Bausch+Lomb Results Presentation Deck
Non-GAAP Appendix
Adjusted EBITDA (non-GAAP) Adjustments (continued)
Separation costs and separation-related costs: The Company has excluded certain costs incurred in connection with activities taken to: (i)
separate the Bausch+Lomb business from the remainder of BHC and (ii) register the Bausch + Lomb business as an independent publicly traded
entity. Separation costs are incremental costs directly related to effectuating the separation of the Bausch+Lomb business from the remainder of
BHC and include, but are not limited to, legal, audit and advisory fees, talent acquisition costs and costs associated with establishing a new board
of directors and audit committee. Separation-related costs are incremental costs indirectly related to the separation of the Bausch+Lomb business
from the remainder of BHC and include, but are not limited to, IT infrastructure and software licensing costs, rebranding costs and costs associated
with facility relocation and/or modification. As these costs arise from events outside of the ordinary course of continuing operations, the Company
believes that the adjustments of these items provide supplemental information with regard to the sustainability of the Company's operating
performance, allow for a comparison of the financial results to historical operations and forward-looking guidance and, as a result, provide useful
supplemental information to investors.
Other Non-GAAP adjustments: The Company also excludes certain other amounts, including IT infrastructure investment, litigation and other
matters, gain/(loss) on sales of assets and certain other amounts that are the result of other, non-comparable events to measure operating
performance if and when present in the periods presented. These events arise outside of the ordinary course of continuing operations. Given the
unique nature of the matters relating to these costs, the Company believes these items are not routine operating expenses. For example, legal
settlements and judgments vary significantly, in their nature, size and frequency, and, due to this volatility, the Company believes the costs
associated with legal settlements and judgments are not routine operating expenses. The Company has also excluded certain other costs,
including settlement costs associated with the conversion of a portion of the Company's defined benefit plan in Ireland to a defined contribution
plan. The Company excluded these costs as this event is outside of the ordinary course of continuing operations and is infrequent in nature. The
Company believes that the exclusion of such out-of-the-ordinary-course amounts provides supplemental information to assist in the comparison of
the financial results of the Company from period to period and, therefore, provides useful supplemental information to investors. However, investors
should understand that many of these costs could recur and that companies in our industry often face litigation.
Adjusted EBITDA excluding foreign exchange (or Adjusted EBITDA growth/change excluding foreign exchange) is Adjusted EBITDA (non-GAAP)
(or Adjusted EBITDA growth/change (non-GAAP)) further adjusted to exclude the impact or the anticipated impact of foreign exchange (FX).
Although changes due to foreign exchange movements are part of our business, they are not within management's control. These changes,
however, can mask positive or negative trends in the underlying business performance. Accordingly, the Company believes the measure is useful
to investors in assessing our performance. Prior to the disclosure of our Q3 2023 results, the company used the label "Adj. EBITDA adjusted for
currency/FX headwinds" to describe this measure. The Company believes that the current label provides additional clarity.
Adjusted Net Income (non-GAAP)
Adjusted net income (non-GAAP) is net income (loss) attributable to Bausch + Lomb Corporation (its most directly comparable GAAP financial
measure) adjusted for asset impairments, restructuring, integration and transformation costs, acquisition-related contingent consideration,
separation costs and separation-related costs and other non-GAAP adjustments, as these adjustments are described above and further adjusted
for amortization of intangible assets and acquisition-related costs and adjustments excluding amortization of intangible assets, as described below:
Amortization of intangible assets: The Company has excluded the impact of amortization of intangible assets, as such amounts are
inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. The Company believes that the
adjustments of these items correlate with the sustainability of the Company's operating performance. Although the Company excludes the
amortization of intangible assets from its non-GAAP expenses, the Company believes that it is important for investors to understand that
such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future
BAUSCH+ LOMB
periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible
assets.
Acquisition-related costs and adjustments excluding amortization of intangible assets: In addition to the acquisition-related costs and
adjustments as described above, the Company has excluded the expense directly attributable to one-time commitment and structuring fees
related to a bridge loan facility put in place prior to the acquisition of Xiidra and certain other ophthalmology assets. The Company excluded
these costs as they are outside of the ordinary course of continuing operations and are infrequent in nature. The Company believes that the
exclusion of such out-of-the-ordinary-course amounts provides supplemental information to assist in the comparison of the financial results of
the Company from period to period and, therefore, provides useful supplemental information to investors.
Adjusted net income (non-GAAP) excludes the impact of these certain items that may obscure trends in the Company's underlying performance.
Management uses Adjusted net income (non-GAAP) for strategic decision making, forecasting future results and evaluating current performance.
By disclosing this non-GAAP measure, it is management's intention to provide investors with a meaningful, supplemental comparison of the
Company's operating results and trends for the periods presented. Management believes that this measure is also useful to investors as such
measure allows investors to evaluate the Company's performance using the same tools that management uses to evaluate past performance and
prospects for future performance. Accordingly, the Company believes that Adjusted net income (non-GAAP) is useful to investors in their
assessment of the Company's operating performance and the valuation of the Company. It is also noted that, in recent periods, our GAAP net
income (loss) attributable to Bausch+Lomb Corporation was significantly lower than our Adjusted net income (non-GAAP).
Constant Currency
Constant currency change or constant currency growth is calculated by adjusting or further adjusting a measure or ratio by changes in or impact of
foreign currency exchange rates. Constant currency impact is determined by comparing 2023 amounts adjusted to exclude currency impact,
calculated using 2022 monthly average exchange rates, to the actual 2022 reported amounts. Constant currency revenue is GAAP revenue (its
most directly comparable GAAP financial measure) adjusted for changes in foreign currency exchange rates. The Company uses Constant
Currency Revenues (non-GAAP) and Constant Currency Revenue Growth (non-GAAP) to assess performance of its reportable segments, and the
Company in total, without the impact of foreign currency exchange fluctuations. The Company believes that such measures are useful to investors
as they provide a supplemental period-to-period comparison. 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 mask positive or negative trends in the underlying
business performance..
In addition, with respect to our contact lens products, we have further adjusted the reported revenue and constant currency revenue of such
products to exclude the impact of the disruptions incurred at our U.S distribution facility as a result of the implantation of a software upgrade at such
facility. The Company excluded these amounts as they are out-of-the-ordinary and not expected to be reoccurring.
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