisfy its obligations 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 (“TSR”) over the long-term. The share-based awards granted under this long-term incentive program may consist of time-based stock options, time-based restricted stock units (“RSUs”) and performance-based RSUs. 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. Bausch + Lomb Long-Term Incentive Plan Prior to May 5, 2022, Bausch + Lomb participated in Bausch Health’s long-term incentive program. Effective May 5, 2022, Bausch + Lomb established the Bausch + Lomb Corporation 2022 Omnibus Incentive Plan (as subsequently amended and restated, the “B+L Plan”) and a total of 28,000,000 common shares of Bausch + Lomb were originally authorized for issuance under the B+L Plan. The B+L Plan was amended and restated effective April 24, 2023, and further amended and restated on May 29, 2024, to increase the number of shares authorized for issuance thereunder, 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 22 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. Share-based awards granted to senior management align with Bausch + Lomb’s focus on enhancing its revenue growth while maintaining focus on total shareholder return over the long-term. The share-based awards granted under this long-term incentive program consist of time-based stock options, time-based RSUs and performance-based RSUs (“PSUs”). The PSUs are comprised of awards that vest upon: (i) achievement of certain share price appreciation conditions, including absolute and relative 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. Approximately 13,300,000 Bausch + Lomb common shares were available for future grants as of March 31, 2025. Bausch + Lomb uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans. The following table summarizes the components and classification of the Company’s share-based compensation expenses related to stock options and RSUs for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, (in millions) 2025 2024 Stock options $ 4 $ 3 RSUs 39 30 $ 43 $ 33 Research and development expenses $ 3 $ 3 Selling, general and administrative expenses 40 30 $ 43 $ 33 23 Share-based awards granted for the three months ended March 31, 2025 and 2024 consist of: Three Months Ended March 31, 2025 2024 Bausch Health Share-Based Awards Time-based RSUs Granted 5,379,000 4,246,000 Weighted-average grant date fair value $ 7.70 $ 9.39 Adjusted Operating Cash Flow performance-based RSUs Granted 2,096,000 1,232,000 Weighted-average grant date fair value $ 7.36 $ 9.89 Bausch + Lomb Share-Based Awards Stock options Granted 1,374,000 1,317,000 Weighted-average exercise price $ 15.86 $ 16.85 Weighted-average grant date fair value $ 4.66 $ 4.92 RSUs Granted 3,033,000 2,967,000 Weighted-average grant date fair value $ 15.95 $ 16.84 TSR PSUs Granted 388,000 826,000 Weighted-average grant date fair value $ 15.86 $ 21.21 Organic Revenue Growth PSUs Granted 753,000 379,000 Weighted-average grant date fair value $ 15.98 $ 16.08 OPG PSU Granted — 1,758,000 Weighted-average grant date fair value $ — $ 17.04 As of March 31, 2025, the remaining unrecognized compensation expense related to all outstanding non-vested stock options, time-based RSUs and performance-based RSUs under the Company’s 2014 Plan and the B+L Plan amounted to $ 276 million, which will be amortized over a weighted-average period of 1.87 years. As of March 31, 2025, the remaining unrecognized compensation expense related to all outstanding non-vested stock options, time-based RSUs and PSUs under the B+L Plan amounted to $ 181 million, which will be amortized over a weighted-average period of 1.86 years. 12. ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss consists of: (in millions) March 31, 2025 December 31, 2024 Foreign currency translation adjustment $ ( 2,012 ) $ ( 2,162 ) Pension adjustment, net of tax ( 17 ) ( 17 ) $ ( 2,029 ) $ ( 2,179 ) Income taxes are not provided for foreign currency translation adjustments arising on the translation of the Company’s operations having a functional currency other than the U.S. 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. 24 13. RESEARCH AND DEVELOPMENT Included in Research and development are costs related to product development and quality assurance programs. Quality assurance are the costs incurred to meet evolving customer and regulatory standards. Research and development costs consist of: Three Months Ended March 31, (in millions) 2025 2024 Product related research and development $ 139 $ 146 Quality assurance 4 5 $ 143 $ 151 14. OTHER EXPENSE, NET Other expense, net consists of: Three Months Ended March 31, (in millions) 2025 2024 Acquired in-process research and development costs $ 28 $ — Acquisition-related transaction costs 1 — Litigation and other matters, net of insurance recoveries and restitutions ( 3 ) 6 Acquisition-related contingent consideration ( 11 ) ( 2 ) Gain on sale of assets, net — ( 4 ) $ 15 $ — Acquired in-process research and development costs for the three months ended March 31, 2025 are related to Bausch + Lomb’s acquisition of Whitecap Biosciences. Acquisition-related contingent consideration for the three months ended March 31, 2025 and 2024 reflects adjustments for changes in estimates in the timing and amounts of expected future royalty and milestone payments and accretion for the time value of money. For the three months ended March 31, 2025, Litigation and other matters primarily relates to restitution received in connection with a certain legal matter. For the three months ended March 31, 2024, Litigation and other matters primarily related to adjustments to provisions for certain legal matters. 15. INCOME TAXES For interim financial statement purposes, U.S. GAAP income tax expense/benefit related to ordinary income is determined by applying an estimated annual effective income tax rate against a company’s ordinary income. Income tax expense/benefit related to items not characterized as ordinary income is recognized as a discrete item when incurred. The estimation of the Company’s income tax provision requires the use of management forecasts and other estimates, application of statutory income tax rates and an evaluation of valuation allowances. The Company’s estimated annual effective income tax rate may be revised, if necessary, in each interim period. Provision for income taxes for the three months ended March 31, 2025 was $ 39 million and included: (i) $ 30 million of income tax provision for the Company’s ordinary loss for the three months ended March 31, 2025 and (ii) $ 9 million of net income tax provision for discrete items, which includes $ 6 million of net income tax provision associated with the filing of certain tax returns. Provision for income taxes for the three months ended March 31, 2024 was $ 8 million and included: (i) $ 28 million of income tax provision for the Company’s ordinary loss for the three months ended March 31, 2024 and (ii) $ 20 million of net income tax benefit for discrete items, which includes $ 22 million of net income tax benefit related to uncertain tax positions. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made. The valuation allowance against deferred tax assets was approximately $ 2,344 million and $ 2,284 million as of 25 March 31, 2025 and December 31, 2024, respectively. The Company will continue to assess the need for valuation allowances on an ongoing basis. As of March 31, 2025 and December 31, 2024, the Company had $ 937 million and $ 924 million, respectively, of unrecognized tax benefits, which included $ 75 million and $ 68 million of interest and penalties, respectively. Of the total unrecognized tax benefits as of March 31, 2025, $ 417 million would reduce the Company’s effective tax rate, if recognized. The Company has included the estimated impact of the Organisation for Economic Co-operation and Development’s Inclusive Framework (Pillar 2), as currently adopted, in its tax provision beginning in 2024. While the estimated impact is not material, it is possible that the further implementation of the Inclusive Framework could have a material effect on the liability for corporate taxes or the consolidated tax rate in the future. The Company continues to be under examination by the Canada Revenue Agency. In the first quarter of 2024, the Company finalized a settlement related to prior year withholding tax returns which was paid in the second quarter of 2024. The Internal Revenue Service (the “IRS”) completed its examinations of the Company’s U.S. consolidated federal income tax returns for the years 2013 and 2014. There were no material adjustments to the Company’s taxable income as a result of these examinations. However, the 2014 tax year remains open to the extent of a 2017 capital loss carried back to that year (the “2017 Capital Loss”). The Company’s annual tax filings for 2015 and 2016 and short period tax return for the period ended September 8, 2017, which was filed as a result of the Company’s internal restructuring efforts during 2017 is currently under IRS examination. As part of its examination, the Company received a notice of proposed adjustment from the IRS that would disallow the 2017 Capital Loss resulting from its internal restructuring. The Company has contested this proposed tax deficiency through the IRS administrative appeals process, and if necessary, intends to continue to contest any proposed tax deficiency through appropriate litigation. Accordingly, no income tax provision had been recorded as of March 31, 2025. If the Company were ultimately unsuccessful in defending its position, and all or a substantial portion of the 2017 capital loss deduction were disallowed, the Company estimates, in a worst-case scenario, that it could be liable for additional income taxes (excluding penalties and interest) of up to $ 2,100 million, which could have an adverse effect on the Company’s financial condition and results of operations. In January 2023, as part of an alternative dispute resolution process with the IRS, the Company reached a tentative settlement on the 2017 Capital Loss. 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’s U.S. affiliates remain under examination for various state tax audits in the U.S. for years 2015 through 2024. The Company’s subsidiaries in Germany are under audit for tax years 2014 through 2019. During the three months ended September 30, 2023, the Company received a preliminary assessment from the German taxing authority for the 2014 through 2016 period that would disallow certain transfer pricing adjustments. The Company contested this alleged tax deficiency through the appropriate appeals process, and reached a preliminary settlement with the German taxing authority during the year ended December 31, 2024. The preliminary settlement resulted in the accrual of an immaterial tax cost and will close out the 2014 to 2016 audit period once the preliminary settlement is finalized. In November 2022, the Company’s affiliate in the Netherlands received an assessment from the Luxembourg Tax Authorities as successor in interest to its affiliate in Luxembourg for tax years 2018 – 2019 for € 271.7 million. The Company is vigorously defending its position and no reserves have been recorded. In January 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. Certain affiliates of the Company in regions outside of Canada, the U.S., Germany, Luxembourg and Australia are currently under examination by relevant taxing authorities, and all necessary accruals have been recorded, including uncertain tax benefits. At this time, the Company does not expect that proposed adjustments, if any, would be material to the Company’s Condensed Consolidated Financial Statements. 26 16. LOSS PER SHARE Loss per share attributable to Bausch Health Companies Inc. is calculated as follows: Three Months Ended March 31, (in millions, except per share amounts) 2025 2024 Net loss attributable to Bausch Health Companies Inc. $ ( 58 ) $ ( 64 ) Basic and diluted weighted-average common shares outstanding 369.6 366.8 Basic and diluted loss per share attributable to Bausch Health Companies Inc. $ ( 0.16 ) $ ( 0.17 ) During the three months ended March 31, 2025 and 2024, all potential common shares issuable for stock options and RSUs were excluded from the calculation of diluted loss per share, as the effect of including them would have been anti-dilutive. The dilutive effect of potential common shares issuable for stock options and RSUs on the weighted-average number of common shares outstanding would have been approximately 4,193,000 and 3,448,000 common shares for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025 and 2024, time-based RSUs, performance-based RSUs and stock options to purchase approximately 14,300,000 and 16,190,000 common shares, respectively, were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive under the treasury stock method. During the three months ended March 31, 2025 and 2024, an additional 2,083,000 and 1,231,000 performance-based RSUs were not included in the computation of diluted earnings per share as the required performance conditions had not been met. 17. LEGAL PROCEEDINGS From time to time, the Company becomes involved in various legal and administrative proceedings, which include product liability, intellectual property, commercial, tax, antitrust, governmental and regulatory investigations, related private litigation and ordinary course employment-related issues. From time to time, the Company also initiates actions or files counterclaims. The Company could be subject to counterclaims or other suits in response to actions it may initiate. The Company believes that the prosecution of these actions and counterclaims is important to preserve and protect the Company, its reputation and its assets. Certain of these proceedings and actions are described in Note 20, “LEGAL PROCEEDINGS,” to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC and the CSA on February 19, 2025. On a quarterly basis, the Company evaluates developments in legal proceedings, potential settlements and other matters that could increase or decrease the amount of the liability accrued. As of March 31, 2025, the Company’s Condensed Consolidated Balance Sheets includes accrued current loss contingencies of $ 310 million related to matters which are both probable and reasonably estimable. For all other matters, unless otherwise indicated, the Company cannot reasonably predict the outcome of these legal proceedings, nor can it estimate the amount of loss, or range of loss, if any, that may result from these proceedings. 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. Securities Class Actions and Related Matters U.S. Securities Litigation - Opt-Out Litigation 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. 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. On January 31, 2021, the District Court issued an order granting final approval of this settlement. After various appeals, and with passage of time, this settlement has become final pursuant to the stipulation of settlement. The matter is now concluded with respect to the Company and all claims have been resolved and discharged as to the Company and its current/former officers and directors. 27 In addition to the consolidated putative class action, thirty-seven groups of individual investors in the Company’s stock and debt securities have chosen to opt out of the consolidated putative class action and filed securities actions in the U.S. District Court for the District of New Jersey against the Company and certain current or former officers and directors. These actions are described and defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 19, 2025. These individual shareholder actions assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Certain of these individual actions assert additional claims, including claims under Section 18 of the Exchange Act, Sections 11, 12(a)(2) and 15 of the Securities Act. These claims are based on alleged purchases of Company stock, options, and/or debt at various times between January 3, 2013 and August 10, 2016. The allegations in the complaints are similar to those made by plaintiffs in the putative class action. 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 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 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. No defendants were fully dismissed from the opt-out actions as a result of the District Court’s decisions. The total number of remaining opt-out actions pending in the District of New Jersey is fifteen actions. Twenty-two of the thirty-seven opt-out actions have been dismissed. On January 7, 2019, the Court entered a stipulation of voluntary dismissal in the Senzar opt-out action. On June 19, 2020, the Court entered stipulations of voluntary dismissal in the Catalyst, Mississippi, Connecticut and Delaware actions. On July 13, 2020, the Court entered a stipulation of voluntary dismissal in the NYCERS action. On December 30, 2020, the Court entered a stipulation of voluntary dismissal in the BlueMountain action. On February 18, 2021, and March 10, 2021, the Court entered stipulations of voluntary dismissal in the T. Rowe, BloombergSen, Principal Funds, Pentwater, Lord Abbett, Equity Trustees and UC Regents actions. On April 30, 2021, the Court entered a stipulation of voluntary dismissal in the Florida SBA action. 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. In addition, in January 2025, the Company reached a confidential settlement in principle, and, thereafter, in April 2025, executed a final confidential settlement agreement of the Blackrock action and the Blackrock Canadian Claims, as defined in the Canadian Securities Litigation – Opt-Out Litigation description, below. On April 22, 2025, the Court entered a stipulation of voluntary dismissal in the Blackrock action. On April 10, 2025, the Court issued an order setting the following cases for a consolidated trial to begin on September 23, 2025: MSD Torchlight Partners, L.P. v. Valeant Pharmaceuticals Int’l, Inc., No. 16-7324 (“MSD”); Forsta AP-Fonden v. Valeant Pharmaceuticals Int’l, Inc., No. 17-12088 (“Forsta”); Ahuja v. Valeant Pharmaceuticals Int’l, Inc., No. 18-846 (“Ahuja”); Brahman Partners II, L.P. v. Valeant Pharmaceuticals Int’l, Inc., No. 18-893 (“Brahman”); USAA Mutual Funds Trust v. Valeant Pharmaceuticals Int’l, Inc., No. 20-7462 (“USAA”); Templeton v. Valeant Pharmaceuticals Int'l, Inc., No. 20-54 78 (“Templeton”). The Company disputes the claims against it in the remaining individual opt-out actions and intends to defend itself vigorously. U.S. Securities Litigation – Kelk Complaint On July 26, 2023, a purported class action complaint captioned Kelk v. Bausch Health Companies Inc., et al. (No. 23-cv-03996), was filed in the U.S. District Court for the District of New Jersey against the Company and certain of its current or former officers. The action alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Plaintiffs allege that defendants made various misrepresentations and omissions regarding the Company’s proposed spin-off of Bausch + Lomb, and allege that those purported misrepresentations and omissions concealed that the spin-off was executed as part of a strategy to subvert the pending opt-out lawsuits and leave plaintiffs in those actions without viable means to a potential recovery. An amended complaint was filed on January 19, 2024. 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. 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. On March 14, 2025, Plaintiffs filed a second amended complaint. Defendants moved to dismiss the second amended complaint on April 28, 2025. The Company disputes the claims against it and intends to defend itself vigorously. Derivative Lawsuit – Powers Complaint 28 On October 2, 2023, a derivative lawsuit captioned Powers v. Papa, et al . (Index No. 159699/2023) was filed in the Supreme Court of the State of New York, County of New York by an alleged stockholder of the Company. The action purports to assert derivative claims on behalf of the Company against the Company’s Board of Directors and certain of its current or former officers and directors. The action asserts claims for, inter alia, breach of fiduciary duty and waste of corporate assets and alleges that the defendants breached their fiduciary duties of loyalty and good faith by causing the Company to issue false and/or misleading statements regarding the Company’s proposed spin-off of Bausch + Lomb. On January 23, 2024, the Court entered a stipulation and order staying this action. Canadian Securities Litigation – Opt-Out Litigation In 2015, several putative class actions were filed against the Company and certain current or former officers and directors in Canada in the provinces of British Columbia, Ontario and Quebec. 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. (Court File No. 540-17-011743159, then Court File No. 500-06-000783-163) and filed in the Quebec Superior Court, was discontinued. The Catucci action was settled in 2020, and the proceeding has been discontinued against the Company, its current and former directors and officers, its underwriters and its insurers. 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. In addition to the class proceedings described above, on April 12, 2018, the Company was served with an application for leave filed in the Quebec Superior Court of Justice to pursue an action under the Quebec Securities Act against the Company and certain current or former officers and directors. This proceeding is captioned BlackRock Asset Management Canada Limited et al. v. Valeant, et al. (Court File No. 500-11-054155-185). The allegations in the proceeding are similar to those made by plaintiffs in the Catucci class action. 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 (collectively, the “Blackrock Canadian Claims”). In January 2025, the Company reached a confidential settlement in principle and, thereafter, in April 2025, executed a final confidential settlement agreement of the Blackrock Canadian Claims and the U.S. Blackrock action as described above in the U.S. Securities Litigation - Opt-Out Litigation. The Company is aware that certain other members of the Catucci class exercised their opt-out rights prior to the June 19, 2018 deadline. On February 15, 2019, one of the entities which exercised its opt-out rights, the California State Teachers’ Retirement System (“CalSTRS”), served the Company with an application in the Quebec Superior Court of Justice for leave to pursue an action under the Quebec Securities Act against the Company, certain current or former officers and directors of the Company and its auditor. That proceeding is captioned California State Teachers’ Retirement System v. Bausch Health Companies Inc. et al. (Court File No. 500-11-055722-181). The allegations in the proceeding are similar to those made by the plaintiffs in the Catucci class action and in the BlackRock opt-out proceedings. On that same date, CalSTRS also served the Company with proceedings (Court File No. 500-17-106044-186) against the same defendants asserting claims under the Quebec Civil Code in respect of the same alleged misrepresentations. On February 3, 2020, the Quebec Superior Court granted the applications of CalSTRS and BlackRock for leave to pursue their respective actions asserting claims under the Quebec Securities Act. On June 16, 2020, the Quebec Court of Appeal granted the defendants leave to appeal that decision. 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. On June 9, 2021, the Quebec Superior Court granted the Company’s application to strike the new allegations from CalSTRS Quebec Securities Act claim, but permitted the amendments to its claim under the Quebec Civil Code. On December 8, 2021, CalSTRS delivered its amended pleadings. On March 17, 2021, four additional opt-outs from the Catucci class issued a Statement of Claim in the Ontario Superior Court of Justice. That proceeding is captioned The Bank of Korea et al. v. Valeant Pharmaceuticals International, Inc. et al. (Court File No. 21-006589666-0000). In addition, these plaintiffs also served and filed a motion for leave to pursue claims under the Ontario Securities Act. 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 disputes the claims against it and intends to defend itself vigorously. 29 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 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 (Hound Partners Offshore Fund, LP et al. v. Valeant Pharmaceuticals International, Inc., et al. (No. 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. The Company disputes the claims and intends to vigorously defend this matter. Antitrust Generic Pricing Antitrust Litigation The Company and its subsidiaries, Oceanside Pharmaceuticals, Inc. (“Oceanside”), Bausch Health US, LLC (formerly Valeant Pharmaceuticals North America LLC) (“Bausch Health US”) and Bausch Health Americas, Inc. (formerly Valeant Pharmaceuticals International) (“Bausch Health Americas”), as well as Bausch + Lomb Corporation (for the purposes of this paragraph, collectively, the “Company”), are defendants in multidistrict antitrust litigation (“MDL”) entitled In re: Generic Pharmaceuticals Pricing Antitrust Litigation, pending in the United States District Court for the Eastern District of Pennsylvania (MDL 2724, 16- MD-2724). The lawsuits seek damages under federal and state antitrust laws, state consumer protection and unjust enrichment laws and allege that the Company’s subsidiaries entered into a conspiracy to fix, stabilize, and raise prices, rig bids and engage in market and customer allocation for generic pharmaceuticals. The lawsuits, which 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. v. Sandoz, Inc., et al., (D. CT, C.A. No. 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. Additionally, Bausch Health Companies Inc. and certain U.S. and Canadian subsidiaries (for the purposes of this paragraph, collectively the “Company”) have been named as defendants in a proposed class proceeding entitled Kathryn Eaton v. Teva Canada Limited, et al. in the Federal Court in Toronto, Ontario, Canada (Court File No. T-607-20). The plaintiff seeks to certify a proposed class action on behalf of persons in Canada who purchased generic drugs in the private sector, alleging that the Company and other defendants violated the Competition Act by conspiring to allocate the market, fix prices, and maintain the supply of generic drugs, and seeking damages under federal law. The proposed class action contains similar allegations to the In re: Generic Pharmaceuticals Pricing Antitrust Litigation pending in the United States Court for the Eastern District of Pennsylvania. The Company disputes the claims against it and intends to defend itself vigorously. These lawsuits cover products of both Bausch + Lomb and the Company’s businesses. It is anticipated that Bausch + Lomb and the Company will split the fees and expenses associated with defending these claims, as well as any potential damages or other liabilities awarded in or otherwise arising from these claims, in the manner set forth in the master separation agreement dated as of March 30, 2022, governing the separation between Bausch Health and Bausch + Lomb. 30 Intellectual Property Patent Litigation/Paragraph IV Matters From time to time, the Company (and/or certain of its affiliates) is also party to certain intellectual property litigation proceedings in the United States and Canada, including as arising from claims filed against the Company or by the Company (or that the Company anticipates filing within the required time periods) related to certain products sold by or on behalf of the Company, which may be in connection with Notices of Paragraph IV Certification (in the United States) and Notices of Allegation (in Canada) received from third-party generic manufacturers, where such products include Xifaxan ® 200 mg and 550 mg, Cabtreo ® , Lotemax ® SM, Lumify ® , Trulance ® and Vyzulta ® in the United States and Zaxine ® 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”), Carnegie Pharmaceuticals LLC (“Carnegie”), Mylan Pharmaceuticals Inc. (“Mylan”) and SABA Ilac Sanayi ve Ticaret A.S. (“SABA”) 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, in which Norwich asserted that the U.S. patents listed in the Food and Drug Administration (“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. and Bausch Health Ireland Limited, holds the New Drug Application for Xifaxan ® and owns or exclusively licenses (from Alfasigma) these patents. On March 26, 2020, certain of the Company’s subsidiaries and Alfasigma filed suit against Norwich in the U.S. 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 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 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 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 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 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 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 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. On November 1, 2023, the DC District Court granted the Company’s and FDA’s motions for summary judgment, thereby ending the lawsuit. 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”). 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. 31 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. Patent Nos. 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. (“Teva”) and Salix intervened in the Second Norwich DC Lawsuit as defendants. On April 17, 2025, the DC District Court granted summary judgment in favor of the FDA, Teva, and the Company. The DC District Court confirmed that the FDA’s decision to only tentatively approve the Norwich Second ANDA was not arbitrary, capricious, or contrary to law because Teva had not forfeited its 180-day exclusivity. On April 18, 2025, Norwich appealed the judgment to the DC Circuit. 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. 32 The Mylan 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. On March 26, 2025, the Company filed 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 SABA Xifaxan ® Litigation The Company received a Notice of Paragraph IV Certification from SABA, dated February 20, 2025, in which SABA 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 SABA’s generic rifaximin tablets, 550 mg, for which SABA filed an ANDA. On April 4, 2025, the Company filed suit against SABA pursuant to the Hatch-Waxman Act, alleging infringement by SABA of one or more claims of the Xifaxan ® patents, thereby triggering a 30 -month stay of the approval of SABA’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. Trulance ® Paragraph IV Proceedings In April 2021, the Company commenced litigation against MSN Laboratories Private Ltd. (“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. 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 Company remains confident in the strength of the Trulance ® patents and intends to vigorously pursue these matters and defend its intellectual property. The 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. On March 20, 2025, the Company filed 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 Curia IP Holdings, LLC (“Curia”) filed a lawsuit against the Company on October 25, 2021, alleging that Xifaxan ® 200 mg and 550 mg tablets infringe certain patents owned by Curia (U.S. Patent Nos. 9,186,355, 10,556,915, 10,745,415 and 10,961,257 (the “Curia Patents”)). Each of the Curia Patents was filed years after the Company’s launches of Xifaxan ® 200 mg and 550 mg tablets. On August 17, 2022, the U.S. District Court for the District of New Jersey dismissed the complaint, without prejudice. Curia then filed an amended complaint on September 16, 2022, realleging infringement of its patents. On August 31, 2023, Curia filed a second lawsuit against the Company alleging that Xifaxan ® 200 mg and 550 mg tablets infringe U.S. Patent No. 11,739,099 (the “’099 Patent”). The ‘099 Patent is related to the Curia Patents and was also filed years after the Company’s launches of Xifaxan ® 200 mg and 550 mg tablets. The first and second lawsuits filed by Curia are now consolidated (the “Curia Lawsuits”). 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. Patent Nos. 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. 33 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. On March 5, 2025, the Company filed a Statement of Claim against Sandoz Canada asserting infringement of one or more claims of Canadian Patent No. 2,739,436. PreserVision ® AREDS Patent Litigation PreserVision ® AREDS and PreserVision ® AREDS 2 are OTC eye vitamin formulas for those with moderate to advanced age-related macular degeneration. The PreserVision ® U.S. formulation patent expired in March 2021, but a patent covering methods of using the formulation remains in force into 2026. Bausch & Lomb Incorporated (“B&L Inc.”) has filed patent infringement proceedings against 20 named defendants in 17 proceedings claiming infringement of these patents and, in certain circumstances, related unfair competition and false advertising causes of action. All of these proceedings are now closed, with fifteen settling and two resulting in default. The last ongoing matter, (Bausch & Lomb Inc. & PF Consumer Healthcare 1 LLC v. SBH Holdings LLC, C.A. No. 20-cv-01463-GBW-CJB (D. Del.)) was finally dismissed with prejudice on April 10, 2025. Lumify ® Paragraph IV Proceedings - DRL, Somerset & Gland On August 16, 2021, B&L Inc. received a Notice of Paragraph IV Certification from Slayback Pharma LLC (“Slayback”), in which Slayback asserted that certain U.S. patents, each of which is listed in the FDA’s Orange Book for Lumify ® (brimonidine tartrate solution) drops (the “Lumify Patents”), are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Slayback’s generic drops, for which an ANDA has been filed by Slayback. B&L Inc., through its affiliate Bausch + Lomb Ireland Limited, exclusively licenses the Lumify Patents from Eye Therapies, LLC (“Eye Therapies”). On September 10, 2021, B&L Inc., Bausch + Lomb Ireland Limited and Eye Therapies filed suit against Slayback pursuant to the Hatch-Waxman Act, alleging infringement by Slayback of one or more claims of the Lumify Patents, thereby triggering a 30 -month stay of the approval of the Slayback ANDA. Since then, U.S. Patent No. 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 (“PTAB”) issued a Final Written Decision, finding all claims of U.S. Patent No. 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. Oral argument is expected before the Federal Circuit on May 7, 2025. Furthermore, two additional patents (U.S. Patent Nos. 11,596,600 and 11,833,245) have issued and been listed in the Orange Book as related to Lumify ® . Lawsuits alleging infringement of these patents were filed against Slayback and its licensee, Dr. Reddy’s Laboratories S.A. and Dr. Reddy’s Laboratories, Inc. (collectively, “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. DRL subsequently petitioned for inter partes review (“IPR”) of the U.S. Patent Nos. 11,596,600 and 11,833,245; the PTAB instituted both petitions. The IPRs are ongoing and argument is expected before the PTAB on May 13, 2025. The lawsuit against DRL in the District of New Jersey is currently stayed. Bausch + Lomb remains confident in the strength of the Lumify ® related patents and intends to vigorously defend its intellectual property. On March 28, 2025, B&L Inc. received a Notice of Paragraph IV Certification from Somerset Therapeutics, LLC (“Somerset”), in which Somerset asserted that U.S. Patent Nos. 8,293,742, 9,259,425, 11,596,600 and 11,833,245, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Somerset’s generic drops, for which an ANDA has been filed by Somerset. On April 28, 2025, B&L Inc., Bausch + Lomb Ireland Limited and Eye Therapies filed suit against Somerset and certain affiliates pursuant to the Hatch-Waxman Act, alleging infringement by Somerset of one or more claims of the Lumify Patents, thereby triggering a 30 -month stay of the approval of the Somerset ANDA. On April 25, 2025, B&L Inc. and Bausch + Lomb Ireland Limited received a Notice of Paragraph IV Certification from Gland Pharma Limited (“Gland”), in which Gland asserted that U.S. Patent Nos. 8,293,742, 9,259,425, 11,596,600 and 11,833,245, each of which is listed in the FDA’s Orange Book for Lumify® (brimonidine tartrate solution) drops, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Gland’s generic drops, for which an ANDA has been filed by Gland. On April 28, 2025, B&L Inc., Bausch + Lomb Ireland Limited and Eye Therapies 34 filed suit against Gland pursuant to the Hatch-Waxman Act, alleging infringement by Gland of one or more claims of such Lumify patents, thereby triggering a 30 -month stay of the approval of the Gland ANDA. In addition to the intellectual property matters described above, in connection with 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 answer (or other response) is due on May 15, 2025. 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 IPR at the U.S. Patent & Trademark Office. The proceedings operate under different standards from district court proceedings, and are often completed within 18 months of institution. IPR challenges have been brought against patents covering the Company’s branded pharmaceutical products. Mylan and MSN have filed IPR petitions for certain U.S. patents listed in the FDA’s Orange Book for Trulance ® (plecanatide). On March 21, 2022, Mylan filed a petition for IPR of U.S. Patent No. 7,041,786 (the “’786 Patent”), which was then instituted on September 14, 2022. On October 12, 2022, MSN also filed a petition for IPR of the ’786 Patent and the PTAB then issued a decision on December 14, 2022, instituting MSN’s IPR and joining it with Mylan’s IPR. On September 8, 2023, the PTAB issued a decision finding that Mylan and MSN had not shown that the ’786 Patent is unpatentable. On September 28, 2023, Mylan appealed the PTAB’s September 8th decision to the Federal Circuit. The Federal Circuit held oral arguments on April 7, 2025. The Company remains confident in the strength of these patents and intends to vigorously defend its intellectual property. Product Liability Shower to Shower ® Products Liability Litigation 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. 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. Plaintiffs also seek pre- and post-judgment interest, exemplary and punitive damages, and attorneys’ fees. 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 plaintiffs in these actions are seeking awards of general, special, compensatory and punitive damages. On November 17, 2020, the British Columbia court issued a judgment declining to certify a class as to the Company or Shower to Shower ® , and at this time no appeal of that judgment has been filed. On December 16, 2021, the plaintiff in the British Columbia class action filed a Second Amended Notice of Civil Claim and Application for Certification, removing the Company as a defendant; as a result, the British Columbia class action is concluded as to the Company. 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. (“JJCI”). 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 35 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. After the conclusion of the confirmation hearing, on March 31, 2025, the Texas Bankruptcy Court issued a memorandum decision denying confirmation of the plan, ordering the dismissal of Red River’s bankruptcy case and vacating the preliminary injunction. The debtor’s time to appeal has expired. Certain claimants filed motions to reconsider the dismissal of the bankruptcy case. On April 17, 2025, the Texas Bankruptcy Court denied the motions to reconsider. The time to appeal that order will terminate 14 days from entry of the order denying the motion to reconsider. 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 U.S. 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. Securities Litigation. This action seeks a declaratory judgment that alleged transfers of certain Company assets to Bausch + Lomb would constitute a voidable transfer under the New Jersey Voidable Transactions Act and that Bausch + Lomb would be liable for damages, if any, awarded against the Company in the individual opt-out actions. The declaratory judgment action also alleges that the potential future separation of Bausch + Lomb from the Company by distribution of Bausch + Lomb stock to the Company’s shareholders would leave the Company with inadequate financial resources to satisfy these plaintiffs’ alleged securities fraud damages in the underlying individual opt-out actions. None of the plaintiffs in this declaratory judgment action have obtained a judgment against the Company in the underlying individual opt-out actions and the Company disputes the claims against it in those underlying actions. The underlying individual opt-out actions assert claims under Sections 10(b) and 20(a) of the Exchange Act, and certain actions assert claims under Section 18 of the Exchange Act. The allegations in those underlying individual opt out actions are made against the Company and several of its former officers and directors only and relate to, among other things, allegedly false and misleading statements made during the 2013-2016 time period by the Company and/or failures to disclose information about the Company’s business and prospects including relating to drug pricing and the use of specialty pharmacies. On March 31, 2022, the Company and Bausch + Lomb removed the declaratory judgment action to the U.S. District Court for the District of New Jersey. On April 29, 2022, Plaintiffs filed a motion to remand. On November 29, 2022, the District Court granted Plaintiffs’ remand motion and the case was remanded to the New Jersey Superior Court Chancery Division. On December 8, 2022, Plaintiffs filed a proposed Order to Show Cause and motion for a preliminary injunction, and sought interim relief including expedited discovery. On December 13, 2022, the Court denied Plaintiffs’ proposed Order to Show Cause and stayed discovery pending the resolution of the Company and Bausch + Lomb’s forthcoming motions to dismiss, while instructing the Company to provide certain notice to Plaintiffs of the intended completion of a potential future distribution referenced above under certain circumstances. 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 complaint. Briefing was complete on February 24, 2023, and the motion to dismiss was heard 36 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. New Mexico Attorney General Consumer Protection Action The Company and Bausch Health US were named in an action brought by State of New Mexico ex rel. Hector H. Balderas, Attorney General of New Mexico, in the County of Santa Fe New Mexico First Judicial District Court (New Mexico ex rel. Balderas v. Johnson & Johnson, et al., Civil Action No. D-101-CV-2020-00013, filed on January 2, 2020), alleging consumer protection claims against Johnson & Johnson and Johnson & Johnson Consumer, Inc., the Company and Bausch Health US related to Shower to Shower ® and its alleged causal link to mesothelioma and other cancers. In April 2020, Bausch Health US filed a motion to dismiss, which in September 2020, the Court granted in part as to the New Mexico Medicaid Fraud Act and New Mexico Fraud Against Taxpayers Act claims and denied as to all other claims. The State of New Mexico brings claims against all defendants under the New Mexico Unfair Practices Act and other common law and equitable causes of action, alleging defendants engaged in wrongful marketing, sale and promotion of talcum powder products. The lawsuit seeks to recover the cost of the talcum powder products as well as the cost of treating asbestos-related cancers allegedly caused by those products. Bausch Health US filed its answer on November 16, 2020. On December 30, 2020 Johnson & Johnson filed a Motion for Partial Judgment on the Pleadings and on January 4, 2021, Bausch Health US filed a joinder to that motion, which was denied on March 8, 2021. Trial 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. 21-30589, Adv. Pro. No. 22-01231) against the State of New Mexico ex rel. Hector H. 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, 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 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. On November 18, 2022, Lupin filed an Amended Complaint, which added Bausch Health US as a defendant. On March 28, 2023, the Company was dismissed without prejudice. On October 10, 2023, Salix Pharmaceuticals, Inc. asserted counterclaims against Lupin for breach of contract. No trial date has been set. Salix Pharmaceuticals, Inc. and Bausch Health US dispute Lupin’s claims. In March 2025, the parties reached a confidential settlement in principle, which remains subject to further documentation. Doctors Allergy Formula Lawsuit In April 2018, Doctors Allergy Formula, LLC (“Doctors Allergy”), filed a lawsuit against Bausch Health Americas in the Supreme Court of the State of New York, County of New York, asserting breach of contract and related claims under a 2015 Asset Purchase Agreement, which purports to include milestone payments that Doctors Allergy alleges should have been paid by Bausch Health Americas. Doctors Allergy claims its damages are not less than $ 23 million. Bausch Health Americas has asserted counterclaims against Doctors Allergy. 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 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 37 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. Trial has been set, with jury selection beginning on April 20, 2026, and trial scheduled for April 24 to May 8, 2026. Bausch Health Americas disputes the claims against it and this lawsuit will be defended vigorously. Apriso ® Qui Tam Litigation In 2018, a qui tam complaint, captioned United States ex rel. Silbersher v. Valeant Pharmaceuticals Int’l, Inc., et al. (No. 4:18-cv-01496), was filed in the U.S. District Court for the Northern District of California against the Company, certain of its subsidiaries (collectively, the “Company”), and a third party, claiming that their alleged misrepresentations before the U.S. Patent Office ultimately resulted in false claims for payment being made to federal and state healthcare payors for Apriso ® . The complaint asserts claims seeking, inter alia , damages, civil penalties and attorneys’ fees under the federal False Claims Act and the false claims acts of several states. In May 2020, the District Court granted defendants’ motion to dismiss, holding that Plaintiff-relator’s qui tam action was precluded by the False Claims Act’s public disclosure bar. Plaintiff-relator appealed to the U.S. Court of Appeals for the Ninth Circuit. In August 2023, the Court of Appeals reversed the District Court’s order and remanded to the District Court for further proceedings. In September 2023, the Company filed a petition for rehearing or rehearing en banc with the Court of Appeals. 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 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. The motion to dismiss remains pending. The Company disputes the claims against it and intends to defend itself vigorously. 18. SEGMENT INFORMATION Reportable Segments The following is a brief description of the Company’s reportable segments: • The Salix segment consists of sales in the U.S. of GI products. Sales of the Xifaxan ® product line currently represent approximately 85 % of the Salix segment revenues. • The International segment consists of sales, with the exception of sales of Bausch + Lomb products and Solta Medical aesthetic medical devices, outside the U.S. and Puerto Rico of branded pharmaceutical products, branded generic pharmaceutical products and OTC products. • The Solta Medical segment consists of global sales of Solta Medical aesthetic medical devices. • The Diversified segment consists of sales in the U.S. of: (i) pharmaceutical products in the areas of neurology and certain other therapeutic classes, (ii) dermatology products, (iii) generic pharmaceutical products and (iv) dentistry products. • The Bausch + Lomb segment consists of global sales of Bausch + Lomb Vision Care, Surgical and Pharmaceuticals products. Resources are allocated and performance is assessed by the Company’s CEO, whom the Company has determined to be the Company’s Chief Operating Decision Maker (the “CODM”). The Company’s CODM evaluates the performance of its segments and allocates resources to them based on segment profit. Segment profit is based on operating income after the elimination of intercompany transactions. Certain costs, such as Amortization of intangible assets, Asset impairments, Restructuring, integration, separation costs, and Other expense, net, are not included in the measure of segment profit, as management excludes these items in assessing segment financial performance. The CODM uses segment profit in the annual budgeting and forecasting process. The CODM considers budget-to-actual variances on a monthly basis for segment profit when making decisions about allocating capital and personnel to the segments. The CODM uses segment profit in determining the compensation of certain employees. In assessing segment performance and managing operations, the CODM does not review segment assets. Corporate includes the finance, treasury, certain research and development programs, tax and legal operations of the Company’s businesses and certain expenses, gains and losses related to the overall management of the Company, which are not allocated to the other business segments. Furthermore, a portion of share-based compensation is considered a corporate cost since the amount of such expense depends on company-wide performance rather than the operating performance of any single segment. 38 Segment Revenues and Profits Segment revenues, profits and reconciliation of segment profit to consolidated Loss before income taxes were as follows: For the three months ended March 31, Salix International Solta Medical Diversified Bausch + Lomb Total (in millions) 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 Revenues: Total revenues $ 542 $ 499 $ 262 $ 265 $ 113 $ 88 $ 205 $ 202 $ 1,137 $ 1,099 $ 2,259 $ 2,153 Less: Cost of goods sold (excluding amortization and impairments of intangible assets) 43 41 102 109 27 19 30 36 481 423 Costs of other revenues — — 17 11 — — — — 1 1 Selling, general and administrative 111 102 52 53 28 25 45 48 447 405 Research and development 17 27 6 5 5 4 3 4 28 28 Segment profit $ 371 $ 329 $ 85 $ 87 $ 53 $ 40 $ 127 $ 114 $ 180 $ 242 $ 816 $ 812 Corporate ( 268 ) ( 244 ) Amortization of intangible assets ( 256 ) ( 274 ) Asset impairments — ( 1 ) Restructuring, integration and separation costs ( 1 ) ( 12 ) Other expense, net ( 15 ) — Operating income 276 281 Interest income 11 9 Interest expense ( 330 ) ( 355 ) Gain on extinguishment of debt — 11 Foreign exchange and other ( 4 ) ( 15 ) Loss before income taxes $ ( 47 ) $ ( 69 ) During the three months ended March 31, 2025 and 2024, ten products represented 50 % and 48 % of total revenues, respectively. 19. SUBSEQUENT EVENT Shareholder Rights Plan On April 14, 2025, the Board of Directors of the Company adopted a shareholder rights plan (the “SRP”). The SRP is intended to ensure, to the extent possible, that all shareholders of the Company are treated fairly in connection with an offer to acquire common shares of the Company which, if acquired and beneficially owned (as defined in the SRP) by an Acquiring Person (as defined in the SRP), would result in such person owning 20 % or more of the outstanding common shares of the Company. Pursuant to the SRP, one right (each, a “Right”) will attach to each common share outstanding on April 14, 2025, and to each common share issued after such time and prior to the earlier of the Separation Time (as defined in the SRP) and Expiration (as defined in the SRP). Each Right entitles its holder, from and after the Separation Time, to purchase common shares of the Company, pursuant to the conditions set forth in the SRP, at a discount to the then market price of the Company’s common shares. The SRP is subject to ratification by the shareholders of the Company. If the SRP is not ratified by the shareholders within six months of its adoption, the SRP, together with the outstanding Rights, will terminate and cease to be effective. 39