Bausch+Lomb IPO Presentation Deck

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 Business uses certain non-GAAP financial measures and non-GAAP ratios, including: (i) Contribution (non-GAAP), (ii) Contribution margin (non-GAAP), (iii) Adjusted net income (non-GAAP), (iv) EBITDA (non-GAAP), (v) Adjusted EBITDA (non-GAAP), (vi) Adjusted EBITDA margin (non-GAAP) and (vii) Free cash flows (non-GAAP) to provide supplemental information to readers. Management believes that these non-GAAP financial measures and non-GAAP ratios, along with the U.S. GAAP measures used by management, reflect how the Business measures its business internally and sets operational goals and incentives. In particular, the Business believes that these non-GAAP financial measures and non-GAAP ratios are useful in evaluating current performance and focus management on the Business' underlying operational results. As a result, the Business uses these non-GAAP financial measures and non-GAAP ratios both to assess the actual financial performance of the Business and to forecast future results as part of its guidance. EBITDA/Adjusted EBITDA/EBITDA Margin/Adjusted EBITDA Margin EBITDA (non-GAAP) is Net income attributable to Bausch+Lomb (its most directly comparable U.S. GAAP financial measure) adjusted for interest income, income taxes, depreciation and amortization. Adjusted EBITDA (non-GAAP) is EBITDA (non-GAAP) further adjusted for the following items: Asset impairments: The Business has excluded the impact of impairments of finite-lived and indefinite-lived intangible assets as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions and divestitures. The Business believes that the adjustments of these items correlate with the sustainability of the Business' operating performance. Although the Business excludes impairments of intangible assets from measuring the performance of its business, the Business believes that it is important for investors to understand that intangible assets contribute to revenue generation. Restructuring and integration costs: The Business 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 Business 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 Business believes that the adjustments of these items provide supplemental information with regard to the sustainability of the Business' 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. Acquisition-related contingent consideration: The Business has excluded the impact of acquisition-related contingent consideration non-cash adjustments due to the inherent uncertainty and volatility associated with such amounts based on changes in assumptions with respect to fair value estimates, and the amount and frequency of such adjustments is not consistent and is significantly impacted by the timing and size of the Business' acquisitions, as well as the nature of the agreed- BAUSCH + LOMB upon consideration. Share-based compensation: The Business has excluded costs relating to share-based compensation. The Business believes that the exclusion of share-based compensation expense assists investors in the comparisons of operating results to peer companies. Share-based compensation expense is a recurring expense that can vary significantly from period to period based on the timing, size and nature of awards granted. Separation costs and separation-related costs: The Business 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 effecting the Separation 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 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 Business believes that the adjustments of these items provide supplemental information with regard to the sustainability of the Business' 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 Business has also excluded other certain costs such as IT infrastructure investment, legal and professional fees (in connection with legal and governmental proceedings, investigations and information requests regarding certain of our legacy distribution, marketing, pricing, disclosure and accounting practices), litigation and other matters, net gain on sale of assets and certain other amounts that are the result of other, non-comparable events to measure operating performance. These events arise outside of the ordinary course of continuing operations. Given the unique nature of the matters relating to these costs, the Business 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 Business believes the costs associated with legal settlements and judgments are not routine operating expenses. The Business has also excluded certain other costs, including settlement costs associated with the conversion of a portion of the Business defined benefit plan in Ireland to a defined contribution plan. The Business excluded these costs as this event is outside of the ordinary course of continuing operations and is infrequent in nature. The Business 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 Business 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 margin (non-GAAP) is Adjusted EBITDA (non-GAAP) divided by Revenues. 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 Business' executive officers and other key employees are based, in part, on the achievement of certain Adjusted EBITDA (non-GAAP) targets. 62