Bausch Health Companies Investor Conference Presentation Deck
22
Non-GAAP Appendix
Description of Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with U.S. generally accepted
accounting principles (GAAP), the Company uses certain non-GAAP financial measures.
These measures do not have any standardized meaning under GAAP and other companies
may use similarly titled non-GAAP financial measures that are calculated differently from the
way we calculate such measures. Accordingly, our non-GAAP financial measures may not be
comparable to similar non-GAAP measures. We caution investors not to place undue reliance
on such non-GAAP measures, but instead to consider them with the most directly comparable
GAAP measures. Non-GAAP financial measures have limitations as analytical tools and
should not be considered in isolation. They should be considered as a supplement to, not a
substitute for, or superior to, the corresponding measures calculated in accordance with
GAAP.
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP) is GAAP net income (loss) attributable to Bausch Health
Companies Inc. (its most directly comparable GAAP financial measure) adjusted for interest
expense, net, (benefit from) provision for income taxes, depreciation and amortization and
certain other items, as further described below. Management believes that Adjusted EBITDA
(non-GAAP), along with the GAAP measures used by management, most appropriately reflect
how the Company measures the business internally and sets operational goals and
incentives. In particular, the Company believes that Adjusted EBITDA (non-GAAP) focuses
management on the Company's underlying operational results and business performance. As
a result, the Company uses Adjusted EBITDA (non-GAAP) both to assess the actual financial
performance of the Company and to forecast future results as part of its guidance.
Management believes Adjusted EBITDA (non-GAAP) is a useful measure to evaluate current
performance. Adjusted EBITDA (non-GAAP) is intended to show our unleveraged, pre-tax
operating results and therefore reflects our financial performance based on operational
factors. In addition, cash bonuses for the Company's executive officers and other key
employees are based, in part, on the achievement of certain Adjusted EBITDA (non-GAAP)
targets.
BAUSCH- Health
Adjusted EBITDA (non-GAAP) is net income (loss) attributable to the
Company (its most directly comparable GAAP financial measure)
adjusted for interest expense, net, (benefit from) provision for income
taxes, depreciation and amortization and the following items:
Restructuring and integration costs: The Company has incurred restructuring costs as it
implemented certain strategies, which involved, among other things, improvements to its
infrastructure and operations, internal reorganizations and impacts from the divestiture of
assets and businesses. With regard to infrastructure and operational improvements which the
Company has taken to improve efficiencies in the businesses and facilities, these tend to be
costs intended to right size the business or organization that fluctuate significantly between
periods in amount, size and timing, depending on the improvement project, reorganization or
transaction. 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.
Asset Impairments, including loss on assets held for sale: The Company has excluded
the impact of impairments of finite-lived and indefinite-lived intangible assets, as well as
impairments of assets held for sale, as such amounts are inconsistent in amount and
frequency and are significantly impacted by the timing and/or size of acquisitions and
divestitures. The Company believes that the adjustments of these items correlate with the
sustainability of the Company's operating performance. Although the Company excludes
impairments of intangible assets and assets held for sale from measuring the performance of
the Company and the business, the Company believes that it is important for investors to
understand that intangible assets contribute to revenue generation.
Goodwill Impairments: The Company excludes the impact of goodwill impairments. When
the Company has made acquisitions where the consideration paid was in excess of the fair
value of the net assets acquired, the remaining purchase price is recorded as goodwill. For
assets that we developed ourselves, no goodwill is recorded. Goodwill is not amortized but is
tested for impairment. The amount of goodwill impairment is measured as the excess of a
reporting unit's carrying value over its fair value. Management excludes these charges in
measuring the performance of the Company and the business.View entire presentation