Bausch & Lomb Corp

Previous wording

Our accompanying unaudited interim Condensed Consolidated Financial Statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 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, 2023, which were included in our Annual Report on Form 10-K filed with the SEC and the Canadian Securities Administrators (the “CSA”) on February 21, 2024 (the “Annual Report”). 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.com 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 accompanying unaudited interim Condensed Consolidated Financial Statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023.

Current wording

Our accompanying unaudited interim Condensed Consolidated Financial Statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 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, 2023, which were included in our Annual Report on Form 10-K filed with the SEC and the Canadian Securities Administrators (the “CSA”) on February 21, 2024 (the “Annual Report”). 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.com 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 accompanying unaudited interim Condensed Consolidated Financial Statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023.

Previous wording

Bausch + Lomb is a subsidiary of Bausch Health Companies Inc. (“BHC”), with BHC holding, directly or indirectly, approximately 88.2% of the issued and outstanding common shares of Bausch + Lomb, as of July 24, 2024. On August 6, 2020, BHC, announced its plan to separate our eye health business into an independent publicly traded entity, separate from the remainder of BHC (the “Separation”). This resulted in the initial public offering of Bausch + Lomb (the “B+L IPO”), and our common shares 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. The completion of the full separation of Bausch + Lomb from the remainder of BHC (the “Separation”), which includes the transfer of all or a portion of BHC’s remaining direct or indirect equity interest in Bausch + Lomb to its shareholders (the “Distribution”), is subject to the achievement of targeted debt leverage ratios and the receipt of applicable shareholder and other necessary approvals and other factors and is subject to various risk factors relating to the Separation. Bausch + Lomb understands that BHC continues to believe that completing the Separation makes strategic sense and that BHC continues to evaluate all relevant factors and considerations related to completing the Separation, including those factors described in BHC’s public filings. For additional information on the risks related to the Separation, see Item 1A. “Risk Factors — Risks Relating to the Separation” of our Annual Report.

Current wording

Bausch + Lomb is a subsidiary of Bausch Health Companies Inc. (“BHC”), with BHC holding, directly or indirectly, approximately 88.2% of the issued and outstanding common shares of Bausch + Lomb, as of October 23, 2024. On August 6, 2020, BHC, announced its plan to separate our eye health business into an independent publicly traded entity, separate from the remainder of BHC (the “Separation”). This resulted in the initial public offering of Bausch + Lomb (the “B+L IPO”), and our common shares 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. The completion of the full Separation may be accomplished by the transfer of all or a portion of BHC’s remaining direct or indirect equity interest in Bausch + Lomb to its shareholders (the “Distribution”). The Distribution is subject to the achievement of targeted debt leverage ratios and the receipt of applicable shareholder and other necessary approvals and other factors and is subject to various risk factors. Bausch + Lomb understands that BHC continues to believe that completing the Separation makes strategic sense and that BHC continues to evaluate all relevant factors and considerations related to completing the Separation, including those factors described in BHC’s public filings. For additional information on the risks related to the Separation, see Item 1A. “Risk Factors — Risks Relating to the Separation” of our Annual Report.

Previous wording

The Vision Care segment—includes both our contact lens and consumer eye care businesses, and includes leading products such as our Biotrue® ONEday daily disposables and our Biotrue® multi-purpose solution.

Current wording

The Vision Care segment—includes both our contact lens and consumer eye care businesses.

Previous wording

The Pharmaceuticals segment—consists of a broad line of proprietary and generic pharmaceutical products for post-operative treatments and treatments for a number of eye conditions, such as glaucoma, eye inflammation, ocular hypertension, dry eyes and retinal diseases. Key proprietary pharmaceutical brands are MIEBO®, Vyzulta®, Lotemax®, Prolensa® and Minims®. In addition, during September 2023, the Company acquired XIIDRA® (as further discussed below), which complements and grows the Company's existing dry eye franchise.

Current wording

The Pharmaceuticals segment—consists of a broad line of proprietary and generic pharmaceutical products for post-operative treatments and treatments for a number of eye conditions, such as glaucoma, eye inflammation, ocular hypertension, dry eyes and retinal diseases. Key proprietary pharmaceutical brands are MIEBO®, XIIDRA®, Vyzulta®, Lotemax®, Prolensa® and Minims®.

Previous wording

Our team of approximately 850 dedicated Research and Development (“R&D”) employees is focused on advancing our pipeline and identifying new product opportunities and we believe we have a significant innovation opportunity today. We plan to develop and, where applicable, commercialize our global pipeline of over 60 projects, many of which are global projects being developed in and for multiple countries. These global and individual projects are in various stages of pre-clinical and clinical development, including new contact lenses for myopia, next-generation cataract equipment, premium IOLs, investigational treatments for dry eye, novel formulation for eye vitamins and preservative free formulation of eye drops, among others, that are designed to grow our portfolio and accelerate future growth.

Current wording

Our team of approximately 850 dedicated Research and Development (“R&D”) employees is focused on advancing our pipeline and identifying new product opportunities and we believe we have a significant innovation opportunity today. We plan to develop and, where applicable, commercialize our global pipeline of approximately 60 projects, many of which are global projects being developed in and for multiple countries. These global and individual projects are in various stages of pre-clinical and clinical development, including new contact lenses for myopia, next-generation cataract equipment, premium IOLs, investigational treatments for dry eye, novel formulation for eye vitamins and preservative free formulation of eye drops, among others, that are designed to grow our portfolio and accelerate future growth.

Previous wording

•SiHy Daily - A silicone hydrogel daily disposable contact lens designed to provide outstanding comfort and clear vision throughout the day. To date SiHy Daily has been launched in over 50 countries, under the brand names INFUSE®, BAUSCH + LOMB ULTRA® ONE DAY and AQUALOX® ONE DAY. We continue to plan to launch our SiHy Daily lenses into additional countries throughout 2024. In addition, we launched our first silicone hydrogel daily disposable multifocal contact lens in May 2023, and launched a toric lens in the U.S. in June 2024.

Current wording

•SiHy Daily - A silicone hydrogel daily disposable contact lens designed to provide outstanding comfort and clear vision throughout the day. To date SiHy Daily has been launched in over 50 countries, under the brand names INFUSE®, BAUSCH + LOMB ULTRA® ONE DAY and AQUALOX® ONE DAY and we are continuing our global roll out. In addition, we launched our first silicone hydrogel daily disposable multifocal contact lens in May 2023, and launched a toric lens in the U.S. in June 2024.

Previous wording

•Lumify® (brimonidine tartrate ophthalmic solution, 0.025%) - An OTC redness reliever eye drop that significantly reduces redness to help eyes look whiter and brighter, revealing eyes’ natural beauty. To date, we have launched and acquired the right to launch Lumify® in various countries. We also have new line extension formulations that were recently launched or are under development, including: (i) Lumify Eye Illuminations TM, three clinically proven products for the sensitive eye area which launched in the U.S. in September 2023 and (ii) Lumify® Preservative Free, for which the New Drug Application (“NDA”) was approved by the U.S. Food and Drug Administration (the “FDA”) in April 2024 and we anticipate launching in the first quarter of 2025.

Current wording

•Lumify® (brimonidine tartrate ophthalmic solution, 0.025%) - An OTC redness reliever eye drop that significantly reduces redness to help eyes look whiter and brighter, revealing eyes’ natural beauty. To date, we have launched and acquired the right to launch Lumify® in various countries. A new line extension formulation, Lumify® Preservative Free, for which the New Drug Application (“NDA”) was approved by the U.S. Food and Drug Administration (the “FDA”) in April 2024, is anticipated to begin launching in the first quarter of 2025.

Previous wording

•MIEBO® (perfluorohexyloctane) (formerly known as NOV03) – In December 2019, we acquired an exclusive license from Novaliq GmbH (the “Novaliq License”) for the commercialization and development in the U.S. and Canada of MIEBO® for the treatment of the signs and symptoms of dry eye disease (“DED”). The NDA was filed with the FDA in June 2022, approved by the FDA on May 18, 2023 and launched in the U.S. in September 2023.

Current wording

•MIEBO® (perfluorohexyloctane) (formerly known as NOV03) – In December 2019, we acquired an exclusive license from Novaliq GmbH (the “Novaliq License”) for the commercialization and development in the U.S. and Canada of MIEBO® for the treatment of the signs and symptoms of dry eye disease (“DED”). MIEBO® launched in the U.S. in September 2023 and was approved in Canada during September 2024. MIEBO® is the first and only FDA-approved treatment for DED that directly targets tear evaporation and the addition of MIEBO® will help build upon our strong portfolio of integrated eye health products.

Previous wording

•enVista® – We are expanding our portfolio of premium IOLs built on the enVista® platform with enVista Aspire TM (Monofocal Plus), enVista Envy TM Trifocal and enVista Beyond TM (extended depth of focus (“EDOF”)) optical designs with two options: non-Toric and Toric for astigmatism patients. enVista Aspire TM monofocal and toric IOLs with Intermediate Optimized optics launched in the U.S. during October 2023 and we anticipate launching in Europe and Canada in 2025. enVista Envy TMlaunched in Canada in June 2024 and we anticipate launching enVista Envy TM in the U.S. during the fourth quarter of 2024 and in Europe in 2025. We anticipate launching enVista Beyond TM in the U.S. in 2026.

Current wording

•enVista® – We are expanding our portfolio of premium IOLs built on the enVista® platform with enVista® Aspire® (Monofocal Plus), enVista® Envy TM Trifocal and enVista Beyond TM (extended depth of focus (“EDOF”)) optical designs with two options: non-Toric and Toric for astigmatism patients. enVista® Aspire® monofocal and toric IOLs with Intermediate Optimized optics launched in the U.S. during October 2023 and we anticipate launching in Europe and Canada in 2025. enVista® Envy TMlaunched in Canada in June 2024 and the U.S. launch is in-process, after receiving FDA approval in October 2024. We anticipate launching enVista® Envy TM in Europe in 2025. We anticipate launching enVista® Beyond TM in the U.S. in 2026.

Previous wording

•Acquisition of Trukera – In July 2024, we acquired Trukera Medical, from its private equity owner, AccelMed Partners, and other shareholders. Trukera Medical, a U.S.-based privately held ophthalmic medical diagnostic company, commercializes ScoutPro®, a point-of-care portable device for precisely measuring osmolarity, or the salt content of a person’s tears. This acquisition is expected to expand the Company's presence in the dry eye market.

Current wording

•Acquisition of Trukera Medical – In July 2024, we acquired TearLab Corporation, d/b/a Trukera Medical (“Trukera Medical”) from its private equity owner, AccelMed Partners, and other shareholders. Trukera Medical, a U.S.-based privately held ophthalmic medical diagnostic company, commercializes ScoutPro®, a point-of-care portable device for precisely measuring osmolarity, the salt content of a person’s tears. This acquisition is expected to expand the Company's presence in the dry eye market.

Previous wording

The Biden administration has imposed U.S. sanctions and export controls against Russia and Belarus in response to the ongoing war. These sanctions temporarily impacted our ability to distribute our U.S. manufactured contact lenses and our U.S. surgical products to Russia and Belarus. However, in response to these sanctions, we applied for licenses with the U.S. Department of Commerce’s Bureau of Industry and Security for both Russia and Belarus and we have all licenses necessary to allow us to sell the applicable currently sanctioned products in each of these countries.

Current wording

The Biden administration has imposed U.S. sanctions and export controls against Russia and Belarus in response to the ongoing war. These sanctions temporarily impacted our ability to distribute our U.S. manufactured contact lenses and our U.S. surgical products to Russia and Belarus. However, in response to these sanctions, we applied for licenses with the U.S. Department of Commerce’s Bureau of Industry and Security for both Russia and Belarus and we have all licenses, or other applicable governmental authorizations, necessary to allow us to sell the applicable currently sanctioned products in each of these countries.

Previous wording

In addition, the EU has also imposed several rounds of sanctions against Russia. We continue to assess the impact of these EU sanctions on our operations in, and services provided through, the EU. We have obtained licenses, where required, for products provided to Russia from the EU, and we have identified certain “controlled” business services for which we are in the process of pursuing licenses from the relevant EU member states.

Current wording

In addition, the EU has also imposed several rounds of sanctions against Russia. We have obtained licenses, where required, for products and services provided to Russia from the EU and from the relevant EU member states.

Previous wording

Our revenues attributable to Russia, Ukraine and Belarus, in the aggregate, were approximately 3% of our total revenues for, both, the six months ended June 30, 2024 and year ended December 31, 2023. 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 the Company’s business.

Current wording

Our revenues attributable to Russia, Ukraine and Belarus, in the aggregate, were approximately 3% of our total revenues for, both, the nine months ended September 30, 2024 and year ended December 31, 2023. 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 the Company’s business.

Previous wording

The conflict between Israel and Hamas began during October 2023 and continues to impact the region. Our revenues attributable to Israel and Iran for the six months ended June 30, 2024 and year ended December 31, 2023 were less than 1% of our total revenues in each period. Sales in Iran are covered by a general OFAC license. 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 the Company’s business.

Current wording

The conflict between Israel and Hamas began during October 2023 and has since expanded to include other countries and militant groups and continues to impact the region. Our revenues attributable to the impacted regions for the nine months ended September 30, 2024 and year ended December 31, 2023 were less than 1% of our total revenues in each period. Sales in Iran are covered by a general OFAC license. 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 the Company’s business.

Previous wording

Over the past few years we had experienced supply chain challenges, which had caused disruptions in availability and delays in shipping. We had therefore implemented actions to help mitigate those challenges, including strategically spot buying key components of inventory and securing multiple supply sources. While we will continue to monitor any future supply chain challenges, the actions taken to mitigate our previous challenges has resulted in higher cost of inventory, which in turn has put pressure on our margins, primarily within our surgical business.

Current wording

Over the past few years we had experienced supply chain challenges, which had caused disruptions in availability and delays in shipping. We therefore implemented actions to help mitigate those challenges, including strategically spot buying key components of inventory and securing multiple supply sources. While we will continue to monitor any future supply chain challenges, the actions taken to mitigate our previous challenges had resulted in higher cost of inventory, which in turn had put pressure on our margins, primarily within our surgical business.

Previous wording

Framework have either introduced or announced their intention to introduce certain components of the global minimum tax in line with the model rules for fiscal years beginning on or after December 31, 2023. For example, on December 15, 2022, the European Union member states unanimously adopted the directive to implement pillar two rules. According to the directive, the member states were expected to enact pillar two rules into domestic law in 2023, with certain elements becoming effective for fiscal years beginning on or after December 31, 2023. On August 4, 2023, Canada released draft legislation to enact certain components of the pillar two proposals into Canadian law as the Global Minimum Tax Act (“GMTA”), which was enacted on June 20, 2024. The GMTA is generally aligned with the model rules proposed by the OECD and is effective for fiscal years beginning on or after December 31, 2023. The United States did not announce plans to enact the tax measures under the two-pillar plan. On February 1, 2023, the U.S. Financial Accounting Standards Board indicated that they believe the minimum tax imposed under pillar two is an alternative minimum tax, and, accordingly, deferred tax assets and liabilities associated with the minimum tax would not be recognized or adjusted for the estimated future effects of the minimum tax but would be recognized in the period incurred. The OECD has published model rules and other guidance with respect to pillar two, which are generally consistent with the agreement reached by the Inclusive Framework in October 2021. On February 1, 2023, the Inclusive Framework released a package of technical and administrative guidance on the implementation of pillar two, including the scope of companies that will be subject to the Global Anti-Base Erosion Rules, transition rules, and guidance on domestic minimum taxes that countries may choose to adopt, among other topics. On December 18, 2023 the OECD announced plans to release additional guidance on model rules and to start the peer review process in 2024. On June 17, 2024, the OECD published further administrative guidance to clarify the operation of the model rules. While many jurisdictions in which the Company operates have adopted the global minimum tax provision of the OECD pillar two effective for tax years beginning in January 2024, the Company has concluded that there is minimal impact to its 2024 tax rate due to the accounting for the tax effects of intercompany transactions. The Company expects that there is risk that the impact of the global minimum tax may eventually result in an increase to its overall effective tax rate.

Current wording

On October 8, 2021, the Organisation for Economic Co-operation and Development (“OECD”)/G20 inclusive framework on Base Erosion and Profit Shifting (the “Inclusive Framework”) published a statement updating and finalizing the key components of a two-pillar plan on global tax reform originally agreed on July 1, 2021, and a timetable for implementation by 2023. The timetable for implementation has since been extended to 2024 or, with respect to certain components of the plan, to 2025. The Inclusive Framework plan has now been agreed to by 147 OECD members, including several countries which did not agree to the initial plan. Under pillar one, a portion of the residual profits of multinational businesses with global turnover above €20 billion and a profit margin above 10% will be allocated to market countries where such allocated profits would be taxed. Under pillar two, the Inclusive Framework has agreed on a global minimum corporate tax rate of 15% for companies with revenue above €750 million, calculated on a country-by-country basis. On October 30, 2021, the G20 formally endorsed the new global minimum corporate tax rate rules. The Inclusive Framework agreement must now be implemented by the OECD Members who have agreed to the plan, effective in 2024. Many members of the Inclusive Framework have either introduced or announced their intention to introduce certain components of the global minimum tax in line with the model rules for fiscal years beginning on or after December 31, 2023. For example, on December 15, 2022, the European Union member states unanimously adopted the directive to implement pillar two rules. According to the directive, the member states were expected to enact pillar two rules into domestic law in 2023, with certain elements becoming effective for fiscal years beginning on or after December 31, 2023. On August 4, 2023, Canada released draft legislation to enact certain components of the pillar two proposals into Canadian law as the Global Minimum Tax Act (“GMTA”), which was enacted on June 20, 2024. The GMTA is generally aligned with the model rules proposed by the OECD and is effective for fiscal years beginning on or after December 31, 2023. The United States did not announce plans to enact the tax measures under the two-pillar plan. On February 1, 2023, the U.S. Financial Accounting Standards Board indicated that they believe the minimum tax imposed under pillar two is an alternative minimum tax, and, accordingly, deferred tax assets and liabilities associated with the minimum tax would not be recognized or adjusted for the estimated future effects of the minimum tax but would be recognized in the period incurred. The OECD has published model rules and other guidance with respect to pillar two, which are generally consistent with the agreement reached by the Inclusive Framework in October 2021. On February 1, 2023, the Inclusive Framework released a package of technical and administrative guidance on the implementation of…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Prolensa® began facing LOE in the fourth quarter of 2023, which in the aggregate accounted for approximately 1% of our total revenues in 2023. While we expect our risk of LOE to be limited over the next five years, this could change based on, among other things, successful challenge 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.

Current wording

Prolensa® began facing LOE in the fourth quarter of 2023, which accounted for approximately 1% of our total revenues in 2023. While we expect our risk of LOE to be limited over the next five years, this could change based on, among other things, successful challenge 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.

Previous wording

Our unaudited operating results for the three and six months ended June 30, 2024 and 2023 were as follows:

Current wording

Our unaudited operating results for the three and nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

Our revenues were $1,216 million and $1,035 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $181 million, or 17%. The increase was attributable to: (i) incremental sales attributable to acquisitions of $104 million, primarily within our Pharmaceuticals segment, (ii) increased volumes of $75 million across each of our segments and (iii) increased net realized pricing of $31 million, primarily driven by our Vision Care segment. The increases in revenue were partially offset by: (i) the unfavorable impact of foreign currencies of $27 million, primarily in Asia, and (ii) the impact of divestitures and discontinuations of $2 million, particularly the discontinuation of certain products within our Pharmaceuticals segment.

Current wording

Our revenues were $1,196 million and $1,007 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $189 million, or 19%. The increase was attributable to: (i) incremental sales attributable to acquisitions of $96 million, primarily within our Pharmaceuticals segment, (ii) increased volumes of $81 million across each of our segments and (iii) increased net realized pricing of $20 million, primarily driven by our Vision Care segment. The increases in revenue were partially offset by: (i) the unfavorable impact of foreign currencies of $5 million, primarily in Latin America, and (ii) the impact of divestitures and discontinuations of $3 million, particularly the discontinuation of certain products within our Pharmaceuticals segment.

Previous wording

The Vision Care segment revenue was $697 million and $646 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $51 million, or 8%. The increase was primarily driven by sales from our dry eye portfolio, Lumify®and PreserVision® within our consumer eye care business and SiHy Daily lenses and Ultra®within our contact lens business. This increase included: (i) an increase in volumes of $29 million, (ii) an increase in net pricing of $27 million and (iii) incremental sales attributable to acquisitions driven by the acquisition of the Blink® Product Line in July 2023, partially offset by the unfavorable impact of foreign currencies of $20 million, primarily in Asia and Russia.

Current wording

The Vision Care segment revenue was $684 million and $648 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $36 million, or 6%. The increase was primarily driven by sales from our dry eye portfolio within our consumer eye care business and SiHy Daily lenses within our contact lens business. This increase included: (i) an increase in volumes of $24 million and (ii) an increase in net pricing of $16 million, partially offset by the unfavorable impact of foreign currencies of $4 million, primarily in Latin America.

Previous wording

The Pharmaceuticals segment revenue was $310 million and $194 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $116 million, or 60%. The increase was primarily driven by: (i) the XIIDRA Acquisition and (ii) the launch of MIEBO® in September 2023. This increase included: (i) incremental sales from the XIIDRA Acquisition of $89 million and (ii) an increase in volumes of $34 million, partially offset by: (i) the unfavorable effect of foreign currencies of $3 million, (ii) a decrease in net realized pricing of $2 million and (iii) the impact of discontinuations of $2 million.

Current wording

The Pharmaceuticals segment revenue was $306 million and $174 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $132 million, or 76%. The increase was primarily driven by: (i) the XIIDRA Acquisition and (ii) the launch of MIEBO® in September 2023. This increase included: (i) incremental sales from the XIIDRA Acquisition of $92 million and (ii) an increase in volumes of $44 million, partially offset by: (i) the impact of discontinuations of $3 million and (ii) a decrease in net realized pricing of $1 million.

Previous wording

The Surgical segment revenue was $209 million and $195 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $14 million, or 7%. The increase was primarily driven by: (i) increased system sales, (ii) increased demand of consumables and (iii) increased demand of implantables, driven by our premium IOL portfolio. This increase included: (i) an increase in volumes of $12 million and (ii) an increase in net realized pricing of $6 million, partially offset by the unfavorable effect of foreign currencies of $4 million.

Current wording

The Surgical segment revenue was $206 million and $185 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $21 million, or 11%. The increase was primarily driven by: (i) increased demand of consumables, (ii) increased system sales and (iii) increased demand of implantables, driven by our premium IOL portfolio. This increase included: (i) an increase in volumes of $13 million, (ii) an increase in net realized pricing of $5 million and (iii) incremental sales from acquisitions of $4 million, partially offset by the unfavorable effect of foreign currencies of $1 million.

Previous wording

Cash discounts and allowances, returns, rebates, chargebacks and distribution fees as a percentage of gross product sales were 35.4% and 29.1% for the three months ended June 30, 2024 and 2023, respectively, an increase of 6.3% percentage points, and is primarily attributable to the increase in rebates, primarily as a result of XIIDRA®and MIEBO®.

Current wording

Cash discounts and allowances, returns, rebates, chargebacks and distribution fees as a percentage of gross product sales were 35.7% and 28.0% for the three months ended September 30, 2024 and 2023, respectively, an increase of 7.7% percentage points, and is primarily attributable to the increase in rebates from XIIDRA®and MIEBO®.

Previous wording

Cost of goods sold was $905 million and $788 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $117 million, or 15%. The increase was primarily driven by: (i) costs of sales associated with acquisitions entered into subsequent to June 30, 2023, which includes the amortization of an interim contract and inventory step-up, and (ii) higher volumes.

Current wording

Cost of goods sold was $464 million and $391 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $73 million, or 19%. The increase was primarily driven by: (i) costs of sales associated with acquisitions entered into subsequent to September 30, 2023, which includes the amortization of inventory step-up and (ii) higher volumes.

Previous wording

Contribution (product sales revenue less cost of goods sold, exclusive of amortization and impairments of intangible assets) increased by $231 million, primarily driven by: (i) the increase in volumes, including related to the launch of MIEBO® during September 2023, (ii) contribution associated with acquisitions entered into subsequent to June 30, 2023 and (iii) the increase in net realized pricing, as previously discussed. These increases were partially offset by the unfavorable impact of foreign currencies.

Current wording

Contribution (product sales revenue less cost of goods sold, exclusive of amortization and impairments of intangible assets) increased by $115 million, primarily driven by: (i) contribution associated with acquisitions entered into subsequent to September 30, 2023, (ii) the increase in volumes, including related to the launch of MIEBO® during September 2023 and (iii) the increase in net realized pricing, as previously discussed.

Previous wording

Cost of goods sold as a percentage of Product sales was 39.7% and 40.4% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Cost of goods sold as a percentage of Product sales was 38.9% and 38.9% for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

SG&A expenses were $535 million and $417 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $118 million, or 28%. The increase was primarily attributable to: (i) higher selling and advertising and promotion costs, primarily attributable to XIIDRA® and the launch of MIEBO® and (ii) higher professional fees.

Current wording

SG&A expenses were $511 million and $418 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $93 million, or 22%. The increase was primarily attributable to higher selling and advertising and promotion costs, primarily attributable to XIIDRA® and the launch of MIEBO®.

Previous wording

R&D expenses were $84 million and $85 million for the three months ended June 30, 2024 and 2023, respectively, a decrease of $1 million, or 1%.

Current wording

R&D expenses were $84 million and $82 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $2 million, or 2%.

Previous wording

Amortization of Intangible assets was $148 million and $113 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $35 million, or 31%, primarily due to assets acquired through acquisitions, as previously discussed, partially offset by fully amortized intangible assets no longer being amortized in 2024.

Current wording

Amortization of Intangible assets was $72 million and $47 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $25 million, or 53%, primarily due to assets acquired through acquisitions, as previously discussed.

Previous wording

Operating income was $26 million and $43 million for the three months ended June 30, 2024 and 2023, respectively, a decrease of $17 million. This decrease primarily reflects the increases in SG&A and amortization expense, partially offset by the increase in contribution, each as previously discussed.

Current wording

Operating income was $43 million and $40 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $3 million. This increase primarily reflects the increase in contribution, partially offset by increases in SG&A and amortization expense, each as previously discussed.

Previous wording

The Vision Care segment profit was $370 million and $321 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $49 million, or 15%. The increase was primarily driven by increased contribution, driven by: (i) the increases in volume and pricing, as previously discussed and (ii) higher manufacturing efficiency ramp-up costs of our Daily SiHy lenses during the six months ended June 30, 2023. The increase in contribution was partially offset by higher advertising and promotional expenses in our consumer eye care business driven by Lumify®, Blink® OTC product line, acquired in July 2023 and Blink TMNutriTears®, which began launching in June 2024.

Current wording

The Vision Care segment profit was $201 million and $182 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $19 million, or 10%. The increase was primarily driven by: (i) increased contribution, driven by the increases in volume and pricing, as previously discussed and (ii) lower R&D expense to strategically position our portfolio within our consumer eye care business. The increase in contribution was partially offset by higher advertising and promotional expenses in our consumer eye care business driven by the Blink® OTC product line, acquired in July 2023.

Previous wording

The Pharmaceuticals segment profit was $78 million and $68 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $10 million, or 15%. The increase was primarily driven by increased contribution, primarily driven by XIIDRA®and MIEBO®, partially offset by selling and advertising and promotional expenses related to XIIDRA® and MIEBO®.

Current wording

The Pharmaceuticals segment profit was $69 million and $53 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $16 million, or 30%. The increase was primarily driven by increased contribution, primarily driven by XIIDRA®and MIEBO®, partially offset by selling and advertising and promotional expenses related to MIEBO® and XIIDRA®.

Previous wording

The Surgical segment profit was $4 million and $9 million for the three months ended June 30, 2024 and 2023, respectively, a decrease of $5 million, or 56%, primarily due to the increase in revenues being more than offset by: (i) higher cost of sales and (ii) higher selling expenses.

Current wording

The Surgical segment profit was $13 million and $9 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $4 million, or 44%, primarily due to the increase in revenues, partially offset by higher cost of sales and higher selling expenses.

Previous wording

Interest expense was$102 million and$58 million for the three months ended June 30, 2024 and 2023, respectively, an increase of$44 million. The increase is primarily attributable to: (i) interest expense associated with our October 2028 Secured Notes and September 2028 Term Facility (each as defined and discussed in further detail, under Item “— Liquidity and Capital Resources — Liquidity and Debt — Long-term Debt”) and (ii) interest expense related to the outstanding balance under our Revolving Credit Facility (as defined and discussed in further detail, under Item “— Liquidity and Capital Resources — Liquidity and Debt — Long-term Debt”). See Note 10, “FINANCING ARRANGEMENTS” to our unaudited interim Condensed Consolidated Financial Statements for further details regarding the October 2028 Secured Notes, September 2028 Term Facility and the Revolving Credit Facility.

Current wording

Interest expense was$100 million and$76 million for the three months ended September 30, 2024 and 2023, respectively, an increase of$24 million. The increase is primarily attributable to interest expense associated with our October 2028 Secured Notes and September 2028 Term Facility (each as defined and discussed in further detail, under Item “— Liquidity and Capital Resources — Liquidity and Debt — Long-term Debt”), partially offset by certain upfront financing commitment costs incurred in connection with the XIIDRA Acquisition during the prior period. See Note 10, “FINANCING ARRANGEMENTS” to our unaudited interim Condensed Consolidated Financial Statements for further details regarding the October 2028 Secured Notes and September 2028 Term Facility.

Previous wording

Foreign exchange and other primarily includes translation gains/losses on intercompany balances and third-party liabilities and the gain/loss due to the change in fair value of foreign currency exchange contracts. Foreign exchange and other was a net loss of$3 million and $9 million for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Foreign exchange and other primarily includes translation gains/losses on intercompany balances and third-party liabilities and the gain/loss due to the change in fair value of foreign currency exchange contracts. Foreign exchange and other was a net loss of$5 million and $3 million for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Provision for income taxes were $72 million and $10 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $62 million. The increase in income taxes was primarily related to: (i) a change in the jurisdictional mix of earnings and (ii) discrete tax effects of: (a) a reduction of certain tax attributes recorded in the previous year, (b) the filings of certain tax returns and (c) a change in the deduction for stock compensation.

Current wording

Benefit from income taxes was $66 million for the three months ended September 30, 2024, as compared to a provision for income taxes of $45 million for the three months ended September 30, 2023, a favorable change of $111 million. The change in income taxes was primarily related to: (i) a change in the jurisdictional and seasonal mix of earnings and (ii) discrete tax effects of: (a) a reduction of certain tax attributes recorded in the previous year and (b) the filings of certain tax returns.

Previous wording

Net loss attributable to Bausch + Lomb Corporation was $151 million and $32 million for the three months ended June 30, 2024 and 2023, respectively, a decrease in our results of $119 million and was primarily due to: (i) the increase in the provision for income taxes of $62 million, (ii) the increase in interest expense of $44 million and (iii) the decrease in our operating results of $17 million, each as previously discussed.

Current wording

Net income attributable to Bausch + Lomb Corporation was $4 million for the three months ended September 30, 2024, as compared to a net loss attributable to Bausch + Lomb Corporation of $84 million for the three months ended September 30, 2023, an increase in our results of $88 million and was primarily due to: (i) the decrease in the provision for income taxes of $111 million and (ii) the increase in our operating results of $3 million, partially offset by the increase in interest expense of $24 million, each as previously discussed.

Previous wording

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

Current wording

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

Previous wording

Our revenues were $2,315 million and $1,966 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $349 million, or 18%. The increase was attributable to: (i) incremental sales attributable to acquisitions of $192 million, primarily within our Pharmaceuticals segment, (ii) increased volumes of $145 million across each of our segments and (iii) increased net realized pricing of $63 million, primarily driven by our Vision Care segment. The increases in revenue were partially offset by: (i) the unfavorable impact of foreign currencies of $47 million, primarily in Asia, and (ii) the impact of divestitures and discontinuations of $4 million, particularly the discontinuation of certain products within our Pharmaceuticals and Vision Care segments.

Current wording

Our revenues were $3,511 million and $2,973 million for the nine months ended September 30, 2024 and 2023, respectively, an increase of $538 million, or 18%. The increase was attributable to: (i) incremental sales attributable to acquisitions of $288 million, primarily within our Pharmaceuticals segment, (ii) increased volumes of $226 million across each of our segments and (iii) increased net realized pricing of $83 million, primarily driven by our Vision Care segment. The increase in revenues were partially offset by: (i) the unfavorable impact of foreign currencies of $52 million, primarily in Asia and Latin America and (ii) the impact of divestitures and discontinuations of $7 million, particularly the discontinuation of certain products within our Pharmaceuticals and Vision Care segments.

Previous wording

The following table presents segment revenues, segment revenues as a percentage of total revenues and the period-over-period changes in segment revenues for the six months ended June 30, 2024 and 2023.

Current wording

The following table presents segment revenues, segment revenues as a percentage of total revenues and the period-over-period changes in segment revenues for the nine months ended September 30, 2024 and 2023.