Investing to Deliver Growth in Durable Franchises
36th Annual J.P. Morgan Healthcare Conference
Jan. 10, 2018
Forward-Looking Statements
This presentation contains forward-looking information and statements,
within the meaning of applicable securities laws (collectively, “forward -
looking statements”), including, but not limited to, statements regarding
Valeant's future prospects and performance, the expected annualized
revenues of selected products, the timing and number of expected product
launches and the anticipated revenues from new and recent product
launches, the anticipated submission, approval and launch dates for certain
of our pipeline products and R&D programs, the anticipated timing of
receipt of clinical and pre-clinical results or data for certain of our pipeline
products and R&D programs, the anticipated timing of the loss of exclusivity
of certain of our products and the expected impact of such loss of
exclusivity on our financial condition, and the Company’s plans and
commitments. Forward-looking statements may generally be identified by
the use of the words "anticipates," "expects," "intends," "plans," "should,"
"could," "would," "may," "will," "believes," "estimates," "potential," "target,"
or "continue" and variations or similar expressions. These forward-looking
statements are based upon the current expectations and beliefs of
management and are provided for the purpose of providing additional
information about such expectations and beliefs and readers are cautioned
that these statements may not be appropriate for other purposes. These
forward-looking statements are subject to certain risks and uncertainties
that could cause actual results and events to differ materially from those
described in these forward-looking statements. These risks and
uncertainties include, but are not limited to, the risks and uncertainties
discussed in the Company's most recent annual and quarterly reports and
detailed from time to time in the Company's other filings with the Securities
and Exchange Commission and the Canadian Securities Administrators,
which risks and uncertainties are incorporated herein by reference. In
addition, certain material factors and assumptions have been applied in
making these forward-looking statements, including that the risks and
uncertainties outlined above will not cause actual results or events to differ
materially from those described in these forward-looking statements, and
additional information regarding certain of these material factors and
assumptions may also be found in the Company’s filings described above.
The Company believes that the material factors and assumptions reflected
in these forward-looking statements are reasonable, but 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
presentation or to reflect actual outcomes, unless required by law.
1
Non-GAAP Information
Recent Assessment of Financial Performance Measures
2
Recently, the Company’s management team undertook an evaluation of
how it would measure the financial performance of the Company going
forward. In evaluating its financial performance measures, the Company
considered its recent changes to its strategy (which included a transition
away from growth by acquisition with a greater focus on R&D activity,
strengthening of the balance sheet through the paydown of debt and
rationalization of the product portfolio through divestitures of non-core
assets) and sought to identify performance measures that best reflect the
Company’s current business operations, strategy and goals. As a result of
that evaluation, new management identified the following primary financial
performance measures for the Company: GAAP Revenues (measure for
both guidance and actual results), GAAP Net Income (measure for actual
results), Adjusted EBITDA (non-GAAP) (measure for both guidance and
actual results) and GAAP Cash Flow from Operations (measure for actual
results). These measures were selected as the Company believes that
these measures most appropriately reflect how the Company measures the
business internally and sets operational goals and incentives. For example,
the Company believes that Adjusted EBITDA (non-GAAP) focuses
management on the Company’s underlying operational results and
business performance, while GAAP Revenue focuses management on the
overall growth of the business.
In addition, in connection with this evaluation of financial performance
measures, the Company assessed the methodology with which it was
calculating non-GAAP measures and made updates where it deemed
appropriate to better reflect the underlying business. For example,
commencing with the first quarter of 2017, Adjusted EBITDA (non-GAAP)
no longer includes adjustments for Foreign exchange gain/loss arising from
intercompany transactions.
The Company began to use these new non-GAAP measures, and the new
methodologies used to calculate these non-GAAP measures, commencing
with the first quarter of 2017. For the purposes of the Company’s actual
results for the first nine months and third quarter of 2016 and other historic
periods presented, the Company has calculated and presented the non-
GAAP measures using the historic methodologies in place as of the
applicable historic dates; however, the Company has also provided a
reconciliation that calculates the non-GAAP measures using the new
methodologies, to allow investors and readers to evaluate the non-GAAP
measures (such as Adjusted EBITDA) on the same basis for the periods
presented.
To supplement the financial measures prepared in accordance with U.S.
generally accepted accounting principles (GAAP), the Company uses certain
non-GAAP financial measures including (i) Adjusted EBITDA, (ii) Adjusted
EBITA, (iii) Adjusted EBITA Margin, (iv) Adjusted Operating Income, (v)
Adjusted Gross Profit, (vi) Adjusted Gross Margin, (vii) Adjusted Selling A&P,
(viii) Adjusted G&A, (ix) Adjusted SG&A, (x) Adjusted R&D, (xi) Total Adjusted
Operating Expense, (xii) Adjusted Net Income, (xiii) Organic Growth and (xiv)
Organic Change. 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.
The reconciliations of these historic non-GAAP measures to the most directly
comparable financial measures calculated and presented in accordance with
GAAP are shown in the appendix hereto. However, for guidance purposes,
the Company does not provide reconciliations of projected Adjusted EBITDA
(non-GAAP) to projected GAAP net income (loss), due to the inherent
difficulty in forecasting and quantifying certain amounts that are necessary for
such reconciliations. In periods where significant acquisitions or divestitures
are not expected, the Company believes it might have a basis for forecasting
the GAAP equivalent for certain costs, such as amortization, that would
otherwise be treated as a non-GAAP adjustment to calculate projected GAAP
net income (loss). However, because other deductions (e.g., restructuring,
gain or loss on extinguishment of debt and litigation and other matters) used
to calculate projected net income (loss) may vary significantly based on actual
events, the Company is not able to forecast on a GAAP basis with reasonable
certainty all deductions needed in order to provide a GAAP calculation of
projected net income (loss) at this time. The amounts of these deductions
may be material and, therefore, could result in GAAP net income (loss) being
materially different from (including materially less than) projected Adjusted
EBITDA (non-GAAP).
Management uses these non-GAAP measures as key metrics in the
evaluation of Company performance and the consolidated financial results
and, in part, in the determination of cash bonuses for its executive officers.
The Company believes these non-GAAP measures are useful to investors in
their assessment of our operating performance and the valuation of our
Company. In addition, these non-GAAP measures address questions the
Company routinely receives from analysts and investors and, in order to
assure that all investors have access to similar data, the Company has
determined that it is appropriate to make this data available to all investors.
However, non-GAAP financial measures are not prepared in accordance with
GAAP, as they exclude certain items as described herein. 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 Information
3
Use of Non-GAAP Generally
Tangible Progress Toward Transformation
O U R M I S S I O N :
Improve people’s lives with our health care products.
“We have built a world-class organization, and we are well positioned to grow as we
continue to transform Valeant.” – Joseph C. Papa, Chairman and CEO
4
STABILIZE
2016
TURNAROUND
2017-2018
TRANSFORM
2018+
Resolving legacy issues and de-risking the balance sheet
Investing in core franchises with attractive growth
Launching new products with meaningful opportunities
Progress Through 2017
Delivered on Commitments Focused on Core Business
• In 3Q17, ~77% of Valeant's total revenue is generated
from the Bausch + Lomb/International segment and the
Salix business
• Bausch + Lomb/International segment (~57% of
Valeant’s revenue in 3Q17) generated organic
revenue growth1,2 in the single digits during each of
the first three quarters of 2017
• Salix (~20% of Valeant’s revenue in 3Q17) generated
organic revenue growth1,2 of 16% and 6% during the
second and third quarter of 2017, respectively
• Generated $1,712 million in cash flow from operations for
the nine months ending Sept. 30, 2017
• Recent New Product Milestones:
• Launched VYZULTA™
• Launched SILIQ™
• FDA accepted NDA for DUOBRII™3 (IDP-118) –
PDUFA date June 18, 2018
• FDA approved LUMIFY™ (formerly Luminesse)
• As of Dec. 31, 2017, reduced total debt by more than
$6.5 billion since the end of 1Q16
• Completed 13 sales including skin care brands (CeraVe®,
AcneFree™ and AMBI®), Dendreon Pharmaceuticals,
iNova Pharmaceuticals, Obagi Medical Products and
Sprout Pharmaceuticals
• Eliminated all long-term debt maturities until 2020 and all
mandatory amortization requirements
• From Sept. 30, 2016 to Sept. 30, 2017, reduced working
capital days by approximately 45 days and inventory days
on hand by more than 30 days
• Achieved dismissals and other positive outcomes in
approximately 70 litigations and investigations relating to
historical matters during 2017
• Agreed to preliminary settlement to resolve the Allergan
shareholder securities litigation, subject to court approval
(Valeant to pay <$100M)
• We believe that our insurance policy limits available are
sufficient to cover the settlement and the cost of
defense
5
1. See Slides 2 and 3 and Appendix for further non-GAAP information.
2. Organic growth, a non-GAAP metric, is defined as an increase on a year-over-year basis
in revenues on a constant currency basis (if applicable) excluding the impact of divestitures
and discontinuations.
3. Provisional name
6
Diversified Portfolio with a Significant International Presence
1. YTD revenue as of 9.30.17
International
40%
U.S.
60%
Global Footprint1 Total Revenue Breakdown1
Global
Consumer
18%
Global
Vision Care
9%
Global
Surgical
7%
Global
Ophtho Rx
7%
International
15%
Salix
17%
All Other
20%
Ortho Dermatologics
7%
Purples: Reported within the Bausch + Lomb/International segment
Greens: Reported within the BrandedRx segment
Global
Consumer
International
Global
Vision Care
Global
Surgical
Global
Ophtho Rx
31% 27% 16% 13% 13%
7
1. Organic growth, a non-GAAP metric, is defined as an increase on a year-over-year
basis in revenues on a constant currency basis (if applicable) excluding the impact
of divestitures and discontinuations.
2. See Slides 2 and 3 and Appendix for further non-GAAP information.
3. YTD revenue as of 9.30.17
Global Vision Care organic revenue
growth1,2 of 8% Y/Y in 3Q17
Expanded presence of B+L on Amazon with
69% growth Y/Y in 3Q17
Launched VYZULTA™ in the U.S. and
received CE Mark in Europe for Stellaris
Elite™
Bausch + Lomb/International Organic Growth (Y/Y)
Key Products3
Bausch + Lomb/International
PreserVision®
renu® Multi-Purpose
Solutions
BioTrue® Multi-
Purpose Solution
LUMIFY™
SofLens®
ULTRA®
BioTrue® ONEday
PureVision®
LOTEMAX® Gel
PROLENSA®
ALREX®
Besivance®
VYZULTA™
Stellaris Elite™
Stellaris® Cataract
and Retina
Consumables
enVista® IOL
Akreos® IOL
Thermage®
JUBLIA®
Tiazac® XC
Artelac®
Bedoyecta®
Global Footprint Provides Access to
Fast-Growing International Markets3
-3%
-4%
0%
2%
6% 6% 6%
-6%
-4%
-2%
0%
2%
4%
6%
8%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
U.S.
28%
International
72%
Consumer and Vision Care1
1. Reported within the B+ L/International segment.
2. Data Source: IRI: Total U.S. MULO 52WE 11-26-17
3. Source: GfK sales through November 2017
4. Source: IRI Market Advantage – Total US MULO – B+L as of 3Q17
5. Based on Universal Product Codes
Bausch + Lomb U.S. Market Share – Soft Contact Lenses3
• #1 item in the vitamin aisle across
U.S. sales2,5
• #1 multi-purpose solution in the
U.S.2
• #1 vision care brand in China with
five-year CAGR (2011–2016) of
20%
8
Consistent Growth
5.10%
2.50%
0.40% 0.40%
-0.60%
-1.20%
-1.70% -1.80% -2.80%
-2.90% -3.30%
-3.90%
-7.00%
-10.90%
Top U.S. Consumer Health Care Companies4
Health &
Beauty
Category
Peer
* Graphic is representative of U.S. Consumer sales only and demonstrates Valeant’s continued growth in U.S. Consumer revenues retail sales.
Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer
• Launched AQUALOX® contact
lenses in Japanese market
• LUMIFY™ (formerly known as
Luminesse) approved by the
FDA on Dec. 22, 2017 and
launching in 2Q18
8.1%
8.2%
8.0%
8.2%
8.4%
8.8% 8.8%
8.7%
8.8%
9.0%
7.4%
7.6%
7.8%
8.0%
8.2%
8.4%
8.6%
8.8%
9.0%
9.2%
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17
9
1. Source: The Glaucoma Drugs Market: Opportunities, Challenges, Strategies & Forecasts, SNS Research; Market Intelligence &
Consultancy Solutions, 2016.
Glaucoma Market Opportunity1
Global glaucoma market represents ~$6 billion
Market is expected to grow at a CAGR of 15% over
the next four-year period, eventually accounting for
more than $11 billion in revenue by the end of 2020
North America market: ~$2.3 billion in annual sales
despite the dominance of generic latanoprost units /
TRXs
U.S. Prostaglandin Market (TRx Data)
Symphony National IDV monthly data MAT Nov 2017
Prostaglandin analog with dual mechanism of action
that reduces intraocular pressure (IOP) in patients
with open-angle glaucoma or ocular hypertension
One Molecule, Two Pathways
Proven IOP reduction
Demonstrated safety profile
VYZULTA™ - FDA Approved
and Now Launching
Latanoprost,
71%
Lumigan, 15%
Travatan Z,
13%
Xalatan, 0% All Other, 1%
12
13
14
15
Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17
T
hous
a
nd
s
Labor Day
Holiday Week
July 4th
Holiday Week
10
1. Reported within Branded Rx segment.
2. Source: Symphony Health
Other Promoted Brands
YTD Growth in RELISTOR® Franchise2
• Growth across a number of brands, including:
RELISTOR® (~40% YTD TRx growth)
APRISO® (~8% YTD TRx growth)
• FDA accepted NDA for PLENVU®, a bowel cleanser
used in preparation for colonoscopies
(PDUFA: Feb. 13, 2018)
XIFAXAN® Highlights
• Investing in the future of this durable asset by
studying new indications and new formulations
Initiated clinical trial in 4Q17
• Duration of market exclusivity supported by a
solid patent estate and a challenging regulatory
pathway for the sole generic filer
We believe the second potential generic
competitor discontinued its clinical program
• PCPs show strong growth with +19% NRx growth
(Nov. ’17 vs. Nov. ’16) and +15% TRx growth
Salix1
XIFAXAN® Weekly TRx Growth >15% Since Primary
Care Team Added
Added Primary
Care Team
2
4
6
Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17
T
hous
a
nd
s
RELISTOR Franchise TRx
~40%
Thanksgiving
Holiday Week
11
1. Provisional name
2. Rachakonda TD et al. J Am Acad Dermatol. 2014 Mar. Psoriasis prevalence among
adults in the United States https://www.ncbi.nlm.nih.gov/pubmed/24388724
3. Cowen. Therapeutic Outlook Dermatology. March 2016
4. IMS Claims Data. April 2015- March 2016, Iqvia. Data on file
PDUFA Date June 18, 2018
• FDA accepted NDA for DUOBRII™1 (IDP-118), an
investigational topical treatment for plaque psoriasis
If approved, will be the first and only topical
combination lotion for adult patients containing a high
potency steroid with a retinoid for a synergistic effect
During Phase 2, more than 52% of patients
achieved treatment success
During Phase 3, there was achievement of a
“clear” to “almost clear” score
• SILIQ™ initial launch in the U.S. demonstrates strength
of strategy and execution
• Early market access better than expected, continuing
to expand and gain additional coverage
• 2-year data on SILIQ™ released in Oct. 2017
demonstrated durable results with a PASI 100 of 59%
• 94% of patients started on SILIQ™ have stayed on
therapy, according to Specialty Pharmacy data
Launch
Mild - Moderate Psoriasis
(1-3, mild, 3-10% mod BSA)
5.6M people mild-
mod
3.7M diagnosed
2.4M treated
with Rx
1.6M
topical
patients
Moderate - Severe Psoriasis
(>10% BSA)
1.9M people mod-
severe
1.4M treated
12% treated
with a Biologic
170k
biologic
patients
Large and Growing Market
Opportunity in the U.S.2,3,4
7.5M Psoriasis Sufferers in the U.S.
150,000 to 260,000 new cases of psoriasis are
diagnosed each year
New Products will Drive the
Turnaround in Dermatology
12
1. Provisional name
Increase Dermatology Sales Force and Reallocate Towards Psoriasis
(>25% increase in sales force)
Submitted ALTRENO™1 (IDP-121) for
acne to the FDA
Submitted JEMDEL™1 (IDP-122) for
psoriasis to the FDA
RETIN-A MICRO® 06 launching in Jan.
2018
FDA accepted NDA for DUOBRII™1
(IDP-118) - PDUFA date June 18, 2018
SILIQ™ ramped up launch with
increased sales force underway
• Additional Key Pipeline Candidates:
IDP-120: Phase 2 (acne)
IDP-123: Phase 3 (acne)
IDP-124: Phase 3 (atopic dermatitis)
IDP-126: Phase 2 (acne)
Dermatology Catalysts
“Based on the strength of our product pipeline over the next five
years, we believe Ortho Dermatologics can double in size.”
– Joseph C. Papa, Chairman and CEO
13
Improved Working Capital Efficiency is Contributing to
Debt Reduction
Generated $1,712
million in cash flow
from operations for the
nine months ending Sept.
30, 2017. In the third
quarter, generated cash
flow from operations of
$490 million
From Sept. 30, 2016 to
Sept. 30, 2017, reduced
working capital days by
~45 days and inventory
days on hand by >30
days
$1,575
$1,712
($432)
($150)
$719
Net Change in
Operating
Activities
Salix Litigation
Payments
Relative Change in
Working Capital
(in millions)
Operating Cash
Flow
(Jan. 1, 2016 – Sept. 30, 2016)
Operating Cash
Flow
(Jan. 1, 2017 – Sept. 30, 2017)
$-
$5
$10
$15
$20
$25
$30
$35
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 &
Beyond
C
u
m
u
lat
iv
e
d
eb
t
re
p
aym
en
t
sc
h
ed
u
le
(i
n
b
ill
io
n
s)
Mar. 31, 2016 Dec. 31, 2017
Reduced Debt and Extended Maturities
1. Debt values are shown at principal value.
2. Reflects the paydown of $923M in term loans from the sale of iNova; issuance of $1B of 5.500% senior
secured notes and repurchase of $1B of unsecured notes maturing in 2020; the paydown of $181M in
term loans from the sale of Obagi; issuance of $750M of add-on senior secured notes to repay $750M of
senior secured term loans; the paydown of $175M of Revolver using cash on hand; issuance of $1.5B
senior unsecured notes and repurchase of $1.5B of unsecured notes maturing in 2020; and the
paydown of $425M of senior secured term loans, using cash on hand.
2018 2019 2020 2021 2022 2023
2024
and beyond
Total
Debt Maturities $0 $0 $2,690M $3,175M $5,321M $6,051M $8,512M $25,749M
Mandatory
Amortization
$0 $0 $0 $0 $0 $0 $0 $0
Total $0 $0 $2,690M $3,175M $5,321M $6,051M $8,512M $25,749M
Eliminated all long-term debt
maturities until 2020 and all
mandatory amortization requirements
As of Dec. 31, 2017, reduced total
debt by more than $6.5 billion since
the end of 1Q16
As of Dec. 31, 2017, ~85% of debt is
fixed rate debt, which provides
protection against rising rates
Reduced Debt and Extended Maturities1
Long-Term Debt Maturity Profile as of Dec. 31, 20171,2
2
14
15
Delivering on Commitment to Simplify Operating
Model and Reduce Debt
Divestiture Date Closed
Sprout Dec. 20, 2017
Obagi Nov. 9, 2017
iNova Sept. 29, 2017
Dendreon June 28, 2017
Armoxindo (Indonesia) May 17, 2017
Delta (Brazil) April 20, 2017
Skin Care Brands
(CeraVe®, AcneFree™
and AMBI®)
March 3, 2017
~$3.8B
in total asset sales
announced since
beginning of 20161
Divestiture Date Closed
Euvipharm (Vietnam) Jan. 25, 2017
Ruconest Dec. 7, 2016
Paragon Nov. 9, 2016
Brodalumab EU Rights June 30, 2016
Synergetics OEM April 1, 2016
Cosmederme (Canada) Jan. 22, 2016
1. Includes future expected milestones.
Stellaris Elite™ next generation surgical platform – H1 2017
Bausch + Lomb ULTRA® for Astigmatism contact lenses and
Biotrue® ONEday for Astigmatism daily disposables – H1 2017
SILIQ™ – 3Q17
Vitesse™ vitreous cutter – 4Q17
Thermage™ FLX System – 4Q17
VYZULTA™ – Dec. 2017
LUMIFY™ – 2Q18
16
Making Progress in Innovation
LATE PHASE
SUBMISSIONS
LAUNCHES
Completed or on Target
Stellaris Elite™
Thermage FLX™
enVista® Trifocal (Intraocular Lens) Submit IDE – H1 2018
New Material (Ophthalmic Viscosurgical Device); Initiated IDE
Study – 4Q17
Loteprednol Gel 0.38% (Ocular Inflammation) Submit NDA –
H1 2018
IDP-120 (Acne) Initiate Phase 3 – H1 2018
IDP-123 (Psoriasis) Initiated Phase 3 – H2 2017
New XIFAXAN® formulation (new indication) Initiated Study –
4Q17
IDP-126 (Acne Combination) Initiated Phase 2 – H2 2017
Bausch + Lomb ULTRA® contact lenses extended wear
Indication – PMA submitted Oct. 2017
DUOBRII™1 (IDP-118 Psoriasis) – 3Q17, PDUFA June 18, 2018
ALTRENO™1 (IDP-121 Acne Lotion) – NDA submitted Oct. 2017
JEMDEL™1 (IDP-122 Psoriasis) – NDA submitted Dec. 2017
PLENVU®1 (NER1006) – H1, PDUFA Feb. 13, 2018
1. Provisional name
17
Significant Seven
New Product Approvals Will Drive Long-Term Growth1
+$1B
in expected
annualized revenues
of selected products
at peak sales over
the next five years
<$100M
in annualized
revenues today
Daily
1. Investigational products subject to FDA approval
1
1
18
1. Provisional name
Catalysts: 2018 and Beyond
Bausch + Lomb
VYZULTA™ Launch (now)
Stellaris Elite™ Launch (now)
LUMIFY™ (formerly
Luminesse) Launch (2Q18)
SiHy Daily Launch (4Q18)
Crystalsert® 2.6 Injector 510(k)
Approval (1H18)
ULTRA® Toric / Multi-Focal
Launch (1Q19)
Consumer E-commerce
Growth (Amazon and Alibaba)
Preliminary resolution of Allergan class-action lawsuit
Additional debt repayments
OraPharma co-promotion of SPRIX®
Corporate / Other
Ortho Dermatologics
Psoriasis / SILIQ™ sales force
expansion
FDA approvals expected
• DUOBRII™1 (IDP-118) -
PDUFA date June 18, 2018
• ALTRENO™1 (IDP-121)
• JEMDEL™1 (IDP-122)
Salix
PLENVU®1 - PDUFA date Feb.
13, 2018
XIFAXAN® Next Generation
Clinical Trial
• New Formulations
• New Indications
Financials that follow were all previously disclosed in 3Q17
results on Nov. 7, 2017
Global Consumer
20
Bausch + Lomb/International Segment – Key Products
Product Description
PreserVision®
A brand of eye vitamins for those diagnosed with moderate-to-advanced age-related
macular degeneration
renu® Multi-Purpose
Solutions
Multi-Purpose solutions that clean and disinfect soft contact lenses
BioTrue® Multi-Purpose
Solution
Multi-Purpose solution that cleans and disinfects soft contact lenses
LUMIFY™
First and only OTC eye drop developed with low-dose brimonidine tartrate for treatment of
eye redness
Product Description
Thermage® Designated for use on different parts of the body to help with skin smoothing
JUBLIA® Topical solution used to treat fungal infections of the toenails
Tiazac® XC Used for the treatment of hypertension
Artelac® Product for providing strong long-lasting relief for dry eyes
Bedoyecta® A brand of vitamin B complex products
International
21
Bausch + Lomb/International Segment – Key Products
Product Description
Stellaris Elite™ Next-generation phacoemulsification and vitrectomy platform
Stellaris® Cataract and
Retina Consumables
Stellaris disposable packs and accessories for cataract surgery and retina surgery
enVista® IOL Hydrophobic intraocular lens for placement during cataract surgery
Akreos® IOL Hydrophilic intraocular lens for placement during cataract surgery
Global Surgical
Product Description
SofLens® Daily disposable contact lenses
BioTrue® ONEday Daily disposable contact lenses
Bausch + Lomb ULTRA® Monthly disposable contact lenses
PureVision® Monthly disposable contact lenses
Global Vision Care
22
Bausch + Lomb/International Segment – Key Products
Product Description
LOTEMAX® Gel Indicated for treatment of inflammation and pain following eye surgery
PROLENSA®
A nonsteroidal anti-inflammatory agent indicated to treat inflammation and reduce eye pain
in patients after cataract surgery
ALREX®
Eye drops indicated for temporary relief of the signs and symptoms of seasonal allergic
conjunctivitis
Besivance®
First and only topical ophthalmic flouroquinolone. Eye drops indicated for bacterial
conjunctivitis (pink eye)
VYZULTA™
First prostaglandin analog, with one of its metabolites being nitric oxide (NO), indicated for
the reduction of intraocular pressure (IOP) in patients with open-angle glaucoma or ocular
hypertension
Global Ophtho Rx
23
Branded Rx Segment – Key Products
Product Description
XIFAXAN®
Tablets used to treat traveler’s diarrhea, irritable bowel syndrome with diarrhea (IBS-D) and
for the reduction in risk of overt hepatic encephalopathy (HE) recurrence
RELISTOR® Tablets or injections to treat constipation caused by opioids
APRISO® Extended-release capsules indicated for the maintenance of remission of ulcerative colitis
UCERIS®
Prescription corticosteroid in extended-release tablet form to help control active, mild-to-
moderate ulcerative colitis
Salix
Product Description
ELIDEL® Topical cream for the treatment of atopic dermatitis, also known as eczema
JUBLIA® Topical solution used to treat fungal infections of the toenails
RETIN-A Micro® Topical treatment of acne vulgaris
ONEXTON® Topical treatment of acne vulgaris
SILIQ™ Injection for the treatment of moderate-to-severe plaque psoriasis
Ortho Dermatologics
24
Branded Rx Segment – Key Products
Product Description
ARESTIN®
Concentrated, locally applied antibiotic that remains active for an extended period of time
for the reduction of pocket depth
NeutraSal®
A prescription rinse that helps perform important functions of saliva when suffering from
oral mucositis and/or hyposalivation (Dry Mouth) stemming from systemic disorders
Dentistry
25
U.S. Diversified Products Segment – Key Products
Product Description
WELLBUTRIN®
Extended-release tablet used to treat adults with a certain type of depression called major
depressive disorder, and for the prevention of autumn-winter seasonal depression
XENAZINE® US Tablet used to treat the involuntary movements (chorea) of Huntington’s disease
CUPRIMINE®
Treatment for Wilson's disease (too much copper in the body), cystinuria (excess amount
of certain proteins in the urine) and for patients with severe rheumatoid arthritis who have
not responded to other therapies
SYPRINE®
Used for treating Wilson's disease in patients who cannot take the medication known as
penicillamine
Neuro & Other
Product Description
Metformin Hydrochloride Extended-release tablet used in the management of type 2 diabetes
Tobramycin/
Dexamethasone
Treatment for bacterial infections of the eye
Bexarotene Used to treat the skin problems that happen with a type of cancer called cutaneous T-cell
lymphona, or CTCL
Generics
26
U.S. Diversified Products Segment – Key Products
Product Description
Thermage® Designated for use on different parts of the body to help with skin smoothing
Fraxel®
Non-invasive laser therapy providing a wide array of treatment options to address many
forms of aging
Clear + Brilliant®
Laser skin care treatment, clinically proven to help fight and prevent the effects of aging
skin
Solta
Key Product LOE / Divestiture 2017 Impact – Forecast
Business
Unit
Product Line with Actual or
Anticipated LOE/Divestiture Date1
LOE/Divested Rev/Profit
Prior Estimate (August)
LOE/Divested Rev/Profit
Current Estimate
Current vs Prior Estimate
Favorable/(Unfavorable)
Revenue Profit Revenue Profit Revenue Profit
Optho Rx
• Lotemax® LOE 1Q18 (anticipated)
• Istalol® LOE 4Q17
$103M $100M $111M $106M +$8M +$6M
Int’l
• Divestitures Euvipharma and
Armoxindo 1Q17
• Zegerid® LOE early 2Q17
• Glumetza® LOE 1Q17
• Wellbutrin® XL add’t Gx Sept ‘16
• Sublinox® add’t Gx Jan 2017
$24M $22M $35M $28M +$11M +$6M
BAUSCH + LOMB / INTERNATIONAL $127M $122M $146M $134M +$19M +$12M
Salix
• Ruconest® Divested Dec. 2016
• Zegerid® add’t US Gx 2017
$20M $19M $20M $19M $ - $ -
BRAND Rx $20M $19M $20M $19M $ - $ -
Neuro &
Other
• Nitropress® LOE Dec 2016
• Ammonul® LOE 1Q16
• Edecrin® LOE 3Q16
• Bupap® LOE 1Q17
• Xenazine® Gx and brand
competition 2Q17
• Virazole® LOE Dec 2016
• Mephyton LOE 1Q18 (anticipated)
• Syprine LOE 1Q18 (anticipated)
• Isuprel® LOE 3Q17 (approved)
$336M $296M $353M $310M +$17M +$14M
Generics • Zegerid® LOE April 2016 $5M $4M $5M $4M $ - $ -
DIVERSIFIED $341M $300M $358M $314M +$17M +$14M
OVERALL COMPANY $488M $441M $524M $467M +$36M +$26M
1. Anticipated date of loss of exclusivity or divestiture is based on the Company’s
current best estimate and actual date of LOE or divestiture, as the case may
be, may occur earlier or later. Changes from prior forecast are noted in red.
27
Key Product LOE / Divestiture 2017 Impact – Y/Y
Business
Unit
Product Line with Actual or
Anticipated LOE/Divestiture Date1
LOE/Divested Rev/Profit
2016A
LOE/Divested Rev/Profit
2017E
Change
2017E vs 2016A
Revenue Profit Revenue Profit Revenue Profit
Optho Rx
• Lotemax® LOE 1Q18 (anticipated)
• Istalol® LOE 4Q17
$129M $124M $111M $106M ($18M) ($18M)
Int’l
• Divestitures Euvipharma and
Armoxindo 1Q17
• Zegerid® LOE early 2Q17
• Glumetza® LOE 1Q17
• Wellbutrin® XL add’t Gx Sept ‘16
• Sublinox® add’t Gx Jan 2017
$44M $32M $35M $28M ($9M) ($4M)
BAUSCH + LOMB / INTERNATIONAL $173M $156M $146M $134M ($27M) ($22M)
Salix
• Ruconest® Divested Dec. 2016
• Zegerid® add’t US Gx 2017
$78M $64M $20M $19M ($58M) ($45M)
BRAND Rx $78M $64M $20M $19M ($58M) ($45M)
Neuro &
Other
• Nitropress® LOE Dec 2016
• Ammonul® LOE 1Q16
• Edecrin® LOE 3Q16
• Bupap® LOE 1Q17
• Xenazine® Gx and brand
competition 2Q17
• Virazole® LOE Dec 2016
• Mephyton LOE 1Q18 (anticipated)
• Syprine LOE 1Q18 (anticipated)
• Isuprel® LOE 3Q17 (approved)
$694M $629M $353M $310M ($341M) ($319M)
Generics • Zegerid® LOE April 2016 $98M $93M $5M $4M ($93M) ($89M)
DIVERSIFIED $792M $722M $358M $314M ($434M) ($408M)
OVERALL COMPANY $1,043M $942M $524M $467M ($519M) ($475M)
28
1. Anticipated date of loss of exclusivity or divestiture is based on the Company’s
current best estimate and actual date of LOE or divestiture, as the case may
be, may occur earlier or later. Changes from prior forecast are noted in red.
Divestitures Included in 2017 Financials1
29
Divestiture Date Closed Revenue EBITDA
Obagi Nov. 9, 2017 ~$60M ~$20M
iNova Sept. 29, 2017 ~$195M ~$100M
Dendreon June 28, 2017 ~$165M ~$65M
Skincare Brands
(CeraVe, AcneFree and
AMBI)
March 3, 2017
~$35M ~$15M
Other2 Various ~$5M ~$0M
TOTAL1 ~$460M ~$200M
1. Excludes Sprout, which closed on December 20, 2017.
2. Primarily Delta (Brazil).
3Q17 Other Financial Information1
Three Months Ended Favorable (Unfavorable)
Sept. 30, 2017 Sept. 30, 2016 Reported Constant Currency3
Cash Interest Expense $424M $437M 3% 3%
Net Interest Expense1,2 $456M $435M (5%) (5%)
Non-cash adjustments
Depreciation1,2 $42M $43M 2% 2%
Non-cash share-based Comp1,2 $19M $37M 49% 49%
Additional cash items
Contingent Consideration /
Milestones
$15M $107M
Restructuring and Other $22M $20M
Capital Expenditures $43M $53M
Tax rate on Adj. EBT
& Other Revenue
15.5% 15.1%
1. See Slides 2 and 3 and this Appendix for further non-GAAP information.
2. Presentation reflects non-GAAP adjustments included in the three months ended Sept. 30, 2016. The
adjustments recorded for interest expense, depreciation, and non-cash share-based compensation were
$32M, $0M and $0M, respectively. These non-GAAP adjustments are no longer recorded in 2017.
3. See this Appendix for further information on the use and calculation of constant currency.
30
Other Financial Information1 for Nine Months ended
Sept. 30, 2017
Nine Months Ended Favorable (Unfavorable)
Sept. 30, 2017 Sept. 30, 2016 Reported Constant Currency3
Cash Interest Expense $1,292M $1,280M (1%) (1%)
Net Interest Expense1,2 $1,383M $1,274M (9%) (8%)
Non-cash adjustments
Depreciation1,2 $124M $128M 3% 1%
Non-cash share-based Comp1,2 $70M $111M 37% 37%
Additional cash items
Contingent Consideration /
Milestones
$183M $169M
Restructuring and Other $72M $102M
Capital Expenditures $118M $181M
Tax rate on Adj. EBT
& Other Revenue
15.5% 15.1%
1. See Slides 2 and 3 and this Appendix for further non-GAAP information.
2. Presentation reflects non-GAAP adjustments included in the nine months ended Sept. 30, 2016. The
adjustments recorded for interest expense, depreciation, and non-cash share-based compensation were
$89M, $15M and $23M, respectively. These non-GAAP adjustments are no longer recorded in 2017.
3. See this Appendix for further information on the use and calculation of constant currency.
31
Non-GAAP Adjustments EPS Impact (Quarter-to-Date)
(a) This subtotal reflects the Adjusted Net income(loss) (non-GAAP) reported by the Company for the periods ended Sept. 30, 2017 and 2016 using the methodology for calculating Adjusted Net
Income(loss) (non-GAAP) as of that date.
(b) As of the third quarter of 2016, Adjusted net income(loss) (non-GAAP) no longer includes adjustments for the following items: Depreciation resulting from a PP&E step-up resulting from
acquisitions and Previously accelerated vesting of certain share-based equity adjustments. Depreciation resulting from a PP&E step-up resulting from acquisitions was a component of
Acquisition-related adjustments excluding amortization of intangible assets. Previously accelerated vesting of certain share-based equity adjustments was a component of Other non-GAAP
charges. As of the first quarter of 2017, Adjusted net income(loss) (non-GAAP) also no longer includes adjustments for Foreign exchange loss/gain on intercompany transactions and Amortization
of deferred financing costs and debt discounts. For the purpose of allowing investors to evaluate Adjusted net income(loss) (non-GAAP) on the same basis for the periods presented, these
adjustments have been removed from the results for the third quarter of 2016.
$ in millions, except per share impact
Income
(Expense)
Earnings Per
Share Impact
Income
(Expense)
Earnings Per
Share Impact
Net Income GAAP 1,301$ 3.69$ (1,218)$ (3.49)$
Acquisition-related adjustments excluding amortization of intangible assets (238) (0.68) 11 0.03
In-process research and development costs 0 0.00 31 0.09
Other (including Gain on Divestures) (311) (0.87) 24 0.07
Loss on Extinguishment of debt 1 0.00 - -
Restructuring and integration costs 6 0.02 20 0.06
Goodwill impairment 312 0.89 1,049 2.99
Asset Impairments 406 1.15 148 0.42
Amortization of finite-lived intangible assets 657 1.86 664 1.89
Amortization of deferred financing costs and debt discounts - - 32 0.09
Tax effect of non-GAAP adjustments (1,767) (5.02) (218) (0.62)
EPS difference between basic and diluted shares - - - 0.01
Adjusted Net Income (Non- GAAP) (a) 367$ 543$
Depreciation resulting from a PP&E step-up from acquisition - - - -
Previously accelerated vesting of certain share-based equity adjustments - - - -
Foreign exchange loss/gain on intercompany transactions - - (1) (0.00)
Amortization of deferred financing costs and debt discounts - - (32) (0.09)
Adjusted Net Income (Non- GAAP) [revised basis](b) $ 367 $ 510
Quarter Ended Quarter Ended
September 30, 2017 September 30, 2016
32
Non-GAAP Adjustments EPS Impact (Year-to-Date)
(a) This subtotal reflects the Adjusted Net income(loss) (non-GAAP) reported by the Company for the period ended Sept. 30, 2017 and 2016 using the methodology for calculating Adjusted Net Income(loss) (non-GAAP) as of
that date.
(b) As of the third quarter of 2016, Adjusted net income(loss) (non-GAAP) no longer includes adjustments for the following items: Depreciation resulting from a PP&E step-up resulting from acquisitions and Previously
accelerated vesting of certain share-based equity adjustments. Depreciation resulting from a PP&E step-up resulting from acquisitions was a component of Acquisition-related adjustments excluding amortization of intangible
assets. Previously accelerated vesting of certain share-based equity adjustments was a component of Other non-GAAP charges. As of the first quarter of 2017, Adjusted net income(loss) (non-GAAP) also no longer includes
adjustments for Foreign exchange loss/gain on intercompany transactions and Amortization of deferred financing costs and debt discounts. For the purpose of allowing investors to evaluate Adjusted net income(loss) (non-
GAAP) on the same basis for the periods presented, these adjustments have been removed from the results for the third quarter of 2016.
$ in millions, except per share impact
Income
(Expense)
Earnings Per
Share Impact
Income
(Expense)
Earnings Per
Share Impact
Net Income GAAP 1,891$ 5.38$ (1,894)$ (5.47)$
Acquisition-related adjustments excluding amortization of intangible assets (297) (0.85) 64 0.18
In-process research and development costs 5 0.01 34 0.10
Other (including Gain on Divestures) (547) (1.56) 94 0.27
Loss on Extinguishment of debt 65 0.18 - -
Restructuring and integration costs 42 0.12 78 0.22
Goodwill impairment 312 0.89 1,049 3.00
Asset Impairments 629 1.79 394 1.12
Amortization of finite-lived intangible assets 1,915 5.45 2,015 5.76
Amortization of deferred financing costs and debt discounts - - 89 0.25
Tax effect of non-GAAP adjustments (3,013) (8.57) (450) (1.29)
EPS difference between basic and diluted shares 0.06
Adjusted Net Income (Non- GAAP) (a) 1,002$ 1,473$
Depreciation resulting from a PP&E step-up from acquisition - - (8) (0.02)
Previously accelerated vesting of certain share-based equity adjustments - - (23) (0.07)
Foreign exchange loss/gain on intercompany transactions - - 14 0.04
Amortization of deferred financing costs and debt discounts - - (89) (0.25)
Adjusted Net Income (Non- GAAP) [revised basis](b) 1,002$ 1,367$
Year to Date Ended Year to Date Ended
September 30, 2017 September 30, 2016
33
3Q17 Top 10 Products – B+L / International
Rank Product 3Q17 2Q17 1Q17 4Q16 3Q16
1 SofLens® $83M $76M $69M $79M $79M
2 Ocuvite® + PreserVision® $73M $71M $58M $70M $66M
3 renu® $57M $55M $51M $55M $60M
4 PureVision® $37M $31M $31M $37M $35M
5
Biotrue® MultiPurpose
Solution
$34M $36M $31M $32M $33M
6 LOTEMAX® $32M $37M $30M $38M $40M
7 BioTrue® ONEday $30M $31M $25M $23M $30M
8 Artelac® $21M $23M $22M $23M $22M
9 Bausch +Lomb ULTRA® $21M $19M $14M $11M $21M
10 Anterior Disposables $21M $23M $21M $22M $20M
Top 10 products by revenues, trailing five quarters
34
Rank Product 3Q17 2Q17 1Q17 4Q16 3Q16
1 XIFAXAN® $286M $233M $185M $251M $273M
2 GLUMETZA® $46M $37M $23M $24M $24M
3 APRISO® $42M $39M $29M $39M $38M
4 UCERIS®1 $37M $37M $29M $45M $41M
5 RETIN-A® Franchise $27M $24M $31M $32M $32M
6 ARESTIN® $26M $28M $24M $37M $28M
7 ELIDEL® $21M $18M $21M $23M $26M
8 JUBLIA® $19M $18M $21M $21M $39M
9 RELISTOR®2 $17M $16M $13M $15M $22M
10 SOLODYN® $14M $13M $32M $29M $26M
3Q17 Top 10 Products – Branded Rx
Top 10 products by revenues, trailing five quarters
35
1. There are two UCERIS products within the Salix Reporting unit that were previously
being treated as separate products. These products are now being aggregated, and the
revenue numbers now reflect this change.
2. There are two RELISTOR products within the Salix Reporting unit that were previously
being treated as separate products. These products are now being aggregated, and the
revenue numbers now reflect this change. When aggregated, RELISTOR is now one of
the top 10 products in Branded Rx.
3Q17 Top 10 Products – U.S. Diversified Products
Rank Product 3Q17 2Q17 1Q17 4Q16 3Q16
1 WELLBUTRIN® $61M $58M $49M $67M $65M
2 XENAZINE® US $28M $32M $29M $33M $35M
3 ISUPREL® $23M $33M $38M $42M $30M
4 CUPRIMINE® $20M $20M $20M $22M $29M
5 SYPRINE® $18M $27M $20M $20M $26M
6 MEPHYTON® $14M $9M $17M $11M $15M
7 MIGRANAL® AG $14M $15M $12M $14M $15M
8 ATIVAN® $13M $16M $17M $7M $13M
9 GLUMETZA® $9M $8M $11M $0M $0M
10 Obagi Nu-Derm® $8M $9M $7M $8M $8M
Top 10 products by revenues, trailing five quarters
36
Bausch + Lomb / Int’l Segment Trailing Five Quarters1
Bausch + Lomb /
International
3Q17 2Q17 1Q17 4Q16 3Q16
Global Vision Care Revenue $208M $187M $170M $178M $198M
Global Surgical Revenue4 $161M $175M $154M $177M $155M
Global Consumer Revenue $392M $379M $375M $397M $401M
Global Ophtho Rx Revenue $149M $167M $143M $159M $162M
International Revenue4 $344M $333M $308M $349M $327M
Segment Revenue $1,254M $1,241M $1,150M $1,260M $1,243M
Segment Adjusted Gross
Margin (non-GAAP)2,3
61% 62% 61% 62% 61%
Segment Adjusted R&D
(non-GAAP)2
$14M $21M $21M $22M $23M
Segment Adjusted SG&A
(non-GAAP)2,3
$358M $370M $349M $348M $355M
Segment Adjusted
Operating Income
(non-GAAP)2,3
$387M $377M $333M $412M $383M
1. Products with sales outside the United States impacted by F/X changes. Please note
rounding impact on percentages.
2. See Slides 2 and 3 and this Appendix for further non-GAAP information.
3. The non-GAAP measures for historic periods are calculated using the former methodologies
used as of that date. See this Appendix for a presentation of the non-GAAP measures on
the same basis for all periods presented and further information on the changes to the
methodologies.
4. As of the third quarter of 2017, one product has been removed from the Global Surgical
business unit and added to the International business unit. This change has been made as
management believes that the product better aligns with the International business unit. For
the purposes of allowing investors to evaluate the results of these two business units on the
same basis for all periods presented, this change also has been made for the results of each
of the historic quarters presented (2Q 2017, 1Q 2017, 4Q 2016 and 3Q 2016).
37
Branded Rx Segment Trailing Five Quarters1
Brand Rx 3Q17 2Q17 1Q17 4Q16 3Q16
Salix Revenue $452M $387M $302M $414M $437M
Dermatology Revenue $148M $130M $192M $214M $223M
Dendreon Revenue $0M $83M $81M $77M $77M
Dentistry Revenue $32M $35M $28M $39M $29M
All Other Revenue $1M $1M $1M $1M $0M
Segment Revenue $633M $636M $604M $745M $766M
Segment Adjusted Gross
Margin (non-GAAP) 2,3
84% 83% 84% 84% 85%
Segment Adjusted R&D
(non-GAAP)2
$16M $15M $14M $18M $20M
Segment Adjusted SG&A
(non-GAAP) 2,3
$160M $170M $167M $169M $147M
Segment Adjusted
Operating Income
(non-GAAP) 2,3
$357M $341M $326M $438M $486M
38
1. Products with sales outside the United States impacted by F/X changes. Please note rounding
impact on percentages.
2. See Slides 2 and 3 and this Appendix for further non-GAAP information.
3. The non-GAAP measures for historic periods are calculated using the former methodologies
used as of that date. See this Appendix for a presentation of the non-GAAP measures on the
same basis for all periods presented and further information on the changes to the
methodologies.
U.S. Diversified Products Segment Trailing Five Quarters1
Diversified Products 3Q17 2Q17 1Q17 4Q16 3Q16
Neuro & Other Revenue $227M $248M $243M $276M $321M
Generics Revenue $82M $82M $85M $93M $120M
Solta Revenue $7M $9M $8M $9M $8M
Obagi Revenue $16M $16M $17M $17M $17M
Other Revenue $0M $1M $2M $3M $4M
Segment Revenue $332M $356M $355M $398M $470M
Segment Adjusted Gross
Margin (non-GAAP)2,3
81% 83% 85% 83% 88%
Segment Adjusted R&D
(non-GAAP)2
$1M $1M $2M $1M $2M
Segment Adjusted SG&A
(non-GAAP)2,3
$30M $36M $37M $33M $31M
Segment Adjusted
Operating Income
(non-GAAP)2,3
$239M $255M $264M $296M $379M
39
1. Products with sales outside the United States impacted by F/X changes. Please note
rounding impact on percentages.
2. See Slides 2 and 3 and this Appendix for further non-GAAP information.
3. The non-GAAP measures for historic periods are calculated using the former methodologies
used as of that date. See this Appendix for a presentation of the non-GAAP measures on the
same basis for all periods presented and further information on the changes to the
methodologies.
Selected U.S. Businesses Pipeline Inventory Trending
(Quarter-to-Date)
Months on Hand
Business Units
As of
June 30, 2016
As of
Sept 30, 2016
Change
3Q16
As of
June 30, 2017
As of
Sept 30, 2017
Change
3Q17
Relative
Change
3Q17 vs 3Q16
Change Sept.
30, 2017 vs
Sept. 30, 2016
Derm 1.52 1.70 0.18 1.33 1.38 0.05 (0.13) (0.32)
Neuro 1.69 1.49 (0.20) 1.57 1.53 (0.04) 0.16 0.04
Ophtho 1.44 1.49 0.05 1.37 1.19 (0.18) (0.23) (0.30)
GI 1.31 1.47 0.16 1.32 1.37 0.05 (0.11) (0.10)
40
Selected U.S. Businesses Pipeline Inventory Trending
(Year-to-Date)
Months on Hand
Business Units
As of
Dec. 31, 2015
As of
Sept 30, 2016
Change
YTD16
As of
Dec. 31, 2016
As of
Sept 30, 2017
Change
YTD17
Relative
Change
17 vs 16
Change Sept.
30, 2017 vs
Sept. 30,
2016
Derm 0.99 1.70 0.71 1.34 1.38 0.04 (0.67) (0.32)
Neuro 1.51 1.49 (0.02) 1.59 1.53 (0.06) (0.04) 0.04
Ophtho 1.32 1.49 0.17 1.44 1.19 (0.25) (0.42) (0.30)
GI 1.80 1.47 (0.33) 1.57 1.37 (0.20) 0.13 (0.10)
41
Financial Summary – Adjusted (non-GAAP)
Presentation Reconciliation
(a) These subtotals reflect Adjusted financial measures (non-GAAP) reported by the Company for the 2017 and 2016 periods presented using the methodology for calculating the Adjusted financial measures (non-GAAP) as of
those dates.
(b) As of the third quarter of 2016, these Adjusted financial measures (non-GAAP) no longer include adjustments for the following items: Depreciation resulting from a PP&E step-up resulting from acquisitions and Previously
accelerated vesting of certain share-based equity adjustments. Depreciation resulting from a PP&E step-up resulting from acquisitions was a component of Acquisition-related adjustments excluding amortization of intangible
assets. Previously accelerated vesting of certain share-based equity adjustments was a component of Other non-GAAP charges. For the purpose of allowing investors to evaluate these Adjusted financial measures (non-GAAP)
on the same basis for the periods presented, these adjustments have been removed from the results for the periods presented in 2016.
42
Total Gross
Profit
Total Gross
Margin
Selling, A&P
Expense G&A Expense
R&D
Expense
Operating
Expense
Operating
Income
(EBITA)
YTD 2017 GAAP $ 4,660 71% 1,421$ 522$ 271$ 2,214$ 424$
Acquisition-related contingent consideration - 0% - - (297)
In-process research and development costs - 0% - - 5
Other (income)/expense - 0% - - (584)
Restructuring and integration costs - 0% - - 42
Other non-GAAP charges - 0% - (37) - (37) 37
Amortization of finite-lived intangibles - 0% - - 1,915
Asset Impairments - 0% - - 629
Goodwill impairment - 0% - - 312
YTD 2017 Non-GAAP 4,660$ 71% 1,421$ 485$ 271$ 2,177$ 2,483$
Total Gross
Profit
Total Gross
Margin
Selling, A&P
Expense G&A Expense
R&D
Expense
Operating
Expense
Operating
Income
(EBITA)
YTD 2016 GAAP $ 5,326 73% 1,547$ 598$ 328$ 2,473$ (716)$
Amortization resulting from inventory step-up 38 1% - 38
Depreciation expense resulting from PP&E step-up/down 6 0% (2) - (2) 8
Acquisition-related contingent consideration - 0% - 18
Share-based compensation - 0% 2 2 (2)
In-process research and development costs - 0% - 34
Other (income)/expense - 0% (6) (6) (19)
Restructuring and integration costs - 0% - 78
Other non-GAAP charges 9 0% (98) (16) (114) 129
Amortization of finite-lived intangibles - 0% - 2,015
Asset Impairments - 0% - 394
Goodwill impairment - 0% - 1,049
YTD 2016 Non-GAAP (As Reported) (a) 5,379$ 74% 1,541$ 500$ 312$ 2,353$ 3,026$
Depreciation expense resulting from PP&E step-up/down (6) 0% - 2 - 2 (8)
Share-based compensation - 0% - (23) - 2 (23)
YTD 2016 Non-GAAP (Revised Basis) (b) 5,373$ 74% 1,541$ 479$ 312$ 2,357$ 2,995$
YTD 2017
YTD 2016
Financial Summary – Adjusted (non-GAAP)
Presentation Reconciliation
(a) These subtotals reflect Adjusted financial measures (non-GAAP) reported by the Company for the 2017 and 2016 periods presented using the methodology for calculating the Adjusted financial measures (non-GAAP) as of
those dates.
(b) As of the third quarter of 2016, these Adjusted financial measures (non-GAAP) no longer include adjustments for the following items: Depreciation resulting from a PP&E step-up resulting from acquisitions and Previously
accelerated vesting of certain share-based equity adjustments. Depreciation resulting from a PP&E step-up resulting from acquisitions was a component of Acquisition-related adjustments excluding amortization of intangible
assets. Previously accelerated vesting of certain share-based equity adjustments was a component of Other non-GAAP charges. For the purpose of allowing investors to evaluate these Adjusted financial measures (non-GAAP)
on the same basis for the periods presented, these adjustments have been removed from the results for the periods presented in 2016.
43
Segment
Gross Profit
Segment
Gross Margin
Selling, A&P
Expense G&A Expense
R&D
Expense
Operating
Expense
Operating
Income (EBITA)
Operating
Margin/ EBITA
Margin
YTD 2017 GAAP $ 2,229 61% 932$ 145$ 55$ 1,132$ 1,097$ 30%
Other non-GAAP charges - 0% - - - - - 0%
YTD 2017 Non-GAAP 2,229$ 61% 932$ 145$ 55$ 1,132$ 1,097$ 30%
Total Gross
Profit
Total Gross
Margin
Selling, A&P
Expense G&A Expense
R&D
Expense
Operating
Expense
Operating
Income (EBITA)
Operating
Margin/ EBITA
Margin
YTD 2016 GAAP $ 2,261 62% 971$ 154$ 64$ 1,189$ 1,072$ 29%
Amortization resulting from inventory step-up 5 0% - - 4 0%
Depreciation expense resulting from PP&E step-up/down 6 0% - - 6 0%
Other non-GAAP charges 3 0% - - 4 0%
YTD 2016 Non-GAAP (As Reported) (a) 2,275$ 62% 971$ 154$ 64$ 1,189$ 1,086$ 30%
Depreciation expense resulting from PP&E step-up/down (6) 0% - - - - (6) 0%
YTD 2016 Non-GAAP (Revised Basis) (b) 2,269$ 62% 971$ 154$ 64$ 1,189$ 1,080$ 30%
YTD 2017
YTD 2016
B&L / International
B&L / International
Financial Summary – Adjusted (non-GAAP)
Presentation Reconciliation
(a) These subtotals reflect Adjusted financial measures (non-GAAP) reported by the Company for the 2016 periods presented using the methodology for calculating the Adjusted financial measures (non-GAAP) as of those dates.
(b) As of the third quarter of 2016, these Adjusted financial measures (non-GAAP) no longer include adjustments for the following items: Depreciation resulting from a PP&E step-up resulting from acquisitions and Previously accelerated
vesting of certain share-based equity adjustments. Depreciation resulting from a PP&E step-up resulting from acquisitions was a component of Acquisition-related adjustments excluding amortization of intangible assets. Previously
accelerated vesting of certain share-based equity adjustments was a component of Other non-GAAP charges. For the purpose of allowing investors to evaluate these Adjusted financial measures (non-GAAP) on the same basis for the
periods presented, these adjustments have been removed from the results for the periods presented in 2016.
44
Segment
Gross Profit
Segment
Gross Margin
Selling, A&P
Expense G&A Expense
R&D
Expense
Operating
Expense
Operating
Income (EBITA)
Operating
Margin/ EBITA
Margin
YTD 2017 GAAP $ 1,566 84% 415$ 82$ 45$ 542$ 1,024$ 55%
Other non-GAAP charges - 0% - - - 0%
YTD 2017 Non-GAAP 1,566$ 84% 415$ 82$ 45$ 542$ 1,024$ 55%
Total Gross
Profit
Total Gross
Margin
Selling, A&P
Expense G&A Expense
R&D
Expense
Operating
Expense
Operating
Income (EBITA)
Operating
Margin/ EBITA
Margin
YTD 2016 GAAP $ 1,726 83% 498$ 64$ 85$ 647$ 1,078$ 52%
Amortization resulting from inventory step-up 33 2% - - 33 2%
Depreciation expense resulting from PP&E step-up/down (0) 0% - - (0) 0%
Other non-GAAP charges 4 0% (6) (6) (15) (27) 32 1%
YTD 2016 Non-GAAP 1,763$ 85% 492$ 58$ 70$ 620$ 1,143$ 55%
YTD 2017
Branded Rx
YTD 2016
Branded Rx
Financial Summary – Adjusted (non-GAAP)
Presentation Reconciliation
45
(a) These subtotals reflect Adjusted financial measures (non-GAAP) reported by the Company for the 2017 and 2016 periods presented using the methodology for calculating the Adjusted financial measures (non-GAAP) as of
those dates.
Segment
Gross Profit
Segment
Gross Margin
Selling, A&P
Expense G&A Expense
R&D
Expense
Operating
Expense
Operating
Income (EBITA)
Operating
Margin/ EBITA
Margin
YTD 2017 GAAP $ 865 83% 74$ 30$ 4$ 108$ 757$ 73%
Other non-GAAP charges - 0% - - - 0%
YTD 2017 Non-GAAP 865$ 83% 74$ 30$ 4$ 108$ 757$ 73%
Total Gross
Profit
Total Gross
Margin
Selling, A&P
Expense G&A Expense
R&D
Expense
Operating
Expense
Operating
Income (EBITA)
Operating
Margin/ EBITA
Margin
YTD 2016 GAAP $ 1,340 88% 80$ 27$ 6$ 113$ 1,227$ 81%
Other non-GAAP charges 2 0% - - 2 0%
YTD 2016 Non-GAAP (As Reported) (a) 1,342$ 88% 80$ 27$ 6$ 113$ 1,229$ 81%
YTD 2016
US Diversified
YTD 2017
US Diversified
Financial Summary – Adjusted (non-GAAP)
Presentation Reconciliation
(a) These subtotals reflect Adjusted financial measures (non-GAAP) reported by the Company for the 2017 and 2016 periods presented using the methodology for calculating the Adjusted financial measures (non-GAAP) as of
those dates.
46
Total
Gross
Profit
Total
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Expense
Operating
Expense
Operating
Income/
EBITA
GAAP $ 1,561 70% 465$ 159$ 81$ 705$ 38$
Acquisition-related contingent consideration - 0% - - (238)
Other (income)/expense - 0% - - (325)
Restructuring and integration costs - 0% - - 6
Other non-GAAP charges - 0% - (14) - (14) 14
Amortization of finite-lived intangibles - 0% - - 657
Asset Impairments - 0% - - 406
Goodwill impairment - 0% - - 312
Non-GAAP 1,561$ 70% 465$ 145$ 81$ 691$ 870$
Total
Gross
Profit
Total
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Expense
Operating
Expense
Operating
Income/
EBITA
GAAP $ 1,822 73% 459$ 201$ 101$ 761$ (863)$
Amortization resulting from inventory step-up 2 0% - - 2
Acquisition-related contingent consideration - 0% - - 9
In-process research and development costs - 0% - - 31
Other (income)/expense - 0% - - 3
Restructuring and integration costs - 0% - - 20
Other non-GAAP charges 2 0% (19) - (19) 21
Amortization of finite-lived intangibles - 0% - - 664
Asset Impairments - 0% - - 148
Goodwill impairment - 0% - - 1,049
Non-GAAP (As Reported) (a) 1,826$ 74% 459$ 182$ 101$ 742$ 1,084$
Q3 2017
Q3 2016
Financial Summary – Adjusted (non-GAAP)
Presentation Reconciliation
(a) These subtotals reflect Adjusted financial measures (non-GAAP) reported by the Company for the 2017 and 2016 periods presented using the methodology for calculating the Adjusted financial measures (non-GAAP) as of
those dates.
47
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/ EBITA
Operating
Margin/ EBITA
Margin
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/ EBITA
Margin
GAAP $ 759 61% 311$ 47$ 14$ 372$ 387$ 31% $ 768 62% 319$ 51$ 21$ 391$ 377$ 30%
Other non-GAAP charges 0 0% - 0 0% -
Non-GAAP $ 759 61% 311$ 47$ 14$ 372$ 387$ 31% $ 768 62% 319$ 51$ 21$ 391$ 377$ 30%
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/ EBITA
Operating
Margin/ EBITA
Margin
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/ EBITA
Margin
GAAP $ 703 61% 302$ 47$ 21$ 370$ 333$ 29% $ 782 62% 302$ 46$ 22$ 370$ 412$ 33%
Other non-GAAP charges
Non-GAAP (As Reported) (a) $ 703 61% 302$ 47$ 21$ 370$ 333$ 29% $ 782 62% 302$ 46$ 22$ 370$ 412$ 33%
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/ EBITA
Operating
Margin/ EBITA
Margin
GAAP $ 759 61% 309$ 46$ 23$ 378$ 381$ 31%
Other non-GAAP charges 2 0% 2 0%
Non-GAAP (As Reported) (a) $ 761 61% 309$ 46$ 23$ 378$ 383$ 31%
B&L / International
Qtr 4 2016
B&L / International
Qtr 1 2017
B&L / International
Qtr 2 2017
Qtr 3 2016
B&L / International
Qtr 3 2017
B&L / International
Financial Summary – Adjusted (non-GAAP)
Presentation Reconciliation
(a) These subtotals reflect Adjusted financial measures (non-GAAP) reported by the Company for the 2017 and 2016 periods presented using the methodology for calculating the Adjusted financial measures (non-GAAP) as of
those dates.
48
Segment
Gross Profit
Segment
Gross Margin
Selling, A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/ EBITA
Operating
Margin/ EBITA
Margin
Segment
Gross Profit
Segment
Gross Margin
Selling, A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/ EBITA
Margin
GAAP $ 533 84% 133$ 27$ 16$ 176$ 357$ 56% $ 526 83% 144$ 26$ 15$ 185$ 341$ 54%
Other non-GAAP charges - 0% - - - - 0% - 0% - - - 0 0%
Non-GAAP $ 533 84% 133$ 27$ 16$ 176$ 357$ 56% $ 526 83% 144$ 26$ 15$ 185$ 341$ 54%
Segment
Gross Profit
Segment
Gross Margin
Selling, A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/ EBITA
Operating
Margin/ EBITA
Margin
Segment
Gross Profit
Segment
Gross Margin
Selling, A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/ EBITA
Margin
GAAP $ 507 84% 139$ 28$ 14$ 181$ 326$ 54% $ 625 84% 151$ 18$ 18$ 187$ 438$ 59%
Other non-GAAP charges - 0% - -
Non-GAAP (As Reported) (a) $ 507 84% 139$ 28$ 14$ 181$ 326$ 54% $ 625 84% 151$ 18$ 18$ 187$ 438$ 59%
Segment
Gross Profit
Segment
Gross Margin
Selling, A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/ EBITA
Operating
Margin/ EBITA
Margin
GAAP $ 652 85% 127$ 20$ 20$ 167$ 485$ 63%
Amortization resulting from inventory step-up 2 0% 2 0%
Other non-GAAP charges (1) 0% (1) 0%
Non-GAAP (As Reported) (a) $ 653 85% 127$ 20$ 20$ 167$ 486$ 63%
Qtr 3 2017
Branded Rx
Qtr 2 2017
Qtr 1 2017
Branded Rx
Qtr 4 2016
Branded Rx
Branded Rx
Qtr 3 2016
Branded Rx
Financial Summary – Adjusted (non-GAAP)
Presentation Reconciliation
(a) These subtotals reflect Adjusted financial measures (non-GAAP) reported by the Company for the 2017 and 2016 periods presented using the methodology for calculating the Adjusted financial measures (non-GAAP) as of
those dates.
49
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/
EBITA Margin
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/
EBITA Margin
GAAP $ 270 81% 21$ 10$ 1$ 32$ 239$ 72% $ 292 83% 27$ 9$ 1$ 37$ 255$ 72%
Integration related technology transfers - 0% - - - 0% - -
Non-GAAP $ 270 81% 21$ 10$ 1$ 32$ 239$ 72% $ 292 83% 27$ 9$ 1$ 37$ 255$ 72%
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/
EBITA Margin
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/
EBITA Margin
GAAP $ 303 85% 25$ 12$ 2$ 39$ 264$ 74% $ 330 83% 24$ 9$ 1$ 34$ 296$ 74%
Integration related technology transfers 0 0% - - - (0) 0% (0) (0)
Non-GAAP $ 303 85% 25$ 12$ 2$ 39$ 264$ 74% $ 330 83% 24$ 9$ 1$ 34$ 296$ 74%
Segment
Gross Profit
Segment
Gross
Margin
Selling,
A&P
Expense
G&A
Expense
R&D
Investment
Operating
Expense
Operating
Income/
EBITA
Operating
Margin/
EBITA Margin
GAAP $ 411 88% 24$ 7$ 2$ 33$ 378$ 81%
Integration related technology transfers 1 0% 1 0
Non-GAAP (As Reported) (a) $ 412 88% 24$ 7$ 2$ 33$ 379$ 81%
Qtr 3 2017
US Diversified
Qtr 2 2017
Qtr 1 2017
US Diversified
Qtr 4 2016
US Diversified
US Diversified
Qtr 3 2016
US Diversified
Reconciliation of reported Net Income (Loss) to EBITDA
and Adjusted EBITDA ($M) (Quarter-to-Date)
(b) This subtotal reflects the Adjusted EBITDA (non-GAAP) reported by the Company for the three months ended Sept. 30, 2016 using the methodology for calculating Adjusted EBITDA
(non-GAAP) as of that date.
(c) As of the first quarter of 2017, non-GAAP adjustments no longer include adjustments for Foreign exchange gain/loss arising from intercompany transactions. For the purpose of
allowing investors to evaluate Adjusted EBITDA on the same basis for the periods presented, this adjustment has been removed from the results for the three months ended Sept. 30,
2016.
2017 2016
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. 1,301$ (1,218)$
Interest expense, net 456 467
Recovery of income taxes (1,700) (113)
Depreciation and amortization 699 708
EBITDA 756 (156)
Adjustments:
Goodwill impairment 312 1,049
Restructuring and integration costs 6 20
Acquired in-process research and development costs - 31
Asset impairments (d) 406 148
Share-based compensation 19 37
Acquisition-related adjustments excluding amortization of intangible assets, net of depreciation expense (238) 11
Loss on extinguishment of debt 1 -
Gain (loss) on investments, net - -
Foreign exchange and other - 1
Other non-GAAP charges (a) (311) 22
Adjusted EBITDA (non-GAAP) (As Reported) (b) 951 1,163
Foreign exchange loss/gain on intercompany transactions - (1)
Adjusted EBITDA (non-GAAP) (Revised basis) (c) 951$ 1,162$
(a) Other non-GAAP charges include: (311)$ 22$
Integration related inventory and technology transfer costs - 1
CEO termination costs (cash severance payment) - -
Legal and other professional fees (b) 14 19
Settlement of certain disputed invoices related to transition services - -
Litigation and other matters 3 1
Net (gain)/loss on sale of assets (c) (328) -
Acquisition related transaction costs - -
Philidor Rx Services, LLC net loss through deconsolidation as of January 31, 2016 - -
Other - 1
September 30,
Adjusted EBITDA (non-GAAP)
Three Months Ended
50
Reconciliation of reported Net Income (Loss) to EBITDA
and Adjusted EBITDA ($M) (Year-to-Date)
(b) This subtotal reflects the Adjusted EBITDA (non-GAAP) reported by the Company for the nine months ended Sept. 30, 2016 using the methodology for calculating Adjusted EBITDA
(non-GAAP) as of that date.
(c) As of the first quarter of 2017, non-GAAP adjustments no longer include adjustments for Foreign exchange gain/loss arising from intercompany transactions. For the purpose of allowing
investors to evaluate Adjusted EBITDA on the same basis for the periods presented, this adjustment has been removed from the results for the nine months ended of Sept. 30, 2016.
2017 2016
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. 1,891$ (1,894)$
Interest expense, net 1,383 1,363
Recovery of income taxes (2,829) (179)
Depreciation and amortization 2,039 2,159
EBITDA 2,484 1,449
Adjustments:
Goodwill impairment 312 1,049
Restructuring and integration costs 42 78
Acquired in-process research and development costs 5 34
Asset impairments (d) 629 394
Share-based compensation 70 134
Acquisition-related adjustments excluding amortization of intangible assets, net of depreciation expense (297) 56
Loss on extinguishment of debt 65 -
Gain (loss) on investments, net - -
Foreign exchange and other - (14)
Other non-GAAP charges (a) (547) 78
Adjusted EBITDA (non-GAAP) (As Reported) (b) 2,763 3,258
Foreign exchange loss/gain on intercompany transactions - 14
Adjusted EBITDA (non-GAAP) (Revised basis) (c) 2,763$ 3,272$
(a) Other non-GAAP charges include: (547)$ 78$
Integration related inventory and technology transfer costs - 10
CEO termination costs (cash severance payment) - 10
Legal and other professional fees (b) 37 57
Settlement of certain disputed invoices related to transition services - 16
Litigation and other matters 111 (32)
Net (gain)/loss on sale of assets (c) (695) (9)
Acquisition related transaction costs - 2
Philidor Rx Services, LLC net loss through deconsolidation as of January 31, 2016 - 3
Other - 21
September 30,
Adjusted EBITDA (non-GAAP)
Nine Months Ended
51
Reconciliation of reported Growth to Organic Growth ($M)
(Quarter-to-Date)
1. See Slide 2 and Appendix for further non-GAAP information.
(e) As of the third quarter of 2017, one product has been removed from the Global Surgical business unit and added to the
International business unit. This change has been made as management believes that the product better aligns with the
International business unit. For the purposes of allowing investors to evaluate the results of these two business units on the same
basis for all periods presented, this change has been made for the results of the three months ended Sept. 30, 2016.
(1)
Q3 2017
(2)
Q3 2016
(3)
Currency
impact
(a)
(4)
2017
excluding
currency
impact
(b)
(5)
% Change
(6)
Divestitures /
Discontinuations
Organic Growth
4/(2-6)
(c)
Global Vision Care 208 198 (2) 210 6% 4 8%
Global Surgical (e) 161 155 3 158 2% - 2%
Global Consumer Products 392 401 8 384 -4% 38 6%
Global Ophthalmology RX 149 162 1 148 -9% - -9%
International (e) 344 327 (25) 369 13% 9 16%
Other revenue - - - - 0% - 0%
Bausch + Lomb / International 1,254 1,243 (15) 1,269 2% 51 6%
Salix (GI) 452 437 - 452 3% 9 6%
Dermatology 148 223 - 148 -34% -34%
Dendreon - 77 - - -100% 77 --
Dentistry 32 29 - 32 10% 10%
Other revenue 1 - - 1 100% - --
Branded Rx 633 766 - 633 -17% 86 -7%
Neuro 227 321 227 -29% - -29%
Generics 82 120 82 -32% - -32%
Solta 7 8 7 -13% - -13%
Obagi 16 17 16 -6% - -6%
Other revenue - 4 - - -100% 4 --
U.S. Diversified Products 332 470 - 332 -29% 4 -29%
Total revenues 2,219$ 2,479$ (15)$ 2,234$ -10% 141$ -4%
As reported
For the Three Months Ended September 30,
52
Reconciliation of reported Growth to Organic Growth ($M)
(Year-to-Date)
53
1. See Slide 2 and Appendix for further non-GAAP information.
(d) As of the third quarter of 2017, one product has been removed from the Global Surgical business unit and added to the International business unit. This change has been made as
management believes that the product better aligns with the International business unit. For the purposes of allowing investors to evaluate the results of these two business units on the same
basis for all periods presented, this change also has been made for the results of the nine months ended Sept. 30, 2016.
(1)
2017
(2)
2016
(3)
Currency
impact
(a)
(4)
2017
excluding
currency
impact
(b)
(5)
% Change
(6)
Divestitures /
Discontinuations
Organic Growth
4/(2-6)
(c)
Global Vision Care 565 565 (6) 571 1% 10 3%
Global Surgical 490 495 (4) 494 0% - 0%
Global Consumer Products 1,147 1,180 10 1,137 -4% 93 5%
Global Ophthalmology RX 459 465 (3) 462 -1% - -1%
International 984 961 (107) 1,091 14% 21 16%
Other revenue - - - - 0% - 0%
Bausch + Lomb / International 3,645 3,666 (110) 3,755 2% 124 6%
Salix (GI) 1,141 1,117 1,141 2% 23 4%
Dermatology 470 626 470 -25% - -25%
Dendreon 164 226 164 -27% 82 14%
Dentistry 95 113 95 -16% 1 -15%
Other revenue 3 2 - 3 50% - 50%
Branded Rx 1,873 2,084 - 1,873 -10% 106 -5%
Neuro 718 1,087 718 -34% - -34%
Generics 249 362 249 -31% - -31%
Solta 24 20 24 20% - 20%
Obagi 49 41 49 20% - 20%
Other revenue 3 11 - 3 -73% 7 -25%
U.S. Diversified Products 1,043 1,521 - 1,043 -31% 7 -31%
Total revenues 6,561$ 7,271$ (110)$ 6,671$ -8% 237$ -5%
(b) To supplement the f inancial measures prepared in accordance w ith U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP
f inancial measures. For additional information about the Company’s use of such non-GAAP financial measures, please refer to the body of the press release to w hich
these tables are attached.
(c) Organic Grow th Definitions: This measure provides grow th rates for businesses that have been ow ned for one year or more.
((Current Year Total sales – acquisitions w ithin the last year - YoY FX impact)- (Prior Year Total sales – divestitures & discontinuations))/( Prior Year Total sales –
divestitures & discontinuations)
As reported
For the Nine Months Ended September 30,
(a) Currency impact for constant currency sales is determined by comparing 2017 reported amounts adjusted to exclude currency impact, calculated using 2016 monthly
average exchange rates, to the actual 2016 reported amounts.
(d)
(d)
Reconciliation of TTM adjusted EBITDA ($M)
TTM TTM TTM TTM TTM
Sep-17 Jun-17 Mar-17 Dec-16 Sep-16
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. 1,376$ (1,143)$ (1,407)$ (2,409)$ (2,279)$
Interest expense, net 1,848 1,859 1,873 1,828 1,794
Recovery of income taxes (2,677) (1,090) (958) (27) (60)
Depreciation and amortization 2,746 2,755 2,809 2,866 2,900
EBITDA 3,293 2,381 2,317 2,258 2,355
Adjustments:
Goodwill impairment 340 1,077 1,077 1,077 1,049
Restructuring and integration costs 96 110 112 132 164
Acquired in-process research and development costs 5 36 37 34 140
Asset impairments 657 399 544 422 547
Share-based compensation 100 119 129 165 163
Acquisition-related adjustments excluding amortization of intangible assets, net of depreciation expense (328) (79) (16) 25 48
Loss on extinguishment of debt 65 64 64 - -
Foreign exchange and other 28 29 16 14 (16)
Other non-GAAP charges (448) (113) (122) 177 178
Adjusted EBITDA (non-GAAP) (As Reported) (a) 3,808$ 4,023$ 4,158$ 4,304$ 4,628$
Foreign exchange loss/gain on intercompany transactions (28)$ (29) (16) (14) 16
Adjusted EBITDA (non-GAAP) (Revised basis) (b) 3,780$ 3,994$ 4,142$ 4,290$ 4,644$
(a) This subtotal reflects the Adjusted EBITDA (non-GAAP) reported by the Company for the TTM period using the methodologies for calculating
Adjusted EBITDA (non-GAAP) as of those dates.
(b) As of the f irst quarter of 2017, non-GAAP adjustments no longer include adjustments for Foreign exchange gain/loss arising from intercompany
transactions. For the purpose of allow ing investors to evaluate Adjusted EBITDA on the same basis for the periods presented, this adjustment has
been removed from the results for all TTM periods presented.
Adjusted EBITDA (non-GAAP)
54
Year-to-Date Financial Results
1. See Slides 2 and 3 and this Appendix for further non-GAAP information.
2. The non-GAAP measures for historic periods are calculated using the former
methodologies used as of that date. See this Appendix for a presentation of the non-
GAAP measures on the same basis for all periods presented and further information on
the changes to the methodologies.
3. See this Appendix for further information on the use and calculation of constant currency.
Nine Months Ended Favorable (Unfavorable)
Sept. 30, 2017 Sept. 30, 2016 Reported Constant Currency3
Revenues $6,561M $7,271M (10%) (8%)
GAAP NI $1,891M ($1,894M)
GAAP Diluted EPS $5.38 ($5.47)
GAAP CF from Operations $1,712M $1,575M 9%
Adj. Gross Profit (non-GAAP)1,2 $4,660M $5,379M (13%) (12%)
Adj. Gross Margin (non-
GAAP)1,2
71% 74%
Adj. Selling, A&P (non-GAAP)1 $1,421M $1,541M 8% 6%
Adj. G&A (non-GAAP)1,2 $485M $500M 3% 2%
Adj. R&D (non-GAAP)1 $271M $312M 13% 13%
Total Adj. Operating Expense
(non-GAAP)1,2
$2,177M $2,353M 7% 6%
Adj. EBITA (non-GAAP)1,2 $2,483M $3,026M (18%) (17%)
Adj. EBITDA (non-GAAP)1,2 $2,763M $3,258M (15%) (16%)
55
Year-to-Date Segment Results – Bausch + Lomb / International
Nine Months Ended Favorable (Unfavorable)
Sept. 30, 2017 Sept. 30, 2016 Reported Constant Currency3
Global Vision Care $565M $565M 0% 1%
Global Surgical4 $490M $495M (1%) 0%
Global Consumer $1,147M $1,180M (3%) (4%)
Global Ophtho Rx $459M $465M (1%) (1%)
International4 $984M $961M 2% 14%
Total Segment Revenue $3,645M $3,666M (1%) 2%
Adj. Gross Profit (non-GAAP)1,2 $2,229M $2,275M (2%) 1%
Adj. Gross Margin (non-GAAP)1,2 61% 62%
Adj. Selling, A&P (non-GAAP)1 $932M $971M 4% 2%
Adj. G&A (non-GAAP)1,2 $145M $154M 6% 5%
Adj. R&D (non-GAAP)1 $55M $64M 14% 13%
Total Adj. Operating Expense (non-GAAP)1,2 $1,132M $1,189M 5% 3%
Adj. EBITA (non-GAAP)1,2 $1,097M $1,086M 1% 4%
Adj. EBITA Margin (non-GAAP)1,2 30% 30%
Revenue % of total 56% 50%
Adj. EBITA (non-GAAP)1,2 % of total 44% 36%
56
1. See Slides 2 and 3 and this Appendix for further non-GAAP information.
2. The non-GAAP measures for historic periods are calculated using the former methodologies used
as of that date. See this Appendix for a presentation of the non-GAAP measures on the same
basis for all periods presented and further information on the changes to the methodologies.
3. See this Appendix for further information on the use and calculation of constant currency
4. As of the third quarter of 2017, one product has been removed from the Global Surgical business
unit and added to the International business unit. This change has been made as management
believes that the product better aligns with the International business unit. For the purposes of
allowing investors to evaluate the results of these two business units on the same basis for all
periods presented, this change also has been made for the results of the nine months ended Sept.
30, 2016.
Year-to-Date Segment Results – Branded Rx
Nine Months Ended Favorable (Unfavorable)
Sept. 30, 2017 Sept. 30, 2016 Reported Constant Currency3
Salix Revenue $1,141M $1,117M 2% 2%
Dermatology Revenue $470M $626M (25%) (25%)
Dendreon Revenue $164M $226M (27%) (27%)
Dentistry Revenue $95M $113M (16%) (16%)
All Other Revenue $3M $2M 50% 50%
Total Segment Revenue $1,873M $2,084M (10%) (10%)
Adj. Gross Profit (non-GAAP)1,2 $1,566M $1,763M (11%) (11%)
Adj. Gross Margin (non-GAAP)1,2 84% 85%
Adj. Selling, A&P (non-GAAP)1 $415M $492M 16% 16%
Adj. G&A (non-GAAP)1,2 $82M $58M (41%) (41%)
Adj. R&D (non-GAAP)1 $45M $70M 36% 36%
Total Adj. Operating Expense (non-GAAP)1,2 $542M $620M 13% 13%
Adj. EBITA (non-GAAP)1,2 $1,024M $1,143M (10%) (10%)
Adj. EBITA Margin (non-GAAP)1,2 55% 55%
Revenue % of total 29% 29%
Adj. EBITA (non-GAAP)1,2% of total 41% 38%
57
1. See Slides 2 and 3 and this Appendix for further non-GAAP information.
2. The non-GAAP measures for historic periods are calculated using the former
methodologies used as of that date. See this Appendix for a presentation of the non-
GAAP measures on the same basis for all periods presented and further information on
the changes to the methodologies.
3. See this Appendix for further information on the use and calculation of constant currency.
Year-to-Date Segment Results – U.S. Diversified
Nine Months Ended Favorable (Unfavorable)
Sept. 30, 2017 Sept. 30, 2016 Reported Constant Currency3
Neuro & Other Revenue $718M $1,087M (34%) (34%)
Generics Revenue $249M $362M (31%) (31%)
Solta Revenue $24M $20M 20% 20%
Obagi Revenue $49M $41M 20% 20%
Other Revenue $3M $11M (73%) (73%)
Total Segment Revenue $1,043M $1,521M (31%) (31%)
Adj. Gross Profit (non-GAAP)1,2 $865M $1,342M (36%) (36%)
Adj. Gross Margin (non-GAAP)1,2 83% 88%
Adj. Selling, A&P (non-GAAP)1 $74M $80M 8% 8%
Adj. G&A (non-GAAP)1,2 $30M $27M (11%) (11%)
Adj. R&D (non-GAAP)1 $4M $6M 33% 33%
Total Adj. Operating Expense (non-GAAP)1,2 $108M $113M 4% 4%
Adj. EBITA (non-GAAP)1,2 $757M $1,229M (38%) (38%)
Adj. EBITA Margin (non-GAAP)1,2 73% 81%
Revenue % of total 16% 21%
Adj. EBITA (non-GAAP)1,2 % of total 30% 41%
58
1. See Slides 2 and 3 and this Appendix for further non-GAAP information.
2. The non-GAAP measures for historic periods are calculated using the former
methodologies used as of that date. See this Appendix for a presentation of the non-
GAAP measures on the same basis for all periods presented and further information on
the changes to the methodologies.
3. See this Appendix for further information on the use and calculation of constant currency.
Non-GAAP Appendix
59
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, as follows.
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 (its most
directly comparable GAAP financial measure) adjusted for certain
items, as further described below. The Company has historically
used Adjusted EBITDA to evaluate current performance. As
indicated above, following an evaluation of the Company’s
financial performance measures, new management of the
Company identified certain new primary financial performance
measures that it is now using to evaluate the Company’s financial
performance. One of those measures is Adjusted EBITDA (non-
GAAP), which the Company uses for both actual results and
guidance purposes. As described above, management of the
Company believes that Adjusted EBITDA (non-GAAP), along with
the other new measures, most appropriately reflect how the
Company measures the business internally and sets operational
goals and incentives, especially in light of the Company’s new
strategies. 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 is now using 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, commencing in 2017, cash bonuses for the
Company’s executive officers and other key employees will be
based, in part, on the achievement of certain Adjusted EBITDA
(non-GAAP) targets.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
60
Adjusted EBITDA reflect adjustments based on
the following items:
Restructuring and integration costs: Prior to 2016, the
Company completed a number of acquisitions, which resulted in
operating expenses which varied significantly from period to period
and which would not otherwise have been incurred. The type,
nature, size and frequency of the Company’s acquisitions have
varied considerably period to period. As a result, the type and
amount of the restructuring, integration and deal costs have also
varied significantly from acquisition to acquisition. In addition, the
costs associated with an acquisition varied significantly from
quarter to quarter, with most costs generally decreasing over time.
Consequently, given the variability and volatility of these costs
from acquisition to acquisition and period to period and because
these costs are incremental and directly related to the acquisition,
the Company does not view these costs as normal operating
expenses. Furthermore, due to the volatility of these costs and due
to the fact that they are directly related to the acquisitions, the
Company believes that such costs should be excluded when
assessing or estimating the long-term performance of the acquired
businesses or assets as part of the Company. Also, the size,
complexity and/or volume of past acquisitions, which often drove
the magnitude of such expenses, were not necessarily indicative
of the size, complexity and/or volume of any future acquisitions. In
addition, since 2016 and for the foreseeable future, while the
Company has undertaken fewer acquisitions, the Company has
incurred (and anticipates continuing to incur) additional
restructuring costs as it implements its new strategies, which will
involve, among other things, internal reorganizations and
divestiture of assets and businesses. The amount, size and timing
of these costs fluctuates, depending on the reorganization or
transaction and, as a result, the Company does not believe that
such costs (and their impact) are truly representative of the
underlying business. In each case, by excluding these expenses
from its non-GAAP measures, management believes it provided
supplemental information that assisted investors with their
evaluation of the Company’s ability to utilize its existing assets and
with its estimation of the long-term value that acquired assets
would generate for the Company. Furthermore, the Company
believes that the adjustments of these items provided
supplemental information with regard to the sustainability of the
Company’s operating performance, allowed for a comparison of
the financial results to historical operations and forward-looking
guidance and, as a result, provided useful supplemental
information to investors.
Acquired in-process research and development costs: The
Company has excluded expenses associated with acquired in-
process research and development, as these amounts are
inconsistent in amount and frequency and are significantly
impacted by the timing, size and nature of acquisitions.
Furthermore, as these amounts are associated with research and
development acquired, they are not a representation of the
Company’s research and development efforts during the period.
Asset Impairments: The Company has excluded the impact of
impairments of finite-lived and indefinite-lived intangibles, 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 intangible
impairments from its non-GAAP expenses, the Company believes
that it is important for investors to understand that intangible
assets contribute to revenue generation.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP))
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
61
Share-based Compensation: The Company excludes the impact
of costs relating to share-based compensation. The Company
believes that the exclusion of share-based compensation expense
assists investors in the comparisons of operating results to peer
companies. Share-based compensation expense can vary
significantly based on the timing, size and nature of awards
granted.
Acquisition-related adjustments excluding amortization of
intangible assets and depreciation expense: The Company 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 Company’s acquisitions, as well as
the nature of the agreed-upon consideration. In addition, the
Company has excluded the impact of fair value inventory step-up
resulting from acquisitions as the amount and frequency of such
adjustments are not consistent and are significantly impacted by
the timing and size of its acquisitions.
Loss on extinguishment of debt: The Company has excluded
loss on extinguishment of debt as this represents a cost of
refinancing our existing debt and is not a reflection of our
operations for the period. Further, the amount and frequency of
such charges are not consistent and are significantly impacted by
the timing and size of debt financing transactions and other factors
in the debt market out of management’s control.
Other Non-GAAP Charges: The Company has excluded certain
other amounts including integration related inventory and
technology transfer costs, CEO termination costs, legal and other
professional fees incurred in connection with recent legal and
governmental proceedings, investigations and information
requests respecting certain of our distribution, marketing, pricing,
disclosure and accounting practices, litigation and other matters,
net (gain)/loss on sale of assets, acquisition-related transaction
costs and certain costs associated with the wind-down of the
arrangements with Philidor Rx Services, LLC (“Philidor”). In
addition, the Company has excluded certain other expenses 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 Company believes these items
are not normal 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
normal operating expenses. In addition, as opposed to more
ordinary course matters, the Company considers that each of the
recent proceedings, investigations and information requests, given
their nature and frequency, are outside of the ordinary course and
relate to unique circumstances. 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.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP))
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
62
Finally, to the extent not already adjusted for above, Adjusted
EBITDA (non-GAAP) reflects adjustments for interest, taxes,
depreciation and amortization (EBITDA represents earnings before
interest, taxes, depreciation and amortization).
As indicated above, in addition to identifying new primary financial
performance measures, the Company also assessed the
methodology with which it was calculating these non-GAAP
measures and made updates where it deemed appropriate to
better reflect the underlying business. As a result, commencing
with the first quarter actual results of 2017, there are certain
differences in the calculation of Adjusted EBITDA (non-GAAP)
between the current presentation and the historic presentation. In
particular, Adjusted EBITDA (non-GAAP) no longer includes
adjustments for Foreign exchange gain/loss arising from
intercompany transactions. For the purposes of the Company’s
actual results for the first nine months and third quarter of 2016
and other historical periods presented, the Company has
calculated and presented the non-GAAP measures using the
historic methodologies in place as of the applicable historic dates;
however, the Company has also provided a reconciliation that
calculates the non-GAAP measure using the new methodology, to
allow investors and readers to evaluate the non-GAAP measure
(such as Adjusted EBITDA) on the same basis for the periods
presented.
Please also see the reconciliation tables in this appendix for
further information as to how these non-GAAP measures are
calculated for the periods presented.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP))
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
63
Adjusted EBITA/Adjusted EBITA Margin/Adjusted
Operating Income
Management uses these non-GAAP measures (the most directly
comparable GAAP financial measure for which is Total GAAP
Revenue less total operating expenses (GAAP)) to assess
performance of its business units and operating and reportable
segments, and the Company, in total, without the impact of foreign
currency exchange fluctuations, fair value adjustments to inventory
in connection with business combinations and integration related
inventory charges and technology transfer costs. In addition, it
excludes certain CEO termination benefits, acquisition related
contingent consideration, acquired in-process research and
development, asset impairments, restructuring, integration and
acquisition-related expenses, amortization of finite-lived intangible
assets, other non-GAAP charges for wind down operating costs,
legal and other professional fees relating to legal and
governmental proceedings, investigations and information
requests respecting certain of our distribution, marketing, pricing,
disclosure and accounting practices and loss upon deconsolidation
of Philidor. The Company believes the exclusion of such amounts
provides supplemental information to management and the users
of the financial statements to assist in the understanding of the
financial results of the Company from period to period and,
therefore, provides useful supplemental information to investors.
Please also see the reconciliation tables in this appendix for
further information as to how these non-GAAP measures are
calculated for the periods presented.
As indicated above, there are certain differences in the calculation
of these non-GAAP measures between the current presentation
and the historic presentation. In particular, these non-GAAP
measures no longer include adjustments for Depreciation resulting
from a PP&E step-up resulting from acquisitions and Previously
accelerated vesting of certain share-based equity adjustments. For
the purposes of the Company’s actual results for the first nine
months and third quarter of 2016 and other historic periods
presented, the Company has calculated and presented the non-
GAAP measures using the historic methodologies in place as of
the applicable historic dates; however, the Company has also
provided a reconciliation that calculates the non-GAAP measures
using the new methodology, to allow investors and readers to
evaluate the non-GAAP measures on the same basis for the
periods presented.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
64
Adjusted Gross Profit/Adjusted Gross Margin
Management uses these non-GAAP measures (the most directly
comparable GAAP financial measure for which is Product sales less
Cost of goods sold) to assess performance of its business units and
operating and reportable segments, and the Company in total,
without the impact of foreign currency exchange fluctuations, fair
value adjustments to inventory in connection with business
combinations and integration related inventory charges and
technology transfer costs. Such measures are useful to investors
as it provides a supplemental period-to-period comparison. Please
also see the reconciliation tables in this appendix for further
information as to how these non-GAAP measures are calculated for
the periods presented.
As indicated above, there are certain differences in the calculation
of these non-GAAP measures between the current presentation
and the historic presentation. In particular, these non-GAAP
measures no longer includes adjustments for Depreciation resulting
from a PP&E step-up resulting from acquisitions. For the purposes
of the Company’s actual results for the first nine months and third
quarter of 2016 and other historic periods presented, the Company
has calculated and presented the non-GAAP measures using the
historic methodologies in place as of the applicable historic dates;
however, the Company has also provided a reconciliation that
calculates the non-GAAP measures using the new methodology, to
allow investors and readers to evaluate the non-GAAP measures
on the same basis for the periods presented.
Adjusted Selling, A&P/Adjusted G&A/Adjusted
SG&A
Management uses these non-GAAP measures (the most directly
comparable GAAP financial measure for which is selling, general
and administrative) as a supplemental measure for period-to-period
comparison. Adjusted Selling, General and Administrative excludes,
as applicable, CEO termination benefits, accelerated depreciation
expense related to fixed assets acquired in the acquisition of Salix,
certain costs associated with the wind-down of the arrangements
with Philidor, and certain costs primarily related to legal and other
professional fees relating to legal and governmental proceedings,
investigations and information requests respecting certain of our
distribution, marketing, pricing, disclosure and accounting
practices. See the discussion under “Other Non-GAAP charges”
above. Please also see the reconciliation tables in this appendix for
further information as to how this non-GAAP measure is calculated
for the periods presented.
As indicated above, there are certain differences in the calculation
of Adjusted G&A and Adjusted SG&A between the current
presentation and the historic presentation. In particular, these non-
GAAP measures no longer includes adjustments for Depreciation
resulting from a PP&E step-up resulting from acquisitions and
Previously accelerated vesting of certain share-based equity
adjustments. For the purposes of the Company’s actual results for
the first nine months and third quarter of 2016 and other historic
periods presented, the Company has calculated and presented the
non-GAAP measures using the historic methodologies in place as
of the applicable historic dates; however, the Company has also
provided a reconciliation that calculates the non-GAAP measures
using the new methodology, to allow investors and readers to
evaluate the non-GAAP measures on the same basis for the
periods presented.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
65
Adjusted R&D
Management uses this non-GAAP measure (the most directly
comparable GAAP financial measure for which is research and
development expenses) as a supplemental measure for period-to-
period comparison. This non-GAAP measure reflects adjustments for a
charge in connection with a settlement of certain disputed invoices
related to transition services. Please also see the reconciliation tables
in this appendix for further information as to how this non-GAAP
measure is calculated for the periods presented.
Total Adjusted Operating Expense
Management uses this non-GAAP measure (the most directly
comparable GAAP financial measure for which is total operating
expenses (GAAP)) as a supplemental measure for period-to-period
comparison. This non-GAAP measure allows investors to supplement
the evaluation of operational efficiencies of the underlying business
without the variability of items that the Company believes are not
normal course of business.
As indicated above, there are certain differences in the calculation of
this non-GAAP measure between the current presentation and the
historic presentation. In particular, total adjusted operating expense no
longer includes adjustments for Depreciation resulting from a PP&E
step-up resulting from acquisitions and Previously accelerated vesting
of certain share-based equity adjustments. For the purposes of the
Company’s actual results for the first nine months and third quarter of
2016 and other historic periods presented, the Company has
calculated and presented the non-GAAP measure using the historic
methodologies in place as of the applicable historic dates; however,
the Company has also provided a reconciliation that calculates the
non-GAAP measure using the new methodology, to allow investors and
readers to evaluate the non-GAAP measure on the same basis for the
periods presented.
Adjusted Net Income (Loss) (non-GAAP)
Historically, management has used adjusted net income (loss) (non-
GAAP) (the most directly comparable GAAP financial measure for
which is GAAP net income (loss)) for strategic decision making,
forecasting future results and evaluating current performance. This
non-GAAP measure excludes the impact of certain items (as further
described below) that may obscure trends in the Company’s underlying
performance. By disclosing this non-GAAP measure, it was
management’s intention to provide investors with a meaningful,
supplemental comparison of the Company’s operating results and
trends for the periods presented. It was management belief that this
measure was also useful to investors as such measure allowed
investors to evaluate the Company’s performance using the same tools
that management had used to evaluate past performance and
prospects for future performance. Accordingly, it was the Company’s
belief that adjusted net income (loss) (non-GAAP) was 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 was significantly lower than our
adjusted net income (non-GAAP). As indicated above, following an
assessment of the Company’s financial performance measures, new
management of the Company identified certain new primary financial
performance measures that will be used to assess Company financial
performance going forward. As a result, the Company no longer uses
or relies on adjusted net income (loss) (non-GAAP) in assessing the
financial performance of the Company. However, a reconciliation of
GAAP net income (loss) to adjusted net income (loss) (non-GAAP) is
presented in the tables in this appendix for the information of readers
to provide readers comparable information for prior periods.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
66
Adjusted net income (non-GAAP) reflects adjustments based on the
following items:
Acquisition- related adjustments excluding amortization of
intangible assets: The Company 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 Company’s
acquisitions, as well as the nature of the agreed-upon consideration. In
addition, the Company has excluded the impact of fair value inventory
step-up resulting from acquisitions as the amount and frequency of
such adjustments are not consistent and are significantly impacted by
the timing and size of its acquisitions.
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
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
periods until such intangible assets have been fully amortized. Any
future acquisitions may result in the amortization of additional
intangible assets.
Restructuring and integration costs: Prior to 2016, the Company
completed a number of acquisitions, which resulted in operating
expenses which varied significantly from period to period and which
would not otherwise have been incurred. The type, nature, size and
frequency of the Company’s acquisitions have varied considerably
period to period. As a result, the type and amount of the restructuring,
integration and deal costs have also varied significantly from
acquisition to acquisition. In addition, the costs associated with an
acquisition varied significantly from quarter to quarter, with most costs
generally decreasing over time. Consequently, given the variability and
volatility of these costs from acquisition to acquisition and period to
period and because these costs are incremental and directly related to
the acquisition, the Company does not view these costs as normal
operating expenses. Furthermore, due to the volatility of these costs
and due to the fact that they are directly related to the acquisitions, the
Company believes that such costs should be excluded when assessing
or estimating the long-term performance of the acquired businesses or
assets as part of the Company. Also, the size, complexity and/or
volume of past acquisitions, which often drove the magnitude of such
expenses, were not necessarily indicative of the size, complexity
and/or volume of any future acquisitions. In addition, since 2016 and
for the foreseeable future, while the Company has undertaken fewer
acquisitions, the Company has incurred (and anticipates continuing to
incur) additional restructuring costs as it implements its new strategies,
which will involve, among other things, internal reorganizations and
divestiture of assets and businesses. The amount, size and timing of
these costs fluctuates, depending on the reorganization or transaction
and, as a result, the Company does not believe that such costs (and
their impact) are truly representative of the underlying business. In
each case, by excluding these expenses from its non-GAAP measures,
management believes it provided supplemental information that
assisted investors with their evaluation of the Company’s ability to
utilize its existing assets and with its estimation of the long-term value
that acquired assets would generate for the Company. Furthermore,
the Company believes that the adjustments of these items provided
supplemental information with regard to the sustainability of the
Company’s operating performance, allowed for a comparison of the
financial results to historical operations and forward-looking guidance
and, as a result, provided useful supplemental information to investors.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
67
Acquired in-process research and development costs: The
Company has excluded expenses associated with acquired in-
process research and development, as these amounts are
inconsistent in amount and frequency and are significantly
impacted by the timing, size and nature of acquisitions.
Furthermore, as these amounts are associated with research and
development acquired, they are not a representation of the
Company’s research and development efforts during the period.
Asset Impairments: The Company has excluded the impact of
impairments of finite-lived and indefinite-lived intangibles, 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
intangible impairments from its non-GAAP expenses, the
Company believes that it is important for investors to understand
that intangible assets contribute to revenue generation.
Other Non-GAAP Charges: The Company has excluded certain
other amounts including integration related inventory and
technology transfer costs, CEO termination costs, legal and other
professional fees incurred in connection with recent legal and
governmental proceedings, investigations and information
requests respecting certain of our distribution, marketing, pricing,
disclosure and accounting practices, litigation and other matters,
net (gain)/loss on sale of assets, acquisition-related transaction
costs and certain costs associated with the wind-down of the
arrangements with Philidor. In addition, the Company has
excluded certain other expenses 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 Company believes these items are not normal
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 normal
operating expenses. In addition, as opposed to more ordinary
course matters, the Company considers that each of the recent
proceedings, investigations and information requests, given their
nature and frequency, are outside of the ordinary course and
relate to unique circumstances. 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.
Loss on extinguishment of debt: The Company has excluded
loss on extinguishment of debt as this represents a cost of
refinancing our existing debt and is not a reflection of our
operations for the period. Further, the amount and frequency of
such charges are not consistent and are significantly impacted by
the timing and size of debt financing transactions and other
factors in the debt market out of management’s control.
Tax: The Company has included the tax impact of the non-GAAP
adjustments using an annualized effective tax rate.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Non-GAAP Appendix
68
As indicated above, in addition to identifying new primary
financial performance measures, the Company also assessed the
methodology with which it was calculating these non-GAAP
measures and made updates where it deemed appropriate to
better reflect the underlying business. As a result, commencing
with the first-quarter results of 2017, there are certain differences
in the calculation of adjusted net income (loss) (non-GAAP)
between the current presentation and the historic presentation. In
particular, adjusted net income (loss) (non-GAAP) no longer
includes Foreign exchange gain/loss arising from intercompany
transactions and amortization of deferred financing costs and
debt discounts In addition, as of the third quarter of 2016,
adjusted net income (loss) (non-GAAP) no longer includes
adjustments for the following items: Depreciation resulting from
a PP&E step-up resulting from acquisitions and Previously
accelerated vesting of certain share-based equity adjustments.
For the purposes of the Company’s actual results for the first
nine months and third quarter of 2016 and other historical
periods presented, the Company has calculated and presented
the non-GAAP measures using the historic methodologies in
place as of the applicable historic dates; however, the Company
has also provided a reconciliation that calculates the non-GAAP
measure using the new methodology, to allow investors and
readers to evaluate the non-GAAP measure (such as adjusted
net income (loss)) on the same basis for the periods presented.
Organic Growth / Organic Change
Organic Growth / Organic Change is change in GAAP Revenue
(its most directly comparable GAAP financial measure) adjusted
for certain items, as further described below. Organic growth /
organic change provides growth rates for businesses that have
been owned for one or more years. The Company uses organic
growth and organic change to assess performance of its
business units and operating and 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 such
measures are useful to investors as it provides a supplemental
period-to-period comparison.
Organic Growth / Organic Change reflects adjustments based on
the following items:
Foreign Exchange: To assist investors in evaluating the
Company’s performance, we have adjusted for changes in foreign
currency exchange rates. Change at constant currency is determined
by comparing 2017 reported amounts adjusted to exclude currency
impact, calculated using 2016 monthly average exchange rates, to
the actual 2016 reported amounts.
Acquisitions, Divestitures and Discontinuations: The
Company has excluded revenue from businesses and products
that have been acquired within the last year and that have been
sold or discontinued.
Please also see the reconciliation in this Appendix for further
information as to how this non-GAAP measure is calculated for
the periods presented.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency
Constant Currency Appendix
69
Constant Currency
Changes in the relative values of non-US currencies to the US
dollar may affect the Company’s financial results and financial
position. To assist investors in evaluating the Company’s
performance, we have adjusted for foreign currency effects.
Constant currency impact is determined by comparing 2017
reported amounts adjusted to exclude currency impact,
calculated using 2016 monthly average exchange rates, to the
actual 2016 reported amounts.
Description of Non-GAAP
Financial Measures
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP)
Adjustments
Adjusted EBITA/Adjusted EBITA
Margin/Adjusted Operating
Income
Adjusted Gross Profit/Adjusted
Gross Margin
Adjusted Selling, A&P/Adjusted
SG&A
Adjusted R&D
Total Adjusted Operating
Expense
Adjusted Net Income (Loss)
(non-GAAP)
Adjusted Net Income (non-
GAAP) Adjustments
Organic Growth / Organic
Change
Constant Currency