Research and Development Expenses
`
`Included in Research and development are costs related to our product development and quality assurance
`programs. Expenses related to product development include: employee compensation costs; overhead and
`occupancy costs; depreciation of research and development facilities and equipment; clinical trial costs; clinical
`manufacturing and scale-up costs; and other third-party development costs. Quality assurance are the costs incurred
`to meet evolving customer and regulatory standards and include: employee compensation costs; overhead and
`occupancy costs; amortization of software; and other third-party costs.
`
`R&D expenses were $127 million and $115 million for the three months ended June 30, 2022 and 2021,
`respectively, an increase of $12 million, or 10%. R&D expenses as a percentage of Product sales were
`approximately 7% and 6% for the three months ended June 30, 2022 and 2021, respectively. The increase was
`primarily attributable to: (i) lower R&D spend in 2021, as certain R&D activities and clinical trials which were
`suspended in response to the COVID-19 pandemic in 2020 and did not normalize until later in 2021, as discussed
`below, and (ii) higher spend on certain Solta and Salix projects.
`
`In 2020, due to the COVID-19 pandemic, certain of our R&D activities were limited and others, including
`new patient enrollments in clinical trials, were temporarily paused, as most trial sites were not able to accept new
`patients due to government-mandated shutdowns. During our third quarter of 2020, many of these trial sites began
`to reopen. During 2021, the pace of new patient enrollments and the increase these activities and related R&D
`spend gradually increased until they approached a normalized spend rate toward the end of 2021. As of the date of
`this filing, we have not had to make material changes to our development timelines and the pause in our clinical
`trials has not had a material impact on our operating results; however, a resurgence of COVID-19 could result in
`unanticipated delays in our ability to conduct new patient enrollments and create other delays which could have a
`significant adverse effect on our future operating results.
`
`Amortization of Intangible Assets
`
`Intangible assets with finite lives are amortized using the straight-line method over their estimated useful
`lives, generally 2 to 20 years. Management continually assesses the useful lives related to the Company's long(cid:173)
`lived assets to reflect the most current assumptions.
`
`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.
`
`Intangible assets, net includes finite-lived intangible assets related to our Xifaxan® branded products. The
`aggregate carrying value of our Xifaxan® intangible assets is approximately $2,963 million as of June 30, 2022, and
`have remaining useful lives of 66 months. Amortization expense related to these intangible assets is approximately
`$539 million annually. While we intend to appeal the Norwich Legal Decision (see "Xifaxan® Paragraph IV
`Proceedings" of Note 18, "LEGAL PROCEEDINGS" to our unaudited interim Consolidated Financial
`Statements), it is possible that this and other potential future developments:
`
`• may adversely impact the estimated future cash flows of our Xifaxan® brands, which could result in an
`impairment of the value of these intangible assets in one or more future periods. Any such impairment
`could be material to the Company's results of operations in the period in which it occurs; and
`
`• 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
`
`Goodwill is not amortized but is tested for impairment at least annually on October 1st at the reporting unit
`level. A reporting unit is the same as, or one level below, an operating segment. The Company performs its annual
`impairment test by first assessing qualitative factors. Where the qualitative assessment suggests that it is more
`likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value test is
`performed for that reporting unit.
`
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`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 Dermatologies 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
`Dermatologies reporting unit at
`
`25
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`March 31, 2022 (the last time goodwill of the Ortho Dermatologies reporting unit was tested). Given the limited
`headroom of the Ortho Dermatologies reporting unit as calculated on March 31, 2022, the Company believed that
`these facts and circumstances suggest the fair value of the Ortho Dermatologies reporting unit could be less than its
`carrying amount, and therefore a quantitative fair value test was performed for the reporting unit.
`
`During the three months ended June 30, 2022, the quantitative fair value test utilized the Company's most
`recent cash flow projections as revised in the second quarter of 2022 which reflect current market conditions and
`current trends in business performance. Our latest discounted cash flow model for the Ortho Dermatologies
`reporting unit includes a range of potential outcomes for, among other matters, macroeconomic factors such as
`higher than expected inflation for many commodities, volatility in many of the equity markets and pressures on
`market interest rates. The quantitative fair value test utilized a long-term growth rate of 1 % and a discount rate of
`10%. The discount rate has increased 1 % since the assessment performed at March 31, 2022, as a result of changes
`in current macroeconomic conditions, including an increase in the risk free rate during the three months ended June
`30, 2022. Based on the quantitative fair value test, the carrying value of the Ortho Dermatologies reporting unit
`exceeded its fair value at June 30, 2022, and we recognized a goodwill impairment of $83 million.
`
`Approximately 80% of our Salix segment revenues is derived from our Xifaxan® product line. While we
`intend to appeal the Norwich Legal Decision (see "Xifaxan® Paragraph IV Proceedings" of Note 18, "LEGAL
`PROCEEDINGS" to our unaudited interim Consolidated Financial Statements), it is possible that this and other
`potential future developments may adversely impact the estimated fair value of the Salix segment, in one or more
`future periods. Any such impairment could be material to the Company's results of operations in the period in
`which it occurs.
`
`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/or Sale
`
`Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances
`indicate that the carrying value of an asset may not be recoverable. Impairment charges associated with these assets
`are included in Asset impairments in the Consolidated Statement of Operations. The Company continues to
`monitor the recoverability of its finite-lived intangible assets and tests the intangible assets for impairment if
`indicators of impairment are present.
`
`Asset impairments, including loss on assets held for sale were $6 million and $47 million for the three
`months ended June 30, 2022 and 2021, respectively, a decrease of $41 million. Asset impairments, including loss
`on assets held for sale for the three months ended June 30, 2022 of $6 million was primarily related to changes in
`forecasted revenues and production costs of a neurology product. Asset impairments, including loss on assets held
`for sale for the three months ended June 30, 2021 of $47 million include: (i) impairments of $25 million due to
`decreases in forecasted sales of a certain product line in our Diversified Products segment, (ii) an adjustment of $20
`million to the loss of assets held for sale in connection with the Amoun Sale and (iii) impairments of $2 million, in
`aggregate, related to the discontinuance of certain product lines.
`
`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.
`
`Restructuring and Integration Costs
`
`The Company evaluates opportunities to improve its operating results and implement cost savings programs
`to streamline its operations and eliminate redundant processes and expenses. Restructuring and integration costs are
`expenses associated with the implementation of these cost savings programs and include expenses associated with:
`(i) reducing headcount, (ii) eliminating real estate costs associated with unused or under-utilized facilities and (iii)
`implementing contribution margin improvement and other cost reduction initiatives.
`
`Restructuring and integration costs were $22 million and $3 million for the three months ended June 30,
`2022 and 2021, respectively. The Company continues to evaluate opportunities to streamline its operations and
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`identify additional cost savings globally. Although a specific plan does not exist at this time, the Company may
`identify and take additional exit and cost-rationalization restructuring actions in the future, the costs of which could
`be material.
`
`26
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`Separation and IPO Costs
`
`The Company has incurred, and expects to continue to incur costs associated with activities to effectuate the
`B+L Separation. The Company also incurred costs associated with activities to effectuate the Solta IPO, which was
`suspended in June 2022. These B+L Separation and Solta IPO activities include: (i) separating the Bausch + Lomb
`and Solta Medical businesses from the remainder of the Company, (ii) completing the B+L IPO and preparing for
`the suspended Solta IPO and (iii) completing the actions necessary for Bausch + Lomb to become an independent
`publicly traded entity. Separation and IPO costs are incremental costs directly related to the ongoing B+L
`Separation and the suspended Solta IPO and include, but are not limited to: (i) legal, audit and advisory fees, (ii)
`talent acquisition costs and (iii) costs associated with establishing a new board of directors and related board
`committees for the Bausch+ Lomb and Solta Medical entities. Separation and IPO costs were $13 million and $6
`million for the three months ended June 30, 2022 and 2021, respectively. The extent and timing of future charges of
`these costs to complete the B+L Separation cannot be reasonably estimated at this time and could be material.
`
`See Note 5, "RESTRUCTURING, INTEGRATION, SEPARATION AND IPO COSTS" to our unaudited
`interim Consolidated Financial Statements for further details regarding these actions.
`
`Other expense, net
`
`Other expense, net for the three months ended June 30, 2022 and 2021 consists of the following:
`
`(in millions)
`Litigation and other matters
`Acquisition-related contingent consideration
`Gain on sale of assets, net
`Acquired in-process research and development costs
`Other, Net
`
`Non-Operating Income and Expense
`
`Interest Expense
`
`Three Months Ended
`June 30,
`2022
`2021
`532
`9
`
`$
`
`8 $
`(5)
`(3)
`1
`(1)
`
`$
`
`$
`
`542
`
`Interest expense primarily consists of interest payments due, amortization of debt premiums, discounts and
`deferred issuance costs on indebtedness under our credit facilities and notes and the amortization of amounts
`excluded from the assessment of hedge effectiveness over the term of the Company's cross-currency swaps during
`2021. In November 2021, we entered into a transaction to unwind our cross-currency swaps. In July 2022, we
`entered into new cross-currency swaps with aggregate notional amounts of$1,000 million.
`
`Interest expense was $410 million and $364 million, and included non-cash amortization and write-offs of
`debt premiums, discounts and deferred issuance costs of $50 million and $12 million, for the three months ended
`June 30, 2022 and 2021, respectively. Interest expense for the three months ended June 30, 2022 increased $46
`million, or 13%, as compared to the three months ended June 30, 2021, primarily attributable to the higher interest
`rates partially offset by the impact of lower outstanding debt balances. The weighted average stated rate of interest
`as of June 30, 2022 and 2021 was 6.34% and 5.85%, respectively.
`
`See Note 10, "FINANCING ARRANGEMENTS" to our unaudited interim Consolidated Financial
`Statements for further details.
`
`Gain (Loss) on Extinguishment of Debt
`
`Gain (loss) on extinguishment of debt represents the differences between the amounts paid to settle
`extinguished debts and the carrying value of the related extinguished debt. The gain on extinguishment of debt was
`$113 million for the three months ended June 30, 2022 as compared to a loss on extinguishment of debt of $45
`million for the three months ended June 30, 2021.
`
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`27
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`The gain on extinguishment of debt for the three months ended June 30, 2022 includes $176 million of gains
`associated with the early retirement of senior unsecured notes as discussed below, partially offset by $63 million of
`losses associated with the refinancing and modification to certain debt obligations completed in connection with the
`B+L IPO, as discussed in further detail below, under "- Liquidity and Capital Resources - Liquidity and Debt"
`and represents the differences between the amounts paid to settle the extinguished debt and its carrying value.
`
`During June 2022, through a series of transactions we repurchased and retired, outstanding senior unsecured
`notes with an aggregate par value of $481 million in the open market for approximately $300 million using: (i) the
`net proceeds from the partial exercise of the over-allotment option in the B+L IPO by the underwriters, after
`deducting underwriting commissions, (ii) amounts available under our revolving credit facility and (iii) cash on
`hand. The senior unsecured notes retired had maturities of January 2028 through February 2031 and had a weighted
`average interest rate of approximately 5.35%. As a result of these transactions, we recognized a gain on the
`extinguishment of debt of approximately $17 6 million, net of write-offs of debt premiums, discounts and deferred
`issuance costs, representing the differences between the amounts paid to retire the senior unsecured notes and their
`carrying value.
`
`The loss on extinguishment of debt of $45 million for the three months ended June 30, 2021 is primarily
`associated with refinancing transactions during the three months ended June 30, 2021 and represents the differences
`between the amounts paid to settle the extinguished debt and its carrying value.
`
`See Note 10, "FINANCING ARRANGEMENTS" to our unaudited interim Consolidated Financial
`Statements for further details.
`
`Foreign Exchange and Other
`
`Foreign exchange and other primarily includes: (i) translation gains/losses on intercompany loans and third(cid:173)
`party liabilities and (ii) the gain/loss due to foreign currency exchange contracts. Foreign exchange and other was a
`gain of$4 million and $7 million for the three months ended June 30, 2022 and 2021, respectively, an unfavorable
`net change of $3 million.
`
`Income Taxes
`
`Provision for income taxes was $10 million for the three months ended June 30, 2022 and compares to a
`benefit for income taxes of $77 million for the three months ended June 30, 2021, an unfavorable change of
`$87 million.
`
`Our effective income tax rate for the three months ended June 30, 2022 differs from the statutory Canadian
`income tax rate primarily due to: (i) the recording of valuation allowance on entities for which no tax benefit of
`losses is expected, (ii) the tax benefit generated from our annualized mix of earnings by jurisdiction and (iii) the
`discrete treatment of certain tax matters, primarily related to: (a) adjustments for book to income tax return
`provisions, (b) a tax deduction for stock compensation and ( c) changes in uncertain tax positions.
`
`Our effective income tax rate for the three months ended June 30, 2021 differs from the statutory Canadian
`income tax rate primarily due to: (i) the tax benefit generated from our annualized mix of earnings by jurisdiction,
`(ii) the recording of valuation allowance on entities for which no tax benefit of losses is expected and (iii) the
`discrete treatment of certain tax matters, primarily related to: (a) potential and recognized withholding taxes on
`intercompany dividends, (b) adjustments for book to income tax return provisions, ( c) tax deduction for stock
`compensation and ( d) changes in uncertain tax positions.
`
`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 Salix segment consists of sales in the U.S. of GI products. Sales of the Xifaxan® product line
`represented 81% and 80% of the Salix segment's revenues for the three and six months ended June 30,
`2022, respectively.
`
`The International segment consists of sales, with the exception of sales of Bausch + Lomb products
`and Solta aesthetic medical devices, outside the U.S. and Puerto Rico of branded pharmaceutical
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`•
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`products, branded generic pharmaceutical products and OTC products.
`
`•
`
`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 Dermatologies
`(dermatological) products and (iv) dentistry products.
`
`•
`
`The Solta Medical segment consists of global sales of Solta aesthetic medical devices.
`
`28
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`•
`
`The Bausch + Lomb segment consists of global sales of Bausch + Lomb Vision Care, Surgical and
`Ophthalmic Pharmaceuticals products.
`
`Segment profit is based on operating income after the elimination of intercompany transactions, including
`between Bausch + Lomb and other segments. Certain costs, such as Amortization of intangible assets, Asset
`impairments, Goodwill impairments, Restructuring, integration, separation and IPO costs and Other (income)
`expense, net, are not included in the measure of segment profit, as management excludes these items in assessing
`segment financial performance. See Note 19, "SEGMENT INFORMATION" to our unaudited interim
`Consolidated Financial Statements for a reconciliation of segment profit to Loss before income taxes.
`
`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 three months ended June 30, 2022 and 2021. The following
`table also presents segment profits, segment profits as a percentage of segment revenues and the period-over-period
`changes in segment profits for the three months ended June 30, 2022 and 2021.
`
`Three Months Ended June 30,
`2021
`Amount
`
`Pct.
`
`Change
`Amount
`Pct.
`
`Pct.
`
`(in millions)
`Segment Revenues
`Salix
`International
`Diversified Products
`Solta Medical
`Bausch + Lomb
`Total revenues
`
`Segment Profits / Segment Profit
`Margins
`Salix
`International
`Diversified Products
`Solta Medical
`Bausch + Lomb
`Total segment profits
`
`2022
`Amount
`
`$
`
`501
`233
`235
`57
`941
`$ 1,967
`
`$
`
`$
`
`354
`66
`141
`20
`208
`789
`
`25 %
`12 %
`12 %
`3%
`48%
`100 %
`
`$
`
`516
`313
`264
`73
`934
`$ 2,100
`
`25 % $
`15 %
`13%
`3%
`44%
`100% $
`
`(15)
`(80)
`(29)
`(16)
`7
`(133)
`
`71 %
`28%
`60%
`35 %
`22%
`40%
`
`$
`
`$
`
`370
`103
`162
`39
`213
`887
`
`72% $
`33 %
`61 %
`53 %
`23 %
`42 % $
`
`(16)
`(37)
`(21)
`(19)
`(5)
`(98)
`
`(3)%
`(26)%
`(11)%
`(22)%
`1%
`(6)%
`
`(4)%
`(36)%
`(13)%
`(49)%
`(2)%
`(11)%
`
`Organic Revenues and Organic Growth Rates (non-GAAP)
`
`Organic revenue and organic revenue change are non-GAAP measures. Non-GAAP measures are not
`standardized measures under the financial reporting framework used to prepare the Company's financial statements
`and might not be comparable to similar financial measures disclosed by other issuers.
`
`Organic revenue and change in organic revenue (non-GAAP), are defined as GAAP Revenue and changes in
`GAAP revenue (the most directly comparable GAAP financial measures), respectively, adjusted for changes in
`foreign currency exchange rates (if applicable) and excluding the impact of recent acquisitions, divestitures and
`discontinuations, as defined further below. Organic revenue (non-GAAP) is impacted by changes in product
`volumes and price. The price component is made up of two key drivers: (i) changes in product gross selling price
`and (ii) changes in sales deductions. The Company uses organic revenue (non-GAAP) and organic revenue changes
`(non-GAAP) to assess performance of its reportable segments, and the Company in total without the impact of
`foreign currency exchange fluctuations and recent acquisitions, divestitures and product discontinuations. The
`Company believes that providing these measures is useful to investors as they provide a supplemental period-to(cid:173)
`period comparison.
`
`The adjustments to GAAP Revenue and changes in GAAP revenue to determine Organic Revenue (non(cid:173)
`GAAP) and changes in Organic Revenue (non-GAAP) are as follows:
`
`Foreign currency exchange rates: Although changes in foreign currency exchange rates are part of our
`business, they are not within management's control. Changes in foreign currency exchange rates, however, can
`https://otp.tolW.~lfvtM~~~n,/8Ne~°!)~u™W_%dRt,!~S-~~~\!§.'sfi~.ij~il@8=11!ot4~~'cil¢QfQ~O~/i9~~~&hasPdf=1
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`currency exchange rates is determined as the difference in the current period reported revenues at their current
`period currency exchange rates and the current period reported revenues revalued using the monthly average
`currency exchange rates during the comparable prior period.
`
`29
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`International Segment Profit
`
`The International segment profit for the three months ended June 30, 2022 and 2021 was $66 million and
`$103 million, respectively, a decrease of $37 million, or 36%. The decrease was primarily attributable to: (i) our
`divestiture of Amoun on July 26, 2021 and (ii) lower contribution primarily attributable to the unfavorable impact
`of foreign currencies and by higher manufacturing variances, primarily as a result of inflationary pressures related
`to certain manufacturing costs. These decreases were partially offset by lower selling expenses.
`
`30
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`Diversified Products Segment:
`
`Diversified Products Segment Revenue
`
`The Diversified Products segment revenue for the three months ended June 30, 2022 and 2021 was $235
`million and $264 million, respectively, a decrease of $29 million, or 11 %. The decrease was primarily driven by: (i)
`a decrease in volume of $17 million and (ii) a decrease in net realized pricing of $12 million, primarily in our
`Neurology and Other business and Ortho Dermatologies business. The decrease in volume was primarily
`attributable to our Neurology and Other business primarily due to: (i) unfavorable inventory balancing of our
`Wellbutrin® product by our wholesalers and (ii) lower demand for Ativan® and Mysoline®.
`
`Diversified Products Segment Profit
`
`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.
`
`Solta Medical Segment:
`
`Solta Medical Segment Revenue
`
`The Solta Medical segment includes the Thermage®product line, which accounted for approximately 71 % of
`the Solta segment revenues for the three months ended June 30, 2022. No other single product group represents
`10% or more of the Solta segment revenues. The Solta Medical segment revenue for the three months ended June
`30, 2022 and 2021 was $57 million and $73 million, respectively, a decrease of$16 million, or 22%. The decrease
`was primarily attributable to a decrease in volume of $20 million, primarily driven by the impact of the COVID-19
`pandemic in China, partially offset by an increase in net realized pricing of $4 million.
`
`Solta Medical Segment Profit
`
`The Solta Medical segment profit for the three months ended June 30, 2022 and 2021 was $20 million and
`$39 million, respectively, a decrease of $19 million, or 49%. The decrease was primarily driven by: (i) the decrease
`in contribution primarily driven by the decrease in revenues, as previously discussed, and (ii) an increase in R&D.
`Bausch + Lomb Segment:
`
`Bausch + Lomb Segment Revenue
`
`The Bausch + Lomb segment has a diversified product line with no single product group representing 10% or
`more of its product sales. The Bausch+ Lomb segment revenue was $941 million and $934 million for the three
`months ended June 30, 2022 and 2021, respectively, an increase of $7 million, or 1 %. The increase was attributable
`to increases in volumes of $41 million and net realized pricing of $15 million. The increase in volume was due to:
`(i) the Vision Care business, primarily attributable to: (a) increased demand for certain consumer eye health
`products including Lumify®, Biotrue® and PreserVision® and (b) the impact of a quality issue in 2021 related to a
`third-party supplier of sterilization services for certain lens care solution bottles and caps, as previously discussed,
`and (ii) increased demand of consumables and intraocular lenses within our Surgical business, partially offset by:
`(i) a decrease in volume in our international contact lens business, primarily driven by the impact of the COVID-19
`pandemic in China and (ii) a decrease in volume in our U.S. Ophthalmic Pharmaceuticals business, primarily
`driven by the impact of generic competition on certain products that had previously lost exclusivity, such as
`Lotemax® Gel, Lotemax® Suspension and Bepreve®. The overall increases in revenues and net realized pricing
`were partially offset by: (i) the unfavorable impact of foreign currencies across all our international businesses of
`$46 million primarily in Europe and Asia and (ii) the impact of divestitures and discontinuations of $3 million,
`related to the discontinuation of certain products.
`
`Bausch + Lomb Segment Profit
`
`The Bausch+ Lomb segment profit for the three months ended June 30, 2022 and 2021 was $208 million
`and $213 million, respectively, a decrease of $5 million, or 2%. The decrease was primarily driven by: (i) higher
`SG&A expenses within U.S. Consumer and Surgical, (ii) the unfavorable impact of foreign currencies and (iii)
`higher manufacturing variances, primarily as a result of inflationary pressures related to certain manufacturing
`costs, partially offset by the impact of manufacturing variances incurred in 2021 related to a quality issue at a third-
`https://otp. tools.investis.com/clients/us/bauscfi _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik="0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 65 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`party supplier, as previously discussed. These decreases were partially offset by the increase in revenues, as
`previously discussed.
`
`31
`
`https://otp. tools.investis.com/clients/us/bausch _health_ companies/SEC/sec-show.aspx?Filingld=16064281 &Cik=0000885590& Type=PDF&hasPdf=1
`
`Slayback Exhibit 1069, Page 66 of 110
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021
`
`Revenues
`
`Our revenue was $3,885 million and $4,127 million for the six months ended June 30, 2022 and 2021,
`respectively, a decrease of $242 million, or 6%. The decrease was due to: (i) the impact of divestitures and
`discontinuations of $146 million, primarily attributable to our divestiture of Amoun on July 26, 2021, (ii) a
`decrease in volumes of $73 million primarily in our Diversified, Salix and Solta segments partially offset by an
`increase in volumes in our Bausch + Lomb segment and (iii) the unfavorable impact of foreign currencies of $102
`million primarily in Europe and Asia. These decreases were partially offset by an increase in net realized pricing of
`$79 million.
`
`The changes in our segment revenues and segment profits for the six months ended June 30, 2022, are
`discussed in further detail in the respective subsequent section" - Reportable Segment Revenues and Profits".
`
`Cash Discounts and Allowances, Chargebacks and Distribution Fees
`
`Provisions recorded to reduce gross product sales to net product sales and revenues for the six months ended
`June 30, 2022 and 2021 were as follows:
`
`(in millions)
`Gross product sales
`Provisions to reduce gross product sales to net product
`sales
`Discounts and allowances
`Returns
`Rebates
`Charge backs
`Distribution fees
`Total provisions
`Net product sales
`Other revenues
`Revenues
`
`Six Months Ended June 30,
`2022
`2021
`Amount
`Amount
`Pct.
`$
`100.0 % $
`6,555
`6,792
`
`Pct.
`100.0 %
`
`278
`60
`1,236
`1,028
`108
`2,710
`3,845
`40
`3,885
`
`$
`
`4.2%
`0.9%
`18.9 %
`15.7 %
`1.6 %
`41.3 %
`58.7 %
`
`$
`
`306
`77
`1,227
`993
`110
`2,713
`4,079
`48
`4,127
`
`4.5 %
`1.1%
`18.1 %
`14.6 %
`1.6 %
`39.9 %
`60.1 %
`
`Cash discounts and allowances, returns, rebates, chargebacks and distribution fees as a pe