•The Diversified Products segment consists of sales in the U.S. of: (i) pharmaceutical products in the areas of neurology and certain other therapeutic classes, (ii) generic products, (iii) Ortho Dermatologics (dermatological) products and (iv) dentistry products.

•The Solta Medical segment consists of global sales of Solta aesthetic medical devices.

•The Bausch + Lomb segment consists of global sales of Bausch + Lomb Vision Care, Surgical and Ophthalmic Pharmaceuticals products.

Separation of the Bausch + Lomb Eye Health Business

The B+L Separation will establish two separate, independent companies:

•Bausch + Lomb - a fully integrated, "pure play" eye health company built on the iconic Bausch + Lomb brand and long history of innovation; and

Setting Up Our Company to Unlock Value

To position ourselves to unlock the value we see in our individual businesses, we have sought to right-size our portfolio of assets and provide financial flexibility. The Company has focused on the following growth drivers, that remain a focus of our growth strategies today:

•made strategic investments in our core businesses in order to support recent revenue growth and prepare for additional growth opportunities we plan to capitalize on for our core businesses;

Divest Assets to Improve Our Capital Structure and Simplify Our Business

Direct Capital Allocation to Drive Growth Within Our Core Businesses

We search for new product opportunities through internal development and strategic licensing agreements, that, if successful, will allow us to leverage our commercial footprint, particularly our sales force, and supplement our existing product portfolio and address specific unmet needs in the market.

•Rifaximin - Development of a fit for purpose Patient Reported Outcomes tool for small intestinal bacterial overgrowth, or "SIBO", is continuing in 2022.

•Amiselimod (S1P modulator) - We commenced a Phase 2 study during the first half of 2021 to evaluate Amiselimod (S1P modulator) for the treatment of mild to moderate ulcerative colitis.

•Internal Development Project ("IDP") 120 - An acne product with a fixed combination of mutually incompatible ingredients: benzoyl peroxide and tretinoin. Phase 3 clinical studies have been completed and met the primary endpoints. We are currently evaluating next steps for this project.

will help eye care professionals provide a better lens wearing experience for their patients with challenging vision needs.

To supplement our internal R&D initiatives and to build-out and refresh our product portfolio, we also search for opportunities to augment our pipeline through arrangements that allow us to gain access to unique products and investigational treatments, by strategically aligning ourselves with other innovative product solutions.

Strategic Investments in our Infrastructure

In support of our core businesses, we have and continue to make strategic investments in our infrastructure, the most significant of which are at our Waterford facility in Ireland, our Rochester facility in New York and our Lynchburg facility in Virginia, both of which support our Bausch + Lomb business.

production of other well-established contact lenses, such as our PureVision®, PureVision®2 (SVS, Toric, and Multifocal), SofLens® 38 and SilSoft®.

Effectively Managing Our Capital Structure

Debt Repayments and Other Financing Transactions

•On February 10, 2022, the Company issued $1,000 million aggregate principal amount of 6.125% Senior Secured Notes due February 2027 (the "February 2027 Secured Notes").

We believe these transactions bring us closer to meeting our commitment to properly capitalize the two entities post-separation while improving our overall capitalization and leverage.

Continue to Manage our Capital Structure

Improving patient access to our products, as well as making them more affordable, is a key element of our business strategy.

Invest in Sustainable Growth Drivers to Position us for Long-Term Growth

We believe our recent product launches, licensing arrangements and the investments in our Waterford, Rochester and Lynchburg facilities demonstrate the growth potential we see in our Bausch + Lomb products and our eye health business and that these investments will position us to further extend our market share in the eye health market.

In addition to the actions previously outlined, the events described below have affected and may affect our business trends. The matters discussed in this section contain forward-looking statements. Please see "Forward-Looking Statements" at the end of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information.

and currencies, (v) disruption in banking systems and capital markets, (vi) reductions in sales and earnings of business in affected areas, (vii) increased costs and (viii) cyberattacks.

In April 2021, U.S. President Joseph Biden proposed changes to the U.S. tax system. Since that date, both houses of Congress have released their own proposals for changes to the U.S. tax system, which differ in a number of respects from the

Global Minimum Corporate Tax Rate

In March 2021, the U.S. Congress enacted the American Rescue Plan Act of 2021. One of the provisions included within the American Rescue Plan Act of 2021 eliminated the Maximum Rebate Amount for Single Source drugs and Innovator Multiple Source drugs in the Medicaid Drug Rebate Program. We are currently reviewing this legislation, the impact of which is uncertain at this time.

Generic Competition and Loss of Exclusivity

Generic Competition to Uceris® - In July 2018, a generic competitor launched a product which will directly compete with our Uceris® Tablet product. As disclosed in our prior filings, the Company initiated various infringement proceedings

See Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC and the CSA on February 23, 2022, for additional information on our competition risks.

The following table provides selected unaudited financial information for the three and six months ended June 30, 2022 and 2021:

Summary of the Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

•a decrease in Amortization of intangible assets of $58 million primarily attributable to fully amortized intangible assets no longer being amortized in 2022;

•a favorable change in Other expense, net of $542 million, primarily attributable to higher adjustments related to the settlements of certain litigation matters during the three months ended June 30, 2021.

Summary of the Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Operating income for the six months ended June 30, 2022 was $446 million and operating loss for the six months ended June 30, 2021 was $491 million, an increase in our operating results of $937 million and reflects, among other factors:

•a decrease in Goodwill impairments of $386 million. Goodwill impairments associated with our Ortho Dermatologics reporting unit were $83 million and $469 million for the six months ended June 30, 2022 and 2021, respectively;

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

The changes in our segment revenues and segment profits for the three months ended June 30, 2022, are discussed in further detail in the respective subsequent section " - Reportable Segment Revenues and Profits".

Cash Discounts and Allowances, Chargebacks and Distribution Fees

Cost of Goods Sold (excluding amortization and impairments of intangible assets)

Selling, General and Administrative Expenses

Amortization of intangible assets was $302 million and $360 million for the three months ended June 30, 2022 and 2021, respectively, a decrease of $58 million. The decrease was primarily attributable to fully amortized intangible assets no longer being amortized in 2022.

•may result in shortened useful lives of the Xifaxan® intangible assets, which would increase amortization expense in future periods.

See Note 8, "INTANGIBLE ASSETS AND GOODWILL" to our unaudited interim Consolidated Financial Statements for further details related to our intangible assets.

Goodwill impairments were $83 million and $0 for the three months ended June 30, 2022 and 2021, respectively, an increase of $83 million.

The Company continues to monitor the market conditions impacting the Ortho Dermatologics reporting unit. During the three months ended June 30, 2022, increases in interest rates and, to a lesser extent, higher than expected inflation in the U.S. and other macroeconomic factors impacted key assumptions used to value the Ortho Dermatologics reporting unit at

See Note 8, "INTANGIBLE ASSETS AND GOODWILL" to our unaudited interim Consolidated Financial Statements for further details related to our goodwill.

Asset Impairments, Including Loss on Assets Held for Sale

See Note 8, "INTANGIBLE ASSETS AND GOODWILL" to our unaudited interim Consolidated Financial Statements for further details related to our intangible assets.

Restructuring, Integration, Separation and IPO Costs

Restructuring, integration separation and IPO costs were $35 million and $9 million for the three months ended June 30, 2022 and 2021, respectively, an increase of $26 million.

See Note 5, "RESTRUCTURING, INTEGRATION, SEPARATION AND IPO COSTS" to our unaudited interim Consolidated Financial Statements for further details regarding these actions.

See Note 10, "FINANCING ARRANGEMENTS" to our unaudited interim Consolidated Financial Statements for further details.

Gain (Loss) on Extinguishment of Debt

See Note 10, "FINANCING ARRANGEMENTS" to our unaudited interim Consolidated Financial Statements for further details.

See Note 16, "INCOME TAXES" to our unaudited interim Consolidated Financial Statements for further details.

Reportable Segment Revenues and Profits

The following is a brief description of the Company's segments:

•The Diversified Products segment consists of sales in the U.S. of: (i) pharmaceutical products in the areas of neurology and certain other therapeutic classes, (ii) generic products, (iii) Ortho Dermatologics (dermatological) products and (iv) dentistry products.

•The Solta Medical segment consists of global sales of Solta aesthetic medical devices.

•The Bausch + Lomb segment consists of global sales of Bausch + Lomb Vision Care, Surgical and Ophthalmic Pharmaceuticals products.

Organic Revenues and Organic Growth Rates (non-GAAP)

The adjustments to GAAP Revenue and changes in GAAP revenue to determine Organic Revenue (non-GAAP) and changes in Organic Revenue (non-GAAP) are as follows:

The following table presents a reconciliation of GAAP revenues to organic revenues (non-GAAP) and the period-over-period changes in organic revenue (non-GAAP) for the three months ended June 30, 2022 and 2021 by segment.

The Diversified Products segment profit for the three months ended June 30, 2022 and 2021 was $141 million and $162 million, respectively, a decrease of $21 million, or 13%. The decrease was primarily driven by the decrease in contribution primarily attributable to the net decrease in revenues, as previously discussed, partially offset by lower general and administrative expenses, primarily due to lower litigation costs.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

The changes in our segment revenues and segment profits for the six months ended June 30, 2022, are discussed in further detail in the respective subsequent section " - Reportable Segment Revenues and Profits".

Cash Discounts and Allowances, Chargebacks and Distribution Fees

Provisions recorded to reduce gross product sales to net product sales and revenues for the six months ended June 30, 2022 and 2021 were as follows:

•distribution service fees as a percentage of gross product sales were unchanged. Price appreciation credits are offset against the distribution service fees when due to wholesalers. Price appreciation credits were $0 and $1 million for the six months ended June 30, 2022 and 2021, respectively.

Cost of Goods Sold (excluding amortization and impairments of intangible assets)

Selling, General and Administrative Expenses

•may result in shortened useful lives of the Xifaxan® intangible assets, which would increase amortization expense in future periods.

See Note 8, "INTANGIBLE ASSETS AND GOODWILL" to our unaudited interim Consolidated Financial Statements for further details related to our intangible assets.

Goodwill impairments were $83 million for the six months ended June 2022, related to our Ortho Dermatologics unit as previously discussed, and for the six months ended June 30, 2021 were $469 million.

See Note 8, "INTANGIBLE ASSETS AND GOODWILL" to our unaudited interim Consolidated Financial Statements for further details related to our goodwill.

Asset Impairments, Including Loss on Assets Held for Sale

See Note 8, "INTANGIBLE ASSETS AND GOODWILL" to our unaudited interim Consolidated Financial Statements for further details related to our intangible assets.

Restructuring, Integration, Separation and IPO Costs

Restructuring, integration, separation and IPO costs were $48 million and $21 million for the six months ended June 30, 2022 and 2021, respectively, an increase of $27 million.

Separation and IPO costs were $23 million and $15 million for the six months ended June 30, 2022 and 2021, respectively. The extent and timing of future charges of these costs to complete the B+L Separation cannot be reasonably estimated at this time and could be material.

See Note 5, "RESTRUCTURING, INTEGRATION, SEPARATION AND IPO COSTS" to our unaudited interim Consolidated Financial Statements for further details regarding these actions.

Gain (Loss) on Extinguishment of Debt

See Note 10, "FINANCING ARRANGEMENTS" to our unaudited interim Consolidated Financial Statements for further details.

See Note 16, "INCOME TAXES" to our unaudited interim Consolidated Financial Statements for further details.

Reportable Segment Revenues and Profits

The Diversified Products segment profit for the six months ended June 30, 2022 and 2021 was $299 million and $362 million, respectively, a decrease of $63 million, or 17% and was primarily driven by the decrease in revenues, as previously discussed.

Adjustments to reconcile net loss to net cash provided by operating activities

Cash provided by operating activities before changes in operating assets and liabilities

Effect of exchange rate on cash and cash equivalents and other

Net increase in cash, cash equivalents, restricted cash and other settlement deposits

Net cash used in investing activities was $114 million for the six months ended June 30, 2022 and was primarily driven by Purchases of property, plant and equipment of $98 million.

See Note 10, "FINANCING ARRANGEMENTS" to our unaudited interim Consolidated Financial Statements for additional information regarding the financing activities described above.

The Company regularly evaluates market conditions, its liquidity profile, and various financing alternatives for opportunities to enhance its capital structure. If opportunities are favorable, the Company may refinance or repurchase existing debt or issue equity or equity-linked securities.

Senior Secured Credit Facilities under the 2018 Restated Credit Agreement

Senior Secured Credit Facilities under the 2022 Amended Credit Agreement

Senior Secured Credit Facilities under the B+L Credit Agreement

The amortization rate for the B+L Term Facility is 1.00% per annum, or $25 million, payable in quarterly installments beginning on September 30, 2022. Bausch + Lomb may direct that prepayments be applied to such amortization payments in order of maturity. As of June 30, 2022, the remaining mandatory quarterly amortization payments for the B+L Term Facility were $119 million through March 2027.

structurally subordinated to: (i) all liabilities of any of the Company's subsidiaries that do not guarantee the Senior Secured Notes and (ii) any of the Company's debt that is secured by assets that are not collateral.

Availability Under Revolving Credit Facilities

As of the date of this filing, August 9, 2022, there were $550 million of outstanding borrowings, $40 million of issued and outstanding letters of credit and approximately $385 million of remaining availability under the 2027 Revolving Credit Facility.

The weighted average stated rate of interest of the Company's outstanding debt as of June 30, 2022 and December 31, 2021 was 6.34% and 5.88%, respectively.

See Note 10, "FINANCING ARRANGEMENTS" to our unaudited interim Consolidated Financial Statements for further details.

Focus on Capitalization of the Post-separation Entities

On May 31, 2022, S&P's downgraded all of its credit ratings 1-notch and affirmed its negative outlook.

Any downgrade in our corporate credit ratings or other credit ratings may increase our cost of borrowing and may negatively impact our ability to raise additional debt capital.

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

In addition to our working capital requirements, as of June 30, 2022, we expect our primary cash requirements during the remainder of 2022 to include:

•IT Infrastructure Investment-We expect to make payments of approximately $20 million for licensing, maintenance and capitalizable costs associated with our IT infrastructure improvement projects during the remainder of 2022;

•Capital expenditures-We expect to make payments of approximately $180 million for property, plant and equipment during the remainder of 2022;

•Benefit obligations-We expect to make aggregate payments under our pension and postretirement obligations of $6 million during the remainder of 2022; and

Future Costs of B+L Separation

There have been no other material changes to the contractual obligations disclosed in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Off-Balance Sheet Arrangements and Contractual Obligations" included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC and the CSA on February 23, 2022.

Our common shares trade on the New York Stock Exchange and the Toronto Stock Exchange under the symbol "BHC".

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

•actions by the FDA or other regulatory authorities with respect to our products or facilities;

•compliance with the legal and regulatory requirements of our marketed products;

•our ability or inability to extend the profitable life of our products, including through line extensions and other life-cycle programs;

•our ability to retain, motivate and recruit directors, executives and other key employees;

•our ability to implement effective succession planning for our executives and key employees;

•factors impacting our ability to achieve anticipated market acceptance for our products, including acceptance of the pricing, effectiveness of promotional efforts, reputation of our products and launch of competing products;

•the challenges and difficulties associated with managing a large complex business, which has, in the past, grown rapidly;

•the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price and sales of our products in connection therewith;

•the consolidation of wholesalers, retail drug chains and other customer groups and the impact of such industry consolidation on our business;

•our ability to maintain strong relationships with physicians and other healthcare professionals;

•our eligibility for benefits under tax treaties and the availability of low effective tax rates for the business profits of certain of our subsidiaries;

•the implementation of the Organisation for Economic Co-operation and Development Inclusive Framework on Base Erosion and Profit Shifting, including the global minimum corporate tax rate, by the countries in which we operate;

•the outcome of any audits by taxation authorities, which outcomes may differ from the estimates and assumptions that we may use in determining our consolidated tax provisions and accruals;

•the trade conflict between the U.S. and China;

•the impact of the United States-Mexico-Canada Agreement ("USMCA") and any potential changes to other trade agreements;

•the fact that a substantial amount of our revenues are derived from the Xifaxan® product line, and that we may be materially impacted by the entry of a generic rifaximin product earlier than January 2028;

•our ability to negotiate the terms of or obtain court approval for the settlement of certain legal and regulatory proceedings;

•the disruption of delivery of our products and the routine flow of manufactured goods;

•interest rate risks associated with our floating rate debt borrowings;

•our ability to effectively distribute our products and the effectiveness and success of our distribution arrangements;

•our ability to effectively promote our own products and those of our co-promotion partners;

•our ability to secure and maintain third-party research, development, manufacturing, licensing, marketing or distribution arrangements;

•the mandatory or voluntary recall or withdrawal of our products from the market and the costs associated therewith;

•our indemnity agreements, which may result in an obligation to indemnify or reimburse the relevant counterparty, which amounts may be material;

•the results of continuing safety and efficacy studies by industry and government agencies;

•uncertainties around the successful improvement and modification of our existing products and development of new products, which may require significant expenditures and efforts;

•the seasonality of sales of certain of our products;

•declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control;

•the impact of any changes in or reforms to the legislation, laws, rules, regulation and guidance that apply to the Company and its businesses and products or the enactment of any new or proposed legislation, laws, rules, regulations or guidance that will impact or apply to the Company or its businesses or products;

•the impact of changes in federal laws and policy that may be undertaken under the current administration;

•illegal distribution or sale of counterfeit versions of our products;

•any plans for the Company's aesthetic medical business;

•interruptions, breakdowns or breaches in our information technology systems; and

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