Third Quarter 2014
`Financial Results
`Conference Call
`
`October 20, 2014
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1618
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`Page 1 of 47
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`

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`Forward-looking Statements
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`
`
`This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian securities
`laws. These forward-looking statements include, but are not limited to, statements regarding Valeant Pharmaceuticals International, Inc.’s (“Valeant”) business
`development activities, including the timing of closing of pending transactions, clinical results and timing of development products, timing of expected product
`launches and its expected future performance (including expected results of operations, outlook and financial guidance), and Valeant’s offer to acquire
`Allergan, Inc. (“Allergan”) and the combined company’s future financial condition, operating results, strategy and plans. Forward-looking statements may be
`identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,”
`“target,” “opportunity,” “tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “seek,” “ongoing,” “upside,” “increases” or “continue” and
`variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are subject to numerous
`assumptions, risks and uncertainties that change over time and could cause actual results to differ materially from those described in the forward-looking
`statements. These assumptions, risks and uncertainties include, but are not limited to, assumptions, risks and uncertainties discussed in Valeant’s most recent
`annual and quarterly report filed with the Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”) and
`assumptions, risks and uncertainties relating to the proposed merger, as detailed from time to time in Valeant’s filings with the SEC and the CSA, which factors
`are incorporated herein by reference. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this
`communication are set forth in other reports or documents that we file from time to time with the SEC and the CSA, and include, but are not limited to:
`the ultimate outcome of any possible transaction between Valeant and Allergan including the possibilities that Valeant will not pursue a transaction with
`Allergan and that Allergan will reject a transaction with Valeant;
`if a transaction between Valeant and Allergan were to occur, the ultimate outcome and results of integrating the operations of Valeant and Allergan, the
`ultimate outcome of Valeant’s pricing and operating strategy applied to Allergan and the ultimate ability to realize synergies;
`the effects of the business combination of Valeant and Allergan, including the combined company’s future financial condition, operating results, strategy
`and plans;
`the effects of governmental regulation on our business or potential business combination transaction;
`ability to obtain regulatory approvals and meet other closing conditions to the transaction, including all necessary stockholder approvals, on a timely
`basis;
`our ability to sustain and grow revenues and cash flow from operations in our markets and to maintain and grow our customer base, the need for
`innovation and the related capital expenditures and the unpredictable economic conditions in the United States and other markets;
`the impact of competition from other market participants;
`the development and commercialization of new products;
`the availability and access, in general, of funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary
`capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets;
`our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a
`default of our other obligations under cross-default provisions; and
`the risks and uncertainties detailed by Allergan with respect to its business as described in its reports and documents filed with the SEC.
`All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement.
`Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date
`hereof. Valeant undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this
`communication or to reflect actual outcomes, expected as required by applicable law.
`
`
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`1
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`Page 2 of 47
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`More Information
`
`ADDITIONAL INFORMATION
`This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates, in part, to the
`exchange offer which Valeant has made to Allergan stockholders. The exchange offer is being made pursuant to a tender offer statement on Schedule TO
`(including the offer to exchange, the letter of election and transmittal and other related offer materials) and a registration statement on Form S-4 filed by
`Valeant with the SEC on June 18, 2014 and with the CSA, as each may be amended from time to time. These materials, as they may be further amended
`from time to time, contain important information, including the terms and conditions of the offer. In addition, Valeant has filed a preliminary proxy
`statement with the SEC on June 24, 2014, as may be amended from time to time, Pershing Square Capital Management, L.P. (“Pershing Square”) has filed
`a definitive proxy statement with the SEC on September 24, 2014, and Valeant and Pershing Square (and, if a negotiated transaction is agreed, Allergan)
`have filed or may file one or more additional proxy statements or other documents with the SEC. This communication is not a substitute for any proxy
`statement, registration statement, prospectus or other document Valeant, Pershing Square and/or Allergan may file with the SEC in connection with the
`proposed transaction. INVESTORS AND SECURITY HOLDERS OF VALEANT AND ALLERGAN ARE URGED TO READ THE TENDER OFFER STATEMENT,
`REGISTRATION STATEMENT AND ANY OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME
`AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any definitive proxy statement(s) (if and
`when available) will be mailed to stockholders of Allergan and/or Valeant, as applicable. Investors and security holders may obtain free copies of the
`tender offer statement, the registration statement and other documents (if and when available) filed with the SEC by Valeant and/or Pershing Square
`through the web site maintained by the SEC at http://www.sec.gov.
`Information regarding the names and interests in Allergan and Valeant of Valeant and persons related to Valeant who may be deemed participants in any
`solicitation of Allergan or Valeant shareholders in respect of a Valeant proposal for a business combination with Allergan is available in the additional
`definitive proxy soliciting materials in respect of Allergan filed with the SEC by Valeant on April 21, 2014, May 28, 2014 and September 25, 2014.
`Information regarding the names and interests in Allergan and Valeant of Pershing Square and persons related to Pershing Square who may be deemed
`participants in any solicitation of Allergan or Valeant shareholders in respect of a Valeant proposal for a business combination with Allergan is available
`in additional definitive proxy soliciting material in respect of Allergan filed with the SEC by Pershing Square. The additional definitive proxy soliciting
`material referred to in this paragraph can be obtained free of charge from the sources indicated above.
`Consent was not obtained nor sought with respect to third party statements referenced in this presentation.
`Non-GAAP Information
`To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), Valeant uses non-GAAP
`financial measures that exclude certain items, such as amortization of inventory step-up, amortization of alliance product assets & property, plant and
`equipment step up, stock-based compensation step-up, contingent consideration fair value adjustments, restructuring, acquisition-related and other
`costs, In-process research and development, impairments and other charges, ("IPR&D"), legal settlements outside the ordinary course of business, the
`impact of currency fluctuations, amortization including intangible asset impairments and other non-cash charges, amortization and write-down of deferred
`financing costs, debt discounts and ASC 470-20 (FSP APB 14-1) interest, loss on extinguishment of debt, (gain) loss on assets sold/held for
`sale/impairment, net, (gain) loss on investments, net, and adjusts tax expense to cash taxes. Management uses non-GAAP financial measures internally
`for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management
`intends to provide investors with a meaningful, consistent comparison of Valeant’s core operating results and trends for the periods presented. Non-
`GAAP financial measures are not prepared in accordance with GAAP. Therefore, the information is not necessarily comparable to other companies and
`should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-
`GAAP reconciliations can be found in our press tables under the Investor Relations tab on www.valeant.com.
`
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`Page 3 of 47
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`Agenda
`
`1. Third Quarter 2014 Results
`
`2. Business Highlights and Outlook
`
`3. Financial Review and Updated Guidance
`
`4. Allergan Update
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`3
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`Page 4 of 47
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`

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`Q3 2014 Results
`
`
`
`Q3 2014
`
`Q3 2013
`
`% Growth
`
`Total Revenue
`
` $2.1 B
`
` $1.5 B
`
`33%
`
`Cash EPS
`
`$2.11
`
`$1.43
`
`48%
`
`GAAP Cash Flow from Operations
`
`$619 M
`
`$202 M
`
`207%
`
`Adjusted Cash Flow from Operations
`
` $771 M
`
`$408 M
`
`89%
`
`Cash Conversion
`
`107%
`
`84%
`
`4
`
`Page 5 of 47
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`

`

`Q3 2014 Results
`
`Total revenue at high end of guidance despite FX impact of $(31M)
`Cash EPS FX Impact of $(0.04)
`
`Guidance
`Q3 2014
`
`Organic Growth – Company
`Same Store Sales
`
`Second half of year
`high single digit
`
`Organic Growth – B&L
`
`Second half of year
`double digit
`
`Results
`Q3 2014
`
`19%
`
`12%
`
`Total Revenue
`
`$1.9B - $2.1B
`
`$2.1B
`
`Cash EPS
`
`$1.90 - $2.00
`
`$2.11
`
`Adjusted Cash Flow from
`Operations
`
`Second half of year
`~$1.3B
`
`$771M
`
`Restructuring
`
`<$70M
`
`$63M
`
`5
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`Page 6 of 47
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`

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`Q3 2014 Organic Growth Including All Generic Impact
`
`Same Store Sales – YoY growth rates for businesses that have been owned for one year or more
`
`
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`
`
`Q1 2014(a)
`
`Q2 2014(a)
`
`Q3 2014
`
`YTD 2014(b)
`
`2%
`
`1%
`
`3%
`
`1%
`
`5%
`
`2%
`
`8%
`
`4%
`
`29%
`
`22%
`
`12%
`
`19%
`
`15%
`
`11%
`
`9%
`
`11%
`
`Pro Forma – YoY growth rates for entire business, including those that have been acquired within the last year
`
`
`
`Total U.S.
`
`Total Developed
`
`Total Emerging Markets
`
`Total Company
`
`Q1 2014(a)
`
`Q2 2014 (a)
`
`Q3 2014
`
`YTD 2014 (b)
`
`3%
`
`3%
`
`4%
`
`4%
`
`9%
`
`7%
`
`10%
`
`8%
`
`24%
`
`18%
`
`9%
`
`16%
`
`13%
`
`10%
`
`8%
`
`10%
`
`(a) As reported.
`(b) Excludes injectables for Q1 in YTD organic growth.
`
`6
`
`Page 7 of 47
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`

`

`Bausch + Lomb Organic Growth
`(adjusted for only FX)
`
`Country/Region
`
`United States
`
`Consumer
`
`Rx Pharma
`
`Surgical
`
`Q/Q%
`
`Q3 2014
`Product
`Sales
`
`$369M
`
`18%
`
` $104M
`
`17%
`
` $107M
`
`25%
`
` $53M
`
` 10%
`
`Contact Lens
`
` $45M
`
` 23%
`
`Generics
`Other Developed
`Markets
`Emerging Markets
`
`Total
`
` $60M
`
` $256M
`
` $217M
`
` $843M
`
` 12%
`
` 5%
`
`11%
`
`12%
`
`Since
`Ownership
`(8/5/13)
`CAGR
`12%
`
`13%
`
`9%
`
`12%
`
`14%
`
`17%
`
`5%
`
`
`13%
`
`10%
`
`7
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`Page 8 of 47
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`

`

`Q3 Organic Growth Drivers
`
`
`
`Turnaround in U.S. Dermatology performance has accelerated with the launches of
`Jublia®, LuzuTM, and RAM 0.08%
`
` Strong double digit growth in the B+L businesses globally
`
` Continued strong performance in Emerging Markets (12% organic growth), despite
`geopolitical uncertainties
`
`
` At or above our forecasted growth in most of our other businesses
` U.S. Dentistry – driven by expanded sales force
`
` U.S. Neuro/Generics – growth in Xenazine, Wellbutrin XL, and orphan products and
`the impact of competitive stock outs on certain generic products
`
` Obagi – driven by improved sales force effectiveness
`
`
` More growth from volume than price for total company
`
`
`8
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`Page 9 of 47
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`

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`Q3 2014 Top 20 Global Brands (1/3)
`
`Top 20 products YTD revenue of $1.8B, representing 31% of total revenue
`
`Top 20 products grew 32% Q3 2014 over Q3 2013 and 16% YTD
`
` All 20 products grew in Q3 2014 over Q3 2013
`
`~50% of Q3 growth from volume for top 20 products
`
`Top 20 products demonstrate diversification
`
` Largest product contributed ~3.5% of Q3 2014 revenue
`
` Top 10 products contributed 22% of Q3 2014 revenue
`
` Mix of products includes Rx, OTC and devices (solutions)
`
` 
`
`
`
`
`
`
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`
`
`Jublia® was 28th largest product in Q3 2014, anticipated to be in top 20 products in Q4
`
`
`
`9
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`Page 10 of 47
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`

`

`Q3 2014 Top 20 Global Brands (2/3)
`($ in M)
`
`
`
`Product
`
`Q3 2014
`Revenue
`
` Primary Growth Driver 2014 YTD
`Revenue
`
`1) Wellbutrin®
`
`2) Ocuvite®/PreserVision®
`
`3) Xenazine® US
`
`4) Solodyn®
`
`5) Targretin® Capsules
`
`6) ReNu Multiplus®
`
`7)
`
`Lotemax® Franchise
`
`8) Arestin®
`
`9) Retin-A® Franchise
`
`10) BioTrue® Solution
`
`$72
`
`$62
`
`$56
`
`$54
`
`$44
`
`$41
`
`$35
`
`$30
`
`$30
`
`$26
`
`Volume
`
`Volume
`
`Volume
`
`Volume
`
`$195
`
`$188
`
`$160
`
`$148
`
`Price + Volume
`
`$88
`
`Volume
`
`Price
`
`Price
`
`Volume
`
`Volume
`
`$145
`
`$106
`
`$75
`
`$68
`
`$77
`
`10
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`Page 11 of 47
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`

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`Q3 2014 Top 20 Global Brands (3/3)
`($ in M)
`
`
`
`Product
`
`Q3 2014
`Revenue
`
` Primary Growth
`Driver
`
`2014 YTD
`Revenue
`
`11) ArtelacTM
`
`12) Zovirax® Franchise
`
`13) Elidel®
`
`14) CeraVe®
`
`15) Syprine®
`
`16) Boston Solutions
`
`17) Cardizem® CD AG
`
`18) Ziana®
`
`19) Duromine®
`
`20) Prolensa®
`
`
`
`
`
`28) Jublia
`
`$25
`
`$23
`
`$22
`
`$21
`
`$20
`
`$20
`
`$18
`
`$17
`
`$17
`
`$16
`
`$12
`
`
`
`
`
`Volume
`
`Price
`
`Price + Volume
`
`Volume
`
`Price
`
`Price
`
`Volume
`
`Volume
`
`Volume
`
`Volume
`
`Volume
`
`$76
`
`$82
`
`$72
`
`$68
`
`$57
`
`$59
`
`$26
`
`$45
`
`$45
`
`$46
`
`$15
`
`
`
`11
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`Page 12 of 47
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`

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`Q3 U.S. Business Highlights (1/3)
`
` Dermatology, $273M Revenues, 33% Q/Q Growth
`
` Strong growth for promoted brands, e.g. Solodyn, Elidel, Acanya®, Zyclara®
`
` After only three months, Jublia has 7% TRx share of total onychomycosis market
`
` Luzu TRx uptake continues to accelerate with 13% share of branded topical
`antifungal market
`
` Includes PreCision since acquisition closed on July 7
`
` Consumer, $141M Revenues, 43% Q/Q Growth
`
` One of the fastest growing OTC Health Care company in the US (September
`YTD)(a)
`
` CeraVe - fastest growing (Major) skin care brand(a)
`
` PreserVision AREDS 2 - #1 selling Vitamin over last 12 weeks(a)
`
` Entire PreserVision brand grew 20% Q/Q based on consumption(a)
`
` BioTrue Multipurpose Solution - Fastest growing Lens Care brand(a)
`
`
`
`
`(a) Source: IRI consumption data.
`
`
`
`
`12
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`Page 13 of 47
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`

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`Q3 U.S. Business Highlights (2/3)
`
`
`
` Ophthalmology Rx, $118M Revenues, 57% Q/Q Growth
`
` Strong performance of Anti-infective/Anti-viral portfolio – Besivance®, Zylet®,
`Zirgan®
`
` Continued Q/Q organic growth from Prolensa +11% and Lotemax Franchise +13%
`
`
`
` Contact Lenses, $45M Revenues, 82% Q/Q Growth
`
` Fastest growing contact lens business – market share expanded from 7% to over
`10% since B+L acquisition(a)
`
` BioTrue ONEday and PureVision® 2 for Presbyopia exceeding expectations and
`capturing market share; current growth doesn’t reflect upside in Bausch + Lomb
`Ultra ® given limited distribution (less than $5M of revenues in Q3 2014)
`
`
`
`
`
`
`
`
`
`(a) Source: Independent third party data.
`
`
`
`
`13
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`Page 14 of 47
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`

`

`Q3 U.S. Business Highlights (3/3)
`
` Surgical, $54M Revenues, 74% Q/Q Growth
` Greater than 55% growth for the cataract refractive lens business
`
` Greater than 40% growth for Stellaris® and Stellaris PC
`
` Number two player in the Posterior Chamber IOL market(a)
`
` 28 Victus® machines expected to be installed in 2014 in the U.S., compared with 14 installed in
`2013
`
`
`
` Neuro & Other/Generics, $392M Revenues, 40% Q/Q Growth
` Neuro growth driven by promoted brands – Xenazine, Wellbutrin XL® and Syprine/Cuprimine®
`
` Continued growth of generics through portfolio expansion and due to competitor stock outs
`
`
`
` Dental, $32M Revenues, 20% Q/Q Growth
` Growth driven by new customers and strong early performance of launch products (e.g. Onset)
`
`
`
`
` Aesthetics, $32M Revenues(b)
` Improved sales force effectiveness resulted in 21% Q/Q organic growth for Obagi
`
`
`
`(a) Source: Market Scope, an ophthalmic market research firm, based on data as of Q2 2014.
`(b) No injectables revenues in Q3 2014.
`
`14
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`Page 15 of 47
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`

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`Q3 Rest of World Business Highlights
`
` Emerging Markets-Europe/Middle East, $279M Revenues, 36% Q/Q Growth
` Strong performance across all regions even with significant FX headwinds
`
` FX impacts on European Emerging Markets ~ $(18M) Revenues (relative to 7/31 Guidance)
`
` Q/Q organic growth in Russia, Ukraine and CIS of ~20%
`
`
`
` Emerging Markets-Asia/Africa, $155M Revenues, 66% Q/Q Growth
` China organic growth of 11% driven primarily by lens franchise
`
` iNova South-East Asia business organic growth of 18% Q/Q
`
`
`
` Emerging Markets-Latin America, $114M Revenues, 13% Q/Q Growth
` Strong performance in Mexico of 12% organic growth, following resolution of supply issues
`
` Brazil and Argentina impacted by economic slowdown and import restrictions in Argentina
`
` Export business negatively impacted by capital controls in Venezuela
`
`
`
` ROW Developed, $421M Revenues, 29% Q/Q Growth
` Australian organic growth of 15% due to strong cough & cold season
`
` Japanese lens care is gaining market share
`
` Continued mid-single digit organic growth in Western Europe
`
` Offset by a decline in Canada largely due to genericization of Wellbutrin® XL and FX impact
`
`
`
`
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`
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`15
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`Page 16 of 47
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`

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`JUBLIA Growth Accelerating by Comprehensive
`Campaign
`
`U.S. Weekly TRx Volume
`5,831 TRxs/week
`
`Canada Monthly TRx Volume
`5,462 TRxs/month
`
`Source: Wolters Kluwer Pharmaceutical + Specialty Pharmacy Data week ending 10/10.
`
`Source: IMS Compuscript for month ending 9/30.
`
`
`Total Prescriptions (TRx)
`
`16
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`Page 17 of 47
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`

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`JUBLIA Growth Accelerating by Comprehensive
`Campaign
`
` Print and digital advertising rolled out 2H Q3
` TV advertising materials recently reviewed by FDA; expected to be on air mid-Q4
` Salesforce focused on Jublia
` U.S.: ~60 person podiatry and ~90 dermatology reps; Canada: ~ 25 dermatology reps
`
` Decision to shift spend from a contracted primary care sales force to additional dermatology reps
`and consumer advertising
`Physician Campaign
`
`Physician Website
`
`Physician
`eBlast/Banners
`
`Physician Journal Ads
`
`Consumer Campaign
`
`
`
`asd
`
` Speaker Programs
` Webinars
` Medical Education
` Ad Boards
`
`Consumer Website
`
`17
`
`Consumer Banners
`
`Consumer Print
`
`Page 18 of 47
`
`

`

`Luzu TRx Volume Now Accounts for 13% of
`Branded Topical Antifungal Market
`
`Luzu Weekly TRx Volume
`
`1,335 TRxs/week
`
`Total Prescriptions (TRx)
`
`Source: Wolters Kluwer Pharmaceutical + Specialty Pharmacy Data week ending 10/10.
`
`18
`
`10/10/2014
`
`9/26/2014
`
`9/12/2014
`
`8/29/2014
`
`8/15/2014
`
`8/1/2014
`
`7/18/2014
`
`7/4/2014
`
`6/20/2014
`
`6/6/2014
`
`5/23/2014
`
`5/9/2014
`
`4/25/2014
`
`4/11/2014
`
`3/28/2014
`
` 1,600
`
` 1,400
`
` 1,200
`
` 1,000
`
` 800
`
` 600
`
` 400
`
` 200
`
` -
`
`Page 19 of 47
`
`

`

`Retin-A Micro® 0.08% Exceeded 1,400 TRx’s
`Through Week of October 10th
`
`Retin-A Micro 0.08% Weekly TRx Volume
`
`1,443 TRx/week
`
`Total Prescriptions (TRx)
`
`Source: Wolters Kluwer Pharmaceutical + Specialty Pharmacy Data week ending 10/10.
`
`19
`
`Page 20 of 47
`
`

`

`Update on Other U.S. Product Launches
` Bausch + Lomb Ultra
` Expanding sales force by 50% to reach peak distribution
`
` Lines 1 and 2 being installed; lines 3 and 4 ordered
`
` Commercial quantities from line 1 expected Q2 2015
`
` Selling to capacity (pilot line)
`
`
`
` BioTrue ONEday – contact lens
` 2nd consecutive quarter with greater than 90% growth
`
`
`
` BioTrue Multi-purpose Solution
` Grew 56% Q/Q pro forma
`
`
`
`
`
`
`
`TrulignTM Toric IOL
` 213% Q/Q pro forma growth
` Victus
` 28 Victus machines expected to be installed in 2014, compared
`with 14 installed in 2013
` CeraVe BabyTM (Q1), Peroxiclear (Q2) ® and SootheXPTM (Q3)
` Continue to promote to and gain recommendations from
`dermatologists and eye care professionals
`
`
`
` Sales and market share building
`
`
`
`
`20
`
`Page 21 of 47
`
`

`

`Near-Term Launch/Pipeline Update (1/2)
`
`
`Product
`
`Description
`
`Adrenaline auto-injector for
`anaphylaxis
`
`Expected Launch
`Date
`
`European launch 1H
`2014; U.S. launch
`late 2016 / early
`2017
`
`Highlights
`
`• Strong start in Europe, with 20%+ market share
`in Sweden and U.K., ~6% share in Germany
`
`OnextonTM
`
`Acne
`
`January 2015
`
`• New combination acne product
`• PDUFA date of November 30, 2014
`
`VesneoTM
`
`Glaucoma
`
`2016
`
`• Positive Phase 3 results
`• NDA to be filed in 1H2015
`• Peak sales potential of ~$500M in the US and
`~$1B globally
`
`
`
`
`Next Gen 0.38%
`
`Post-Operative Inflammation
`and Pain
`
`2016
`
`• First twice-daily ophthalmic steroid
`• Positive Phase 3 results
`• 2nd Phase 3 initiated
`• NDA to be filed in 3Q2015
`
`21
`
`Page 22 of 47
`
`

`

`Near-Term Launch/Pipeline Update (2/2)
`
`
`Product
`
`Highlights
`
`Description
`
`Expected Launch
`Date
`
`Hydrating Cleansing Bar
`
`January 2015
`
`• Locks in moisture 3x longer than the leading
`cleansing bar (Dove) and 6x longer than Cetaphil
`bar
`
`SA Cleanser, Baby Cream,
`Baby Sunscreen SPF 45,
`Night Cream, Anti-Itch
`
`Various
`
`• Continues brand expansion
`
`
`Gummies
`
`Eye Health
`
`Q1 2015
`
`• Continues brand expansion
`• Gummies is the fastest growing vitamin category
`
`Brimonidine
`
`Eye Whitening
`
`2016
`
`• Recent completion of Phase 3 studies
`• Planned NDA submission Q1 2015
`
`22
`
`Page 23 of 47
`
`

`

`Continued Growth Through Business Development
`
` Acquisitions Closed since Q2 Earnings(a)
` Bescon – Asia
`
` Contact lenses, full range of modalities for both clear and color, and daily silicone
`hydrogel lenses
`
` Global opportunity
`
` PT Armoxindo Farma – Indonesia
`
` Branded generics
` Acquisitions Closed in Q4
` MedPharma – Middle East and North Africa
`
` Branded generics platform including manufacturing
`
` Zarracom – Turkey
`
` Acrylic hydrophobic IOLs
` Acquisitions signed since Q2 Earnings
` Croma – Europe
`
` Expanding existing Central and Eastern European rights to global rights; existing
`sales concentrated in Western Europe
`
` Surgical products including viscolelastics, IOLs and instruments; dry eye and anti-
`inflammatory pharmaceuticals
`
`
`(a) ~$2M revenue impact from closed deals in Q3 2014.
`
`
`
`
`
`
`23
`
`Page 24 of 47
`
`

`

`Financial Outlook
`
`Howard Schiller
`
`Page 25 of 47
`
`

`

`Financial Summary
`
`Total Revenue
`
`Cost of Goods Sold% (% of product sales)
`
`SG&A% (% of total revenue)
`R&D Expense
`
`Operating Margin (% of total revenue)
`(excluding amortization)
`Cash EPS (Reported)
`
`GAAP Cash Flow from Operations
`Adjusted Cash Flow from Operations
`
`Fully Diluted Share Count
`
`
`
` Q3 2013
`$1,542M
`
`
`Q4 2013
`$2,064M
`
`Q1 2014
`$1,886M
`
`Q2 2014
`$2,041M
`
`Q3 2014
`$2,056M
`
`
`
`
`
`
`
`27%
`
`23%
`$49M
`
`47%
`$1.43
`
`$202M
`$408M
`
`340 M
`
`26%
`
`22%
`$60M
`
`26%
`
`26%
`$61M
`
`28%
`
`25%
`$66M
`
`26%
`
`24%
`$59M
`
`
`
`
`
`
`
`
`
`
`
`49%
`$2.15
`
`$280M
`$607M
`
`341 M
`
`45%
`$1.76
`
`$484M
`$636M
`
`342 M
`
`44%
`$1.91
`
`$376M
`$500M
`
`341M
`
`47%
`$2.11
`
`$619M
`$771M
`
`341M
`
`25
`
`Page 26 of 47
`
`

`

`FX Impact on Q3/Q4 versus 7/31 Guidance
`
` Significant Q3 FX headwinds - Revenue: $(31)M; Cash EPS: $(0.04)
`
`Q4 impact
` Revenue: ~$(53)M
`•
`• Cash EPS: ~$(0.06)
`(assuming current rates)
`
`(a) Order is based on actual financial impact versus outlook as of July 31, 2014.
`
`26
`
`Currency(a)
`
`Russian Ruble
`
`Euro
`
`Polish Zloty
`
`Canadian Dollar
`
`Japanese Yen
`
`Brazilian Real
`
`Serbian Dinar
`
`Australian Dollar
`
`Mexican Peso
`
`British Pound
`
`South African Rand
`
`Argentine Peso
`
`Indian Rupee
`
`Hungarian Forint
`
`10/15/14
` Spot % Change vs. 7/31/14
`(14.6)%
`
`(4.4)%
`
`(6.2)%
`
`(3.6)%
`
`(3.0)%
`
`(9.5)%
`
`(6.4)%
`
`(6.2)%
`
`(3.5)%
`
`(5.8)%
`
`(4.5)%
`
`(3.6)%
`
`(1.9)%
`
`(3.4)%
`
`Page 27 of 47
`
`

`

`Restructuring and Integration Update
`
`
`
`Q1 15
`Q2 14 Q3 14 Q4 14
`Estimate Estimate
`
`Restructuring / Integration Expense $143M $63M
`
`< $50M
`
` < $25M
`
` B+L Restructuring and Integration charges were $36M for the quarter, down from $53M
`in Q2
`
` Restructuring and Integration charges for deals completed in Q3 (PT Armoxindo Farma,
`Bescon) were ~$3M for the quarter
`
`
`
` Due to uncertain timing of close, these expenses were not included in restructuring
`expense estimate presented on 7/31
`
`
` Restructuring and Integration charges expected to further decline in Q4 to less than
`$50M Q4 14 and less than $25M in Q1 15, assuming no additional deals
`
`
`
`
`
`
`
`
`
`27
`
`Page 28 of 47
`
`

`

`Cash Flow from Operations
`
`
`
`Adjusted Net Income
`
`Q1 14 Q2 14 Q3 14
`YTD
` 600 651 719 1,969
`
` GAAP Cash Flow from Operations
`
` 484 376 619 1,479
`
`Adjusted Cash Flow from Operations
`
` 636 500 771 1,907
`
`Cash Conversion
`
`106%
`
`77%
`
`107%
`
`97%
`
`
`
`Investment in Working Capital
`
` 43 166 <10
`
` ~219
`
`Guided to cash conversion of 90%
`
`28
`
`Page 29 of 47
`
`

`

`Balance Sheet
`
`
`
` Significant deleveraging in Q3
`
` $1.1B Term Loan repaid in Q3 resulting in $16.3B debt outstanding
`
` Net leverage ratio reduced to ~4.0 times adjusted pro forma EBITDA
`
` In addition, on October 15, redeemed $500M 6.75% senior notes due 2017
`
`
`
` Accounts Receivable DSO have declined each quarter in 2014 (calculated using gross
`sales):
`
` Q1 2014: 72 Days
`
` Q2 2014: 66 Days
`
` Q3 2014: 64 Days
`
` Today and going forward, we will be disclosing gross sales to allow you to do this
`calculation
`
` Due to changes in product mix and higher gross sales, accounts receivable increased by
`$109M with an offsetting increase in accrued liabilities of ~$90M related to rebates,
`returns and allowances
`
` Net increase of ~$20M in receivables in Q3 vs. Q2 2014 against $30M increase in net sales
`
` U.S. Rx wholesale inventory levels flat on a unit basis and down on a dollar basis vs. Q2
`2014
`29
`
`
`
`Page 30 of 47
`
`

`

`B+L One Year Anniversary Update – Blueprint for Allergan
`
` Accelerated organic growth from <5% pre acquisition to 10% since acquisition (adjusted
`only for FX)
` Continued strength of pharma
`
` Turnaround for lens and surgical
`
` Increased scale of combined Valeant and B+L consumer business has accelerated growth
`
` Benefit from Valeant’s decentralized approach
`
` Valeant’s emerging market capabilities have accelerated B+L’s emerging market growth
`
`
`
` Successful recent product launches; limited contribution to date, will be growth drivers in
`future
` Bausch + Lomb Ultra
`
` Victus
`
` BioTrue ONEday for Presbyopia
`
` Trulign
`
` PureVision 2 for Presbyopia
`
` enVista BLIS™ lens inserter
`
`
`
`
`
` Peroxiclear
` Soothe XP
`
` On track to achieve at least $900 million in Bausch + Lomb synergies
`
` ~$800 million annualized run rate realized by Q3 14
`
` Remainder of synergies expected to be achieved by end of 2015
`
` Primarily related to manufacturing, Europe and small amounts from a number of other areas
`
` Cost to achieve synergies expected to be ~$600M
`
` Great people added at all levels to our organization
`
`
`
`
`
`
`
`
`
`30
`
`Page 31 of 47
`
`

`

`Q4 Outlook
`
` Continued growth drivers for Q4
` Confident in 10+% same store organic growth
`
` Expect continued strong performance from Jublia and other recent product launches
`
`
` Updated Q4 guidance
` Revenues: unchanged
`
` Based on current exchange rates, FX revenue impact would be ~$(53)M
`
` Cash EPS: raised $0.10 to $2.45 to $2.55
`
` Based on current exchange rates, FX Cash EPS impact would be ~$(0.06)
`
` Reflects strong momentum of our overall business
`
`
`
`
`Full year 2014 guidance
` Revenues: from $8.0B - $8.3B to $8.1B - $8.3B
`
` Cash EPS: from $7.90 - $8.10 to $8.22 - $8.32
`
` Adjusted Cash Flow from Operations: from $2.3B - $2.6B to greater than $2.5B (expect
`at least 90% cash conversion for full year 2014)
`
`
` Net leverage ratio reduced to ~3.9 times adjusted pro forma EBITDA by year end
`
`
`31
`
`
`
`
`
`Page 32 of 47
`
`

`

`2015 Outlook
`
`
`2015 Revenue
` Growth
` (No acquisitions)
`
`July 31
`2015 Outlook
`
`~$8.9 B
`9%
`
`Current
`2015 Outlook
`
`~$9.1 B+
`10%+
`
`Gross Margins
`
`74%
`
`75%
`
`Rationale
`• Higher than expected 2H 2014
`revenue, strength across all
`businesses and increasing
`confidence in Jublia
`
`• Q3 and Q4 gross margins
`better than expected
`• Expected improved mix,
`declining Xenazine revenue
`and current cost improvement
`initiatives
`
`SG&A Margins
`
`Low to mid
`20% as % of
`revenue
`
`Low to mid
`20% as % of
`revenue
`
`~23% - 24%
`•
`• Will continue to invest in
`launch products in 2015
`
`Cash EPS
` Assuming no acquisitions
`
`
`~$9.40
`
`
`~$10.00
`
`• Cash EPS Growth Assuming
`No Acquisitions
`July 31st – 17%
`•
`• Oct 20th – 21%
`
` Acquisitions -
` Leverage stays at ~4.0x
` or below
`
`~$9.90
`
`~$10.70
`
`32
`
`Page 33 of 47
`
`

`

`Allergan Update
`
`Allergan Update
`
`Page 34 of 47
`
`Page 34 of 47
`
`

`

`Allergan Update
`
` We remain focused on completing the Allergan Transaction
`
` Record date to vote at Special Meeting is October 30th
` With T+3 settlement, shares need to be purchased by October 27th
`
`
` Special Meeting will be held December 18th
` Allergan shareholders need to remove a majority of directors in order for Allergan
`to be compelled to negotiate
`
`
` The economic choice is clear
` Receive greater than ~$20.00 of 2016 EPS per Allergan share in a combination
`with Valeant vs. ~$10.00 standalone Allergan EPS
`
`
` VRX + AGN combination will generate significantly more synergies than any
`other combination
`
`
`
`
`
`
`34
`
`Page 35 of 47
`
`

`

`Appendix:
`Organic Growth Detail
`
`Page 36 of 47
`
`

`

`Same Store Organic Growth Calculation
`
`SAME STORE SALES ORGANIC GROWTH
`
`CURRENT YEAR PRIOR YEAR
`
`Quarterly Product Sales
` Subtract: Prior Year Revenue for Acquired
` Businesses (1)
`
` 2,023.5 1,511.3
`
`
` -
`343.5
`
` Add/(Subtract): Year over Year Fx impact
`
` 24.9
`
`
`
` Subtract: Divestitures and Discontinuations
`
` 81.7
`
`Basis for Organic Growth Calculation
`
` 1,704.9 A 1,429.6 B
`
`Same Store Organic Growth % = (A-B)/B
`
`19%
`
`
`
`(1) Revenue is subtracted for the period of time that the business was not owned in the prior year. For example, B+L was acquired on
`August 5th, 2013 so revenues from Jul 1 - Aug 5 2013 are excluded from the current year revenues
`
`36
`
`Page 37 of 47
`
`

`

`Pro Forma Organic Growth Calculation
`
`PRO FORMA ORGANIC GROWTH
`
`CURRENT YEAR PRIOR YEAR
`
`Quarterly Product Sales ($M)
`
` 2,023.5 1,511.3
`
` Add: Prior Year Revenue for Acquired Businesses (1)
`
` - 340.9
`
` Add/(Subtract): Year over Year Fx impact
`
` 25.0
`
`
`
` Subtract: Divestitures and Discontinuations
`
` 81.7
`
`Basis for Organic Growth Calculation
`
` 2,048.5 A 1,770.5 B
`
`Pro Forma Organic Growth % = (A-B)/B
`
`16%
`
`
`
`(1) Revenue is added for the period of time that the business was not owned in the prior year. For example, B+L was acquired on
`August 5th, 2013 so revenues from Jul 1 - Aug 5 2013 are added to the prior year revenues
`
`37
`
`Page 38 of 47
`
`

`

`Appendix:
`Accounts Receivab