BHC 10-K & 10-Q changes, risk factors and insider trading

•the impact of the current market and economicmacroeconomic conditions in one or more of our markets on our business;

•our ability to manage the transition of key management positions and to recruit and retain executives and key personnel;

•our ability to develop or acquire more effective or less costlycompetitive pharmaceutical or OTC products or medical devices than our competitors;

•the impact of potential adversedivestitures effect ofand acquisitions of assets, products and businesses;

•the impact of apotential failureexclusion to be included infrom formularies developed by managed care organizations and third-party payors;

•the impact of pricing controls, social or governmental pressure to lower the cost of drugs, and consolidation across the supply chain, such as IRA-related legislation promulgated by the IRA and theCMS’s selection in January 2025 by CMS of Xifaxan® for the second round of negotiation under the drug price negotiation programnegotiations for initial price applicability in 20272027, and the outcome thereof;

•the effect of changesfluctuations in inventory levels or fluctuations in buying patterns by our large distributor and retail customers;

•the impact of potentialthe imposition of and adverse changes to duties, tariffs and other trade protection measures (including any retaliations to such measures);

•risks associated with the disruption in the global economy caused by the ongoing conflictinternational conflicts, including between Russia and Ukraine, and in the Middle East involving Israel, Hamas and other countries and militant groups in the region;

•risks associated with the breakdown, interruption, breach or other compromise of our information technology systems;

Risks Relating to EconomicMarket and MarketMacroeconomic Conditions

Current market and economicmacroeconomic conditions in one or more of our markets could impact our business, liquidity, financial condition, cash flows and results of operations.

Over the last several years in the U.S. and globally, market and economicmacroeconomic conditions have been challenging, particularly in light of public health pandemics and, more recently, as a result of uncertainty concerning government shutdowns, debt ceilings, government funding and potential trade wars. Any negative impact on economic conditions in one or more of our core markets, including volatility or deterioration in the debt and equity capital markets, heightened inflation, deflation or other adverse economic conditions may adversely affect our business, liquidity, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.business. Ongoing uncertain economic and financial market conditions may also adversely affect the financial condition of our customers, suppliers and other business partners. When our customers’ financial conditions are adversely affected, it could materially and adversely affect our sales and financial results, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.business. Our global business may be negatively affected by local economic conditions, including heightened inflation, increasing labor costs, potential recession, the imposition of or adverse amendments to duties, tariffs and other trade restrictions (including any retaliation to such measures) and currency exchange rate fluctuations, which could adversely affect our cost to manufacture and provide our products and services and revenues generated through sales of such products and services. There is no guarantee that we will be able to fully absorb any such additional costs or declines in the prices for our products and services, which may adversely impact our financial condition, cash flows and results of operations. Changes in economic conditions, including supply chain constraints, logistics challenges, labor shortages, imposition of or adverse amendments to new or existing duties, tariffs and other trade protection measures (including new or continued retaliation to such measures) and steps taken by governments and central banks, including stimulus and spending programs, have, in the past, led to (and could, in the future, lead to) heightened inflation, resulting in an increase in costs and changes in fiscal and monetary policy, including increased interest rates. In a heightened inflationary environment, we may be unable to raise the prices of our products and services sufficiently to keep up with the rate of inflation. Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all. In addition, geopolitical instability (such as the imposition of and adverse changes to U.S. duty, tariff and other trade protection measures and countermeasures against the United States being taken in retaliation for the same, the ongoing conflict between Russia and Ukraine, the ongoing conflicts and unrest in the Middle East, and tensions between the U.S. and other members of NATO and related sanctions and other measures could continue to have significant ramifications on global financial markets, including volatility in the U.S. and global financial markets.

The B+L Separation ishas been subject to challenge and could be subject to further challenges in the future, any of which could delay or prevent the consummation of such transactions or cause them to occur on terms that are different or less favorable than we originally anticipated.

The B+L Separation, which may include a distribution of all or a portion of our remaining equity interest in Bausch + Lomb to our shareholders, iscould be subject to further challenge, which could delay or prevent the consummation of such transactions or cause them to occur on worse terms than we currently expect. For example, in March 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 of its current or former officers and directors. 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. In addition, the Company could, in the future, face additional legal proceedings and investigations and inquiries by governmental agencies relating to these or similar matters. For more information regarding legal proceedings, see Note 20,21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements elsewhere in this Form 10-K.

We are unable to predict the outcome of any such proceedings, investigations and inquiries, but we may incur significant costs and diversion of management attention as a result of these matters, regardless of the outcome. Some or all of these proceedings, investigations and inquiries may lead to damages, settlement payments, fines, penalties, consent orders or other administrative sanctions against us. Furthermore, publicity surrounding these proceedings, investigations and inquiries or any enforcement action as a result thereof, even if ultimately resolved favorably for us could result in additional investigations and legal proceedings. As a result, these proceedings, investigations and inquiries could have a material adverse effect on our reputation, business, financial condition, cash flowsreputation and results of operations and could cause the market value of our common shares and/or debt securities to decline.business.

Unanticipated developments and other challenges could delay or prevent the completion of the B+L Separation (including the Distribution, as defined below), result in changes to the anticipated structure of the B+L Separation (whether by way of “butterfly reorganization” rules in Section 55 of the Canadian Tax Act, return of capital or another form of sale or transfer of the Company’s ownership interest in Bausch + Lomb), cause the B+L Separation to occur on terms or conditions that are different or less favorable than originally anticipated or affect our ability to realize some or all of the anticipated benefits of the B+L Separation. Such developments and other challenges may include possible delays in obtaining any necessary shareholder, stock exchange, regulatory or other approval or the failure to obtain any such approvals, possible delays in obtaining any required tax opinions or rulings or the failure to obtain any such tax opinions or rulings, failure to satisfy conditions, complications arising from the portion of Bausch Health’s ownership of Bausch + Lomb that is pledged as collateral securingunder certain of the 9.00%Company’s Intermediateindebtedness, Holdcoincluding the 2025 Credit Agreement and the 2032 Senior Secured Notes (each as defined belowin Note 10, “FINANCING ARRANGEMENTS” to our audited Consolidated Financial Statements), negotiating challenges, the uncertainty of the financial markets, disruptions to business and commerce induced by changes in global markets, financial and economic conditions (such as international conflicts) and changes in the law.

The Company continues to evaluate the structure of the B+L Separation and other related details, and, subject to the terms of the Company’s agreements with Bausch + Lomb, the Company may consider undertaking the B+L Separation through one or more distributions effected as a dividend or a tax-free reduction of capital, one or more distributions in exchange for Bausch Health shares or other securities, any combination thereof or another form of sale or transfer of the Company’s ownership interest in Bausch + Lomb. Prior to the completion of any B+L Separation, the Company may also sell a portion of its remaining direct or indirect equity interest in Bausch + Lomb through an offering to third parties.

We have and will continue to expend significant resources in pursuing the B+L Separation, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.business.

Any of the above factors could cause the B+L Separation process (or the failure to consummate the B+L Separation) to have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.business.

In connection with the various separation-related agreements entered into between Bausch + Lomb and us in connection with any B+L Separation, Bausch + Lomb agreed to indemnify us for certain liabilities. However, there can be no assurance that the indemnity from Bausch + Lomb will be sufficient to protect us against the full amount of such liabilities, or that Bausch + Lomb will be able to fully satisfy its indemnification obligations in the future. Even if we ultimately succeed in recovering from Bausch + Lomb any amounts for which we are held liable, we may be temporarily required to bear these losses. Each of these risks could negatively affect our business, financial condition, results of operations and cash flows. Furthermore, any indemnification claim against us by Bausch + Lomb, including for a breach of the tax-related covenants described above, could be substantial, may not be able to be satisfied and may have a material adverse effect on us. Each of these risks could also negatively affect our business, financial condition, results of operations and cash flows.

We are involvedthe insubject orof and may become subject to various otheradditional legal and governmental proceedingsproceedings, thatwhich arehave uncertain, costly and time-consuminghad and could continue to have a material adverse effect on our business, financial condition, cash flowsreputation and results of operationsbusiness, and could causeresult thein marketadditional value of our common sharesclaims and/or debtmaterial securities to decline.liabilities.

Further,We may be involved in additional litigation in the future. For example, the pharmaceutical and medical device industries historically have generated substantial litigation concerning the manufacture, use and sale of products and we expect this litigation activity to continue. As a result, we expect that patents related to our products will be routinely challenged, and the validity or enforceability of our patents may not be upheld. In order to protect or enforce patent rights, we may initiate litigation against third parties.parties Ourto patentsprotect mayor alsoenforce be challenged in administrative proceedings in the United States Patent and Trademark Office andour patent offices outside of the United States.rights. If we are not successful in defending an attack on our patents and maintaining exclusive rights to market one or more of our products still under patent protection, we could lose a significant portion of sales in a very short period. Even in cases where we prevail in an infringement claim, legal remedies available for harm caused to us may not be sufficient to make us whole. We may also become subject to, or threatened with, legal proceedings and infringement claims by third parties and may have to defend against charges that we infringed, misappropriated or otherwise violated patents or the intellectual property or proprietary rights of third parties. Third parties may also request a preliminary or permanent injunction from a court of law to prevent us from marketing a product. Even if we believe third-party intellectual property claims are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity, enforceability or priority. If we are found to infringe, misappropriate or otherwise violate the intellectual property rights of others, we could lose our right to develop, manufacture or sell products, including our generic products, or could be required to pay monetary damages or royalties to license proprietary rights from third parties, which could be substantial and may include treble damages and attorneys’ fees,fees. Third parties may also request a preliminary or permanent injunction from a court of law to prevent us from marketing a product. Even if weresolved arein foundour favor, litigation or other legal proceedings relating to willfully infringe any intellectual property rightsclaims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. Furthermore, because of others.the However,substantial weamount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the value of our common shares. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors or other third parties may be able to obtainsustain anythe requiredcosts of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace, including compromising our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license onnecessary commerciallytechnology reasonablefrom termsthird parties or atenter all.into development collaborations that would help us commercialize our product candidates, if approved. Any of the foregoing events couldwould have a material adverse effect onharm our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.prospects.

In addition, in the U.S., it has become increasingly common for patent infringement actions to prompt claims that antitrust laws have been violated during the prosecution of the patent or during litigation involving the defense of that patent. Such claims by direct and indirect purchasers and other payers are typically filed as class actions. The relief sought may include treble damages and restitution claims. Similarly, antitrust claims may be brought by government entities or private parties following settlement of patent litigation, alleging that such settlements are anti-competitive and in violation of antitrust laws. In the U.S. and Europe, regulatory authorities have continued to challenge as anti-competitive so-called “reverse payment” settlements between branded and generic drug manufacturers. We may also be subject to other antitrust litigation involving competition claims unrelated to patent infringement and prosecution. For more information regarding legal proceedings, see Note 20,21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements. A successful antitrust claim by a private party or government entity against us could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.business.

InFurthermore, addition,our sinceproducts may cause, or may appear to cause, adverse side effects (including death) or potentially dangerous drug interactions that we may not learn about or understand fully until the drug has been administered to patients for some time. If our products cause, or are alleged to cause, serious or widespread personal injury, we have to withdraw those products from the market and/or incur significant costs, including payment of substantial sums in damages, and we may be subject to exposure relating to product liability claims. Since March 31, 2014, we have self-insured substantially all of our product liability risk for claims arising after that date. We periodically evaluate and adjust our claims reserves to reflect trends in our own experience, as well as industry trends. However, historical loss trends may not be adequate to cover future losses, as historical trends may not be indicative of future losses. If ultimate results exceed our estimates, this would result in losses in excess of our reserved amounts. If we were required to pay a significant amount on account of these liabilities for which we self-insure, this could have a material adverse effect on our business, financial condition, cash flows and results of operationsbusiness and could cause the market value of our common shares and/or debt securities to decline.

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been updated through February 19,18, 20252026 and should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K. The mattersfollowing discussedsection generally discusses 2025 and 2024 items and comparisons between 2025 and 2024. Discussions of 2023 items and comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” containin certainPart forward-lookingII, statementsItem within the meaning of Section 27A7 of the SecuritiesCompany’s ActAnnual ofReport 1933,on asForm amended,10-K and Section 21E offor the Securitiesfiscal Exchangeyear Actended ofDecember 1934,31, as2024, amended, and that may be forward-looking information within the meaning defined under applicable Canadian securities laws (collectively, “Forward-Looking Statements”). See “Forward-Looking Statements” at the end of this discussion. Additional company information, including this Form 10-K, is availablefiled on SEDAR+February at19, www.sedarplus.ca and on the U.S. Securities and Exchange Commission (the “SEC”) website at www.sec.gov.2025. All currency amounts are expressed in U.S. dollars, unless otherwise noted.

We generated revenues for 2024,2025, 20232024 and 2022,2023, of $9,625$10,266 million, $8,757$9,625 million and $8,124$8,757 million, respectively. Our portfolio of products falls into five reportable segments: (i) Salix, (ii) International, (iii) Solta Medical, (iv) Diversified and (v) Bausch + Lomb. The following is a brief description of the Company’s segments:

For additional discussion of our reportable segments, see the discussion in Item 1. “Business — Segment Information” and Note 22,23, “SEGMENT INFORMATION” to our audited Consolidated Financial Statements for further details on these reportable segments.Statements.

On August 6, 2020, we announced our plan to separate our eye health business consisting of our 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.Lomb (the “B+L Separation”). On May 5, 2022, the registration statement related to the initial public offering of Bausch +Lomb (the “B+L IPO”) was declared effective, and Bausch + Lomb’s common stock began trading on the New York Stock Exchange and the Toronto Stock Exchange, in each case under the ticker symbol “BLCO” on May 6, 2022. Prior to the effectiveness of the registration statement, B+L was an indirect wholly-owned subsidiary of Bausch Health. On May 10, 2022, a wholly owned subsidiary of Bausch Health sold 35,000,000 common shares of Bausch + Lomb pursuant toin the B+Linitial IPO.public Upon the closingoffering of theBausch B+L IPO and after giving effect to the subsequent partial exercise of the over-allotment option by the underwriters,Lomb. 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 February 12,11, 2025.2026. See Item 1. “Business— Separation of the Bausch + Lomb Eye Health Business” of this Form 10-K for more information on the B+L Separation.

We continue to believe that the B+L Separation, which may include the monetization of all or a portion of our ownership interest in Bausch + Lomb, the transfer of all or a portion of our remaining direct or indirect equity interest in Bausch + Lomb to our shareholders, the monetization of all or a portion of our ownership interest in Bausch + Lomb, or a combination thereof, makes strategic sense. The completion of the B+L Separation is subject to the achievement of targeted debt leverage ratios and the receipt of any applicable shareholder and other necessary approvals. We continue to evaluate all relevant factors and considerations related to the B+L Separation, including the Xifaxan® Generics Litigation (see “Xifaxan® Paragraph IV Proceedings” of Note 20,21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements) on the B+L Separation..

ToWe position ourselvescontinue to unlockexecute theon actions intended to bring out value we see in our individual businesses, we have sought to right-size our portfolio of assets and provide financial flexibility.Company. In line with this focus on our core businesses, we have: (i) made measurable progress in effectively managing our capital structure, including taking actions to reduce the principal balances or extend maturities of our long-term debt, (ii) directed capital allocation to drive growth within theseour core businesses, (iii) increased our efforts to improve patient access, (iv) divested assets to improve our capital structure and simplify our businessaccess and (viv) continued to invest in sustainable growth drivers to position us for long-term growth.

We believe that these and other actions we have taken to transform our Company, have helped focus our operations, improved our capital structure and mitigated certain risks associated with legacy litigation matters. We believe that these measures, along with our continued commitment to improving people’s lives through our health products, help position us to unlock potential value across our portfolio of assetsassets, including by separating our eye health and pharmaceutical businesses. Although management believes the B+L Separation will unlock additional value, there can be no assurance that it will be successful in doing so.

On September 29, 2023, Bausch + Lomb entered into a new term loan facility (“B+L September 2028 Term Loan B Facility”) of $500 million and issued new Senior Secured Notes (“B+L October 2028 Senior Secured Notes”) of $1,400 million to finance the $1,750 million upfront payment related to the acquisition of XIIDRA® and certain other ophthalmology assets from Novartis and associated acquisition-related transaction and financing costs (as discussed in “-Strategic—Strategic Acquisitions” below and Note 10, “FINANCING ARRANGEMENTS” to our audited Consolidated Financial Statements).

Our capital allocation is also driven by our long-term growth strategies. We allocate resources to promote our core businesses globally through: (i) strategic acquisitions, (ii) R&D investment, (iiiii) strategic licensing agreements and (iviii) strategic investments in our infrastructure.acquisitions. We believe that the outcome of this process allows us to better drive value in our product portfolio and generate operational efficiencies.

As of the date of this Form 10-Q10-Q, there are no other material changes to the risk factors as disclosed in Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Unless the context otherwise indicates, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “we,” “us,” “our,” “the Company,” “Bausch Health,” and similar terms refer to Bausch Health Companies Inc. and its subsidiaries, taken together. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and the related notes (the “Financial Statements”) included elsewhere in this Quarterly Report on Form 10-Q for the quarterly period ended MarchJune 31,30, 2026 (this “Form 10-Q”). The matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contain certain forward-looking statements within the meaning of Section 27A of The Securities Act of 1933, as amended, and Section 21E of The Securities Exchange Act of 1934, as amended, and that may be forward-looking information within the meaning of applicable Canadian securities laws (collectively “forward-looking statements”). Forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”, “intend”, “estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “should”, “target”, “potential”, “opportunity”, “designed”, “create”, “predict”, “project”, “forecast”, “seek”, “strive”, “ongoing”, “likely”, “evolve”, “decrease” or “increase” and variations or other similar expressions. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances are forward-looking statements.

These statements are based upon the current expectations and beliefs of management. Readers are cautioned that actual results may vary from those in the forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making such forward-looking statements, including, but not limited to, factors and assumptions relating to: (i) our ability to execute our business strategy, business plans and operational efficiency initiatives; (ii) demand for, competitive positioning of and pricing for our current and anticipated products and our ability to achieve expected revenues, margins and expense levels; (iii) the successful development, regulatory approval, manufacture and timing of launches and commercialization of pipeline and other products; (iv) the completion, timing, integration and expected benefits of acquisitions and other strategic transactions and the plannedpotential separation of our eye health business consisting of our Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals businesses on anticipated terms, timing and costs; (v) the scope, duration and financial and operational impact of product quality matters and manufacturing facility compliance and certification matters; (vi) the continued availability and performance of key third‑party distribution, fulfillment and other arrangements and the stability of global supply chains; (vii) the continuation of patent protection and regulatory exclusivity for key products; (viii) the expected impacts of the Inflation Reduction Act (“IRA”), and the selectionimpact byof the negotiated prices, expected to become effective in 2027, for Xifaxan® under certain programs of the Centers for Medicare & Medicaid Services (“CMS”) of Xifaxan® for inclusion in the drug price negotiation program with negotiated pricing expected to become effective in 2027, and other healthcare reform measures and our ability to mitigate the impact thereof; (ix) our ability to generate cash flows and access liquidity to meet working capital needs, satisfy debt maturities as they become due, reduce debt levels and comply with financial and other covenants under our financing arrangements; (x) the expected scope and impact of tariffs, counter‑tariffs and other trade restrictions and the effectiveness of mitigation actions and the Company’s ability to recover any tariffs that are eligible for refund claims; (xi) macroeconomic and geopolitical conditions (including inflation, recessionary pressures, foreign currency exchange rates and interest rates), changes in tax laws and related guidance (including legislation referred to as the One Big Beautiful Bill Act (the “OBBBA”) and Organisation for Economic Co-operation and Development (“OECD”) related measures); (xii) the expected outcomes of litigation and other contingencies; and (xiii) the factors described under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Our accompanying unaudited interim Condensed Consolidated Financial Statements as of MarchJune 31,30, 2026 and for the three and six months ended MarchJune 31,30, 2026 and 2025 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for interim financial statements, and should be read in conjunction with our Consolidated Financial Statements for the year ended December 31, 2025, which were included in our Annual Report on Form 10-K. In our opinion, the unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair statement of the financial condition, results of operations and cash flows for the periods indicated. Additional company information is available on SEDAR+ at www.sedarplus.ca and on the SEC website at www.sec.gov. All currency amounts are expressed in U.S. dollars, unless otherwise noted. Certain defined terms used herein have the meaning ascribed to them in the Financial Statements.

On August 6, 2020, we announced our plan to separate our eye health business consisting of our Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals businesses into an independent publicly traded entity, Bausch + Lomb (the “B+L Separation”). On May 10, 2022, a wholly owned subsidiary of Bausch Health sold 35,000,000 common shares of Bausch + Lomb in the initial public offering of Bausch + Lomb. Bausch Health currently indirectly holds 310,449,643 common shares of Bausch + Lomb, which represents approximately 87% of B+L’s outstanding common shares as of AprilJuly 22, 2026.

We continue to believe that the B+L Separation, which may include the monetizationevaluation of all or a portion of our ownership interest in Bausch + Lomb, the transfer of all or a portion of our remaining direct or indirect equity interest in Bausch + Lomb to our shareholders, or a combination thereof, makes strategic sense. The completion of the B+L Separation is subject to the achievement of targeted debt leverage ratios and the receipt of any applicable shareholder and other necessary approvals. We continue to evaluate all relevant factors and considerations relatedrelating to theour Binvestment in Bausch +L Separation,Lomb, including the Xifaxan® Generics Litigation (see “Xifaxan® Paragraph IV Proceedings” of Note 17, “LEGAL PROCEEDINGS” to our unaudited interim Condensed Consolidated Financial Statements).

We believe that these measures, along with our continued commitment to improving people’s lives through our health products, help position us to unlock potential value across our portfolio of assets, including by separating our eye health and pharmaceutical businesses. Although management believes the B+L Separation willcould unlock additional value, there can be no assurance that it will be successful in doing so.

At the time of our announcement of the B+L Separation, we emphasized that it is important that the post-separation entities be appropriately capitalized, with appropriate leverage and with access to additional capital, if and when needed, to provide each entity with the ability to independently allocate capital to areas that will strengthen their own competitive positions in their respective lines of business and position each entity for sustainable growth. Therefore, we see the appropriate capitalization and leverage of these businesses post-separation as a key to maximizing value across our portfolio of assets and, as such, it is a primary objective of our plan of separation.

Defined terms used above and in the following section but not defined in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are defined and discussed in Note 10, “FINANCING ARRANGEMENTS” to our unaudited interim Condensed Consolidated Financial Statements.

As of MarchJune 31,30, 2026, we had aggregate maturities and mandatory payments of our principal balances of debt obligations as follows:

As of March 31, 2026, we had approximately 80 projects in our global pipeline. Certain core internal R&D projects that have received a significant portion of our R&D investment in current and prior periods are listed below.

•Fraxel FTX® - The next generation Fraxel® is a fractionated laser device for skin resurfacing launchedthat inhas the U.S. in April 2025 and wasbeen submitted for approval in multiple markets globally.

•Lumify® Franchise – An OTC redness reliever eye drop that significantly reduces redness to help eyes look whiter and brighter. To date, Bausch + Lomb has launched and acquired the right to launch Lumify® in various countries. A new line extension formulation, Lumify® Preservative Free,Free was launched in the first quarter of 2025. In addition, Bausch + Lomb is in the process of initiating a Lumify® next generation clinical study, for which a Phase 3 study met all primary and secondary endpoints and for which the New Drug Application has been submitted and approval is anticipated during the first half of 2027.

•LuxLife® – Bausch + Lomb is expanding its portfolio of premium intraocular lenses (“IOLs”) built on the “Lux” platform with the LuxLife® Trifocal IOL with two options, non-Toric and Toric for astigmatic patients. The European launch of this product is in process.

•Bausch + Lomb is expanding its portfolio of premium IOLs built on the enVista® platform with: enVista Aspire® monofocal and toric IOLs with Intermediate Optimized optics launched in the U.S. in October 2023, in Europe and Canada in 2025, enVista Envy® trifocal IOLs launched in Canada in June 2024, in the U.S. in November 2024 and in Europe in October 2025, and launches in Singapore and Hong Kong are expected and enVista BeyondTM extended depth of focus is anticipated to launch in the U.S. in 2027. Bausch + Lomb recently received topline results and is conducting a comprehensive review of the data.

In January 2025, Bausch + Lomb acquired Whitecap Biosciences, LLC which is currentlywas developing two innovative therapies for potential use in glaucoma and geographic atrophy. However, during July 2026, Bausch + Lomb announced that the Phase 2 study regarding the glaucoma neuroprotective candidate did not meet its primary endpoint, and as such will no longer advance this program, and will now focus on developing an innovative therapy for potential use in geographic atrophy.

Salix - We believe in our GI product portfolio and we have implemented initiatives, including increasing our marketing investment in Xifaxan®, to further capitalize on the value of the infrastructure we have built around these products to extend our market share. We have continued our investmentinvested in Xifaxan® DTCdirect-to-consumer advertising and new sales force capabilities. InWe Januaryalso 2026,continue weto receivedinvest in the development of Larsucosterol, a novel therapeutic molecule that has demonstrated promising results in Phase 2 trials for the double-blindtreatment Phaseof 3 clinical trials for two global RED-C clinical programs evaluating our rifaximin SSD formulation, designed to prevent OHEAH and relatedhas complicationsbeen ingranted patientsBreakthrough withTherapy early-stagedesignation liver cirrhosis. While safe and well-tolerated, both clinical trials did not meetby the primaryFDA. endpoint.In Weaddition, we have also invested in developing our investigational oral drug Amiselimod (S1P modulator) for the treatment of moderate to severe ulcerative colitis. WeThis haveprogram met with the FDA for an end of Phase 2 meeting, as well as with the EU’s European Medicines Agency and Japan’s Pharmaceuticals and Medical Devices Agency for Amiselimod (S1P modulator) for the treatment of moderate to severe ulcerative colitis. All regulatory feedback is currentlyremains under review.evaluation.

International - Our International product portfolio in Canada includes our recently launched product, CABTREO® Topical Gel, a triple-combination topical treatment for acne. Our current focus in Canada is on expanding towards general practitioners (“GPs”) and strengthening awareness and education for both GPs and patients. In EMEA and Latin America, our portfolio remains primarily focused on branded generic products.

Additionally, on February 20, 2026 the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). In response to the U.S. Supreme Court’s decision, new Executive Orders were announced aimed at restructuring U.S. tariff policy and exploring alternative statutory authorities under which to impose or maintain tariffs. On March 4, 2026, the U.S. Court of International Trade (“CIT”) ordered the U.S. Customs and Border Protection (“CBP”) to liquidate (meaning calculate and finalize) and, where applicable, reliquidate, or correct, certain import entries without regard to duties imposed under the IEEPA. The CIT order provides relief for entries affected by IEEPA tariffs. On April 10,20, 2026, the CBP opened the Consolidated Administration and Processing of Entries (“CAPE”) portal to facilitate the submission and processing of IEEPA duty refund claims. We are evaluating the impact of these developments on our business, financial condition, cash flows and results of operations, however, as of the date of this filing, no amounts related to potential tariff recoveries have not been recorded.material.

Our revenues attributable to Russia, Ukraine and Belarus for each of the threesix months ended MarchJune 31,30, 2026 and 2025 were approximately 2% of our total revenues. In addition, we do not have any research or manufacturing facilities in Russia, Ukraine or Belarus. While we have been monitoring this conflict and will continue to do so as this conflict continues to evolve, we are unable to predict the impact of this conflict on our business.

In August 2022, the Inflation Reduction Act (“IRA”) was signed into law, which among other matters made significant changes to how drugs are covered and paid for under the Medicare program, including imposing financial penalties if drug prices are increased at a rate faster than inflation, redesigning Medicare Part D benefits to shift a greater portion of the costs to manufacturers and allowing the U.S. government to set prices for certain drugs in Medicare. The IRA provides for (i) the U.S. government to set or “negotiate” prices for select high-cost Medicare Part D (beginning in 2026) and Medicare Part B drugs (beginning in 2028) that are more than nine years (for small-molecule drugs) or 13 years (for biological products) from their initial FDA approval, (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation beginning in 2022 for Medicare Part D and 2023 for Medicare Part B drugs and (iii) Medicare Part D redesign which replaced the current Part D Coverage Gap Discount Program and established a $2,000 cap for out-of-pocket limits costs for Medicare beneficiaries beginning in 2025, which has increased to $2,100 for 2026, with manufacturers being responsible for 10% of costs up to the $2,100 cap and 20% after that cap is reached. Although we have taken certain actions which we believe may mitigate any negative pricing impact, the reduction of prices or reimbursement levels for certain of our products could materially affect our business and consolidated results of operations and may accelerate revenue erosion prior to the expiration of intellectual property protections.

In January 2025, the CMS selected Xifaxan® for itsparticipation drugin pricethe negotiationMedicare programDrug asPrice partNegotiation ofProgram established under the IRA. There remains a possibility that additionalOther products fromin our portfolio may be selected for negotiation in subsequentfuture years. AfterFollowing the Companycompletion completedof negotiationsnegotiations, withCMS thepublicly CMS,announced the finalized maximum fair pricesprice werefor announced publiclyXifaxan® on November 25, 2025. The agreednegotiated price for Xifaxan® will takebecome effecteffective on January 1, 2027,2027 and is projectedexpected to reduce revenue andrevenue, operating results forand cash flows associated with Xifaxan®. primarily in that year. AsSince generic versions of Xifaxan® are currently expected to enter the market in 2028, the Company believes the impact onof ourthe revenuesnegotiated andprice operating results is anticipated towill be concentratedmost insignificant 2027,during and is not expected to have a substantial influence on our long-term business strategies or overall cash flow.2027.

2026 through 2030 LOE Branded Products - Based on current patent expiration dates, settlement agreements and/or competitive information, we have identified branded products that we believe could begin facing potential LOE and/or generic competition in the U.S. during the years 2026 through 2030. These products and year of expected LOE include, but are not limited to, Aplenzin® (2026), Bryhali® (2026), Relistor® Subcutaneous (2028), Xifaxan® (2028), Plenvu® (2030) and Duobrii® (2030) in the U.S. and Jublia® (2028) in Canada. These dates may change based on, among other things, challenges to our patents, settlement of existing or future patent litigation and at-risk generic launches. We believe the entry into the market of generic competition generally would have an adverse impact on the volume and/or pricing of the affected products, however we are unable to predict the magnitude or timing of this impact.

In addition, for a number of our products (including Xifaxan® 550 mg, Cabtreo® and VyzultaRelistor® Oral tablets in the U.SU.S.), we have commenced (or anticipate commencing) and have (or may have) ongoing infringement proceedings against potential generic competitors in the U.S. If we are not successful in these proceedings, we may face increased generic competition for these products.

Through the dateAs of thisJune filing,30, we believe that all of2026, our remaining global operations and facilities have the relevant operational good manufacturing practices certificates and all Company products and allour operating sites are in good compliance in all material respects with all relevant notified bodies and global health authorities.authorities, subject to ordinary course inspections, observations and remediations. See Item 1A “Risk Factors – Manufacturing and Supply Risks” of our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on certain risks relating to manufacturing activities.

The following table provides selected unaudited financial information for the three and six months ended MarchJune 31,30, 2026 and 2025:

Summary of the Three Months Ended MarchJune 31,30, 2026 Compared to the Three Months Ended MarchJune 31,30, 2025

Revenues for the three months ended MarchJune 31,30, 2026 and 2025 were $2,524$2,852 million and $2,259$2,530 million, respectively, an increase of $265$322 million, or 12%.13%. The increase is primarily attributable to growth in our Salix, Bausch + Lomb, Salix, Solta Medical and International segments driven by: (i) improved net realized pricing, (ii) incremental sales attributable to acquisitions and (iii) the favorable impact of foreign currencies and (iii) incremental sales attributable to acquisitions,currencies, partially offset by: (i) lower volumes and (ii) the impact of divestitures and discontinuations. These changes in net realized pricing and volumes were partially the result of our decision to exit certain channels, as discussed below.

Operating lossincome for the three months ended MarchJune 31,30, 2026 and 2025 was $950$740 million asand compared$444 tomillion, operating income of $276 million for the three months ended March 31, 2025,respectively, and included non-cash charges for Depreciation and amortization of intangible assets of $295$281 million and $305 million, Goodwill impairments of $1,426$307 million and $0 and Share-based compensation of $52$54 million and $43$46 million, respectively. The decreaseincrease in our operating results of $1,226$296 million reflects, among other factors:

•aan decreaseincrease in selling, general and administrative (“SG&A”) expenses of $6$13 million, primarily attributable to higher compensation costs and selling expenses, partially offset by lower general and administrative expenses and advertising expenses, partially offset by higher compensation costs and the unfavorable impact of foreign currencies;

•an increase in Other expense,expense (income), net of $17$61 million, primarily attributable to: (i) higher provisions for certain legal matters and (ii) higher acquisition-related contingent consideration, partially offset by lower acquired IPR&D costs.consideration.

Loss before income taxes for the threesix months ended MarchJune 31,30, 2026 and 2025 was $1,354$1,006 million andas $47compared million,to respectively,Income anbefore unfavorableincome changetaxes of $1,307$93 million for the six months ended June 30, 2025, a decrease in our results of $1,099 million. The change is primarily attributable to: the(i) a decrease in our operating results of $1,226$930 million, as previously discussed, and an(ii) increasea decrease in InterestGain expenseon extinguishment of $72debt of $179 million.

Net loss attributable to Bausch Health for the threesix months ended MarchJune 31,30, 2026 and 2025 was $1,423$1,165 million andas $58compared million,to respectively,Net an unfavorable change of $1,365 million, which is primarilyincome attributable to anBausch unfavorableHealth changeof $90 million for the six months ended June 30, 2025, a decrease of $1,255 million, primarily due to a decrease in Lossour before income taxesresults of $1,307$1,099 million, as previously discussed, and an increaseunfavorable change in Provision for income taxes of $38$114 million.

Our unaudited operating results for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

Three Months Ended MarchJune 31,30, 2026 Compared to the Three Months Ended MarchJune 31,30, 2025

For the three months ended March 31, 2026, revenues were impacted by our decision to exit certain channels within the Salix and Diversified segments during the second half of 2025. Historically, sales through these channels were subject to high rebates and chargebacks. While this strategic decision resulted in lower volumes within the exited channels, it contributed to an improvement in net realized pricing. At the same time, we have continued to see volume growth in other channels, which has helped to offset the reduction in sales from the exited channels.

Our revenues were $2,524$2,852 million and $2,259$2,530 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, an increase of $265$322 million, or 12%.13%. The increase was primarily due to: (i) an increase in net realized pricing of $229$326 million, (ii) incremental sales attributable to acquisitions of $35 million across all our segments,and (iiiii) the favorable impact of foreign currencies of $71 million and (iii) incremental sales attributable to acquisitions of $33$25 million, partially offset by: (i) a decrease in volumes of $64$57 million, primarily attributable to our decision to exit certain channels, as discussed abovemillion and (ii) the impact of divestitures and discontinuations of $4$7 million. These changes in net realized pricing and volumes were partially the result of our decision to exit certain channels, as discussed above.

The changes in our segment revenues and segment profits for the three months ended MarchJune 31,30, 2026 are discussed in further detail below under “ — Reportable Segment Revenues and Profits.”

We actively manage these offerings, focusing on the incremental costs of our patient assistance programs, the level of discounting to non-retail accounts and identifying opportunities to minimize product returns. We also concentrate on managing our relationships with our payors and wholesalers, reviewing the ranges of our offerings and being disciplined as to the amount and type of incentives we negotiate. Provisions recorded to reduce gross product sales to net product sales and revenues for the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

Cash discounts and allowances, returns, rebates, chargebacks and distribution fees as a percentage of gross product sales were 37.0%35.4% and 43.2%42.4% for the three months ended MarchJune 31,30, 2026 and 2025, respectively, a decrease of 6.27.0 percentage points and includes:

•rebates as a percentage of gross product sales which waswere lower primarily due to lower rebates for: (i) lower gross product sales for certain branded products such as Xifaxan®, Relistor®, Apriso®, OnextonJublia® and Wellbutrin® and (ii) lower rebates for Bausch + Lomb’s XIIDRA®;

•chargebacks as a percentage of gross product sales which waswere lower primarily due to lower chargebacks for Xifaxan® and Wellbutrin® and lower gross product sales of certain generic products such as Elidel® AG.

Cost of goods sold primarily includes: manufacturing and packaging; the cost of products we purchase from third parties; royalty payments we make to third parties; depreciation of manufacturing facilities and equipment; and lower of cost or net realizable value adjustments to inventories. Cost of goods sold typically varyvaries between periods as a result of product mix, volume, royalties, changes in foreign currency and inflation. Cost of goods sold excludes the amortization and impairments of intangible assets.

Cost of goods sold was $721$753 million and $683$748 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, an increase of $38$5 million, or 6%.million. The increase was primarily driven by: (i) afavorable change in product mix and (ii) higher manufacturing variances, partially offset by: (i) decrease in volumes and (ii) the unfavorable impact in 2025 of foreignthe currencies.amortization of inventory step-up related to Bausch + Lomb’s acquisition of XIIDRA®.