Financial Analysis

COMMITMENTS AND CONTINGENCIES The Company has commitments related to capital expenditures of approximately $129 million as of December 31, 2025. Under certain agreements, the Company may be required to make payments contingent upon the achievement of specific developmental, regulatory, or commercial milestones. As of December 31, 2025, the Company believes it is reasonably possible that it may potentially make milestone and license fee payments, including sales-based milestone payments, of approximately $300 million over time, in the aggregate, to third parties for products currently under development or being marketed, primarily consisting of the following: Under the terms of a June 2013 distribution and supply agreement with Mylan Pharmaceuticals Inc. (as assignee of Spear Pharmaceuticals, Inc and Spear Dermatology Products Inc.), the Company may be required to make sales-based milestone payments. The Company believes it is reasonably possible that these payments over time may approximate $35 million, in the aggregate. Under the terms of a December 2019 agreement with Novaliq GmbH, Bausch + Lomb has acquired an exclusive license for the commercialization and development in the U.S. and Canada of MIEBO (perfluorohexyloctane), formerly known as NOV03, for the treatment of the signs and symptoms of dry eye disease and may be required to make sales-based milestone payments. The Company believes it is reasonably possible that these payments over time may approximate $88 million, …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

FINANCING ARRANGEMENTS Principal amounts of debt obligations and principal amounts of debt obligations net of premiums, discounts and issuance costs as of December 31, 2025 and 2024 consists of the following: 2025 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 2,187 2,166 2025 Credit Agreement 2030 Revolving Credit Facility April 2030 2030 Term Loan B Facility October 2030 2,985 2,869 AR Credit Facility January 2028 300 300 B+L Credit Facilities B+L Revolving Credit Facility May 2027 110 110 B+L May 2027 Term Loan B Facility May 2027 2,437 2,412 B+L May 2027 Incremental Term Loan B Facility May 2027 400 396 B+L September 2028 Term Loan B Facility September 2028 489 483 494 486 B+L 2030 Revolving Credit Facility June 2030 100 100 B+L January 2031 Term Loan B Facility January 2031 2,313 2,286 Senior Secured Notes: 5.500% Secured Notes November 2025 1,680 1,678 6.125% Secured Notes February 2027 1,000 993 5.750% Secured Notes August 2027 500 498 4.875% Secured Notes June 2028 803 799 1,600 1,589 11.00% First Lien Secured Notes September 2028 888 1,155 1,774 2,481 14.00% Second Lien Secured Notes October 2030 352 578 352 622 10.00% Secured Notes April 2032 6,000 6,284 B+L Senior Secured Notes: B+L 8.375% Secured …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

SHARE-BASED COMPENSATION In May 2014, shareholders approved Bausch Healths 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). Approximately 25,890,000 common shares were available for future grants as of December 31, 2025. The Company uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans. Bausch Healths Long-Term Incentive Plan Bausch Health has a long-term incentive program with the objective of aligning the share-based awards granted to senior management with the Companys 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 Companys adjusted operating cash flow (Adjusted Operating Cash Flow) with a TSR modifier. The following table summarizes the components and classification of the Companys share-based compensation expense related to stock options and RSUs for t …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS 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 Companys financial assets and liabilities measured at fair value on a recurring basis as of: December 31, 2025 December 31, 2024 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Cash equivalents $ 587 $ 574 $ 13 $ $ 567 $ 557 $ 10 $ Restricted cash $ 16 $ 16 $ $ $ 20 $ 20 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

INTANGIBLE ASSETS AND GOODWILL Intangible Assets The major components of intangible assets as of December 31, 2025 and 2024 consist of: Weighted- Average Remaining Useful Lives (Years) 2025 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 2 $ 22,534 $ (19,981) $ 2,553 $ 22,446 $ (19,026) $ 3,420 Corporate brands 5 1,003 (789) 214 988 (701) 287 Product rights/patents 5 3,271 (3,253) 18 3,255 (3,224) 31 Partner relationships, technology and other 6 445 (385) 60 370 (355) 15 Total finite-lived intangible assets 27,253 (24,408) 2,845 27,059 (23,306) 3,753 Acquired IPR&D NA 100 100 100 100 B&L Trademark NA 1,698 1,698 1,698 1,698 $ 29,051 $ (24,408) $ 4,643 $ 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 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 u …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES The components of Income (loss) before income taxes for 2025, 2024 and 2023 consist of: (in millions) 2025 2024 2023 Domestic $ (743) $ (596) $ (382) Foreign 1,110 763 (8) $ 367 $ 167 $ (390) The components of Provision for income taxes for 2025, 2024 and 2023 consist of: (in millions) 2025 2024 2023 Current: Domestic $ 25 $ (9) $ (21) Foreign (140) (161) (194) (115) (170) (215) Deferred: Domestic (3) (4) (21) Foreign (129) (65) 15 (132) (69) (6) $ (247) $ (239) $ (221) Provision for income taxes differs from the expected amount calculated by applying the Companys Canadian statutory federal rate of 25% to Income (loss) before income taxes for 2025. The provincial impacts in the reconciliation below reflect the impact of a full valuation allowance on the net deferred tax assets in Canada. A reconciliation of the differences is as follows: (in millions) 2025 Percent Income before income taxes $ 367 Expected provision for income taxes at Canadian statutory rate $ (92) 25 % Provincial and local income tax, net of federal (national) income tax effect % Foreign Tax Effects Germany Foreign tax rate differences 8 (2) % Other (2) (1) % Ireland Foreign tax rate differences 157 (43) % Changes in valuation allowances (11) 3 % Nondeductible expense (17) 5 % Other (22) 6 % Netherlands Loss carryforwards 10 (3) % Changes in valuation allowances (16) 4 % Other (6) 2 % Poland Unremitted Earnings Withholding tax 5 (1) % Nondeductible interest (8) 2 % Other 15 (4) % United States F …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

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 below. On a quarterly basis, the Company evaluates developments in legal proceedings, potential settlements and other matters that could increase or decrease the amount of the liability accrued. As of December 31, 2025, the Companys Consolidated Balance Sheets includes accrued current loss contingencies of $178 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 Companys business, financial condition and results of operations, and c …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

LEASES As disclosed in detail in Note 2, SIGNIFICANT ACCOUNTING POLICIES, the Company leases certain facilities, vehicles and equipment principally under multi-year agreements. In 2025, Bausch + Lomb entered into a sale and master lease agreement with a third party. Under this agreement, in October 2025, Bausch + Lomb sold various fixed asset equipment, for a sale price of $36 million, and then leased the equipment back through a three-year leaseback transaction. This transaction did not qualify as a sale under the applicable accounting guidance, and, as such, the associated equipment remained included within Property, plant and equipment, net. The Company refers to these failed sale-leasebacks as financial leases and recorded the related obligations in Financial leases and Non-current portion of Financial leases in the Consolidated Balance Sheets. Right-of-use assets and lease liabilities associated with the Companys operating leases and fixed asset equipment and financial lease associated with Bausch + Lombs lease back transaction are included in the Consolidated Balance Sheets as of December 31, 2025 and 2024 as follows: (in millions) 2025 2024 Right-of-use assets included in: Other non-current assets $ 215 $ 211 Fixed asset equipment included in: Property, plant and equipment, net $ 36 $ Lease liabilities included in: Accrued and other current liabilities $ 61 $ 58 Other non-current liabilities 167 165 Financial leases 11 Non-current portion of financial leases 23 Total l …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Standards, Adopted as of December 31, 2025 In December 2023, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (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. ASU 2023-09 is effective beginning with the 2025 annual report for fiscal year ended December 31, 2025 and the Company has adopted ASU 2023-09 on a prospective basis. See Note 17, INCOME TAXES for application of this standard. Recently Issued Accounting Standards, Not Adopted as of December 31, 2025 In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06). ASU 2025-06 removes all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendment in ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS The Company has defined benefit plans and a participatory defined benefit postretirement medical and life insurance plan, which covers a closed grandfathered group of legacy Bausch & Lomb Holdings Incorporated (B&L) U.S. employees and employees in certain other countries. The U.S. defined benefit accruals were frozen as of December 31, 2004 and benefits that were earned up to December 31, 2004 were preserved. Participants continue to earn interest credits on their cash balance at an interest crediting rate that is equal to the greater of: (i) the average annual yield on 10-year treasury bonds in effect for the November preceding the plan year or (ii) 4.50%. The most significant non-U.S. plans are two defined benefit plans in Ireland. In 2011, both Ireland defined benefit plans were closed to future service benefit accruals; however, additional accruals related to annual salary increases continued. In December 2014, one of the Ireland defined benefit plans was amended effective August 2014 to eliminate future benefit accruals related to salary increases. All of the pension benefits accrued through the plan amendment date were preserved. As a result of the plan amendment, there are no active plan participants accruing benefits under the amended Ireland defined benefit plan. The U.S. postretirement benefit plan was amended effective January 1, 2005 to eliminate employer contributions after age 65 for participants who did …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION Reportable Segments The following is a brief description of the Companys 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. 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 Companys Chief Executive Officer, whom the Company has determined to be the Companys Chief Operating Decision Maker (the CODM). The 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, Goodwill impairments, Asset impairments, Restructuring, integratio …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Use of Estimates The Consolidated Financial Statements have been prepared by the Company in United States (U.S.) dollars and in accordance with U.S. generally accepted accounting principles (U.S. GAAP), applied on a consistent basis. The 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. 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 Bausch + Lombs outstanding common shares as of December 31, 2025. The completion of the full B+L Separation, which may be accomplished by the monetization of all or a portion of the Companys ownership interest in Bausch + Lomb, the transfer of all or a portion of the Co …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

SHAREHOLDER RIGHTS PLAN On April 14, 2025, the Board of Directors of the Company adopted a shareholder rights plan (the SRP), which the Board subsequently amended and restated to remove provisions related to a director appointment and nomination agreement that terminated on August 14, 2025. 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) attached 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 Companys common shares. On October 7, 2025, the Companys shareholders approved the ordinary resolution ratifying, confirming and approving the adoption of the SRP, as amended, and the shareholders will be asked to reconfirm the SRP at every third annual meeting of the shareholders thereafter. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

SUBSEQUENT EVENT Salix Goodwill In January 2026, the Company received the results for the double-blind Phase 3 clinical trials for two global RED-C clinical programs evaluating its rifaximin soluble solid dispersion formulation, designed to prevent overt hepatic encephalopathy and related complications in patients with early-stage liver cirrhosis. While safe and well-tolerated, both clinical trials failed to achieve their primary endpoints. The Company performed a preliminary quantitative goodwill analysis as of January 22, 2026 for the Salix reporting unit using revised forecasts, an updated discount rate, and a new long-term growth rate that reflect the impact of the Phase 3 clinical trial results. The Company anticipates recognizing an impairment charge to the goodwill of the Salix reporting unit of approximately $1,400 million in the first quarter of 2026.

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FINANCING ARRANGEMENTS Principal amounts of debt obligations and principal amounts of debt obligations net of premiums, discounts and issuance costs consist of the following: June 30, 2026 December 31, 2025 (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: 2025 Credit Agreement 2030 Revolving Credit Facility April 2030 $ $ $ $ 2030 Term Loan B Facility October 2030 2,970 2,866 2,985 2,869 B+L Credit Facilities B+L September 2028 Term Loan B Facility September 2028 489 483 B+L 2030 Revolving Credit Facility June 2030 150 150 100 100 B+L January 2031 Term Loan B Facility January 2031 2,313 2,286 B+L January 2031 Refinancing Term Facility January 2031 2,795 2,766 Senior Secured Notes: 4.875% Secured Notes June 2028 803 800 803 799 11.00% First Lien Secured Notes September 2028 888 1,111 888 1,155 14.00% Second Lien Secured Notes October 2030 352 556 352 578 10.00% Secured Notes April 2032 6,000 6,246 6,000 6,284 B+L Senior Secured Notes: B+L 8.375% Secured Notes October 2028 1,400 1,389 1,400 1,387 B+L January 2031 Secured Notes January 2031 771 761 792 781 Senior Unsecured Notes: 8.50% January 2027 643 643 643 643 7.00% January 2028 171 171 171 171 5.00% January 2028 433 432 433 432 6.25% February 2029 821 818 821 817 5.00% February 2029 452 450 452 450 7.25% May 2029 336 335 336 335 5.25% January 2030 779 775 779 775 5.25% February 2031 463 460 4 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

SHARE-BASED COMPENSATION Bausch Healths Long-Term Incentive Plan In May 2014, shareholders approved Bausch Healths 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). Approximately 15,339,000 common shares were available for future grants as of June 30, 2026. 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 Companys 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: (i) the attainment of certain targets that are based on the Companys adjusted operating cash flow with a relative TSR modifier or (ii) the attainment of certain targets that are based on the Companys adjusted unlevered free cash flow with a relative TSR modifier. Bausch + Lomb Long-Term Incentive Plan …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS 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 Companys financial assets and liabilities measured at fair value on a recurring basis: June 30, 2026 December 31, 2025 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Cash equivalents $ 934 $ 924 $ 10 $ $ 587 $ 574 $ 13 $ Restricted cash $ 13 $ 13 $ $ $ 16 $ 16 $ $ Cross …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

INTANGIBLE ASSETS AND GOODWILL Intangible Assets The major components of intangible assets consist of: June 30, 2026 December 31, 2025 (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 $ 22,487 $ (20,338) $ 2,149 $ 22,534 $ (19,981) $ 2,553 Corporate brands 1,002 (828) 174 1,003 (789) 214 Product rights/patents 3,264 (3,248) 16 3,271 (3,253) 18 Partner relationships, technology and other 437 (395) 42 445 (385) 60 Total finite-lived intangible assets 27,190 (24,809) 2,381 27,253 (24,408) 2,845 Acquired IPR&D 100 100 100 100 B&L Trademark 1,698 1,698 1,698 1,698 $ 28,988 $ (24,809) $ 4,179 $ 29,051 $ (24,408) $ 4,643 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 Other expense (income), net 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 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

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 companys 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 Companys 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 Companys estimated annual effective income tax rate may be revised, if necessary, in each interim period. Provision for income taxes for the six months ended June 30, 2026 was $165 million and included: (i) $174 million of income tax provision calculated on the Companys income after adjustments for discrete events and entities which have a full valuation allowance and (ii) $8 million of net income tax provision for discrete items, which includes: (a) $2 million income tax benefit due to changes in uncertain tax positions, primarily the release of tax reserves in France, offset by interest accrual and (b) $5 million income tax benefit associated with the filing of certain income tax returns. Provision for income taxes for the six months ended June 30, 2025 was $51 million and included: (i) $102 million of income tax provision for the Companys ordinary income for the six months ended June 30, 2025 and (ii) $51 million of net inco …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

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 21, LEGAL PROCEEDINGS, to the Companys Consolidated Financial Statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 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 June 30, 2026, the Companys Condensed Consolidated Balance Sheets includes accrued current loss contingencies of $18 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 proceeding …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

New Accounting Standards In July 2025, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) 2025-05, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05), which simplifies the estimation of credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, and allows entities to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. The guidance is effective January 1, 2026. The Company has elected the practical expedient and the application of this ASU did not have a material impact on its consolidated financial statements and related disclosures. Recently Issued Accounting Standards, Not Adopted as of June 30, 2026 In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expense (ASU 2024-03), which requires public companies to disclose, in interim and annual reporting periods, additional information about specific expenses in the financial statements. The amendments in ASU 2024-03 are effectiv …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

REVENUE RECOGNITION The Companys revenues are primarily generated from product sales, primarily in the therapeutic areas of GI, hepatology, neuroscience, 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 Companys 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 am …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION Reportable Segments The following is a brief description of the Companys 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. 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 neuroscience 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 Companys CEO, whom the Company has determined to be the Companys Chief Operating Decision Maker (the CODM). The Companys 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, Goodwill impairments, Restructuring, integration and separation …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

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 Companys Annual Report on Form 10-K for the year ended December 31, 2025. The unaudited Condensed Consolidated Financial Statements have been prepared using accounting policies that are consistent with the policies used in preparing the Companys audited Consolidated Financial Statements for the year ended December 31, 2025. The unaudited Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of the Companys 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 Vi …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing