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FRISCO, TX, July 29, 2026 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE; NYSE Texas: CRK) today reported financial and operating results for the quarter ended June 30, 2026.

Highlights of 2026's Second Quarter

Return of production growth in quarter with 16% growth over first quarter.Sold a 27% noncontrolling common equity interest in Pinnacle Gas Services LLC ("Pinnacle") for $600 million and used the proceeds to redeem and retire all of Pinnacle's preferred equity securities and its outstanding indebtedness.Turned five Western Haynesville wells to sales in the second quarter with an average lateral length of 9,679 feet and an average per well initial production rate of 33 MMcf per day.Turned twelve Legacy Haynesville wells to sales during the second quarter with an average lateral length of 11,835 feet and an average per well initial production rate of 31 MMcf per day. Five of these wells were horseshoe wells.Second quarter 2026 financial results: Natural gas and oil sales, including realized hedging gains, were $332 million for the quarter.Cash flows from operating activities was $170 million and operating cash flow before changes in working capital was $189 million or $0.65 per share.Net income available to the Company was $9 million, or $0.03 per share and adjusted net income available to the Company was $8 million or $0.03 per share for the quarter.Net income was $15 million and adjusted EBITDAX was $245 million. Financial Results for the Three Months Ended June 30, 2026

Comstock produced 113.1 Bcfe in the second quarter of 2026, which increased 16% from the first quarter of this year and increased 1% from the same period in 2025. During the second quarter of 2026, Comstock realized $2.55 per Mcfe before hedging and $2.93 per Mcfe after hedging. Comstock's natural gas and oil sales in the second quarter of 2026 were $331.6 million (including realized hedging gains of $43.3 million). Cash flows from operating activities in the second quarter of 2026 was $170.2 million. Operating cash flow before changes in working capital generated in the second quarter of 2026 was $188.5 million, and net income available to the Company for the second quarter was $8.8 million or $0.03 per diluted share. The net income available to the Company in the quarter included a pre-tax $1.0 million unrealized gain on hedging contracts held for price risk management resulting from the change in future natural gas prices since the first quarter of 2026. Excluding this item, exploration expense and gain on sale of assets, adjusted net income available to the Company for the second quarter of 2026 was $8.3 million, or $0.03 per diluted share.

Comstock's production cost per Mcfe in the second quarter returned to normal levels and averaged $0.77 per Mcfe, which was comprised of $0.38 for gathering and transportation costs, $0.25 for lease operating costs, $0.06 for production and other taxes and $0.08 for cash general and administrative expenses. Comstock's unhedged operating margin was 70% in the second quarter of 2026 and 74% after hedging.

Financial Results for the Six Months Ended June 30, 2026

For the six months ended June 30, 2026, production was down 7% to 1,166 MMcfe per day compared to the same period in 2025. Comstock realized $3.35 per Mcfe before hedging and $3.18 per Mcfe after hedging for its production of 211.0 Bcfe. Natural gas and oil sales for the six months ended June 30, 2026 totaled $670.2 million (including realized hedging losses of $37.1 million). Cash flows from operating activities for the first six months of 2026 was $442.2 million. Operating cash flow before changes in working capital generated in the first six months of 2026 was $380.4 million, and net income available to the Company was $116.2 million or $0.40 per diluted share. Net income available to the Company for the first six months of 2026 included a pre-tax $83.8 million unrealized gain on hedging contracts held for price risk management. Excluding this item and exploration expense and gain on sale of assets, adjusted net income available to the Company for the six months ended June 30, 2026 was $47.7 million, or $0.16 per diluted share.

Comstock's production cost per Mcfe for the six months ended June 30, 2026 averaged $0.85 per Mcfe, which was comprised of $0.40 for gathering and transportation costs, $0.27 for lease operating costs, $0.09 for production and other taxes and $0.09 for cash general and administrative expenses. Comstock's unhedged operating margin was 75% for the first six months of 2026 and 73% after hedging.

Drilling Results

Comstock drilled 17 (15.6 net) operated horizontal Haynesville/Bossier shale wells in the second quarter of 2026, which had an average lateral length of 11,104 feet. Comstock turned 16 (12.7 net) operated wells to sales in the second quarter of 2026.

Since its last operational update in May 2026, Comstock has turned 17 (13.6 net) operated Haynesville/Bossier shale wells to sales. These wells had initial production rates that averaged 31 MMcf per day. The completed lateral length of these wells averaged 11,201 feet. Included in the wells turned to sales were five more successful Western Haynesville wells:

Well

 Vertical 
Depth
(feet)

 Completed
Lateral (feet)

 Initial
Production
Rate (MMcf
per day)       Ericson KN #1 15,414 7,975 30Jensen WW #1 14,272 9,243 31Glass KG #1 14,972 11,182 35Lotspeich BJ #1 17,903 9,805 34Jones LA #1 16,069 10,191 33 Earnings Call Information

Comstock has planned a conference call for 10:00 a.m. Central Time on July 30, 2026, to discuss the second quarter 2026 operational and financial results. Investors wishing to listen should visit the Company's website at www.comstockresources.com for a live webcast. Investors wishing to participate in the conference call telephonically will need to register at:
https://register-conf.media-server.com/register/BIb1b9c89894d24cf390641104a3f40885.
Upon registering to participate in the conference call, participants will receive the dial-in number and a personal PIN number to access the conference call. On the day of the call, please dial in at least 15 minutes in advance to ensure a timely connection to the call. The conference call will also be broadcast live in listen-only mode and can be accessed via the website URL: https://edge.media-server.com/mmc/p/xprpo4xr.

If you are unable to participate in the original conference call, a web replay will be available for twelve months beginning at 1:00 p.m. CT on July 30, 2026. The replay of the conference can be accessed using the webcast link: https://edge.media-server.com/mmc/p/xprpo4xr.

This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described herein. Although the Company believes the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct. Information concerning the assumptions, uncertainties and risks that may affect the actual results can be found in the Company's filings with the Securities and Exchange Commission ("SEC") available on the Company's website or the SEC's website at sec.gov.

Comstock Resources, Inc. is a leading independent natural gas producer with operations focused on the development of the Haynesville shale in North Louisiana and East Texas. The Company's stock is traded on the NYSE and the NYSE Texas under the symbol CRK.

COMSTOCK RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

  Three Months Ended
June 30,  Six Months Ended
June 30,   2026  2025  2026  2025 Revenues:            Natural gas sales $287,745  $339,225  $706,020  $751,511 Oil sales  476   741   1,234   1,443 Total natural gas and oil sales  288,221   339,966   707,254   752,954 Gas services  63,481   130,296   229,982   230,162 Gain on sale of assets  1,580   —   3,400   — Total revenues and other operating income  353,282   470,262   940,636   983,116 Operating expenses:            Production and ad valorem taxes  7,196   10,555   17,621   21,734 Gathering and transportation  43,331   41,759   85,135   84,376 Lease operating  28,150   31,109   56,431   66,109 Exploration  4,427   —   13,770   2,150 Depreciation, depletion and amortization  167,432   158,379   308,964   326,270 Gas services  63,014   126,714   225,870   243,483 General and administrative  17,151   12,300   35,373   23,380 Total operating expenses  330,701   380,816   743,164   767,502 Operating income  22,581   89,446   197,472   215,614 Other income (expenses):            Gain (loss) from derivative financial instruments  44,365   235,847   46,761   (94,492)Other income  259   2,100   522   2,439 Interest expense  (55,042)  (55,178)  (108,103)  (110,015)Total other income (expenses)  (10,418)  182,769   (60,820)  (202,068)Income before income taxes  12,163   272,215   136,652   13,546 (Provision for) benefit from income taxes  2,837   (141,487)  (9,153)  1,789 Net income  15,000   130,728   127,499   15,335 Net income attributable to noncontrolling interest  (6,234)  (5,886)  (11,283)  (11,771)Net income available to the Company $8,766  $124,842  $116,216  $3,564              Net income per share:            Basic $0.03  $0.45  $0.40  $0.05 Diluted $0.03  $0.44  $0.40  $0.05 Weighted average shares outstanding:            Basic  291,612   290,604   291,465   290,455 Diluted  291,612   294,247   291,465   294,026  COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per unit amounts)

  Three Months Ended June 30,  Six Months Ended June 30,   2026  2025  2026  2025 Natural gas production (MMcf)  113,069   112,164   210,924   227,193 Oil production (Mbbls)  5   13   16   23 Total production (MMcfe)  113,102   112,238   211,021   227,329              Natural gas sales $287,745  $339,225  $706,020  $751,511 Natural gas hedging settlements (1)  43,333   4,286   (37,055)  (3,673)Total natural gas including hedging  331,078   343,511   668,965   747,838 Oil sales  476   741   1,234   1,443 Total natural gas and oil sales including hedging $331,554  $344,252  $670,199  $749,281              Average natural gas price (per Mcf) $2.54  $3.02  $3.35  $3.31 Average natural gas price including hedging (per Mcf) $2.93  $3.06  $3.17  $3.29 Average oil price (per barrel) $95.20  $57.00  $77.13  $62.74 Average price (per Mcfe) $2.55  $3.03  $3.35  $3.31 Average price including hedging (per Mcfe) $2.93  $3.07  $3.18  $3.30              Production and ad valorem taxes $7,196  $10,555  $17,621  $21,734 Gathering and transportation  43,331   41,759   85,135   84,376 Lease operating  28,150   31,109   56,431   66,109 Cash general and administrative (2)  8,792   6,771   19,570   13,411 Total production costs $87,469  $90,194  $178,757  $185,630              Production and ad valorem taxes (per Mcfe) $0.06  $0.09  $0.09  $0.10 Gathering and transportation (per Mcfe)  0.38   0.37   0.40   0.37 Lease operating (per Mcfe)  0.25   0.28   0.27   0.29 Cash general and administrative (per Mcfe)  0.08   0.06   0.09   0.06 Total production costs (per Mcfe) $0.77  $0.80  $0.85  $0.82              Unhedged operating margin  70%  73%  75%  75%Hedged operating margin  74%  74%  73%  75%             Gas services revenue $63,481  $130,296  $229,982  $230,162 Gas services expenses  63,014   126,714   225,870   243,483 Gas services margin $467  $3,582  $4,112  $(13,321)             Natural Gas and Oil Capital Expenditures:            Unproved property acquisitions $20,409  $9,932  $39,449  $19,616 Total natural gas and oil properties acquisitions $20,409  $9,932  $39,449  $19,616 Exploration and Development:            Development leasehold $4,006  $5,295  $7,374  $8,851 Exploratory drilling and completion  174,359   130,997   349,134   231,104 Development drilling and completion  199,356   123,991   357,915   269,569 Other development costs  12,707   7,919   19,277   8,434 Total exploration and development capital expenditures $390,428  $268,202  $733,700  $517,958  (1)   Included in gain (loss) from derivative financial instruments in operating results.

(2)   Excludes stock-based compensation.

COMSTOCK RESOURCES, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)

  Three Months Ended
June 30,  Six Months Ended
June 30,   2026  2025  2026  2025 ADJUSTED NET INCOME AVAILABLE TO THE COMPANY:            Net income available to the Company $8,766  $124,842  $116,216  $3,564 Unrealized (gain) loss from derivative financial instruments  (1,032)  (231,561)  (83,816)  90,819 Exploration expense  4,427   —   13,770   2,150 Gain on sale of assets  (1,580)  —   (3,400)  — Adjustment to income taxes  (2,330)  140,873   4,919   (14,419)Adjusted net income available to the Company(1) $8,251  $34,154  $47,689  $82,114              Adjusted net income available to the Company per share(2) $0.03  $0.12  $0.16  $0.28 Diluted shares outstanding  291,612   294,247   291,465   294,026                           ADJUSTED EBITDAX:            Net income $15,000  $130,728  $127,499  $15,335 Interest expense  55,042   55,178   108,103   110,015 Income taxes  (2,837)  141,487   9,153   (1,789)Depreciation, depletion, and amortization  167,432   158,379   308,964   326,270 Exploration  4,427   —   13,770   2,150 Unrealized (gain) loss from derivative financial instruments  (1,032)  (231,561)  (83,816)  90,819 Stock-based compensation  8,359   5,529   15,803   9,971 Gain on sale of assets  (1,580)  —   (3,400)  — Total Adjusted EBITDAX (3) $244,811  $259,740  $496,076  $552,771                           OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL(4):            Cash flows from operating activities $170,205  $347,564  $442,170  $522,310 Increase (decrease) in accounts receivable  11,542   (34,978)  (61,952)  (1,318)Increase (decrease) in other current assets  12,148   (25,322)  2,949   (25,881)Increase in accounts payable and accrued expenses  (5,390)  (77,628)  (2,764)  (46,487)Operating cash flow before changes in working capital $188,505  $209,636  $380,403  $448,624  (1)   Adjusted net income available to the Company is presented because of its acceptance by investors and by Comstock management as an indicator of the Company's profitability excluding non-cash unrealized gains and losses on derivative financial instruments, exploration expense and other unusual items.

(2)   Adjusted net income available to the Company per share is calculated to include the dilutive effects of unvested restricted stock pursuant to the two-class method and performance stock units pursuant to the treasury stock method.

(3)   Adjusted EBITDAX is presented in the earnings release because management believes that adjusted EBITDAX, which represents Comstock's results from operations before interest, income taxes, and certain non-cash items, including depreciation, depletion and amortization, unrealized gains and losses on derivative financial instruments and exploration expense, is a common alternative measure of operating performance used by certain investors and financial analysts.

(4)   Operating cash flow before changes in working capital is presented in the earnings release because management believes it to be useful to investors as a measure of operating cash generation of the Company based on the revenues and expenses that were related to the period versus the period when the revenues were received or expenses paid while enhancing comparability across periods. Operating cash flow before changes in working capital is not a measure of Comstock's liquidity or actual cash generation.

COMSTOCK RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

  June 30,
2026  December 31,
2025 ASSETS      Cash and cash equivalents $45,008  $23,930 Accounts receivable  180,593   242,545 Derivative financial instruments  53,156   19,206 Other current assets  59,804   75,257 Total current assets  338,561   360,938 Property and equipment, net  6,756,314   6,215,494 Goodwill  335,897   335,897 Operating lease right-of-use assets  71,684   94,733 Derivative financial instruments  22,230   —   $7,524,686  $7,007,062        LIABILITIES AND STOCKHOLDERS' EQUITY      Accounts payable $503,111  $501,695 Accrued costs  171,187   153,248 Operating leases  37,598   46,937 Derivative financial instruments  —   27,636 Total current liabilities  711,896   729,516 Long-term debt  3,098,770   2,809,066 Deferred income taxes  495,428   437,098 Long-term operating leases  33,570   47,692 Asset retirement obligation  21,444   20,787 Total liabilities  4,361,108   4,044,159 Stockholders' Equity:      Common stock  146,810   146,527 Additional paid-in capital  1,191,881   1,376,053 Accumulated earnings  1,240,446   1,124,230 Total stockholders' equity attributable to Comstock  2,579,137   2,646,810 Noncontrolling interest  584,441   316,093 Total stockholders' equity  3,163,578   2,962,903   $7,524,686  $7,007,062 

LOUISVILLE, Ky., July 29, 2026 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated (Nasdaq: CHDN) (the "Company," "CDI," "we") today reported business results for the quarter ended June 30, 2026.

Company Highlights

Second quarter 2026 financial results, as compared to the prior year quarter: All-time record net revenue of $980 million, up $46 million or 5%Net income attributable to CDI of $241 million, up $24 million or 11%All-time record Adjusted EBITDA of $477 million, up $26 million or 6% Churchill Downs Racetrack ran the 152nd Kentucky Derby with all-time record Derby Week contribution to Adjusted EBITDA. All-time record all-sources wagering for Kentucky Derby WeekHighest peak viewership of 24.4 million, up 12% vs. prior year and highest average viewership of 19.6 million, up 11% vs. prior year152nd Kentucky Oaks in primetime for the first time with 2.4 million viewers and record all sources wagering for the Kentucky Oaks race day card We ended second quarter of 2026 with net bank leverage of 3.7x. CONSOLIDATED RESULTS
   Second Quarter(in millions, except per share data)2026
 2025
    Net revenue$980 $934Net income attributable to CDI$241 $217Diluted EPS attributable to CDI$3.42 $2.99Adjusted net income attributable to CDI(a)$242 $224Adjusted Diluted EPS(a)$3.45 $3.10Adjusted EBITDA(a)$477 $451 (a) This is a non-GAAP measure. See explanation of non-GAAP measures below. SEGMENT RESULTS

The summaries below present revenue from external customers and intercompany revenue from each of our reportable segments. All comparisons are against the applicable prior year period unless otherwise noted.

Live and Historical Racing

 Second Quarter(in millions)2026
 2025
    Revenue$575 $541Adjusted EBITDA 318  297       Second quarter 2026 revenue increased $34 million due to a $21 million increase from Churchill Downs Racetrack, a $12 million increase from our Kentucky HRM venues, and a $1 million increase from our Virginia HRM venues. The Churchill Downs Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue. The Kentucky HRM increase was due to a $5 million increase from our Southwestern Kentucky venues, a $3 million increase from our Northern Kentucky venues, a $3 million increase from our Western Kentucky venues, and a $1 million increase from our Louisville venues. The Virginia HRM increase was due to a $5 million net increase primarily from our Northern Virginia venues, partially offset by a $4 million net decrease from our Central Virginia venues primarily from increased competition.

Second quarter 2026 Adjusted EBITDA increased $21 million due to a $16 million increase from Churchill Downs Racetrack, a $6 million increase from our Kentucky HRM venues, and a $1 million increase from our Virginia HRM venues, partially offset by a $2 million decrease at our New Hampshire venues primarily due to the planned closure of our temporary Casino Salem venue during the construction of the Rockingham Grand Casino venue. The Churchill Downs Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue, partially offset by higher operating expenses. The Kentucky HRM increase was due to a $2 million increase from our Northern Kentucky venues, a $2 million increase from our Southwestern Kentucky venues, and a $2 million increase from our Western Kentucky venues. The Virginia HRM increase was primarily due to a $4 million net increase from our Northern Virginia venues, a $1 million increase from our Western Virginia venue, and a $1 million increase from our Southern Virginia venues, partially offset by a $5 million net decrease from our Central Virginia venues primarily from increased competition.

Wagering Services and Solutions

 Second Quarter(in millions)2026
 2025
    Revenue$178 $168Adjusted EBITDA 52  48       Second quarter 2026 revenue increased $10 million due to $9 million growth in our Horse Racing business from record-breaking Derby Week wagering and a $1 million increase from our Exacta business.

Second quarter 2026 Adjusted EBITDA increased $4 million due to a $3 million increase from our Horse Racing business and a $1 million increase from our Exacta business.

Gaming

 Second Quarter(in millions)2026
 2025
    Revenue$270 $266Adjusted EBITDA 133  127       Second quarter 2026 revenue increased $4 million primarily due to an $8 million increase primarily from our New York, Indiana, and Maryland properties, partially offset by a $4 million decrease primarily from the cessation of HRM operations in Louisiana in May 2025.

Second quarter 2026 Adjusted EBITDA increased $6 million. Our equity investments increased $4 million from strong performance at Rivers Des Plaines in Illinois and Miami Valley Gaming in Ohio. Our wholly-owned gaming properties increased $4 million primarily from strong performance at our New York venue, partially offset by a $2 million decrease primarily from the cessation of HRM operations in Louisiana in May 2025.

All Other

 Second Quarter(in millions) 2026   2025     Revenue$2  $2 Adjusted EBITDA (26)  (21)         Second quarter 2026 revenue is consistent with the prior year. All intercompany captive revenue is eliminated in consolidation.

Second quarter 2026 Adjusted EBITDA decreased $5 million primarily due to a reduction of corporate legal-related fees in the prior year quarter and claim development within our captive insurance company.

NET INCOME ATTRIBUTABLE TO CDI

The Company's second quarter 2026 net income attributable to CDI was $241 million compared to $217 million in the prior year quarter.

The following factors impacted the comparability of the Company's second quarter 2026 net income to the prior year quarter:

a $4 million after-tax decrease in transaction, pre-opening, and other expenses; anda $2 million after-tax impairment charge in the prior year quarter related to a write-off of obsolete HRMs in Virginia. Excluding the items above, second quarter 2026 adjusted net income attributable to CDI increased $18 million primarily due to the following:

a $10 million after-tax increase primarily driven by the results of our operations;a $4 million after-tax decrease in interest expense; anda $4 million after-tax increase in equity income from our unconsolidated affiliates.
Conference Call

A conference call regarding this news release is scheduled for Thursday, July 30, 2026 at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast and broadcast of the call at http://ir.churchilldownsincorporated.com/events.cfm, or by registering in advance via teleconference here. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are encouraged to dial-in 15 minutes prior to the start time. An online replay will be available by noon ET on Thursday, July 30, 2026. A copy of the Company’s news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at www.churchilldownsincorporated.com.

Use of Non-GAAP Measures

In addition to the results provided in accordance with GAAP, the Company also uses non-GAAP measures, including adjusted net income, adjusted diluted EPS, EBITDA (earnings before interest, taxes, depreciation and amortization), and Adjusted EBITDA.

The Company uses non-GAAP measures as key performance measures of the results of operations for purposes of evaluating performance internally. These measures facilitate comparison of operating performance between periods and help investors to better understand the operating results of the Company by excluding certain items that may not be indicative of the Company's core business or operating results. The Company believes the use of these measures enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. The non-GAAP measures are supplemental measures of our performance that is not required by, or presented in accordance with, GAAP, and should not be considered as an alternative to, or more meaningful than, net income or diluted EPS (as determined in accordance with GAAP) as a measure of our operating results.

We use Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources. We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure provided in accordance with GAAP. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited.

Adjusted net income and adjusted diluted EPS exclude discontinued operations net income or loss; net income or loss attributable to noncontrolling interests; transaction expense, which includes acquisition and disposition related charges, as well as legal, accounting, and other deal-related expense; pre-opening expense; and certain other gains, charges, recoveries, and expenses.

Adjusted EBITDA includes our portion of EBITDA from our equity investments and the portion of EBITDA attributable to noncontrolling interests.

Adjusted EBITDA excludes:

Transaction expense, net, which includes: Acquisition, disposition, and property sale related charges; andOther transaction expense, including legal, accounting, and other deal-related expense; Stock-based compensation expense;Rivers Des Plaines' impact on our investments in unconsolidated affiliates from legal reserves and transaction costs;Asset impairments, net;Gain on property sales;Legal reserves;Pre-opening expense; andOther charges, recoveries, and expenses For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the Consolidated Statements of Comprehensive Income. See the Reconciliation of Net Income to Adjusted EBITDA included herewith for additional information.

About Churchill Downs Incorporated

Churchill Downs Incorporated ("CDI") (Nasdaq: CHDN) has created extraordinary entertainment experiences for over 150 years, beginning with the Company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the acquisition, development, and operation of live and historical racing entertainment venues, the growth of the online wagering businesses, and the acquisition, development, and operation of regional casino gaming properties. https://www.churchilldownsincorporated.com/

This news release contains various "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "seek," "should," "will," "scheduled," and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers' confidence and discretionary spending or our access to credit, including the impact of inflation; changes in, or new interpretations of, applicable tax laws or rulings that could result in additional tax liabilities; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, and related economic matters on our results of operations, financial conditions, and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; negative shifts in public opinion regarding gambling that could result in increased regulation of, or new restrictions on, the gaming industry; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine ("HRM") manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; cybersecurity risk, including cybersecurity breaches, loss or misuse of our confidential information as a result of a breach including customers’ personal information, or IT system operational disruptions, could lead to government enforcement actions or other litigation; costs of compliance with increasingly complex laws and regulations regarding data privacy and protection of personal information; reliance on our technology services and catastrophic events, system failures, errors or defects disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates, disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; whether the objective of a strategic alternative review process will be achieved; the terms, structure, benefits and costs of any strategic transaction; the timing of any strategic transaction and whether any strategic transaction will be consummated on the terms proposed or at all; the risk that the announcement or exploration of strategic alternatives could have an adverse effect on our ability to retain key personnel and maintain relationships with partners, suppliers, employees, shareholders and other business relationships; the risk of any unexpected costs or expenses resulting from the exploration of strategic alternatives; the risk of any litigation relating to the exploration of strategic alternatives or any strategic transaction; and other factors described under the heading "Risk Factors" in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.

We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)     Three Months Ended June 30, Six Months Ended June 30,(in millions, except per common share data) 2026   2025   2026   2025 Net revenue:       Live and Historical Racing$543  $510  $840  $783 Wagering Services and Solutions 167   158   276   265 Gaming 270   266   527   529 All Other —   —   —   — Total net revenue 980   934   1,643   1,577 Operating expense:       Live and Historical Racing 268   256   467   446 Wagering Services and Solutions 96   91   164   158 Gaming 192   191   380   383 All Other 5   4   10   8 Selling, general and administrative expense 61   61   120   116 Asset impairments, net —   2   —   2 Transaction expense, net 1   2   2   2 Total operating expense 623   607   1,143   1,115 Operating income 357   327   500   462 Other (expense) income:       Interest expense, net (70)  (75)  (142)  (147)Equity in income of unconsolidated affiliates 41   37   77   70 Miscellaneous, net —   3   6   3 Total other (expense) income (29)  (35)  (59)  (74)Income from operations before provision for income taxes 328   292   441   388 Income tax provision (86)  (74)  (116)  (93)Net income 242   218   325   295 Net income attributable to noncontrolling interests 1   1   1   1 Net income attributable to
Churchill Downs Incorporated$241  $217  $324  $294         Net income attributable to Churchill Downs Incorporated per common share data:       Basic net income$3.43  $3.02  $4.59  $4.02 Diluted net income$3.42  $2.99  $4.58  $3.98 Weighted average shares outstanding:       Basic 70   72   70   73 Diluted 70   72   70   73  CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)    (in millions)June 30,
2026 December 31,
2025ASSETS   Current assets:   Cash and cash equivalents$196  $201 Restricted cash 99   88 Accounts receivable, net 129   93 Income taxes receivable —   17 Other current assets 60   44 Total current assets 484   443 Property and equipment, net 2,911   2,919 Investment in and advances to unconsolidated affiliates 690   685 Goodwill 900   900 Other intangible assets, net 2,513   2,515 Other assets 23   23 Total assets$7,521  $7,485 LIABILITIES AND SHAREHOLDERS' EQUITY   Current liabilities:   Accounts payable$261  $184 Accrued expenses and other current liabilities 370   400 Income taxes payable 38   — Current deferred revenue 27   55 Current maturities of long-term debt and notes payable 663   63 Dividends payable —   31 Total current liabilities 1,359   733 Long-term debt, net of current maturities and loan origination fees 1,627   1,986 Notes payable, net of current maturities and debt issuance costs 2,483   3,081 Non-current deferred revenue 12   15 Deferred income taxes 562   520 Other liabilities 87   94 Total liabilities 6,130   6,429 Commitments and contingencies   Redeemable noncontrolling interest 50   46 Shareholders' equity:   Preferred stock —   — Common stock 7   — Retained earnings 1,335   1,011 Accumulated other comprehensive loss (1)  (1)Total Churchill Downs Incorporated shareholders' equity 1,341   1,010 Total liabilities and shareholders' equity$7,521  $7,485  CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
   Six Months Ended June 30,(in millions) 2026   2025 Cash flows from operating activities:   Net income$325  $295 Adjustments to reconcile net income to net cash provided by operating activities:   Depreciation and amortization 115   117 Distributions from unconsolidated affiliates 72   63 Equity in income of unconsolidated affiliates (77)  (70)Stock-based compensation 13   11 Deferred income taxes 42   4 Asset impairments —   2 Amortization of operating lease assets 3   3 Other 5   4 Changes in operating assets and liabilities:   Income taxes 55   81 Deferred revenue (31)  (37)Other assets and liabilities (10)  14 Net cash provided by operating activities 512   487 Cash flows from investing activities:   Capital maintenance expenditures (38)  (32)Capital project expenditures (79)  (133)Other (2)  (1)Net cash used in investing activities (119)  (166)Cash flows from financing activities:   Proceeds from borrowings under long-term debt obligations 646   642 Repayments of borrowings under long-term debt obligations (1,006)  (547)Payment of dividends (31)  (30)Repurchase of common stock —   (341)Taxes paid related to net share settlement of stock awards (3)  (4)Change in bank overdraft 8   (5)Other (1)  (2)Net cash used in financing activities (387)  (287)Net increase in cash, cash equivalents and restricted cash 6   34 Cash, cash equivalents and restricted cash, beginning of period 289   252 Cash, cash equivalents and restricted cash, end of period$295  $286  CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)     Three Months Ended June 30, Six Months Ended June 30,(in millions, except per common share data) 2026   2025   2026   2025 GAAP net income attributable to CDI$241  $217  $324  $294         Adjustments, continuing operations:       Transaction, pre-opening, and other expense 3   9   9   13 Other charges and recoveries, net (1)  (1)  (5)  (1)Asset impairments, net —   2   —   2 Income tax impact on net income adjustments(a) (1)  (3)  (1)  (4)Total adjustments 1   7   3   10 Adjusted net income attributable to CDI$242  $224  $327  $304         Adjusted diluted EPS$3.45  $3.10  $4.66  $4.15         Weighted average shares outstanding - Diluted 70   72   70   73                 (a) The income tax impact for each adjustment is derived by applying the effective tax rate, including current and deferred income tax expense, based upon the jurisdiction and the nature of the adjustment.  Three Months Ended June 30, Six Months Ended June 30,(in millions)2026
 2025
 2026
 2025
Total Wagering       TwinSpires Horse Racing(a)$634 $609 $1,009 $993            (a) TwinSpires Horse Racing wagering does not include wagering generated by Velocity and national affiliates. CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)     Three Months Ended June 30, Six Months Ended June 30,(in millions) 2026   2025   2026   2025 Net revenue from external customers:       Live and Historical Racing:       Churchill Downs Racetrack$247  $228  $250  $232 Louisville 59   57   114   109 Northern Kentucky 29   27   65   58 Southwestern Kentucky 49   43   93   84 Western Kentucky 18   16   37   28 Virginia 138   136   271   266 New Hampshire 3   3   10   6 Total Live and Historical Racing$543  $510  $840  $783         Wagering Services and Solutions:$167  $158  $276  $265         Gaming:       Florida$24  $26  $48  $51 Iowa 24   23   48   47 Indiana 35   32   68   64 Louisiana 29   32   65   77 Maine 26   28   51   52 Maryland 28   25   49   46 Mississippi 24   24   48   49 New York 51   48   97   91 Pennsylvania 29   28   53   52 Total Gaming$270  $266  $527  $529 All Other —   —   —   — Net revenue from external customers$980  $934  $1,643  $1,577         Intercompany net revenues:       Live and Historical Racing$32  $31  $36  $35 Wagering Services and Solutions 11   10   20   19 Gaming —   —   5   4 All Other 2   2   4   4 Eliminations (45)  (43)  (65)  (62)Intercompany net revenue$—  $—  $—  $—  CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
   Three Months Ended June 30, 2026(in millions)Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other TotalNet revenue from external customers           Pari-mutuel:           Live and simulcast racing$53 $133 $4 $190 $— $190Historical racing(a) 265  —  —  265  —  265Racing event-related services 192  —  —  192  —  192Gaming(a) 3  4  232  239  —  239Other(a) 30  30  34  94  —  94Total$543 $167 $270 $980 $— $980  Three Months Ended June 30, 2025(in millions)Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other TotalNet revenue from external customers           Pari-mutuel:           Live and simulcast racing$54 $125 $4 $183 $— $183Historical racing(a) 252  —  5  257  —  257Racing event-related services 173  —  —  173  —  173Gaming(a) 3  4  225  232  —  232Other(a) 28  29  32  89  —  89Total$510 $158 $266 $934 $— $934                  (a) Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers' loyalty points are recorded at the estimated standalone selling prices in other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for HRMs or gaming revenue for our casino properties. These amounts were $16 million in each of the three months ended June 30, 2026 and 2025.  Six Months Ended June 30, 2026(in millions)Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other TotalNet revenue from external customers           Pari-mutuel:           Live and simulcast racing$64 $214 $14 $292 $— $292Historical racing(a) 522  —  —  522  —  522Racing event-related services 193  —  1  194  —  194Gaming(a) 7  10  450  467  —  467Other(a) 54  52  62  168  —  168Total$840 $276 $527 $1,643 $— $1,643  Six Months Ended June 30, 2025(in millions)Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other TotalNet revenue from external customers           Pari-mutuel:           Live and simulcast racing$65 $205 $15 $285 $— $285Historical racing(a) 489  —  14  503  —  503Racing event-related services 174  —  1  175  —  175Gaming(a) 6  8  439  453  —  453Other(a) 49  52  60  161  —  161Total$783 $265 $529 $1,577 $— $1,577                  (a) Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers' loyalty points are recorded at the estimated standalone selling prices in other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for HRMs or gaming revenue for our casino properties. These amounts were $32 million for the six months ended June 30, 2026 and $30 million for the six months ended June 30, 2025. CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
  Adjusted EBITDA by segment is comprised of the following: Three Months Ended June 30, 2026(in millions)Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other Eliminations TotalRevenue$575  $178  $270  $1,023  $2  $(45) $980               Pari-mutuel taxes and purses (119)  (8)  (7)  (134)  —   —   (134)Gaming taxes (2)  (1)  (81)  (84)  —   —   (84)Marketing and advertising (16)  (6)  (8)  (30)  —   —   (30)Salaries and benefits (38)  (9)  (41)  (88)  —   —   (88)Content expense (1)  (78)  (2)  (81)  —   35   (46)Selling, general and administrative expense (14)  (4)  (12)  (30)  (24)  —   (54)Maintenance, insurance and utilities (13)  (3)  (9)  (25)  (3)  2   (26)Gaming equipment rental and technology costs (13)  (2)  (5)  (20)  —   8   (12)Food and beverage costs (4)  —   (4)  (8)  —   —   (8)Other operating expense(a) (37)  (15)  (18)  (70)  (1)  —   (71)Equity in income of unconsolidated affiliates —   —   50   50   —   —   50 Other income —   —   —   —   —   —   — Adjusted EBITDA$318  $52  $133  $503  $(26) $—  $477   Three Months Ended June 30, 2025(in millions)Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other Eliminations TotalRevenue$541  $168  $266  $975  $2  $(43) $934               Pari-mutuel taxes and purses (116)  (8)  (7)  (131)  —   —   (131)Gaming taxes (1)  (1)  (80)  (82)  —   —   (82)Marketing and advertising (16)  (6)  (9)  (31)  —   —   (31)Salaries and benefits (38)  (9)  (43)  (90)  —   —   (90)Content expense (2)  (76)  (2)  (80)  —   32   (48)Selling, general and administrative expense (10)  (5)  (11)  (26)  (22)  1   (47)Maintenance, insurance and utilities (12)  (1)  (10)  (23)  (1)  2   (22)Gaming equipment rental and technology costs (12)  (1)  (5)  (18)  —   8   (10)Food and beverage costs (4)  —   (4)  (8)  —   —   (8)Other operating expense(a) (33)  (13)  (16)  (62)  —   —   (62)Equity in income of unconsolidated affiliates —   —   47   47   —   —   47 Other income —   —   1   1   —   —   1 Adjusted EBITDA$297  $48  $127  $472  $(21) $—  $451   Six Months Ended June 30, 2026(in millions)Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other Eliminations TotalRevenue$876  $296  $532  $1,704  $4  $(65) $1,643               Pari-mutuel taxes and purses (195)  (12)  (18)  (225)  —   —   (225)Gaming taxes (4)  (1)  (156)  (161)  —   —   (161)Marketing and advertising (28)  (8)  (16)  (52)  —   —   (52)Salaries and benefits (74)  (17)  (84)  (175)  —   —   (175)Content expense (2)  (121)  (3)  (126)  —   44   (82)Selling, general and administrative expense (25)  (8)  (24)  (57)  (46)  —   (103)Maintenance, insurance and utilities (25)  (5)  (19)  (49)  (7)  4   (52)Gaming equipment rental and technology costs (27)  (3)  (9)  (39)  —   17   (22)Food and beverage costs (8)  —   (9)  (17)  —   —   (17)Other operating expense(a) (57)  (24)  (35)  (116)  (1)  —   (117)Equity in income of unconsolidated affiliates —   —   96   96   —   —   96 Other income —   —   1   1   —   —   1 Adjusted EBITDA$431  $97  $256  $784  $(50) $—  $734   Six Months Ended June 30, 2025(in millions)Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other Eliminations TotalRevenue$818  $284  $533  $1,635  $4  $(62) $1,577               Pari-mutuel taxes and purses (188)  (12)  (22)  (222)  —   —   (222)Gaming taxes (3)  (1)  (152)  (156)  —   —   (156)Marketing and advertising (30)  (7)  (17)  (54)  —   —   (54)Salaries and benefits (70)  (17)  (87)  (174)  —   —   (174)Content expense (3)  (120)  (4)  (127)  —   41   (86)Selling, general and administrative expense (21)  (10)  (22)  (53)  (43)  1   (95)Maintenance, insurance and utilities (22)  (2)  (19)  (43)  (4)  4   (43)Gaming equipment rental and technology costs (24)  (2)  (9)  (35)  —   16   (19)Food and beverage costs (8)  —   (8)  (16)  —   —   (16)Other operating expense(a) (50)  (24)  (33)  (107)  —   —   (107)Equity in income of unconsolidated affiliates —   —   90   90   —   —   90 Other income —   —   1   1   —   —   1 Adjusted EBITDA$399  $89  $251  $739  $(43) $—  $696               (a)   Other operating expense primarily includes supplies, regulatory licenses and fees, property taxes, and third-party service fees and costs. CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)     Three Months Ended June 30, Six Months Ended June 30,(in millions) 2026   2025   2026   2025 Reconciliation of Net Income to Adjusted EBITDA:       Net income attributable to Churchill Downs Incorporated$241  $217  $324  $294 Net income attributable to noncontrolling interests 1   1   1   1 Net income 242   218   325   295         Adjustments:       Depreciation and amortization 59   58   115   117 Interest expense 70   75   142   147 Income tax provision 86   74   116   93 Stock-based compensation expense 8   7   13   11 Pre-opening expense 2   2   5   6 Other expenses, net —   4   2   4 Asset impairments, net —   2   —   2 Transaction expense, net 1   2   2   2 Other income, expense:       Interest, depreciation and amortization expense related to equity investments 10   10   19   20 Other charges and recoveries, net (1)  (1)  (5)  (1)Total adjustments 235   233   409   401 Adjusted EBITDA$477  $451  $734  $696         Adjusted EBITDA by segment:       Live and Historical Racing$318  $297  $431  $399 Wagering Services and Solutions 52   48   97   89 Gaming 133   127   256   251 Total segment Adjusted EBITDA 503   472   784   739 All Other (26)  (21)  (50)  (43)Total Adjusted EBITDA$477  $451  $734  $696  CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL JOINT VENTURE FINANCIAL STATEMENTS
(Unaudited) Summarized financial information for our equity investments is comprised of the following:
 Summarized Income Statement Three Months Ended June 30, Six Months Ended June 30,(in millions) 2026   2025   2026   2025 Net revenue$228  $216  $444  $421         Operating and SG&A expense 142   135   279   265 Depreciation and amortization 6   6   12   12 Operating income 80   75   153   144 Interest and other expense, net (9)  (10)  (19)  (21)Net income$71  $65  $134  $123           Summarized Balance Sheet(in millions)June 30,
2026 December 31,
2025Assets   Current assets$97  $109 Property and equipment, net 309   315 Other assets, net 266   265 Total assets$672  $689     Liabilities and Members' Deficit   Current liabilities$102  $89 Long-term debt 765   803 Other liabilities 1   — Members' deficit (196)  (203)Total liabilities and members' deficit$672  $689  CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited) 2026 capital projects for the Company are as follows:(in millions)ProjectTarget
Completion2026
Planned Spend    Live and Historical Racing Segment  Churchill Downs RacetrackVictory RunApril 2028$25-30New HampshireRockingham Grand Casino (HRM Venue)Mid-2027$70-80All Other & Completed Projects  All Other Projects TBD$30-50Completed Projects Completed$55-60  Total:$180-220 Contact: Sam Ullrich
(502) 638-3906
[email protected]

SummaryCompaniesSecond-quarter revenue forecast at $1.38 billion versus $1.34 billion estimateSecond-quarter adjusted profit forecast is 47 cents per share versus 43 cents estimateFirst-quarter royalties rise 22% to $715 million while licensing revenue grows 23% to $574 millionJuly 29 (Reuters) - Arm Holdings , signaled strong demand from AI on Wednesday, yet shares slid 8% after hours in choppy ‌trade even though the intellectual property and chip designer forecast second-quarter revenue above Wall Street estimates.

The boom around AI and more recently the demand for agents - programs that can act with little or no human direction - has boosted demand for Arm's chip architecture, which powers an increasing number of data center central processing units (CPUs). Cloud giants such as Alphabet (GOOGL.O), opens new tab ​and Amazon.com (AMZN.O), opens new tab build custom AI chips, which have boosted the company's licensing revenue and royalties as more complex chips are shipped to ​data centers.

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"The more inference workloads you run, that creates work that only CPUs can do," Arm CEO Rene Haas ⁠told Reuters.

Inference refers to the process of generating an answer when a user queries a chatbot such as Anthropic's Claude.

Arm sells intellectual property ​that other chip companies license and pay royalties on for each unit shipped, but has recently decided to make its own central processing unit for the ​data center.

Higher demand from big tech company chips, along with new entrants such as Nvidia (NVDA.O), opens new tab and its Vera processor, helped the company report higher-than-expected revenue, Haas said. Qualcomm also launched its C1000 data center chip, which does not contribute to Arm revenue now but will in the future, he said.

Haas said the company has shipped 1.5 billion ​Arm cores for the data center — an important data-crunching portion of each chip — in the last six years, but about 30% were shipped in the ​last nine months.

"Growth is accelerating," Haas said.

Revenue from royalties rose 22% to $715 million in the first quarter, while licensing revenue increased 23% to $574 million.

The company's spending plans and ‌forecast remain ⁠unchanged, finance chief Jason Child said during a conference call on Wednesday.

Arm expects smartphone royalties to drop next quarter and forecast second-quarter growth of roughly 10% and 15%, Child said.

POWER-EFFICIENT DESIGNSArm's chip designs are prized for their power efficiency, a critical advantage for data center operators looking to manage the soaring energy costs and heat generated by running massive AI models.

Its AGI CPU, a new AI data center chip unveiled in March, is exceeding initial expectations, ​with demand surpassing $2 billion across fiscal ​years 2027 and 2028, the company ⁠said. It has already delivered the product to multiple customers.

Cloud firm Oracle (ORCL.N), opens new tab has agreed to buy the new chip, Haas said. The CEO did not disclose the contract value.

"We have new customers in North America and China," ​Haas said, adding that the company can now secure supply for more than $1 billion worth of chips.

"I feel ​better about (supply) than I ⁠did 90 days ago," he said.

Jefferies analysts forecast sales of the new chip reaching $18 billion in fiscal 2031, surpassing the chip designer's own projection of $15 billion. Haas said the company was not changing any forecasts on Wednesday.

Arm projected second-quarter revenue of $1.38 billion, above analysts' average estimate of $1.34 billion, according to data compiled by ⁠LSEG.

The British ​chip designer expects second-quarter profit of 47 cents per share, adjusted for stock compensation, among ​other things, compared with analysts' expectations of 43 cents per share.

The company reported revenue of $1.29 billion and adjusted per-share earnings of 45 cents for the first quarter. Analysts expected revenue of $1.26 ​billion and adjusted profit of 40 cents a share.

Reporting by Juby Babu in Mexico City; Editing by Sahal Muhammed and Rod Nickel and David Gregorio

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron’s magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.

, /PRNewswire/ -- Mid-America Apartment Communities, Inc., or MAA (NYSE: MAA), today announced operating results for the three and six months ended June 30, 2026.

Three months ended June 30,

Six months ended June 30,

2026

2025

2026

2025

Earnings per common share - diluted

$

1.04

$

0.92

$

2.10

$

2.46

Funds from operations (FFO) per Share - diluted (1)

$

2.10

$

2.19

$

4.32

$

4.39

Core FFO per Share - diluted (1)

$

2.08

$

2.15

$

4.21

$

4.35

(1)

A reconciliation of Net income available for MAA common shareholders to FFO and Core FFO is found later in this release.

Brad Hill, President and Chief Executive Officer, said, "Second quarter Core FFO results exceeded our expectations due to steady demand and continued disciplined expense management. Our focus on new lease pricing resulted in an acceleration in our new lease sequential pricing trends, supported our consistently strong renewal results and delivered blended lease-over-lease pricing that was 20 basis points better year-over-year. As steady demand increasingly outweighs the declining pressure from new deliveries more broadly across our footprint, the improved pricing and operating fundamentals we see in a number of our markets should become more broad-based, supporting an accelerating recovery.  Our pricing momentum, operating discipline, and growing contribution from our new developments, position MAA to deliver attractive future earnings growth."

During the second quarter of 2026, MAA's Same Store effective blended lease rate growth was 0.7%, a 20 basis point improvement over the same period in the prior year as well as a 100 basis point improvement on a sequential basis, driven by a 170 basis point improvement in new lease pricing from the first quarter of 2026.   As of June 30, 2026, resident turnover in the Same Store Portfolio remained historically low at 39.6% with a low level of move-outs associated with buying single-family homes of 10.9% for the quarter. During the second quarter of 2026, MAA completed the initial lease-up of MAA Cathedral Arts in Dallas, Texas, completed the development of MAA Plaza Midwood located in Charlotte, North Carolina and began construction of a multifamily apartment community in the Kansas City market. During the second quarter of 2026, Mid-America Apartments, L.P. (MAALP), MAA's operating partnership, entered into a unsecured delayed draw term loan (referred to in this release as the DDTL Facility) in the aggregate committed principal amount of up to $350.0 million. The DDTL Facility is scheduled to mature in November 2030. As of June 30, 2026, there was $100.0 million outstanding under the DDTL Facility. During the second quarter of 2026, MAA repurchased 0.4 million shares of its common stock at a weighted average share price of $130.66 for total consideration of $50 million. Same Store Operating Results
Same Store results for the three and six months ended June 30, 2026 as compared to the same periods in the prior year are summarized below:

Three months ended June 30, 2026 vs. 2025

Six months ended June 30, 2026 vs. 2025

Revenues

Expenses

NOI (1)

Average Effective
Rent per Unit

Revenues

Expenses

NOI (1)

Average Effective
Rent per Unit

Same Store Operating Growth

-0.3 %

0.8 %

-1.0 %

-0.2 %

-0.3 %

1.1 %

-1.2 %

-0.2 %

(1)

A reconciliation of Net income available for MAA common shareholders to NOI, including Same Store NOI, is found later in this release.

Same Store operating statistics for the three and six months ended June 30, 2026 are summarized below:

Three months ended June 30, 2026

Six months ended June 30, 2026

As of June 30, 2026

Average Effective
Rent per Unit

Average Physical
Occupancy

Average Effective
Rent per Unit

Average Physical
Occupancy

Resident Turnover

Same Store Operating Statistics

$

1,688

95.3 %

$

1,687

95.4 %

39.6 %

Same Store net effective lease pricing statistics for the three and six months ended June 30, 2026 are summarized below:

Same Store Net Effective Lease Pricing Statistics

Three Months Ended
June 30, 2026

Six Months Ended
June 30, 2026

Effective Blended Lease Rate Growth

0.7 %

0.3 %

Effective New Lease Rate Growth

-5.3 %

-6.0 %

Effective Renewal Lease Rate Growth

5.2 %

5.3 %

Acquisition and Disposition Activity
In April 2026, MAA closed on the acquisition of a land parcel located in the Nashville market through its pre-purchase development program, and MAA began construction of a 312-unit multifamily apartment community at the property in July 2026.

In July 2026, MAA closed on the acquisition of a land parcel located in the Northern Virginia market through its pre-purchase development program and plans future development of a 306-unit multifamily apartment community at the property starting in the third quarter of 2026.

In May 2026, MAA closed on the disposition of a 194-unit multifamily apartment community located in the Raleigh, North Carolina market for net proceeds of approximately $40 million, resulting in a gain on the sale of depreciable real estate assets of approximately $35 million.

Development and Lease-up Activity
A summary of MAA's development communities under construction as of the end of the second quarter of 2026 is set forth below (dollars in thousands):

Units as of

Development Costs as of

Expected Project

Total

June 30, 2026

June 30, 2026

Completions By Year

Development

Expected

Costs

Expected

Projects (1)

Total

Delivered

Leased

Total

to Date

Remaining

2026

2027

2028

6

1,749

193

127

$

597,500

$

360,361

$

237,139

2

2

2

(1)

Two of the development projects were leasing as of June 30, 2026.    

During the second quarter of 2026, MAA completed the development of MAA Plaza Midwood located in Charlotte, North Carolina and began construction on a 263-unit multifamily apartment community in the Kansas City market. 

MAA funded approximately $81 million of costs for current and planned development projects, including predevelopment activities, during the second quarter of 2026.

A summary of the total units, physical occupancy and cost of MAA's lease-up communities as of the end of the second quarter of 2026 is set forth below (dollars in thousands):

Total

As of June 30, 2026

Lease-Up

Total

Physical

Costs

Projects (1)

Units

Occupancy

to Date

5

1,759

74.4

%

$

623,742

(1)

Two of the lease-up projects are expected to stabilize in the third quarter of 2026, two in the fourth quarter of 2026 and one in the third quarter of 2027.

During the second quarter of 2026, MAA completed the lease-up of MAA Cathedral Arts located in Dallas, Texas. 

Balance Sheet and Financing Activities
As of June 30, 2026, MAA had $882.8 million of combined cash and available capacity under MAALP's unsecured revolving credit facility.

In June 2026, MAALP entered into the DDTL Facility in the aggregate committed principal amount of up to $350.0 million.  Advances of loans under the DDTL Facility may be requested by MAALP in one or more draws (subject to a maximum of five draws) and will be available until December 21, 2026.  The DDTL Facility is scheduled to mature in November 2030. Amounts borrowed under the DDTL Facility will bear interest at a variable rate, at MAALP's election, either (1) based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin ranging from 0.675% to 1.550% based upon MAALP's credit rating or (2) a base rate plus an applicable margin ranging from 0.00% to 0.55% based upon MAALP's credit rating. The DDTL Facility also contains an uncommitted accordion feature that allows MAALP to increase the total amount of unsecured indebtedness under the DDTL Facility to $550.0 million until December 21, 2026. As of June 30, 2026, there was $100.0 million outstanding under the DDTL Facility. MAALP intends to use the loan proceeds for general corporate purposes, including repayment of other debt.

During the second quarter of 2026, MAA repurchased 0.4 million shares of its common stock at a weighted average share price of $130.66 for total consideration of $50 million.

Dividends and distributions paid on shares of common stock and noncontrolling interests during the second quarter of 2026 were $182.5 million, as compared to $181.8 million for the same period in the prior year.

Balance sheet highlights as of June 30, 2026 are summarized below (dollars in billions):

Total debt to adjusted

total assets (1)

Net Debt/Adjusted

EBITDAre (2)

Total debt

outstanding

Average effective

interest rate

Fixed rate debt as a %

of total debt

Total debt average

years to maturity

31.2 %

4.5x

$

5.7

3.9 %

86.6 %

6.0

(1)

As defined in the covenants for the unsecured senior notes issued by MAALP.

(2) 

Adjusted EBITDAre is calculated for the trailing twelve month period ended June 30, 2026. A reconciliation of Unsecured notes payable, net and Secured notes payable, net to Net Debt and a reconciliation of Net income to Adjusted EBITDAre are found later in this release.

130th Consecutive Quarterly Common Dividend Declared
MAA declared its 130th consecutive quarterly common dividend, which will be paid on July 31, 2026 to holders of record on July 15, 2026. The current annual dividend rate is $6.12 per common share. The timing and amount of future dividends will depend on actual cash flows from operations, MAA's financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986 and other factors as MAA's Board of Directors deems relevant. MAA's Board of Directors may modify the dividend policy from time to time.

2026 Earnings and Same Store Guidance 
MAA is updating its prior 2026 guidance for Earnings per diluted common share, Core FFO per diluted Share, Core AFFO per diluted Share and Same Store performance. MAA expects to provide updates to its 2026 Earnings per diluted common share, Core FFO per diluted Share and Core AFFO per diluted Share guidance on a quarterly basis.

FFO, Core FFO and Core AFFO are non-GAAP financial measures. Acquisition and disposition activity materially affects depreciation and capital gains or losses, which combined, generally represent the majority of the difference between Net income available for common shareholders and FFO. As discussed in the definitions of non-GAAP financial measures found later in this release, MAA's definition of FFO is in accordance with the National Association of Real Estate Investment Trusts', or NAREIT's, definition, and Core FFO represents FFO as adjusted for items that are not considered part of MAA's core business operations. MAA believes that Core FFO is helpful in understanding operating performance in that Core FFO excludes not only depreciation expense of real estate assets and certain other non-routine items, but it also excludes certain items that by their nature are not comparable over periods and therefore tend to obscure actual operating performance.

2026 Guidance

Previous Range

Previous Midpoint

Updated Range

Updated Midpoint

Earnings:

Full Year 2026

Full Year 2026

Full Year 2026

Full Year 2026

Earnings per common share - diluted

$4.18 to $4.50

$4.34

$3.96 to $4.20

$4.08

Core FFO per Share - diluted

$8.37 to $8.69

$8.53

$8.41 to $8.65

$8.53

Core AFFO per Share - diluted

$7.34 to $7.66

$7.50

$7.38 to $7.62

$7.50

MAA Same Store Portfolio:

Property revenue growth

-0.20% to 1.30%

0.55 %

-0.20% to 0.40%

0.10 %

Property operating expense growth

1.90% to 3.40%

2.65 %

1.25% to 2.25%

1.75 %

NOI growth

-1.70% to 0.30%

-0.70 %

-1.70% to 0.10%

-0.90 %

MAA expects Core FFO for the third quarter of 2026 to be in the range of $2.04 to $2.16 per diluted Share, or $2.10 per diluted Share at the midpoint. The projected difference from Core FFO per diluted Share for the second quarter of 2026 to the midpoint of MAA's guidance for the third quarter of 2026 is summarized below:

Core FFO per diluted Share

Q2 2026 per diluted Share reported results

$

2.08

Same Store NOI

0.01

Non Same Store NOI

0.02

Interest expense

(0.01)

Q3 2026 per diluted Share guidance midpoint

$

2.10

MAA does not forecast Earnings per diluted common share on a quarterly basis as MAA generally cannot predict the timing of forecasted acquisition and disposition activity within a particular quarter (rather than during the course of the full year). Additional details and guidance items are provided in the Supplemental Data to this release. 

Supplemental Material and Conference Call
Supplemental Data to this release can be found on the "For Investors" page of the MAA website at www.maac.com. MAA will host a conference call to further discuss second quarter results on July 30, 2026, at 9:00 AM Central Time. The conference call-in number is (888) 596-4144. You may also join the live webcast of the conference call by accessing the "For Investors" page of the MAA website at www.maac.com. MAA's filings with the Securities and Exchange Commission (SEC) are filed under the registrant names of Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P.

About MAA
MAA, an S&P 500 company, is a real estate investment trust (REIT) focused on delivering full-cycle and superior investment performance for shareholders through the ownership, management, acquisition, development and redevelopment of quality apartment communities primarily in the Southeast, Southwest and Mid-Atlantic regions of the United States. As of June 30, 2026, MAA had ownership interest in 104,698 apartment units, including communities in development, across 16 states and the District of Columbia. For further details, please visit the MAA website at www.maac.com or contact Investor Relations at [email protected], or via mail at MAA, 6815 Poplar Ave., Suite 500, Germantown, TN 38138, Attn: Investor Relations.

Forward-Looking Statements
This release (as well as the Supplemental Data to this release) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not discuss historical fact, but instead are statements related to expectations, projections, intentions, assumptions and beliefs regarding the future. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "forecasts," "projects," "assumes," "will," "may," "could," "should," "budget," "target," "outlook," "proforma," "opportunity," "guidance" and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding quarterly and full year 2026 guidance (including earnings guidance, Same Store Portfolio guidance and other related projections and assumptions), development costs for our development communities, timelines for occupancy, completion and stabilization of our development communities, and timelines for stabilization of our lease-up communities. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, as described below, which may cause our actual results, performance, achievements or outcomes to be materially different from the future results, performance, achievements or outcomes expressed or implied by such forward-looking statements. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of such statements should not be regarded as a representation by us or any other person that the results, performance, achievements or outcomes described in such statements will be achieved.

The following factors, among others, could cause our actual results, performance, achievements or outcomes to differ materially from those expressed or implied in the forward-looking statements: adverse effects on occupancy levels and rental revenues due to unfavorable market and economic conditions; adverse changes in real estate markets, including changes in supply and/or demand for multifamily housing or increased competition from alternative housing options; failure of development communities to be completed within budget and on a timely basis, if at all, to lease-up as anticipated or to achieve anticipated results; unexpected capital needs; material changes in operating costs, including real estate taxes, utilities and insurance costs, due to inflation and other factors; losses due to uninsured risks, deductibles and self-insured retentions, or losses from catastrophes in excess of coverage limits; ability to obtain financing at favorable rates, if at all, or refinance existing debt as it matures; level and volatility of interest or capitalization rates or capital market conditions; changes in the legal requirements we are subject to, or the imposition of new legal requirements, that adversely affect our operations; extreme weather and natural disasters; disease outbreaks and other public health events and measures that are taken by federal, state, and local governmental authorities in response to such outbreaks and events; legal proceedings or class action lawsuits; and other risks identified in our annual report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 6, 2026, our quarterly reports on Form 10-Q, other reports we file with the SEC and in other documents that we publicly disseminate.

Except as required by law, we undertake no obligation to publicly update or revise forward-looking statements contained in this release to reflect events, circumstances or changes in expectations after the date of this release.

FINANCIAL HIGHLIGHTS

Dollars in thousands, except per share data

Three months ended June 30,

Six months ended June 30,

2026

2025

2026

2025

Rental and other property revenues

$

555,127

$

549,902

$

1,108,852

$

1,099,197

Net income available for MAA common shareholders

$

120,828

$

107,205

$

244,265

$

287,956

Total NOI (1)

$

336,407

$

335,248

$

684,560

$

683,190

Earnings per common share: (2)

Basic

$

1.04

$

0.92

$

2.10

$

2.46

Diluted

$

1.04

$

0.92

$

2.10

$

2.46

Funds from operations per Share - diluted: (2)

FFO (1)

$

2.10

$

2.19

$

4.32

$

4.39

Core FFO (1)

$

2.08

$

2.15

$

4.21

$

4.35

Core AFFO (1)

$

1.77

$

1.85

$

3.74

$

3.89

Dividends declared per common share

$

1.530

$

1.515

$

3.060

$

3.030

Dividends/Core FFO (diluted) payout ratio

73.6

%

70.5

%

72.7

%

69.7

%

Dividends/Core AFFO (diluted) payout ratio

86.4

%

81.9

%

81.8

%

77.9

%

Consolidated interest expense

$

53,132

$

45,111

$

104,541

$

90,272

Debt discount and debt issuance cost amortization

(1,776)

(1,624)

(3,535)

(3,241)

Capitalized interest

4,408

5,048

8,280

10,153

Total interest incurred

$

55,764

$

48,535

$

109,286

$

97,184

(1)

The following reconciliations are found later in this release: (i) Net income available for MAA common shareholders to NOI; and (ii) Net income available for MAA common shareholders to FFO, Core FFO and Core AFFO.

(2)

See the "Share and Unit Data" section for additional information.

Dollars in thousands, except share price

June 30, 2026

December 31, 2025

Gross Assets (1)

$

18,238,708

$

17,921,913

Gross Real Estate Assets (1)

$

17,968,887

$

17,662,513

Total debt

$

5,691,901

$

5,405,372

Common shares and units outstanding

118,944,528

119,819,916

Share price

$

138.94

$

138.91

Book equity value

$

5,601,501

$

5,839,645

Market equity value

$

16,526,153

$

16,644,185

Net Debt/Adjusted EBITDAre (2)

4.5x

4.3x

(1)

Reconciliations of Total assets to Gross Assets and Real estate assets, net, to Gross Real Estate Assets are found later in this release.

(2)

Adjusted EBITDAre is calculated for the trailing twelve month period for each date presented. The following reconciliations are found later in this release: (i) Unsecured notes payable, net and Secured notes payable, net to Net Debt; and (ii) Net income to EBITDA, EBITDAre and Adjusted EBITDAre.

CONSOLIDATED STATEMENTS OF OPERATIONS

Dollars in thousands, except per share data (Unaudited)

Three months ended June 30,

Six months ended June 30,

2026

2025

2026

2025

Revenues:

Rental and other property revenues

$

555,127

$

549,902

$

1,108,852

$

1,099,197

Expenses:

Operating expenses, excluding real estate taxes and insurance

136,525

132,465

264,138

257,420

Real estate taxes and insurance

82,195

82,189

160,154

158,587

Depreciation and amortization

162,548

153,521

324,418

305,871

Total property operating expenses

381,268

368,175

748,710

721,878

Property management expenses

17,955

17,511

40,416

38,089

General and administrative expenses

15,146

12,813

31,862

28,432

Interest expense

53,132

45,111

104,541

90,272

(Gain) loss on sale of depreciable real estate assets

(35,255)

69

(55,419)

(71,842)

Other non-operating income

(2,102)

(4,722)

(18,107)

(5,556)

Income before income tax expense

124,983

110,945

256,849

297,924

Income tax expense

(454)

(600)

(5,975)

(1,638)

Income from continuing operations before real estate joint venture activity

124,529

110,345

250,874

296,286

Income from real estate joint venture

289

530

555

995

Net income

124,818

110,875

251,429

297,281

Net income attributable to noncontrolling interests

3,068

2,748

5,320

7,481

Net income available for shareholders

121,750

108,127

246,109

289,800

Dividends to MAA Series I preferred shareholders

922

922

1,844

1,844

Net income available for MAA common shareholders

$

120,828

$

107,205

$

244,265

$

287,956

Earnings per common share - basic:

Net income available for common shareholders

$

1.04

$

0.92

$

2.10

$

2.46

Earnings per common share - diluted:

Net income available for common shareholders

$

1.04

$

0.92

$

2.10

$

2.46

SHARE AND UNIT DATA

Shares and units in thousands

Three months ended June 30,

Six months ended June 30,

2026

2025

2026

2025

Net Income Shares (1)

Weighted average common shares - basic

116,079

116,976

116,349

116,908

Effect of dilutive securities

65

187

96

241

Weighted average common shares - diluted

116,144

117,163

116,445

117,149

Funds From Operations Shares And Units

Weighted average common shares and units - basic

119,009

119,950

119,284

119,932

Weighted average common shares and units - diluted

119,094

120,015

119,360

119,995

Period End Shares And Units

Common shares at June 30,

116,015

117,071

116,015

117,071

Operating Partnership units at June 30,

2,930

2,950

2,930

2,950

Total common shares and units at June 30,

118,945

120,021

118,945

120,021

(1)

For additional information on the calculation of diluted common shares and earnings per common share, please refer to the Notes to the Condensed Consolidated Financial Statements in MAA's Quarterly Report on Form 10-Q for the three months ended June 30, 2026, expected to be filed with the SEC on or about July 30, 2026.

CONSOLIDATED BALANCE SHEETS

Dollars in thousands (Unaudited)

June 30, 2026

December 31, 2025

Assets

Real estate assets:

Land

$

2,176,947

$

2,129,401

Buildings and improvements and other

15,218,047

14,852,509

Development and capital improvements in progress

406,830

426,759

17,801,824

17,408,669

Less: Accumulated depreciation

(6,244,124)

(5,914,017)

11,557,700

11,494,652

Undeveloped land

73,359

73,359

Investment in real estate joint venture

41,868

41,313

Real estate assets, net

11,672,927

11,609,324

Cash and cash equivalents

51,836

60,258

Restricted cash

13,168

13,717

Other assets

256,653

245,683

Assets held for sale

—

46,401

Total assets

$

11,994,584

$

11,975,383

Liabilities and equity

Liabilities:

Unsecured notes payable, net

$

5,331,445

$

5,044,979

Secured notes payable, net

360,456

360,393

Accrued expenses and other liabilities

701,182

730,366

Total liabilities

6,393,083

6,135,738

Redeemable common stock

18,907

20,402

Shareholders' equity:

Preferred stock

9

9

Common stock

1,157

1,166

Additional paid-in capital

7,283,817

7,401,962

Accumulated distributions in excess of net income

(1,846,433)

(1,734,986)

Accumulated other comprehensive loss

(4,555)

(5,300)

Total MAA shareholders' equity

5,433,995

5,662,851

Noncontrolling interests - Operating Partnership units

136,117

141,503

Total shareholders' equity

5,570,112

5,804,354

Noncontrolling interests - consolidated real estate entities

12,482

14,889

Total equity

5,582,594

5,819,243

Total liabilities and equity

$

11,994,584

$

11,975,383

RECONCILIATION OF NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS TO FFO, CORE FFO, CORE AFFO AND FAD

Amounts in thousands, except per share and unit data

Three months ended June 30,

Six months ended June 30,

2026

2025

2026

2025

Net income available for MAA common shareholders

$

120,828

$

107,205

$

244,265

$

287,956

Depreciation and amortization of real estate assets

161,037

152,149

321,530

303,140

(Gain) loss on sale of depreciable real estate assets

(35,255)

69

(55,419)

(71,842)

MAA's share of depreciation and amortization of real estate assets of real estate joint venture

168

167

338

331

Net income attributable to noncontrolling interests

3,068

2,748

5,320

7,481

FFO attributable to common shareholders and unitholders

249,846

262,338

516,034

527,066

(Gain) loss on embedded derivative in preferred shares (1)

(1,091)

(1,693)

483

(1,283)

Loss (gain) on investments, net of tax (1)(2)

1,068

317

(16,169)

(337)

Casualty related (recoveries) and charges, net (1)

(2,299)

(3,346)

2,220

(3,568)

Core FFO attributable to common shareholders and unitholders

247,524

257,616

502,568

521,878

Recurring capital expenditures

(37,242)

(35,343)

(55,990)

(55,449)

Core AFFO attributable to common shareholders and unitholders

210,282

222,273

446,578

466,429

Redevelopment capital expenditures

(31,749)

(15,435)

(42,516)

(32,844)

Revenue enhancing capital expenditures

(23,519)

(20,104)

(38,081)

(35,292)

Commercial capital expenditures

(2,161)

(2,755)

(3,379)

(6,729)

Other capital expenditures

(10,608)

(12,048)

(22,703)

(27,489)

FAD attributable to common shareholders and unitholders

$

142,245

$

171,931

$

339,899

$

364,075

Dividends and distributions paid

$

182,546

$

181,814

$

365,906

$

363,581

Weighted average common shares - diluted

116,144

117,163

116,445

117,149

FFO weighted average common shares and units - diluted

119,094

120,015

119,360

119,995

Earnings per common share - diluted:

Net income available for common shareholders

$

1.04

$

0.92

$

2.10

$

2.46

FFO per Share - diluted

$

2.10

$

2.19

$

4.32

$

4.39

Core FFO per Share - diluted

$

2.08

$

2.15

$

4.21

$

4.35

Core AFFO per Share - diluted

$

1.77

$

1.85

$

3.74

$

3.89

(1)

Included in Other non-operating income in the Consolidated Statements of Operations.

(2)

For the three months ended June 30, 2026 and 2025, loss on investments is presented net of tax benefit of $0.3 million and $0.1 million, respectively. For the six months ended June 30, 2026 and 2025, gain on investments is presented net of tax expense of $4.3 million and $0.1 million, respectively.

RECONCILIATION OF NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS TO NET OPERATING INCOME

Dollars in thousands

Three Months Ended

Six Months Ended

June 30,
2026

March 31,
2026

June 30,
2025

June 30,
2026

June 30,
2025

Net income available for MAA common shareholders

$

120,828

$

123,437

$

107,205

$

244,265

$

287,956

Depreciation and amortization

162,548

161,870

153,521

324,418

305,871

Property management expenses

17,955

22,461

17,511

40,416

38,089

General and administrative expenses

15,146

16,716

12,813

31,862

28,432

Interest expense

53,132

51,409

45,111

104,541

90,272

(Gain) loss on sale of depreciable real estate assets

(35,255)

(20,164)

69

(55,419)

(71,842)

Other non-operating (income) expense

(2,102)

(16,005)

(4,722)

(18,107)

(5,556)

Income tax expense

454

5,521

600

5,975

1,638

Income from real estate joint venture

(289)

(266)

(530)

(555)

(995)

Net income attributable to noncontrolling interests

3,068

2,252

2,748

5,320

7,481

Dividends to MAA Series I preferred shareholders

922

922

922

1,844

1,844

Total NOI

$

336,407

$

348,153

$

335,248

$

684,560

$

683,190

Same Store NOI

$

316,219

$

328,696

$

319,502

$

644,915

$

652,418

Non-Same Store and Other NOI

20,188

19,457

15,746

39,645

30,772

Total NOI

$

336,407

$

348,153

$

335,248

$

684,560

$

683,190

RECONCILIATION OF NET INCOME TO EBITDA, EBITDAre AND ADJUSTED EBITDAre

Dollars in thousands

Three Months Ended

Twelve Months Ended

June 30, 2026

June 30, 2025

June 30, 2026

December 31, 2025

Net income

$

124,818

$

110,875

$

410,714

$

456,566

Depreciation and amortization

162,548

153,521

640,842

622,295

Interest expense

53,132

45,111

199,526

185,257

Income tax expense

454

600

8,932

4,595

EBITDA

340,952

310,107

1,260,014

1,268,713

(Gain) loss on sale of depreciable real estate assets

(35,255)

69

(55,643)

(72,066)

Adjustments to reflect MAA's share of EBITDAre of unconsolidated affiliates

422

351

1,571

1,424

EBITDAre

306,119

310,527

1,205,942

1,198,071

(Gain) loss on embedded derivative in preferred shares (1)

(1,091)

(1,693)

655

(1,111)

Loss (gain) on investments (1)

1,414

397

(27,524)

(7,457)

Casualty related (recoveries) and charges, net (1)

(2,299)

(3,346)

1,190

(4,598)

Legal costs, settlements and (recoveries), net (1)(2)

—

—

61,908

61,908

Adjusted EBITDAre

$

304,143

$

305,885

$

1,242,171

$

1,246,813

(1)

Included in Other non-operating income in the Consolidated Statements of Operations

(2)

During both the twelve months ended June 30, 2026 and December 31, 2025, in accordance with its accounting policies, MAA recognized $61.9 million of accrued legal settlements and legal defense costs.

RECONCILIATION OF UNSECURED NOTES PAYABLE, NET AND SECURED NOTES PAYABLE, NET TO NET DEBT

Dollars in thousands

June 30, 2026

December 31, 2025

Unsecured notes payable, net

$

5,331,445

$

5,044,979

Secured notes payable, net

360,456

360,393

Total debt

5,691,901

5,405,372

Cash and cash equivalents

(51,836)

(60,258)

Net Debt

$

5,640,065

$

5,345,114

RECONCILIATION OF TOTAL ASSETS TO GROSS ASSETS

Dollars in thousands

June 30, 2026

December 31, 2025

Total assets

$

11,994,584

$

11,975,383

Accumulated depreciation

6,244,124

5,914,017

Accumulated depreciation for Assets held for sale (1)

—

32,513

Gross Assets

$

18,238,708

$

17,921,913

(1)

Included in Assets held for sale in the Consolidated Balance Sheets. 

RECONCILIATION OF REAL ESTATE ASSETS, NET TO GROSS REAL ESTATE ASSETS

Dollars in thousands

June 30, 2026

December 31, 2025

Real estate assets, net

$

11,672,927

$

11,609,324

Accumulated depreciation

6,244,124

5,914,017

Assets held for sale, net

—

46,401

Accumulated depreciation for Assets held for sale (1)

—

32,513

Cash and cash equivalents

51,836

60,258

Gross Real Estate Assets

$

17,968,887

$

17,662,513

(1)

Included in Assets held for sale in the Consolidated Balance Sheets.

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDAre
For purposes of calculations in this release, Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization for real estate, or Adjusted EBITDAre, represents EBITDAre further adjusted for items that are not considered part of MAA's core operations such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares, gain or loss on sale of non-depreciable assets, gain or loss on investments, casualty related charges and (recoveries), net, gain or loss on debt extinguishment and legal costs, settlements and (recoveries), net. As an owner and operator of real estate, MAA considers Adjusted EBITDAre to be an important measure of performance from core operations because Adjusted EBITDAre excludes various income and expense items that are not indicative of operating performance. MAA's computation of Adjusted EBITDAre may differ from the methodology utilized by other companies to calculate Adjusted EBITDAre. Adjusted EBITDAre should not be considered as an alternative to Net income as an indicator of operating performance.

Core Adjusted Funds from Operations (Core AFFO)
Core AFFO is composed of Core FFO less recurring capital expenditures. Because net income attributable to noncontrolling interests is added back, Core AFFO, when used in this release, represents Core AFFO attributable to common shareholders and unitholders. Core AFFO should not be considered as an alternative to Net income available for MAA common shareholders as an indicator of operating performance. As an owner and operator of real estate, MAA considers Core AFFO to be an important measure of performance from operations because Core AFFO measures the ability to control revenues, expenses and recurring capital expenditures.

Core Funds from Operations (Core FFO)
Core FFO represents FFO as adjusted for items that are not considered part of MAA's core business operations such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares; gain or loss on sale of non-depreciable assets; gain or loss on investments, net of tax; casualty related charges and (recoveries), net; gain or loss on debt extinguishment; legal costs, settlements and (recoveries), net, and mark-to-market debt adjustments. Because net income attributable to noncontrolling interests is added back, Core FFO, when used in this release, represents Core FFO attributable to common shareholders and unitholders. While MAA's definition of Core FFO may be similar to others in the industry, MAA's methodology for calculating Core FFO may differ from that utilized by other REITs and, accordingly, may not be comparable to such other REITs. Core FFO should not be considered as an alternative to Net income available for MAA common shareholders as an indicator of operating performance. MAA believes that Core FFO is helpful in understanding its core operating performance between periods in that it removes certain items that by their nature are not comparable over periods and therefore tend to obscure actual operating performance.

EBITDA
For purposes of calculations in this release, Earnings Before Interest, Income Taxes, Depreciation and Amortization, or EBITDA, is composed of net income plus depreciation and amortization, interest expense, and income taxes. As an owner and operator of real estate, MAA considers EBITDA to be an important measure of performance from core operations because EBITDA excludes various expense items that are not indicative of operating performance. EBITDA should not be considered as an alternative to Net income as an indicator of operating performance.

EBITDAre
For purposes of calculations in this release, Earnings Before Interest, Income Taxes, Depreciation and Amortization for real estate, or EBITDAre, is composed of EBITDA further adjusted for the gain or loss on sale of depreciable assets, gain on consolidation of third-party development and adjustments to reflect MAA's share of EBITDAre of an unconsolidated affiliate. As an owner and operator of real estate, MAA considers EBITDAre to be an important measure of performance from core operations because EBITDAre excludes various expense items that are not indicative of operating performance. While MAA's definition of EBITDAre is in accordance with NAREIT's definition, it may differ from the methodology utilized by other companies to calculate EBITDAre. EBITDAre should not be considered as an alternative to Net income as an indicator of operating performance.

Funds Available for Distribution (FAD)
FAD is composed of Core FFO less total capital expenditures, excluding development spending, property acquisitions, capital expenditures relating to significant casualty losses that management expects to be reimbursed by insurance proceeds and corporate related capital expenditures. Because net income attributable to noncontrolling interests is added back, FAD, when used in this release, represents FAD attributable to common shareholders and unitholders. FAD should not be considered as an alternative to Net income available for MAA common shareholders as an indicator of operating performance. As an owner and operator of real estate, MAA considers FAD to be an important measure of performance from core operations because FAD measures the ability to control revenues, expenses and capital expenditures.

Funds From Operations (FFO)
FFO represents net income available for MAA common shareholders (calculated in accordance with GAAP) excluding gain or loss on disposition of operating properties, asset impairment and gain on consolidation of third-party development, plus depreciation and amortization of real estate assets, net income attributable to noncontrolling interests and adjustments for joint ventures. Because net income attributable to noncontrolling interests is added back, FFO, when used in this release, represents FFO attributable to common shareholders and unitholders. While MAA's definition of FFO is in accordance with NAREIT's definition, it may differ from the methodology for calculating FFO utilized by other companies and, accordingly, may not be comparable to such other companies. FFO should not be considered as an alternative to Net income available for MAA common shareholders as an indicator of operating performance. MAA believes that FFO is helpful in understanding operating performance in that FFO excludes depreciation and amortization of real estate assets. MAA believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies.

Gross Assets
Gross Assets represents Total assets plus Accumulated depreciation and Accumulated depreciation for Assets held for sale. MAA believes that Gross Assets can be used as a helpful tool in evaluating its balance sheet positions. MAA believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies.

Gross Real Estate Assets
Gross Real Estate Assets represents Real estate assets, net plus Accumulated depreciation, Assets held for sale, net, Accumulated depreciation for Assets held for sale, Cash and cash equivalents and 1031(b) exchange proceeds included in Restricted cash. MAA believes that Gross Real Estate Assets can be used as a helpful tool in evaluating its balance sheet positions. MAA believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies.

Net Debt
Net Debt represents Unsecured notes payable,net and Secured notes payable,net less Cash and cash equivalents and 1031(b) exchange proceeds included in Restricted cash. MAA believes Net Debt is a helpful tool in evaluating its debt position.

NON-GAAP FINANCIAL MEASURES (Continued)

Net Operating Income (NOI)
Net Operating Income represents Rental and other property revenues less Total property operating expenses, excluding depreciation and amortization, for all properties held during the period, regardless of their status as held for sale. NOI should not be considered as an alternative to Net income available for MAA common shareholders. MAA believes NOI is a helpful tool in evaluating operating performance because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance.

Non-Same Store and Other NOI
Non-Same Store and Other NOI represents Rental and other property revenues less Total property operating expenses, excluding depreciation and amortization, for all properties classified within the Non-Same Store and Other Portfolio during the period. Non-Same Store and Other NOI includes storm-related expenses related to severe weather events, including hurricanes and winter storms. Non-Same Store and Other NOI should not be considered as an alternative to Net income available for MAA common shareholders. MAA believes Non-Same Store and Other NOI is a helpful tool in evaluating operating performance because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance.

Same Store NOI
Same Store NOI represents Rental and other property revenues less Total property operating expenses, excluding depreciation and amortization, for all properties classified within the Same Store Portfolio during the period. Same Store NOI excludes storm-related expenses related to severe weather events, including hurricanes and winter storms. Same Store NOI should not be considered as an alternative to Net income available for MAA common shareholders. MAA believes Same Store NOI is a helpful tool in evaluating operating performance because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance.

OTHER KEY DEFINITIONS

Average Effective Rent per Unit
Average Effective Rent per Unit represents the average of gross rent amounts after the effect of leasing concessions for occupied units plus prevalent market rates asked for unoccupied units, divided by the total number of units. Leasing concessions represent discounts to the current market rate. MAA believes average effective rent is a helpful measurement in evaluating average pricing. It does not represent actual rental revenue collected per unit.

Average Physical Occupancy
Average Physical Occupancy represents the average of the daily physical occupancy for an applicable period.

Development Communities
Communities remain identified as development until certificates of occupancy are obtained for all units under development. Once all units are delivered and available for occupancy, the community moves into the Lease-up Communities portfolio.

Effective Blended Lease Rate Growth
Effective Blended Lease Rate Growth represents the combined weighted average of Effective New Lease Rate Growth and Effective Renewal Lease Rate Growth from our Same Store Portfolio for the applicable period.

Effective New Lease Rate Growth
Effective New Lease Rate Growth represents the growth in gross rent amounts after the effect of leasing concessions for new leases from our Same Store Portfolio that were effective during the applicable period as compared to the prior lease.

Effective Renewal Lease Rate Growth
Effective Renewal Lease Rate Growth represents the growth in gross rent amounts after the effect of leasing concessions for renewal leases from our Same Store Portfolio that were effective during the applicable period as compared to the prior lease.             

Lease-up Communities
New acquisitions acquired during lease-up and newly developed communities remain in the Lease-up Communities portfolio until stabilized. Communities are considered stabilized when achieving 90% average physical occupancy for 90 days.

Non-Same Store and Other Portfolio
Non-Same Store and Other Portfolio includes recently acquired communities, communities in development or lease-up, communities that have been disposed of or identified for disposition, communities that have experienced a significant casualty loss, stabilized communities that do not meet the requirements defined by the Same Store Portfolio, retail properties and commercial properties.

Resident Turnover
Resident turnover represents resident move outs excluding transfers within the Same Store Portfolio as a percentage of expiring leases on a trailing twelve month basis as of the end of the reported quarter.

Same Store Portfolio (or Same Store)
MAA reviews its Same Store Portfolio at the beginning of each calendar year, or as significant transactions or events warrant. Communities are generally added into the Same Store Portfolio if they were owned and stabilized at the beginning of the previous year. Communities are considered stabilized when achieving 90% average physical occupancy for 90 days. Communities that have been approved by MAA's Board of Directors for disposition are excluded from the Same Store Portfolio. Communities that have experienced a significant casualty loss are also excluded from the Same Store Portfolio.

SOURCE MAA

Second Quarter Consolidated Revenues of $2.85 billion, up 13% on a Reported basis and 11% on an Organic (non-GAAP)1 basis over the prior year period GAAP Net Income Attributable to Bausch Health of $258 million and GAAP Net Income of $260 million GAAP Earnings per Diluted Share Attributable to Bausch Health of $0.68 compared to $0.40 in the prior year period; Adjusted Earnings per Diluted Share (non-GAAP)1 of $1.26 compared to $0.90 in the prior year period, an increase of 40% Consolidated Adjusted EBITDA Attributable to Bausch Health (non-GAAP)1 of $1,075 million, up 28% on a Reported basis over the prior year period BAUSCH HEALTH EXCLUDING BAUSCH + LOMB SECOND QUARTER 2026 RESULTS

Delivered thirteenth consecutive quarter of year-over-year Revenue growth, with Revenue up 16% on a Reported basis and 13% on an Organic (non-GAAP)1 basis Net Income increased $84 million over the prior year period, and Adjusted EBITDA (non-GAAP)1 grew 28%  Generated $517 million in Cash Provided by Operating Activities and $471 million in Adjusted Cash Flows from Operations (non-GAAP)1   Raising full-year 2026 Revenue, Adjusted EBITDA (non-GAAP)1, and Adjusted Cash Flows from Operations (non-GAAP)1 guidance , /PRNewswire/ -- Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC) ("Bausch Health" or the "Company" or "we" or "our") today announced its second quarter 2026 financial results and other key updates from the quarter.

"The second quarter marks our thirteenth consecutive quarter of year-over-year growth in Revenue and Adjusted EBITDA for Bausch Health, excluding Bausch + Lomb, reflecting the strength of our portfolio, disciplined execution, and the dedication of our teams around the world. We delivered our highest Revenue and Adjusted EBITDA growth rates in the past three years, generated our strongest Adjusted Cash Flow from Operations since Q4 2024, and reduced Net Debt by one of our largest amounts since our 2022 debt refinancing. This performance strengthens our financial flexibility and supports continued investment in our business, our pipeline, and business development opportunities. We remain focused on driving long-term value creation," said Thomas J. Appio, Chief Executive Officer, Bausch Health.

1   

This is a non-GAAP measure or a non-GAAP ratio. For further information on non-GAAP measures and non-GAAP ratios, please refer to the "Non-GAAP Information" section of this news release. Please also refer to tables at the end of this news release for a reconciliation of this and other non-GAAP measures and ratios to the most directly comparable GAAP measure.

Second Quarter 2026 Revenue Performance

Total consolidated reported revenues were $2.85 billion for the second quarter of 2026, compared with $2.53 billion in the second quarter of 2025, an increase of $322 million, or 13%. Excluding the impact of foreign exchange of $25 million, acquisitions of $35 million, and divestitures and discontinuations of $7 million, revenue increased 11% on an organic1 basis compared with the second quarter of 2025.

Reported revenues by segment were as follows:

Three Months Ended
June 30,

Reported Change

Change at
Constant
Currency1

(Non-GAAP)

Change in
Organic
Revenue1

(Non-GAAP)

(in millions)

2026

2025

Amount

Pct.

Total Bausch Health Revenues

$2,852

$2,530

$322

13 %

12 %

11 %

Bausch Health (excl. B+L)

$1,458

$1,252

$206

16 %

15 %

13 %

Salix segment

$758

$627

$131

21 %

21 %

21 %

International segment

$305

$278

$27

10 %

5 %

5 %

Solta Medical segment

$176

$128

$48

38 %

37 %

12 %

Diversified segment

$219

$219

$0

— %

— %

— %

Bausch + Lomb segment

$1,394

$1,278

$116

9 %

8 %

8 %

Salix Segment
Salix segment reported revenues were $758 million for the second quarter of 2026, compared with $627 million for the second quarter of 2025, an increase of $131 million, or 21%. Segment revenues increased 21% on an organic1 basis compared with the second quarter of 2025. Xifaxan® was the primary contributor to growth, with 26% revenue growth in the second quarter of 2026.

International Segment
International segment reported revenues were $305 million for the second quarter of 2026, compared with $278 million for the second quarter of 2025, an increase of $27 million, or 10%. Excluding the impact of foreign exchange of $12 million, segment revenues grew 5% on an organic1 basis compared with the second quarter of 2025, with strong execution across LATAM and EMEA more than offsetting softer results in Canada.

Solta Medical Segment
Solta Medical segment reported revenues were $176 million for the second quarter of 2026, compared with $128 million in the second quarter of 2025, an increase of $48 million, or 38% aided by the acquisition of our full service distributor in China. Excluding a $1 million favorable impact from foreign exchange and acquisitions of $32 million, segment revenues increased by 12% on an organic1 basis compared with the second quarter of 2025, led by growth in APAC including South Korea, China and Taiwan.

Diversified Segment
Diversified segment reported revenues were $219 million for the second quarter of 2026, flat compared with $219 million for the second quarter of 2025. Segment revenues were flat on an organic1 basis compared with the second quarter of 2025. Results in the Neuroscience business balanced softer performance in Dermatology, Generics, and Dentistry.

Bausch + Lomb Segment
Bausch + Lomb segment reported revenues were $1.39 billion for the second quarter of 2026, compared with $1.28 billion for the second quarter of 2025, an increase of $116 million, or 9%. Excluding the impact of foreign exchange of $12 million, acquisitions of $3 million and divestitures and discontinuations of $5 million, segment revenues increased 8% on an organic1 basis compared with the second quarter of 2025.

Consolidated Operating Income
Consolidated operating income was $740 million for the second quarter of 2026, compared with consolidated operating income of $444 million for the second quarter of 2025, an increase of $296 million, primarily attributable to results in the Salix, Bausch + Lomb, and Solta Medical segments. 

Consolidated Net Income Attributable to Bausch Health
Consolidated net income attributable to Bausch Health for the second quarter of 2026 was $258 million, compared with consolidated net income attributable to Bausch Health of $148 million for the second quarter of 2025.

Consolidated Adjusted Net Income Attributable to Bausch Health (non-GAAP)1
Consolidated adjusted net income attributable to Bausch Health (non-GAAP)1 for the second quarter of 2026 was $476 million, compared with $335 million for the second quarter of 2025, an increase of $141 million, primarily due to higher revenues.

Consolidated Earnings Per Share Attributable to Bausch Health
Consolidated earnings per share attributable to Bausch Health for the second quarter of 2026 was $0.68 on a diluted basis, compared with consolidated earnings per share of $0.40 on a diluted basis for the second quarter of 2025.

Consolidated Adjusted Earnings Per Share Attributable to Bausch Health (non-GAAP)1
Consolidated adjusted earnings per share attributable to Bausch Health (non-GAAP)1 for the second quarter of 2026 was $1.26, compared with $0.90 for the second quarter of 2025.

Consolidated Adjusted EBITDA Attributable to Bausch Health (non-GAAP)1
Consolidated adjusted EBITDA attributable to Bausch Health (non-GAAP)1 was $1,075 million for the second quarter of 2026, compared with $842 million for the second quarter of 2025, an increase of $233 million.

Consolidated Cash Provided by Operating Activities
The Company generated $671 million of cash from operating activities in the second quarter of 2026, an increase of 132% versus $289 million in the second quarter of 2025.

Balance Sheet Highlights
As of June 30, 2026, Bausch Health reported consolidated cash and cash equivalents of $1,825 million, up from $1,309 million as of December 31, 2025. The Company remains focused on strengthening its balance sheet and delivering value to all stakeholders.

Focus on Strategic Priorities

The Company entered the second half of 2026 with strong financial momentum, with revenue and earnings growth across multiple segments. Upon the successful completion of major refinancing initiatives in the prior twelve-month period, the Company materially improved its debt maturity profile. The Company remains committed to evaluating all options for unlocking shareholder value, including maximizing the value of our Bausch Health and Bausch + Lomb assets.

2026 Financial Outlook

The Company updated its Consolidated full-year Revenue and Adjusted EBITDA (non-GAAP)1 guidance for 2026.

Bausch Health (excluding Bausch + Lomb) is raising its full year Revenue, Adjusted EBITDA (non-GAAP)1, and Adjusted Cash Flows from Operations (non-GAAP)1 guidance, which includes the currently estimated impact of applicable tariffs for the calendar year as of the date of this release.

Current Guidance (as of July 29, 2026)

BHC

BHC

(excl. B+L)

B+L

Revenues (in Billions)

$10.790 - $11.040

$5.350 - $5.500

$5.440 - $5.540

Revenue growth vs. Prior Year

4% - 6%

Adjusted EBITDA1 (in Billions)

$4.050 - $4.175

$3.025 - $3.100

$1.025 - $1.075

Adj. EBITDA1 growth vs. Prior Year

8% - 11%

Adjusted Cash Flows from Operations1 (in Billions)

$1.400 - $1.475

Other than with respect to GAAP revenues, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP)1 to GAAP net income (loss) or forward-looking Adjusted Cash Flows from Operations (non-GAAP)1 to GAAP cash provided by operating activities, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because deductions (such as restructuring, gain or loss on extinguishment of debt and litigation and other matters) used to calculate projected net income (loss) and payments (such as payments of legal settlements, transformation costs, separation costs and separation-related costs, interest charged against premium, financing fees paid in connection with the debt refinancing transactions and acquired IPR&D expense) used to calculate Adjusted Cash Flows from Operations (non-GAAP)1 vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all adjustments needed in order to provide a GAAP calculation of projected net income (loss) or cash provided by operating activities at this time. The amount of these adjustments may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP)1. These statements represent forward-looking information and may represent a financial outlook, and actual results may vary. Please see the risks and assumptions referred to in the "Forward-looking Statements" section of this news release. The guidance in this news release is only effective as of the date it is given and will not be updated or affirmed unless and until the Company publicly announces updated or affirmed guidance. The rapid recent developments in the evolving landscape of tariffs and responses have resulted in uncertainty regarding these measures and the effects they may have. We continue to assess the direct and indirect impacts on our businesses of such tariffs, including retaliatory tariffs and other trade protectionist measures as the situation develops, and there can be no assurance that such impacts will not be adverse.

Conference Call Details

Date:           Wednesday, July 29, 2026

Time:           5:00 p.m. EDT

Webcast:     http://ir.bauschhealth.com/events-and-presentations

A replay of the conference call will be available on the investor relations website.

About Bausch Health

Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC) is a global, diversified pharmaceutical company enriching lives through our relentless drive to deliver better health care outcomes. We develop, manufacture and market a range of products primarily in gastroenterology, hepatology, neuroscience, dermatology, dentistry, aesthetics, international pharmaceuticals and eye health, through our controlling interest in Bausch + Lomb Corporation. Our ambition is to be a globally integrated healthcare company, trusted and valued by patients, HCPs, employees and investors. For more information about Bausch Health, visit www.bauschhealth.com and connect with us on LinkedIn.

Forward-looking Statements

This news release contains forward-looking information and statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws (collectively, "forward-looking statements"), including, but not limited to, statements relating to the Company's: future prospects and performance, financial guidance, research and development efforts and anticipated timing or results thereof, proposed plan to separate its eye health business, including the timing thereof, management of its balance sheet, generation of cash, ability to launch and commercialize new products, including the timing of regulatory processes with respect to the Company's product pipeline, ability to enforce and defend its Xifaxan® intellectual property rights, ability to execute its growth strategies and strategic priorities generally, and other corporate and strategic transactions. Forward-looking statements may generally be identified by the use of the words "anticipates," "hopes," "expects," "intends," "plans," "should," "could," "would," "may," "believes," "estimates," "potential," "target," or "continue" and positive and negative variations or similar expressions, and phrases or statements that certain actions, events or results may, could, should or will be achieved, received or taken, or will occur or result, and similar such expressions also identify forward-looking information. These forward-looking statements, including the full-year guidance, are based upon the current expectations and beliefs of management. The Company's 2026 financial outlook and full-year guidance are included to provide further information about management's expectations about the Company's future business operations, activities and results and may not be appropriate for other purposes.

These forward-looking statements are subject to certain factors, risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. These factors, risks and uncertainties include, but are not limited to: our ability to execute our business strategy, business plans and operational efficiency initiatives; demand for, competitive positioning of and pricing for our current and anticipated products and our ability to achieve expected revenues, margins and expense levels; the successful development, regulatory approval, manufacture and timing of launches and commercialization of pipeline and other products; the completion, timing, integration and expected benefits of acquisitions and other strategic transactions (including the planned separation of our eye health business consisting of our Bausch + Lomb global Vision Care, Surgical and Pharmaceuticals businesses) on anticipated terms, timing and costs; the scope, duration and financial and operational impact of product quality matters and manufacturing facility compliance and certification matters; the continued availability and performance of key third-party distribution, fulfillment and other arrangements and the stability of global supply chains; the continuation of patent protection and regulatory exclusivity for key products; the expected impacts of the Inflation Reduction Act, and the impact of the negotiated prices for Xifaxan®, expected to become effective in 2027, under certain programs of the Centers for Medicare & Medicaid Services, and other healthcare reform measures and our ability to mitigate the impact thereof; our ability to generate cash flows and access liquidity to meet working capital needs, satisfy debt maturities as they become due, reduce debt levels and comply with financial and other covenants under our financing arrangements; the expected scope and impact of tariffs, counter-tariffs and other trade restrictions and the effectiveness of mitigation actions and the Company's ability to recover any tariffs that are eligible for refund claims; macroeconomic and geopolitical conditions (including inflation, recessionary pressures, foreign currency exchange rates and interest rates), changes in tax laws and related guidance (including legislation referred to as the One Big Beautiful Bill Act and Organisation for Economic Co-operation and Development related measures); the expected outcomes of litigation and other contingencies; and other factors, 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 U.S. Securities and Exchange Commission and the Canadian Securities Administrators, which factors, risks and uncertainties are incorporated herein by reference.

We caution that, as it is not possible to predict or identify all relevant factors that may impact forward-looking statements, the factors referred to above are not exhaustive and should not be considered a complete statement of all potential risks and uncertainties. When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the aforementioned factors and other uncertainties and potential events. These forward-looking statements speak only as of the date made. Bausch Health undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect actual outcomes, except as required by law.

Non-GAAP Information

To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures and non-GAAP ratios to provide supplemental information to readers. Management uses these non-GAAP measures and ratios as key metrics in the evaluation of the Company's 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 and ratios are useful to investors in their assessment of our operating performance and the valuation of the Company. In addition, these non-GAAP measures and ratios 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, these measures and ratios are not prepared in accordance with GAAP nor do they have any standardized meaning under GAAP. In addition, other companies may use similarly titled non-GAAP financial measures and ratios that are calculated differently from the way we calculate such measures and ratios. Accordingly, our non-GAAP financial measures and ratios may not be comparable to such similarly titled non-GAAP financial measures and ratios used by other companies. We caution investors not to place undue reliance on such non-GAAP measures and ratios, but instead to consider them with the most directly comparable GAAP measures and ratios. Non-GAAP financial measures and ratios 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 historical non-GAAP financial measures and ratios to the most directly comparable financial measures and ratios calculated and presented in accordance with GAAP are shown in the tables below. However, as indicated above, 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. Many of the adjustments and exclusions used to calculate the projected non-GAAP measures may vary significantly based on actual events, so the Company is not able to forecast on a GAAP basis with reasonable certainty all adjustments needed in order to provide a GAAP calculation of these projected amounts. The amounts of these adjustments may be material and, therefore, could result in the GAAP amount being materially different from (including materially less than) the projected non-GAAP measures.

Commencing in the third quarter of 2025, the Company now includes payments of Acquired IPR&D in the calculation of Adjusted Cash Flows From Operations (non-GAAP). Prior-period amounts presented herein have been restated to conform to the current year's presentation.

Description of Non-GAAP Financial Measures

EBITDA (non-GAAP), Adjusted EBITDA (non-GAAP) and Adjusted EBITDA Attributable to Bausch Health (non-GAAP)

EBITDA (non-GAAP) is Net income (loss) (its most directly comparable GAAP financial measure) adjusted for interest expense, net, (Benefit from) provision for income taxes, depreciation and amortization. Adjusted EBITDA (non-GAAP) is Net income (loss) (its most directly comparable GAAP financial measure) adjusted for interest expense, net, (Benefit from) provision for income taxes, depreciation and amortization, and certain other items described below. Adjusted EBITDA attributable to Bausch Health (non-GAAP) is Adjusted EBITDA (non-GAAP) further adjusted to exclude the Adjusted EBITDA attributable to noncontrolling interest (non-GAAP) as defined below.

Management believes that Adjusted EBITDA (non-GAAP) and Adjusted EBITDA attributable to Bausch Health (non-GAAP), along with the GAAP measures used by management, most appropriately reflect how the Company measures the business internally and sets operational goals and incentives. In particular, the Company believes that these metrics focus management on the Company's underlying operational results and business performance. As a result, the Company uses these metrics to assess the financial performance of the Company and to forecast future results as part of its guidance. Management believes these metrics are a useful measure to evaluate current performance. These metrics are intended to show our unleveraged, pre-tax operating results and therefore reflect our financial performance based on operational factors. In addition, cash bonuses for the Company's executive officers and other key employees are based, in part, on the achievement of certain Adjusted EBITDA (non-GAAP) targets.

Adjusted EBITDA (non-GAAP) is Net income (loss) (its most directly comparable GAAP financial measure) adjusted for interest, income taxes, depreciation and amortization and the following items:

Restructuring, integration and transformation costs: The Company has incurred restructuring costs as it implemented certain strategies, which involved, among other things, improvements to its infrastructure and operations, internal reorganizations and impacts from the divestiture of assets and businesses. With regard to infrastructure and operational improvements which the Company has taken to improve efficiencies in the businesses and facilities, these tend to be costs intended to right size the business or organization that fluctuate significantly between periods in amount, size and timing, depending on the improvement project, reorganization or transaction. Additionally, the Company is launching certain transformation initiatives that will result in certain changes to and investment in its organizational structure and operations. These transformation initiatives arise outside of the ordinary course of continuing operations and, as is the case with the Company's restructuring efforts, costs associated with these transformation initiatives are expected to fluctuate between periods in amount, size and timing. These out-of-the-ordinary-course charges include third-party advisory costs, as well as certain severance-related costs. Investors should understand that the outcome of these transformation initiatives may result in future restructuring actions and certain of these charges could recur. The Company believes that the adjustments of these items provide supplemental information with regard to the sustainability of the Company's operating performance, allow for a comparison of the financial results to historical operations and forward-looking guidance and, as a result, provide useful supplemental information to investors. Asset impairments: The Company has excluded the impact of impairments of finite-lived and indefinite-lived intangible assets, as well as impairments of assets held for sale, as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions and divestitures. The Company believes that the adjustments of these items correlate with the sustainability of the Company's operating performance. Although the Company excludes impairments of intangible assets and assets held for sale from measuring the performance of the Company and the business, the Company believes that it is important for investors to understand that intangible assets contribute to revenue generation. Goodwill impairments: The Company excludes the impact of goodwill impairments. When the Company has made acquisitions where the consideration paid was in excess of the fair value of the net assets acquired, the remaining purchase price is recorded as goodwill. For assets that we developed ourselves, no goodwill is recorded. Goodwill is not amortized but is tested for impairment. The amount of goodwill impairment is measured as the excess of a reporting unit's carrying value over its fair value. Management excludes these charges in measuring the performance of the Company and the business. Share-based compensation: The Company has excluded 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 costs and adjustments (excluding amortization of intangible assets): The Company has excluded the impact of acquisition-related costs and fair value inventory step-up resulting from acquisitions as the amounts and frequency of such costs and adjustments are not consistent and are significantly impacted by the timing and size of its acquisitions. In addition, the Company excludes 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 are not consistent and are significantly impacted by the timing and size of the Company's acquisitions, as well as the nature of the agreed-upon consideration. Loss (gain) on extinguishment of debt: The Company has excluded loss (gain) on extinguishment of debt as this represents a gain or loss from refinancing our existing debt and is not a reflection of our operations for the period. Further, the amount and frequency of such amounts 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. Separation costs and separation-related costs: The Company has excluded certain costs incurred in connection with activities regarding the separation of the eye-health business. Separation costs are incremental costs directly related to effectuating the separation of the eye-health business, and include, but are not limited to, legal, audit and advisory fees. Separation-related costs are incremental costs indirectly related to the separation of the eye-health business and include, but are not limited to, rebranding costs and costs associated with facility relocation and/or modification. As these costs arise from events outside of the ordinary course of continuing operations, the Company believes that the adjustments of these items provide supplemental information with regard to the sustainability of the Company's operating performance, allow for a comparison of the financial results to historical operations and forward-looking guidance and, as a result, provide useful supplemental information to investors. Other adjustments: The Company has excluded certain other amounts, including legal and other professional fees incurred in connection with legal and governmental proceedings, investigations and information requests regarding certain of our legacy distribution, marketing, pricing, disclosure and accounting practices, litigation and other matters, and net (gain) loss on sale of assets or other disposition of assets. 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 has also excluded IT infrastructure investments that are the result of other, non-comparable events to measure operating performance. These events arise outside of the ordinary course of continuing operations. The Company has also excluded certain other costs, including professional fees associated with contemplated, but not completed, strategic transactions. The Company excluded these costs as the consideration of such matters are outside of the ordinary course of continuing operations and are infrequent in nature. The Company believes that the exclusion of such out-of-the-ordinary-course amounts provides supplemental information to assist in the comparison of the financial results of the Company from period to period and, therefore, provides useful supplemental information to investors. However, investors should understand that many of these costs could recur and that companies in our industry often face litigation. Adjusted EBITDA attributable to Bausch Health (non-GAAP) is Adjusted EBITDA (non-GAAP) further adjusted to exclude the Adjusted EBITDA attributable to noncontrolling interest (non-GAAP). Adjusted EBITDA attributable to noncontrolling interest (non-GAAP) is Net income attributable to noncontrolling interest (its most directly comparable GAAP financial measure) adjusted for the portion of the adjustments described above attributable to noncontrolling interest.

Adjusted Net Income (non-GAAP) and Adjusted Net Income attributable to Bausch Health (non-GAAP)

Adjusted net income (non-GAAP) is Net income (its most directly comparable GAAP financial measure), adjusted for asset impairments, goodwill impairments, restructuring, integration and transformation costs, acquisition-related costs and adjustments (excluding amortization of intangible assets), gain (loss) on extinguishment of debt, separation costs and separation-related costs and other non-GAAP adjustments as these adjustments are described above, and amortization of intangible assets and write down of financing fees as described below:

Amortization of intangible assets: The Company has excluded the impact of amortization of intangible assets, as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. The Company believes that the adjustments of these items correlate with the sustainability of the Company's operating performance. Although the Company excludes the amortization of intangible assets from its non-GAAP expenses, the Company believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. Write down of financing fees: In addition to excluding Loss (gain) on extinguishment of debt, the Company has excluded the impact of the write down of financing fees from Adjusted net income (non-GAAP). The amount and frequency of such amounts 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. In addition, the Company excluded these costs as they are outside of the ordinary course of continuing operations and are infrequent in nature. The Company believes that the exclusion of such out-of-the-ordinary-course amounts provides supplemental information to assist in the comparison of the financial results of the Company from period to period and, therefore, provides useful supplemental information to investors. Adjusted net income attributable to Bausch Health (non-GAAP) is Adjusted net income (non-GAAP) further adjusted to exclude the Adjusted net income attributable to noncontrolling interest (non-GAAP). Adjusted net income attributable to noncontrolling interest (non-GAAP) is Net income attributable to noncontrolling interest (its most directly comparable GAAP financial measure) adjusted for the portion of the adjustments described above attributable to noncontrolling interest.

Historically, management has used Adjusted net income (loss) (non-GAAP) for strategic decision making, forecasting future results and evaluating current performance. This non-GAAP measure excludes the impact of certain items (as described above) that may obscure trends in the Company's underlying performance. By disclosing this non-GAAP measure, it is management's intention to provide investors with a meaningful, supplemental comparison of the Company's operating results and trends for the periods presented. Management believes that this measure is also useful to investors as such measure allows investors to evaluate the Company's performance using the same tools that management uses to evaluate past performance and prospects for future performance. Accordingly, the Company believes that Adjusted net income (non-GAAP) is useful to investors in their assessment of the Company's operating performance. It is also noted that, in recent periods, our GAAP Net income (loss) was significantly lower than our Adjusted net income (non-GAAP).

Adjusted Earnings Per Share (non-GAAP)

Adjusted earnings per share (non-GAAP) is calculated as Basic and Diluted loss per share attributable to Bausch Health (its most directly comparable GAAP financial measure), adjusted for the non-GAAP adjustments to reconcile Net income (loss) attributable to Bausch Health to Adjusted income attributable to Bausch Health (non-GAAP) and the diluted effect of stock options and restricted stock units excluded in the determination of Basic and Diluted loss per share attributable to Bausch Health during the period as the effect of including them would have been antidilutive. Management believes this non-GAAP measure excludes certain factors that could distort the visibility of the Company's underlying performance per share and offers investors a clearer, supplemental view of the Company's performance and trends over the reported periods. As a result, the Company considers Adjusted earnings per share (non-GAAP) to be beneficial for investors evaluating the Company's operating results, overall valuation, and potential return on investment. Management notes that for the periods presented, the Company's GAAP EPS was notably lower than its Adjusted earnings per share (non-GAAP).

Organic Revenue (non-GAAP) and Change in Organic Revenue (non-GAAP)

Organic revenue (non-GAAP) and Change in organic revenue (non-GAAP), are defined as GAAP Revenue and change in GAAP Revenue (the most directly comparable GAAP financial measures), adjusted for changes in foreign currency exchange rates (if applicable) and excluding the impact of recent acquisitions, divestitures and discontinuations, as defined below.

Organic revenue (non-GAAP) is impacted by changes in product volumes and price. The price component is made up of two key drivers: (i) changes in product gross selling price and (ii) changes in sales deductions. The Company uses organic revenue (non-GAAP) and change in organic revenue (non-GAAP) to assess performance of its reportable segments, and the Company in total. The Company believes that providing these non-GAAP measures is useful to investors as they provide a supplemental period-to-period comparison.

The adjustments to GAAP Revenue to determine Organic Revenue (non-GAAP) and Change in Organic Revenue (non-GAAP) are as follows:

Foreign currency exchange rates: Although changes in foreign currency exchange rates are part of our business, they are not within management's control. Changes in foreign currency exchange rates, however, can mask positive or negative trends in the business. The impact of changes in foreign currency exchange rates is determined as the difference in the current period reported revenues at their current period currency exchange rates and the current period reported revenues revalued using the monthly average currency exchange rates during the comparable prior period. Acquisitions, divestitures and discontinuations: In order to present period-over-period organic revenue (non-GAAP) growth/change on a comparable basis, revenues associated with acquisitions, divestitures and discontinuations are adjusted to include only revenues from those businesses and assets owned during both periods. Accordingly, organic revenue and change in organic revenue exclude from the current period, revenues attributable to each acquisition for twelve months subsequent to the day of acquisition, as there are no revenues from those businesses and assets included in the comparable prior period. Organic revenue and change in organic revenue exclude from the prior period, all revenues attributable to each divestiture and discontinuance during the twelve months prior to the day of divestiture or discontinuance, as there are no revenues from those businesses and assets included in the comparable current period. Constant Currency

Changes in the relative values of non-U.S. currencies to the U.S. dollar may affect the Company's financial results and financial position. To assist investors in evaluating the Company's performance, we have adjusted for the effects of changes in foreign currencies. The impact of changes in foreign currency exchange rates is determined by comparing the current period reported revenues at their current period currency exchange rates and the current period reported revenues revalued using the monthly average currency exchange rates during the comparable prior period.

Please also see the reconciliation tables below for further information as to how these non-GAAP measures and ratios are calculated for the periods presented.

Adjusted Cash Flows from Operations (non-GAAP)

Adjusted cash flows from operations (non-GAAP) is Cash provided by operating activities (its most directly comparable GAAP financial measure) adjusted for: (i) payments of legacy legal settlements, net of insurance recoveries and restitutions, (ii) payments of transformation costs, (iii) payments for separation costs and separation-related costs, (iv) interest payments charged against premium, (v) fees paid in connection with the debt refinancing transactions and (vi) payments of acquired IPR&D.

As these payments arise from events outside of the ordinary course of continuing operations as discussed above, the Company believes that the adjustments of these items provide supplemental information with regard to the sustainability of the Company's cash from operations, allow for a comparison of the financial results to historical operations and forward-looking guidance and, as a result, provide useful supplemental information to investors.

Adjusted EBITDA excluding Bausch + Lomb (non-GAAP)

Adjusted EBITDA excluding Bausch + Lomb (non-GAAP) is Adjusted EBITDA (non-GAAP) adjusted to remove Adjusted EBITDA attributable to Bausch + Lomb (non-GAAP). Adjusted EBITDA attributable to Bausch + Lomb (non-GAAP) is Income (loss) before income taxes of our Bausch + Lomb segment (its most directly comparable GAAP financial measure) adjusted for the portion of the Company's interest expense, depreciation, amortization and other adjustments as described above, allocated or attributable to Bausch + Lomb.

Adjusted EBITDA excluding Bausch + Lomb is not intended to be, and may not be, representative of income from continuing operations (for Bausch Health excluding Bausch + Lomb) or from discontinued operations (for Bausch + Lomb) in accordance with GAAP, as: (i) the criteria for that accounting has not been met and (ii) certain cost allocations to Bausch Health excluding Bausch + Lomb and Bausch + Lomb are not in accordance with the criteria for that accounting. As such, Adjusted EBITDA excluding Bausch + Lomb (non-GAAP) as included herein may not be indicative of the results of the operations or Adjusted EBITDA attributable to Bausch Health (non-GAAP) in the future, or if Bausch + Lomb met the criteria to be treated as a discontinued operation during any of the periods presented.

Adjusted Cash Flows from Operations excluding Bausch + Lomb (non-GAAP)

Adjusted Cash Flows from Operations excluding Bausch + Lomb (non-GAAP) is Adjusted Cash Flows from Operations (non-GAAP) adjusted to remove Adjusted Cash Flows from Operations attributable to Bausch + Lomb (non-GAAP). Adjusted Cash Flows from Operations attributable to Bausch + Lomb (non-GAAP) is Cash Flows from Operations of our Bausch + Lomb segment (its most directly comparable GAAP financial measure) adjusted for the portion of the Company's payment of separation costs, separation-related costs and other adjustments as described above, allocated or attributable to Bausch + Lomb.

Adjusted Cash Flows from Operations excluding Bausch + Lomb is not intended to be, and may not be, representative of Cash Flows from Operations (for Bausch Health excluding Bausch + Lomb) or from discontinued operations (for Bausch + Lomb) in accordance with GAAP, as: (i) the criteria for that accounting has not been met and (ii) certain cost allocations to BHC excluding Bausch + Lomb and Bausch + Lomb are not in accordance with the criteria for that accounting. As such, Adjusted Cash Flows from Operations excluding Bausch + Lomb (non-GAAP) as included herein may not be indicative of the cash flows or Adjusted Cash Flows from Operations attributable to Bausch Health (non-GAAP) in the future, or if Bausch + Lomb met the criteria to be treated as a discontinued operation during any of the periods presented.

Management believes that Adjusted EBITDA excluding Bausch + Lomb (non-GAAP), Adjusted Cash Flows from Operations (non-GAAP) and Adjusted Cash Flows from Operations excluding Bausch + Lomb (non-GAAP), along with the GAAP and other non-GAAP measures used by management, most appropriately reflects how the Company measures the business internally and sets operational goals and incentives. In particular, the Company believes that these metrics focus management on the Company's underlying operational results and business performance. As a result, the Company uses these metrics to assess the actual financial performance of the Company and to forecast future results as part of its guidance. Management believes these metrics are a useful measure to evaluate current performance. These metrics are intended to show our unleveraged, pre-tax operating results and therefore reflect our financial performance based on operational factors. In addition, cash bonuses for the Company's executive officers and other key employees are based, in part, on the achievement of certain Adjusted EBITDA (non-GAAP) and Adjusted Cash Flows from Operations (non-GAAP) targets.

Net Debt (non-GAAP)

Net Debt (non-GAAP) is long-term debt (its most directly comparable GAAP financial measure) adjusted for premiums, discount and issuance costs less unrestricted cash and cash equivalents.

Net Debt excluding Bausch + Lomb (non-GAAP)

Net Debt excluding Bausch + Lomb (non-GAAP) is Net Debt (non-GAAP) adjusted to remove Net Debt attributable to Bausch + Lomb (non-GAAP). Net Debt attributable to Bausch + Lomb (non-GAAP) is long-term debt of our Bausch + Lomb segment (its most directly comparable GAAP financial measure) adjusted for the portion of the Company's premiums, discount and issuance costs less unrestricted cash and cash equivalents allocated or attributable to Bausch + Lomb.

Management believes Net Debt (non-GAAP) and Net Debt excluding Bausch + Lomb (non-GAAP) provides investors with useful information regarding the Company's overall leverage position and its ability to service its outstanding debt obligations.

Bausch Health Companies Inc.

 Table 1

Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2026 and 2025

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2026

2025

2026

2025

Revenues

Product sales

$     2,825

$     2,504

$     5,325

$     4,731

Other revenues

27

26

51

58

2,852

2,530

5,376

4,789

Expenses

Cost of goods sold (excluding amortization and impairments of intangible assets)

753

748

1,474

1,431

Cost of other revenues

19

16

36

34

Selling, general and administrative

907

894

1,768

1,761

Research and development

173

159

336

302

Amortization of intangible assets

225

256

466

512

Goodwill impairments

—

—

1,426

—

Restructuring, integration and separation costs

9

31

22

32

Other expense (income), net

26

(18)

58

(3)

2,112

2,086

5,586

4,069

Operating income (loss)

740

444

(210)

720

Interest income

11

13

21

24

Interest expense

(396)

(465)

(798)

(795)

Gain (loss) on extinguishment of debt

—

178

(1)

178

Foreign exchange and other

(7)

(30)

(18)

(34)

Income (loss) before income taxes

348

140

(1,006)

93

Provision for income taxes

(88)

(12)

(165)

(51)

Net income (loss)

260

128

(1,171)

42

Net (income) loss attributable to noncontrolling interest

(2)

20

6

48

Net income (loss) attributable to Bausch Health Companies Inc.

$       258

$       148

$    (1,165)

$        90

.

Bausch Health Companies Inc.

 Table 2

Reconciliation of Net income (loss) attributable to Bausch Health Companies Inc. to
  Adjusted Net Income Attributable to Bausch Health Companies Inc. (non-GAAP)

For the Three and Six Months Ended June 30, 2026 and 2025

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2026

2025

2026

2025

Net income (loss) attributable to Bausch Health Companies Inc.

$     258

$     148

$   (1,165)

$      90

Non-GAAP adjustments: (a)

Amortization of intangible assets

225

256

466

512

Goodwill impairments

—

—

1,426

—

Asset impairments

9

—

9

—

Restructuring, integration and transformation costs

14

52

33

81

Acquisition-related costs and adjustments (excluding amortization of intangible assets)

6

(6)

22

6

(Gain) loss  on extinguishment of debt and write down of financing fees

—

(126)

9

(126)

Separation costs and separation-related costs

1

2

2

7

Gain on sale of assets, net

—

—

(3)

—

Litigation and other matters, net of insurance recoveries and restitutions

6

8

16

5

Other

6

48

14

60

Tax effect of non-GAAP adjustments

(35)

(23)

(29)

(38)

Noncontrolling interest portion of the non-GAAP adjustments

(14)

(24)

(28)

(42)

Adjusted net income attributable to Bausch Health Companies Inc. (non-GAAP)

$     476

$     335

$     772

$     555

Earnings (loss) per share attributable to Bausch Health Companies Inc.

Basic

$     0.69

$     0.40

$    (3.12)

$     0.24

Diluted

$     0.68

$     0.40

$    (3.12)

$     0.24

Adjusted earnings per share attributable to Bausch Health Companies Inc. (non-GAAP) (b)

$     1.26

$     0.90

$     2.04

$     1.49

Weighted-average common shares

Basic

375.0

370.9

373.9

370.3

Diluted

378.1

373.1

378.5

373.5

(a)

The components of and further details respecting each of these non-GAAP adjustments and the financial statement line item to which each component relates can be found on Table 2a.

(b)

Adjusted earnings per share attributable to Bausch Health Companies Inc. is calculated using diluted weighted average common shares of 378.5 million which includes the diluted effect of stock options and restricted stock units of 4.6 million (the "Dilutive Shares") for the six months ended June 30, 2026. The Dilutive Shares were not included in the determination of basic and diluted loss per share attributable to Bausch Health Companies Inc. as the effect of including them would have been antidilutive.

Bausch Health Companies Inc.

 Table 2a

Reconciliation of GAAP to Non-GAAP Financial Information

For the Three and Six Months Ended June 30, 2026 and 2025

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2026

2025

2026

2025

Cost of goods sold reconciliation:

GAAP Cost of goods sold (excluding amortization and impairments of intangible

  assets)

$      753

$      748

$    1,474

$    1,431

Fair value inventory step-up resulting from acquisitions (a)

—

(21)

(3)

(43)

Adjusted Cost of goods sold (excluding amortization and impairments of
     intangible assets) (non-GAAP)

$      753

$      727

$    1,471

$    1,388

Selling, general and administrative reconciliation:

GAAP Selling, general and administrative

$      907

$      894

$    1,768

$    1,761

IT infrastructure investment (b)

(4)

(4)

(9)

(12)

Legal and other professional fees (b)

1

(11)

1

(14)

Separation-related costs (c)

(1)

(2)

(2)

(7)

Transformation costs (d)

(5)

(21)

(11)

(49)

Adjusted Selling, general and administrative (non-GAAP)

$      898

$      856

$    1,747

$    1,679

Amortization of intangible assets reconciliation:

GAAP Amortization of intangible assets

$      225

$      256

$      466

$      512

Amortization of intangible assets (e)

(225)

(256)

(466)

(512)

Adjusted Amortization of intangible assets (non-GAAP)

$       —

$       —

$       —

$       —

Goodwill impairments reconciliation:

GAAP Goodwill impairments

$       —

$       —

$    1,426

$       —

Goodwill impairments (f)

—

—

(1,426)

—

Adjusted Goodwill impairments (non-GAAP)

$       —

$       —

$       —

$       —

Restructuring, integration and separation costs reconciliation:

GAAP Restructuring, integration and separation costs

$        9

$       31

$       22

$       32

Restructuring and integration costs (d)

(9)

(31)

(22)

(32)

Adjusted Restructuring, integration and separation costs (non-GAAP)

$       —

$       —

$       —

$       —

Other expense (income), net reconciliation:

GAAP Other expense (income), net

$       26

$      (18)

$       58

$       (3)

Litigation and other matters, net of insurance recoveries and restitutions (g)

(6)

(8)

(16)

(5)

Acquisition-related contingent consideration (a)

(6)

29

(18)

40

Gain on sale of assets, net (h)

—

—

3

—

Acquisition-related costs (a)

—

(2)

(1)

(3)

Asset impairments (i)

(9)

—

(9)

—

Other (b)

(1)

—

(1)

—

Adjusted Other expense (income), net (non-GAAP)

$        4

$        1

$       16

$       29

Bausch Health Companies Inc.

Table 2a (continued)

Reconciliation of GAAP to Non-GAAP Financial Information

For the Three and Six Months Ended June 30, 2026 and 2025

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2026

2025

2026

2025

Gain (loss) on extinguishment of debt reconciliation:

GAAP Gain (loss) on extinguishment of debt

$       —

$      178

$       (1)

$      178

Gain (loss) on extinguishment of debt (j)

—

(178)

1

(178)

Adjusted Gain (loss) on extinguishment of debt (non-GAAP)

$       —

$       —

$       —

$       —

Interest expense reconciliation:

GAAP Interest expense

$     (396)

$    (465)

$    (798)

$    (795)

Write-down of financing fees (j)

—

(52)

8

(52)

Adjusted Interest expense (non-GAAP)

$     (396)

$    (517)

$    (790)

$    (847)

Foreign exchange and other reconciliation:

GAAP Foreign exchange and other

$       (7)

$      (30)

$      (18)

$      (34)

Other professional fees (b)

2

(33)

5

(34)

Adjusted Foreign exchange and other (non-GAAP)

$       (5)

$      (63)

$      (13)

$      (68)

Provision for income taxes reconciliation:

GAAP Provision for income taxes

$      (88)

$      (12)

$    (165)

$      (51)

Tax effect of non-GAAP adjustments (k)

(35)

(23)

(29)

(38)

Adjusted Provision for income taxes (non-GAAP)

$     (123)

$      (35)

$    (194)

$      (89)

Net (income) loss attributable to noncontrolling interest reconciliation:

GAAP Net (income) loss attributable to noncontrolling interest

$       (2)

$       20

$        6

$       48

Noncontrolling interest portion of amortization of intangible assets (l)

(7)

(8)

(14)

(16)

Noncontrolling interest portion of all other adjustments (l)

(7)

(16)

(14)

(26)

Adjusted net (income) loss attributable to noncontrolling interest (non-GAAP)

$      (16)

$       (4)

$      (22)

$        6

(a)

Represents the three components of the non-GAAP adjustment of "Acquisition-related costs and adjustments (excluding amortization of intangible assets)" (see Table 2).

(b)

Represents the four components of the non-GAAP adjustment of "Other" (see Table 2).

(c)

Represents the one component of the non-GAAP adjustment of "Separation costs and separation-related costs" (see Table 2).

(d)

Represents the two components of the non-GAAP adjustment of "Restructuring, integration and transformation costs" (see table 2).

(e)

Represents the sole component of the non-GAAP adjustment of "Amortization of intangible assets" (see Table 2).

(f)

Represents the sole component of the non-GAAP adjustment of "Goodwill impairments" (see Table 2).

(g) 

Represents the sole component of the non-GAAP adjustment of "Litigation and other matters, net of insurance recoveries and restitutions" (see Table 2).

(h)

Represents the sole component of the non-GAAP adjustment of "Gain on sale of assets, net" (see Table 2).

(i)

Represents the sole component of the non-GAAP adjustment of "Asset impairments" (see Table 2).

(j)  

Represents the two components of the non-GAAP adjustment of "Gain (loss) on extinguishment of debt and write-down of financing fees" (see Table 2).

(k)

Represents the sole component of the non-GAAP adjustment of "Tax effect of non-GAAP adjustments" (see Table 2).

(l)

Represents the portion of the non-GAAP adjustments attributable to noncontrolling interest (see Table 2).           

Bausch Health Companies Inc.

 Table 2b

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (non-GAAP)

For the Three and Six Months Ended June 30, 2026 and 2025

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2026

2025

2026

2025

Net income (loss)

$     260

$     128

$  (1,171)

$      42

Interest expense, net

385

452

777

771

Provision for income taxes

88

12

165

51

Depreciation and amortization

281

307

576

612

EBITDA (non-GAAP)

1,014

899

347

1,476

Adjustments:

Goodwill impairments

—

—

1,426

—

Asset impairments

9

—

9

—

Restructuring, integration and transformation costs

14

52

33

81

Acquisition-related costs and adjustments (excluding amortization of intangible assets)

6

(6)

22

6

(Gain) loss on extinguishment of debt

—

(178)

1

(178)

Share-based compensation

54

46

106

89

Separation costs and separation-related costs

1

2

2

7

Other adjustments:

Litigation and other matters, net of insurance recoveries and restitutions

6

8

16

5

Gain on sale of assets, net

—

—

(3)

—

Other

6

48

14

60

Adjusted EBITDA (non-GAAP) (a)

1,110

871

1,973

1,546

Adjusted EBITDA attributable to noncontrolling interest (non-GAAP) (b)

(35)

(29)

(61)

(43)

Adjusted EBITDA attributable to Bausch Health Companies Inc. (non-GAAP) (c)

$   1,075

$     842

$   1,912

$   1,503

(a)

Includes the impact of Acquired IPR&D charges of $5 million and $1 million for the three months ended June 30, 2026 and 2025, respectively, and $16 million and $29 million for the six months ended June 30, 2026 and 2025, respectively.

(b)

Adjusted EBITDA attributable to noncontrolling interest (non-GAAP) is Net (income) loss attributable to noncontrolling interest adjusted for the noncontrolling interest portion of the adjustments above as follows:

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2026

2025

2026

2025

Net (income) loss attributable to noncontrolling interest

$       (2)

$       20

$        6

$       48

Noncontrolling interest portion of adjustments for:

Interest expense, net

(11)

(16)

(23)

(28)

Depreciation and amortization

(13)

(13)

(26)

(26)

All other adjustments

(9)

(20)

(18)

(37)

Adjusted EBITDA attributable to noncontrolling interest (non-GAAP)

$      (35)

$      (29)

$      (61)

$      (43)

(c)

Includes the impact of Acquired IPR&D charges net of noncontrolling interest (non-GAAP) of $4 million and $1 million for the three months ended June 30, 2026 and 2025, respectively and $14 million and $25 million for the six months ended June 30, 2026 and 2025, respectively.

Bausch Health Companies Inc.

Table 3a

Organic Growth (non-GAAP) - by Segment

For the Three Months Ended June 30, 2026 and 2025

(unaudited)

Calculation of Organic Revenue for the Three Months Ended

June 30, 2026

June 30, 2025

Change in

GAAP Revenues

Change in

Organic Revenue

Revenue

as

Reported

Changes
in
Exchange
Rates (a)

Acquisitions

Organic
Revenue

(Non-GAAP) (b)

Revenue

as

Reported

Divestitures

and
Discontinuations

Organic
Revenue
(Non-GAAP) (b)

(in millions)

Amount

Pct.

Amount

Pct.

Bausch Health (excl. B+L)

Salix

$  758

$    —

$     —

$   758

$   627

$         (1)

$  626

$  131

21 %

$  132

21 %

International

305

(12)

—

293

278

—

278

27

10 %

15

5 %

Solta Medical

176

(1)

(32)

143

128

—

128

48

38 %

15

12 %

Diversified

Neuroscience

138

—

—

138

118

—

118

20

17 %

20

17 %

Dermatology

47

—

—

47

55

—

55

(8)

(15) %

(8)

(15) %

Generics

14

—

—

14

21

(1)

20

(7)

(33) %

(6)

(30) %

Dentistry

20

—

—

20

25

—

25

(5)

(20) %

(5)

(20) %

Total Diversified

219

—

—

219

219

(1)

218

—

— %

1

— %

Bausch Health (excl. B+L)
   revenues

1,458

(13)

(32)

1,413

1,252

(2)

1,250

206

16 %

163

13 %

Bausch + Lomb

Vision Care

784

(4)

—

780

753

(5)

748

31

4 %

32

4 %

Surgical

256

(6)

(3)

247

216

—

216

40

19 %

31

14 %

Pharmaceuticals

354

(2)

—

352

309

—

309

45

15 %

43

14 %

Total Bausch + Lomb
   revenues

1,394

(12)

(3)

1,379

1,278

(5)

1,273

116

9 %

106

8 %

Total Bausch Health
     Companies Inc. revenues

$ 2,852

$   (25)

$    (35)

$ 2,792

$ 2,530

$         (7)

$ 2,523

$  322

13 %

$  269

11 %

(a)

The impact for changes in foreign currency exchange rates is determined as the difference in the current period reported revenues at their current period currency exchange rates and the current period reported revenues revalued using the monthly average currency exchange rates during the comparable prior period.

(b)

To supplement the financial measures prepared in accordance with GAAP, the Company uses certain non-GAAP financial measures. For additional information about the Company's use of such non-GAAP financial measures, refer to the body of the news release to which these tables are attached. Organic revenue (non-GAAP) for the three months ended June 30, 2026 is calculated as revenue as reported adjusted for the impact for changes in exchange rates (previously defined in this news release) and excluding the impact of recent acquisitions. Organic revenue (non-GAAP) for the three months ended June 30, 2025 is calculated as revenue as reported less revenues attributable to divestitures and discontinuances during the twelve months prior to the day of divestiture or discontinuance, as there are no revenues from those businesses and assets included in the comparable current period.

Bausch Health Companies Inc.

Table 3b

Organic Growth (non-GAAP) - by Segment

For the Six Months Ended June 30, 2026 and 2025

(unaudited)

Calculation of Organic Revenue for the Six Months Ended

June 30, 2026

June 30, 2025

Change in

GAAP Revenues

Change in

Organic Revenue

Revenue

as

Reported

Changes
in
Exchange
Rates (a)

Acquisitions

Organic
Revenue

(Non-GAAP) (b)

Revenue

as

Reported

Divestitures

and
Discontinuations

Organic
Revenue
(Non-GAAP) (b)

(in millions)

Amount

Pct.

Amount

Pct.

Bausch Health (excl. B+L)

Salix

$ 1,397

$    —

$     —

$ 1,397

$ 1,169

$         (1)

$ 1,168

$  228

20 %

$  229

20 %

International

590

(37)

—

553

540

(1)

539

50

9 %

14

3 %

Solta Medical

347

(5)

(64)

278

241

—

241

106

44 %

37

15 %

Diversified

Neuroscience

251

—

—

251

236

—

236

15

6 %

15

6 %

Dermatology

80

—

—

80

101

—

101

(21)

(21) %

(21)

(21) %

Generics

32

—

—

32

39

(1)

38

(7)

(18) %

(6)

(16) %

Dentistry

41

—

—

41

48

—

48

(7)

(15) %

(7)

(15) %

Total Diversified

404

—

—

404

424

(1)

423

(20)

(5) %

(19)

(4) %

Bausch Health (excl. B+L)
  revenues

2,738

(42)

(64)

2,632

2,374

(3)

2,371

364

15 %

261

11 %

Bausch + Lomb

Vision Care

1,495

(29)

—

1,466

1,409

(7)

1,402

86

6 %

64

5 %

Surgical

484

(18)

(4)

462

430

—

430

54

13 %

32

7 %

Pharmaceuticals

659

(7)

—

652

576

(1)

575

83

14 %

77

13 %

Total Bausch + Lomb
  revenues

2,638

(54)

(4)

2,580

2,415

(8)

2,407

223

9 %

173

7 %

Total Bausch Health
  Companies Inc. revenues

$ 5,376

$   (96)

$    (68)

$ 5,212

$ 4,789

$       (11)

$ 4,778

$  587

12 %

$  434

9 %

(a)

The impact for changes in foreign currency exchange rates is determined as the difference in the current period reported revenues at their current period currency exchange rates and the current period reported revenues revalued using the monthly average currency exchange rates during the comparable prior period.

(b)

To supplement the financial measures prepared in accordance with GAAP, the Company uses certain non-GAAP financial measures. For additional information about the Company's use of such non-GAAP financial measures, refer to the body of the news release to which these tables are attached. Organic revenue (non-GAAP) for the six months ended June 30, 2026 is calculated as revenue as reported adjusted for the impact for changes in exchange rates (previously defined in this news release) and excluding the impact of recent acquisitions. Organic revenue (non-GAAP) for the six months ended June 30, 2025 is calculated as revenue as reported less revenues attributable to divestitures and discontinuances during the twelve months prior to the day of divestiture or discontinuance, as there are no revenues from those businesses and assets included in the comparable current period.

Bausch Health Companies Inc.

Table 4

Other Financial Information

(unaudited)

(in millions)

June 30,
2026

December 31,
2025

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents

$      1,825

$       1,309

Restricted cash

13

16

Cash, cash equivalents and restricted cash

$      1,838

$       1,325

(in millions)

June 30,
2026

December 31,
2025

Debt Obligations

Senior Secured Credit Facilities:

Revolving Credit Facilities

$        150

$         100

Term Loan Facilities

5,765

5,787

Senior Secured Notes

10,214

10,235

Senior Unsecured Notes

4,098

4,098

Other

12

12

Total long-term debt and other, net of premiums, discounts and issuance costs

20,239

20,232

Plus: Unamortized premiums, discounts and issuance costs

502

585

Total long-term debt and other

$     20,741

$      20,817

(in millions)

June 30,
2026

December 31,
2025

Maturities of Debt Obligations (at principal amount)

Remainder of 2026

$         29

58

2027

701

701

2028

3,766

4,240

2029

1,667

1,662

2030

4,173

4,118

2031

3,903

3,453

Thereafter

6,000

6,000

Total debt obligations

$     20,239

$      20,232

Three Months Ended

June 30,

Six Months Ended

June 30,

(in millions)

2026

2025

2026

2025

Cash provided by operating activities

$        671

$        289

900

500

Net cash impact of legacy legal matters (a)

9

84

167

99

Payments of transformation costs

6

18

14

22

Payments of separation costs and separation-related costs

—

4

—

11

Interest payments charged against debt premium

(56)

(37)

(100)

(164)

Fees paid in connection with debt refinancing

2

84

13

84

Payments of Acquired IPR&D

5

—

16

28

Adjusted cash flows from operations (non-GAAP) (b)

$        637

$        442

$      1,010

$         580

(a)

Payments of legacy legal settlements, net of insurance recoveries and restitutions.

(b)

This is a non-GAAP measure. For further information on non-GAAP measures and non-GAAP ratios, please refer to the "Non-GAAP Information" section of this news release.

Bausch Health Companies Inc.

Table 4 (continued)

Other Financial Information

(unaudited)

Three Months Ended June 30, 2026

(in millions)

Bausch Health
Companies, Inc.

Bausch + Lomb
Corporation

Bausch Health
(excluding B+L) (b)

Cash provided by operating activities

$                671

$                153

$                517

Payments of legacy legal matters

9

5

5

Payments of transformation costs

6

3

3

Interest payments charged against debt premium

(56)

—

(56)

Fees paid in connection with debt refinancing

2

—

2

Payments of Acquired IPR&D

5

5

—

Adjusted cash flows from operations (non-GAAP) (a)

$                637

$                166

$                471

(a)

This is a non-GAAP measure. Management considers the presentation of Adjusted cash flows from operations for Bausch Health (excl. B+L) (non-GAAP) to be meaningful information and utilizes it in decision making and for compensation purposes. Adjusted cash flows from operations for Bausch Health (excl. B+L) (non-GAAP) is not intended to be representative of GAAP operating activities and Adjusted cash flows from operations for B+L (non-GAAP) is not intended to be representative of discontinued operations as the criteria for that accounting has not been met. As such, Adjusted cash flows from operations excluding B+L (non-GAAP) as included herein may not be indicative of the results of the operations or Adjusted cash flows from operations attributable to Bausch Health (non-GAAP) in the future, or if B+L met the criteria to be treated as a discontinued operation during any of the periods presented.

(b)

Amounts may not cross foot due to rounding.

Bausch Health Companies Inc.

Table 5

Reconciliation of Reported Net Income (Loss) to Adjusted EBITDA (non-GAAP)

For the Three Months Ended June 30, 2026 and 2025

(unaudited)

Three Months Ended June 30, 2026

Three Months Ended June 30, 2025

(in millions)

Bausch Health
Companies Inc.

Bausch + Lomb
Corporation

Bausch Health
(excluding B+L)

Bausch Health
Companies Inc.

Bausch + Lomb
Corporation

Bausch Health
(excluding B+L)

Net Income (Loss)

$         260

$         (10)

$         270

$         128

$        (58)

$         186

Interest expense, net

385

89

296

452

125

327

Provision for (benefit from) income taxes

88

(1)

89

12

(89)

101

Depreciation and amortization

281

102

179

307

107

200

EBITDA(a)

1,014

180

834

899

85

814

Adjustments:

Asset impairments

9

9

—

—

—

—

Restructuring, integration and transformation costs

14

7

7

52

49

3

Acquisition-related costs and adjustments (excluding
  amortization of intangible assets)

6

2

4

(6)

5

(11)

(Gain) loss on extinguishment of debt

—

—

—

(178)

9

(187)

Share-based compensation

54

38

16

46

30

16

Separation costs and separation-related costs

1

—

1

2

—

2

Other adjustments:

Litigation and other matters, net of insurance
  recoveries and restitutions

6

5

1

8

6

2

Other

6

4

2

48

11

37

Adjusted EBITDA (non-GAAP) (a),(b)

$       1,110

$         245

$         865

$         871

$        195

$         676

Impact of Acquired IPR&D

$           5

$           5

$          —

$           1

$           1

$          —

(a)

This is a non-GAAP measure. Management considers the presentation of Adjusted EBITDA for Bausch Health (excluding B+L) (non-GAAP) to be meaningful information and utilizes it in decision making and for compensation purposes. Adjusted EBITDA for Bausch Health Excluding B+L (non-GAAP) is not intended to be representative of GAAP continuing operations and Adjusted EBITDA for B+L is not intended to be representative of discontinued operations as the criteria for that accounting has not been met. As such, Adjusted EBITDA for Bausch Health excluding B+L (non-GAAP) as included herein may not be indicative of the results of the operations or Adjusted EBITDA attributable to Bausch Health (non-GAAP) in the future, or if B+L met the criteria to be treated as a discontinued operation during any of the periods presented.

(b)

Adjusted EBITDA (non-GAAP) above includes Adjusted EBITDA attributable to noncontrolling interests. For Bausch Health Companies Inc., this amounted to $35 million and $29 million for the three months ended June 30, 2026 and 2025, respectively, which includes $4 million related to B+L in each period.

SOURCE Bausch Health Companies Inc.

Continued strength in core growth engines supports reaffirmed Fiscal 2027 outlook

, /PRNewswire/ -- Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today reported financial results for the quarter ended June 30, 2026.

First Quarter Highlights:

Net sales of $874.1 million increased $191.3 million, or 28 percent, from the prior year Net earnings of $74.3 million increased $22.6 million, or 44 percent, from the prior year Adjusted EBITDA of $106.5 million increased $5.1 million, or 5 percent, from the prior year Earnings per share of $1.37 increased $0.42, or 44 percent, from the prior year Adjusted earnings per share of $1.53 increased $0.47, or 44 percent, from the prior year "Our targeted growth businesses continued to deliver strong, sustainable year-over-year top-line improvements, including Data Centers and Commercial HVAC revenue expansion of 90% and 22%, respectively," said Modine President and Chief Executive Officer, Neil D. Brinker. "As anticipated, our first quarter was impacted by the supply chain constraints we discussed last quarter, which limited production and temporarily reduced margins within our Data Centers segment. We are taking decisive actions to secure supply, including working closely with our partners to lock in volume requirements while simultaneously qualifying additional suppliers. These initiatives are yielding positive results, driving sequential volume and margin improvements as the quarter progressed. Our team continues to drive operational efficiency and ramp production across our manufacturing footprint, keeping us fully on track to meet future customer commitments and deliver on our full-year financial outlook."

First Quarter Financial Results

Net sales increased 28 percent to $874.1 million, compared with $682.8 million in the prior year. Sales growth was driven by higher sales in the Data Centers and Commercial HVAC segments, partially offset by lower sales in the Performance Technologies segment.

Gross profit increased 10 percent to $182.0 million and gross margin decreased by 340 basis points to 20.8 percent. Gross profit increased in the Data Centers and Commercial HVAC segments, while Performance Technologies experienced a decline in gross profit. The decrease in gross margin resulted from lower gross margins in all three business segments, as further discussed below.

Selling, general and administrative ("SG&A") expenses increased 22 percent to $103.3 million, but decreased as a percentage of sales. The increase in SG&A expenses was primarily due to higher expenses in the Data Centers segment to support growth, incremental expenses from acquisitions in the Commercial HVAC segment, costs related to the pending spin-off of the Performance Technologies segment, and higher expenses related to incentive compensation. 

Operating income decreased 1 percent to $74.8 million. The decrease was driven by higher SG&A expenses to support growth and to prepare for the spin-off of the Performance Technologies segment, partially offset by higher gross profit on higher sales volume, as compared to the prior year. The Company recorded $3.9 million of restructuring expenses during the quarter, primarily severance expenses related to headcount reductions and costs related to equipment transfers. In addition, the Company incurred $7.1 million of costs related to the pending spin-off of the Performance Technologies segment. Adjusted EBITDA, which excludes restructuring expenses, disposition costs, certain other charges, interest expense, the benefit or provision for income taxes, and depreciation and amortization expense, was $106.5 million, an increase of $5.1 million, or 5 percent compared to the prior year. 

Earnings per share was $1.37, compared with $0.95 in the prior year, an increase of $0.42 or 44 percent. Adjusted earnings per share was $1.53, compared with adjusted earnings per share of $1.06 in the prior year, an increase of $0.47 or 44 percent. This included a favorable income tax benefit related to shares issued for stock-based incentive compensation awards during the quarter, which is  expected to be largely offset by the negative impact of nondeductible compensation within the fiscal year.    

First Quarter Segment Review

Data Centers segment sales were $348.6 million, compared with $183.7 million one year ago, an increase of 90 percent. This increase was primarily driven by higher sales to hyperscale customers in North America. The segment reported gross margin of 20.2 percent, which was 960 basis points lower than the prior year. This decrease was primarily due to higher expenses related to the capacity expansion in North America combined with the temporary impact of production inefficiencies due to supply chain constraints, higher material costs, and higher warranty expense, as the prior year benefited from the favorable settlement of a warranty claim. SG&A expenses decreased as a percentage of sales due to the significant increase in revenue. The segment reported operating income of $46.3 million, a 33 percent increase from the prior year, and adjusted EBITDA of $51.7 million, an increase of 27 percent from the prior year. Commercial HVAC segment sales were $261.6 million, compared with $214.2 million one year ago, an increase of 22 percent. This increase was primarily driven by higher coil sales to data center customers and $19.7 million of incremental sales from acquired businesses. The segment reported gross margin of 24.4 percent, which was 280 basis points lower than the prior year, primarily due to unfavorable sales mix and temporary inefficiencies due to production transfers. The segment reported operating income of $31.4 million, a 2 percent decrease from the prior year, and adjusted EBITDA of $41.6 million, a 7 percent increase from the prior year. Performance Technologies segment sales were $277.8 million, compared with $285.5 million one year ago, a decrease of 3 percent. This decrease primarily resulted from lower sales to automotive and commercial vehicle customers due to market weakness, partially offset by higher sales to power generation customers. The segment reported gross margin of 17.6 percent, which was 60 basis points lower than the prior year, primarily due to higher material and tariff costs. The segment reported operating income of $27.6 million, a 4 percent increase from the prior year, and adjusted EBITDA of $36.2 million, a 3 percent decrease from the prior year. Balance Sheet & Liquidity

Net cash provided by operating activities for the quarter ended June 30, 2026, was $41.4 million, an increase of $13.7 million compared to the prior year. Free cash flow for the quarter ended June 30, 2026, was a use of $5.0 million, a decrease of $5.2 million from the prior year.  This decrease was primarily due to higher capital expenditures to increase production capacity in the Data Centers segment, partially offset by favorable net changes in working capital. Cash payments for restructuring activities and disposition costs totaled $14.9 million during the quarter ended June 30, 2026.

Total debt was $528.2 million as of June 30, 2026. Cash and cash equivalents totaled $95.3 million as of June 30, 2026. Net debt was $432.9 million as of June 30, 2026, an increase of $70.1 million from the end of fiscal 2026. This increase resulted from purchases of  stock in conjunction with our equity compensation plan. Under this plan, participants have the option to sell back shares of their vested equity awards to satisfy individual tax withholding obligations. These repurchased shares are held as treasury stock, which reduces the number of shares outstanding used to calculate earnings per share.   

Outlook

"Our financial outlook for Fiscal 2027 remains unchanged, and we remain confident in our ability to deliver another year of record-breaking results," said Modine President and Chief Executive Officer, Neil D. Brinker. "In response to the near-term supply chain challenges in our Data Centers segment, we are taking decisive actions to resolve these bottlenecks and have already made significant progress. Demand for our products remains robust as evidenced by three consecutive quarters of record order intake leading to our backlog nearly doubling over the past year. Now we are focused on operational execution across the enterprise, which will allow us to deliver on our near- and long-term goals. Simultaneously, we are also progressing on our long-term strategic transformation. Our planned spin-off and merger of the Performance Technologies business with Gentherm remains firmly on schedule to close in the fourth calendar quarter of this year, having cleared several major milestones this past quarter."

The current full-year guidance remains unchanged and continues to reflect the Performance Technologies business for the entirety of fiscal 2027. Following the close of the transaction (expected in the fourth quarter of calendar 2026), Modine will issue an updated outlook reflecting the continuing business.  

Fiscal 2027

Current Outlook

Net Sales

+20% to 35%

Adjusted EBITDA

$650 to $680 million

Conference Call and Webcast

Modine will conduct a conference call and live webcast, with a slide presentation, on Thursday, July 30, 2026, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss its first quarter fiscal year 2027 financial results. The webcast and accompanying slides will be available on the Investor Relations section of the Modine website at www.modine.com. Participants are encouraged to log on to the webcast and conference call about ten minutes prior to the start of the event. A replay of the audio and slides will be available on the Investor Relations section of the Modine website at www.modine.com on or after July 30, 2026. A call-in replay will be available through midnight on August 6, 2026, at 877-660-6853, (international replay 201-612-7415); Conference ID# 13761279. The Company will post a transcript of the call on its website on or after August 3, 2026.

About Modine

For more than 100 years, Modine has solved the toughest thermal management challenges for mission-critical applications. Our purpose of Engineering a Cleaner, Healthier World™ means we are always evolving our portfolio of technologies to provide the latest heating, cooling, and ventilation solutions. Through the hard work of more than 13,000 employees worldwide, our businesses advance our purpose with systems that improve air quality, reduce energy and water consumption, lower harmful emissions, enable cleaner running vehicles, and use environmentally friendly refrigerants. Modine is a global company headquartered in Racine, Wisconsin (U.S.), with operations in North America, South America, Europe, and Asia. For more information about Modine, visit www.modine.com.

Forward-Looking Statements

This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as "believes," "estimates," "expects," "plans," "anticipates," "intends," "projects," and other similar "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under "Risk Factors" in Item 1A of Part I of the Company's most recent Annual Report on Form 10-K. Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to geopolitical tensions and military conflicts, including the conflict between the U.S. and Iran, inflation, energy costs, government incentive or funding programs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, changes in interest rates, tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, and public health threats; the overall health and pricing focus of our customers; changes or threats to the market growth prospects for our customers; our ability to successfully exit portions of our business that do not align with our strategic plans, including the various risks related to the pending Reverse Morris Trust transaction with Gentherm; our ability to realize the sales growth and return on investments anticipated in our Data Centers segment and our ability to execute on other organic growth opportunities and acquisitions; our ability to realize anticipated benefits, including improved profit margins and cash flow, from strategic initiatives and our continued application of 80/20 principles across our businesses; our ability to be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses, particularly in our Data Centers segment, while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and product warranty and liability claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology systems; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets and the impact of changes in tax regulations; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this press release, and we do not assume any obligation to update any forward-looking statements.

Non-GAAP Financial Disclosures

Adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, net debt, free cash flow, organic sales and organic sales growth (which are defined below) as used in this press release are not measures that are defined in generally accepted accounting principles (GAAP). These non-GAAP measures are used by management as performance measures to evaluate the Company's overall financial performance and liquidity. These measures are not, and should not be viewed as, substitutes for the applicable GAAP measures, and may be different from similarly titled measures used by other companies.

Definition – Adjusted EBITDA and adjusted EBITDA margin

The Company defines adjusted EBITDA as net earnings excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense, restructuring expenses, impairment charges, pension termination charges, acquisition and disposition costs, and certain other gains or charges. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales. The Company believes that adjusted EBITDA and adjusted EBITDA margin provide relevant measures of profitability and earnings power. The Company views these financial metrics as being useful in assessing operating performance from period to period by excluding certain items that it believes are not representative of its core business. Adjusted EBITDA, when calculated for the business segments, is defined as operating income excluding depreciation and amortization expenses, restructuring expenses, impairment charges, and certain other gains or charges.

Definition – Adjusted earnings per share

Diluted earnings per share plus restructuring expenses, impairment charges, pension termination charges, acquisition and disposition costs, and excluding changes in income tax valuation allowances and certain other gains or charges. Adjusted earnings per share is an overall performance measure, not including costs associated with restructuring, acquisitions, and dispositions and certain other gains or charges.

Definition – Net debt

The sum of debt due within one year and long-term debt, less cash and cash equivalents. Net debt is an indicator of the Company's debt position after considering on-hand cash balances.

Definition – Free cash flow

Free cash flow represents net cash provided by operating activities less expenditures for property, plant and equipment. Free cash flow presents cash generated from operations during the period that is available for strategic capital decisions.

Definition – Organic sales and organic sales growth

Net sales and net sales growth can be impacted by acquisitions, dispositions, and foreign currency exchange rate fluctuations. The Company defines organic sales as external net sales excluding the impact of acquisitions and the effects of foreign currency exchange rate fluctuations. Organic sales growth represents the percentage change of organic sales compared to prior year external net sales, excluding the impact of dispositions. The effect of exchange rate changes is calculated by using the same foreign currency exchange rates as those used to translate financial data for the prior period. The Company adjusts for acquisitions and dispositions by excluding net sales in the current and prior periods, respectively, for which there are no comparable sales in the reported periods. These sales growth measures provide a more consistent indication of our performance, without the effects of foreign currency exchange rate fluctuations or acquisitions and dispositions. 

Forward-looking non-GAAP financial measure

The Company's fiscal 2027 guidance includes adjusted EBITDA, as defined above, which is a non-GAAP financial measure. The fiscal 2027 guidance includes the Company's estimates for interest expense of approximately $24 to $27 million, a provision for income taxes of approximately $130 to $140 million, and depreciation and amortization expense of approximately $87 to $92 million. The non-GAAP financial measure also excludes certain cash and non-cash expenses or gains. These expenses and gains may be significant and include items such as restructuring expenses (including severance and equipment transfer costs), impairment charges, acquisition and disposition costs, and certain other items.  These expenses for the first three months of fiscal 2027 are presented on page 8.  In connection with the pending Reverse Morris Trust transaction with Gentherm, the Company expects to incur approximately $25 to $35 million of additional costs during the remainder of fiscal 2027, primarily for transaction advisory, legal, accounting, tax and other professional services.  Estimates of other expenses and gains for the remainder of fiscal 2027 are not available due to the low visibility and unpredictability of these items.

Modine Manufacturing Company

Consolidated statements of operations (unaudited)

(In millions, except per share amounts)

Three months ended June 30, 

2026

2025

Net sales

$

874.1

$

682.8

Cost of sales

692.1

517.4

Gross profit

182.0

165.4

Selling, general & administrative expenses

103.3

84.9

Restructuring expenses

3.9

4.8

Operating income

74.8

75.7

Interest expense

(6.4)

(5.8)

Other income (expense) – net

0.2

(4.2)

Earnings before income taxes

68.6

65.7

Benefit (provision) for income taxes

5.7

(14.0)

Net earnings

74.3

51.7

Net earnings attributable to noncontrolling interest

(0.4)

(0.5)

Net earnings attributable to Modine

$

73.9

$

51.2

Net earnings per share attributable to Modine shareholders – diluted

$

1.37

$

0.95

Weighted-average shares outstanding – diluted

54.0

53.7

Condensed consolidated balance sheets (unaudited)

(In millions)

June 30, 2026

March 31, 2026

Assets

Cash and cash equivalents

$

95.3

$

73.5

Trade receivables

659.9

731.0

Inventories

609.0

506.1

Other current assets

162.7

105.5

Total current assets

1,526.9

1,416.1

Property, plant and equipment – net

536.1

520.9

Intangible assets – net

190.2

197.0

Goodwill

290.2

292.1

Deferred income taxes

88.7

85.3

Other noncurrent assets

163.3

163.2

Total assets

$

2,795.4

$

2,674.6

Liabilities and shareholders' equity

Debt due within one year

$

52.0

$

51.4

Accounts payable

508.9

464.8

Other current liabilities

188.9

212.7

Total current liabilities

749.8

728.9

Long-term debt

476.2

384.9

Other noncurrent liabilities

359.6

358.0

Total liabilities

1,585.6

1,471.8

Total equity

1,209.8

1,202.8

Total liabilities & equity

$

2,795.4

$

2,674.6

Modine Manufacturing Company

Condensed consolidated statements of cash flows (unaudited)

(In millions)

Three months ended June 30, 

2026

2025

Cash flows from operating activities:

Net earnings

$

74.3

$

51.7

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

20.7

19.0

Stock-based compensation expense

8.0

5.3

Deferred income taxes

(3.8)

0.7

Other – net

1.1

2.6

Changes in operating assets and liabilities:

Trade accounts receivable

68.3

(10.6)

Inventories

(105.4)

(61.6)

Accounts payable

58.0

46.7

Other assets and liabilities

(79.8)

(26.1)

Net cash provided by operating activities

41.4

27.7

Cash flows from investing activities:

Expenditures for property, plant and equipment

(46.4)

(27.5)

Payments for business acquisitions, net of cash acquired

—

(119.0)

Other – net

—

2.5

Net cash used for investing activities

(46.4)

(144.0)

Cash flows from financing activities:

Net increase in debt

91.9

172.0

Purchases of treasury stock

(64.6)

(5.1)

Other – net

(0.2)

—

Net cash provided by financing activities

27.1

166.9

Effect of exchange rate changes on cash

(0.3)

2.2

Net increase in cash, cash equivalents and restricted cash

21.8

52.8

Cash, cash equivalents and restricted cash – beginning of period

73.7

71.9

Cash, cash equivalents and restricted cash – end of period

$

95.5

$

124.7

Modine Manufacturing Company

Segment operating results (unaudited)

(In millions)

Three months ended June 30, 

2026

2025

Net sales:

Data Centers

$

348.6

$

183.7

Commercial HVAC

261.6

214.2

Performance Technologies

277.8

285.5

Segment total

888.0

683.4

Corporate and eliminations

(13.9)

(0.6)

Net sales

$

874.1

$

682.8

Three months ended June 30, 

2026

2025

$'s

% of sales

$'s

% of sales

Gross profit:

Data Centers

$

70.3

20.2

%

$

54.7

29.8

%

Commercial HVAC

63.9

24.4

%

58.2

27.2

%

Performance Technologies

48.8

17.6

%

51.9

18.2

%

Segment total

183.0

20.6

%

164.8

24.1

%

Corporate and eliminations

(1.0)

—

0.6

—

Gross profit

$

182.0

20.8

%

$

165.4

24.2

%

Three months ended June 30, 

2026

2025

Operating income:

Data Centers

$

46.3

$

34.7

Commercial HVAC

31.4

32.2

Performance Technologies

27.6

26.5

Segment total

105.3

93.4

Corporate and eliminations

(30.5)

(17.7)

Operating income

$

74.8

$

75.7

Modine Manufacturing Company

Adjusted financial results (unaudited)

(In millions, except per share amounts)

Three months ended June 30, 

2026

2025

Net earnings

$

74.3

$

51.7

Interest expense

6.4

5.8

(Benefit) provision for income taxes

(5.7)

14.0

Depreciation and amortization expense

20.7

19.0

Other (income) expense  – net

(0.2)

4.2

Restructuring expenses (a)

3.9

4.8

Disposition costs (b)

7.1

—

Acquisition and integration costs (c)

—

1.9

Adjusted EBITDA

$

106.5

$

101.4

Net earnings per share attributable to Modine shareholders – diluted

$

1.37

$

0.95

Restructuring expenses (a)

0.06

0.08

Disposition costs (b)

0.10

—

Acquisition and integration costs (c)

—

0.03

Adjusted earnings per share

$

1.53

$

1.06

____

(a)

Restructuring expenses primarily consist of employee severance expenses and equipment transfer costs.  The tax benefit related to restructuring expenses during both the first quarter of fiscal 2027 and fiscal 2026 was $0.7 million. 

(b)

Disposition costs primarily relate to the pending Reverse Morris Trust transaction with Gentherm and include fees for legal, accounting, tax, and other professional services and other costs directly related to the transaction.  The tax benefit related to the disposition costs during the first quarter of fiscal 2027 was $1.7 million.

(c)

Acquisition and integration costs primarily related to the Company's fiscal 2026 acquisitions, including L.B. White, AbsolutAire, and Climate by Design International.  The costs primarily included fees for legal, accounting, and other professional services and costs directly associated with integration activities.  In addition, the adjustment for the first quarter of fiscal 2026 includes $0.2 million for the impact of an inventory purchase accounting adjustment.  The tax benefit related to the acquisition-related costs and adjustments during the first quarter of fiscal 2026 was $0.4 million. 

Modine Manufacturing Company

Segment adjusted financial results (unaudited)

(In millions)

Three months ended June 30, 2026

Three months ended June 30, 2025

Data

Commercial

Performance 

Corporate and 

Data

Commercial

Performance 

Corporate and 

Centers

HVAC

Technologies

eliminations

Total

Centers

HVAC

Technologies

eliminations

Total

Operating income

$

46.3

$

31.4

$

27.6

$

(30.5)

$

74.8

$

34.7

$

32.2

$

26.5

$

(17.7)

$

75.7

Depreciation and
amortization expense

5.4

8.0

6.9

0.4

20.7

5.7

5.5

7.5

0.3

19.0

Restructuring expenses (a)

—

2.2

1.7

—

3.9

0.2

1.1

3.5

—

4.8

Disposition costs (a)

—

—

—

7.1

7.1

—

—

—

—

—

Acquisition and
integration costs (a)

—

—

—

—

—

—

—

—

1.9

1.9

Adjusted EBITDA

$

51.7

$

41.6

$

36.2

$

(23.0)

$

106.5

$

40.6

$

38.8

$

37.5

$

(15.5)

$

101.4

Net sales

$

348.6

$

261.6

$

277.8

$

(13.9)

$

874.1

$

183.7

$

214.2

$

285.5

$

(0.6)

$

682.8

Adjusted EBITDA
margin

14.8

%

15.9

%

13.0

%

12.2

%

22.1

%

18.1

%

13.1

%

14.9

%

____

(a)

See the Adjusted EBITDA reconciliations on the previous page for information on restructuring expenses and other adjustments.

Modine Manufacturing Company

Net debt (unaudited)

(In millions)

June 30, 2026

March 31, 2026

Debt due within one year

$

52.0

$

51.4

Long-term debt

476.2

384.9

Total debt

528.2

436.3

Less: cash and cash equivalents

95.3

73.5

Net debt

$

432.9

$

362.8

Free cash flow (unaudited)

(In millions)

Three months ended June 30, 

2026

2025

Net cash provided by operating activities

$

41.4

$

27.7

Expenditures for property, plant and equipment

(46.4)

(27.5)

Free cash flow

$

(5.0)

$

0.2

Organic sales and organic sales growth (unaudited)

(In millions)

Three months ended June 30, 2026

Three months ended June 30, 2025

Effect of

Sales

Organic

External

Exchange Rate

Effect of

Organic

External

Effect of

Excluding

Sales

Sales

Changes

 Acquisitions

Sales

Sales

Dispositions

Dispositions

Growth

Net sales:

Data Centers

$

348.4

$

—

$

—

$

348.4

$

183.6

$

—

$

183.6

90

%

Commercial HVAC

247.9

(2.0)

(19.7)

226.2

213.7

—

213.7

6

%

Performance Technologies

277.8

(4.1)

—

273.7

285.5

—

285.5

(4)

%

Net Sales

$

874.1

$

(6.1)

$

(19.7)

$

848.3

$

682.8

$

—

$

682.8

24

%

Kathleen Powers
(262) 636-1687
[email protected]

SOURCE Modine