2020 Annual Report

See Brilliantly
Four Things
We Are Doing
During
COVID-19

Standing behind our

associates

Ensuring critical
supply of our
products

Promoting the safe

use of our products

Staying committed to
our core principles

As the world faces a threat that cannot be seen,

Alcon remains fully committed to serving the
eye care professionals, patients and customers
who depend on us. We are united behind a
noble mission of empowering people around
the world to

See Brilliantly.
Read more at alcon.com/info
 ii Message from the Board Chair
iv Message from the CEO
vi Market Overview

Table of viii
x
Financial Highlights
Portfolio Update

Contents xii
xiii
2020 Strategic Update
Innovation
xiv Keeping Our Associates, Customers and
Patients Safe and Connected
 Dear Shareholder,
At Alcon, we are driven by our purpose of helping people See Brilliantly. This
mission has guided us in our journey to become one of the world’s leading
eye care companies and one of a few dedicated exclusively to eye health. We
are committed to serving a universal public good that is critical to quality of
life and delivers significant economic benefits to society.
2020 was our first full year as an independent company, following our
separation from Novartis in 2019. While a global pandemic cast a shroud
over nearly everything in the year, I could not be more proud of how Alcon
responded to the unprecedented challenges COVID-19 visited on all of our
stakeholders. Importantly, we kept all of our associates fully employed while
eschewing any government assistance. We prioritized the safety of our
associates, while finding new ways to meet customer and patient needs and
progressing our strategic priorities. The pandemic has caused significant
slow-downs in the markets we serve as widespread shutdowns and localized
restrictions caused the deferral of surgical procedures and significant
disruption for our customers. Despite this, Alcon exits 2020 as a stronger
company, having delivered cutting-edge technology to the market and
increased market shares, while continuing to feed our creative engine.
As we accelerate our product pipeline, innovation expands our ability to
address significant unmet needs around the world and make a significant
positive impact on quality of life. More than ever, this mission guides us as we
pursue our plans for sustainable growth. Against the backdrop of COVID-19,
“We are committed to we have continued to expand the frontiers of sight-saving and vision-
restoring products and services, and our product pipeline to fuel our future
serving a universal public growth is among the strongest in Alcon's history.
good that is critical to As a newly independent company in 2019, we had the rare opportunity to
quality of life and delivers select an entirely new Board. The level of engagement and energy our Board
of Directors brings to their areas of responsibility, and their resiliency as
significant economic Board and Committee meetings moved to virtual across multiple
benefits to society.” international time zones has been extraordinary. This highly qualified Board
has brought rich experience and diversity of thought to the boardroom and
has been extremely collaborative in their interactions with each other and
with the Alcon management team.
On behalf of the Alcon Board, I have participated in dozens of outreach calls
with investors and stewardship teams since our separation. I believe these
connections are vital as we share perspectives on important topics around
Alcon’s governance. In these discussions, I have highlighted Alcon’s ESG
focus. This year, to allow for greater focus by the Board on ESG matters, we
created a separate Governance and Nomination Committee. A major
milestone this year was the publication of our first Corporate Responsibility
Report, where we shared our approach to managing our ESG priorities.

ii Alcon Annual Report 2020

Finally, our people are at the heart of our company. I am proud of our team’s commitment to our stakeholders and the way
we have managed the business through a period of significant change and uncertainty. The progress we have made this
year brings us closer to completing an important step in Alcon’s history. With the completion of our separation journey, we
are starting a new chapter with a solid foundation for long-term growth, and an exciting pipeline of innovation for
ophthalmology and optometry for the next decade.
I thank you for your continued interest and support of Alcon.

Yours sincerely,

F. Michael Ball
Chair

Our Stakeholders

Patients Associates
Customers Communities

Investors Ophthalmologists Research

Optometrists Partners
Eye Care Suppliers
Professionals

Alcon Annual Report 2020 iii

 Dear Shareholder,
2020 will be remembered as a year when the ordinary became extraordinary.
Frontline workers kept the engines of healthcare running during a global
crisis, and our associates worked tirelessly on the frontline, delivering critical
medical supplies and products to customers and patients. We are grateful for
their dedication and ingenuity.

Resilience
I’m extraordinarily proud of Alcon’s resiliency during these challenging times.
The organization quickly pivoted to address our customers' needs and to
position the company for success as the market started to recover. Coming
out of 2020, we are a more agile and nimble company. To protect our
associates, we implemented a response framework with recommended
COVID-19 prevention, containment and mitigation measures. To keep
supplying our customers and patients, we kept our manufacturing facilities
open and built supply in anticipation of new product launches. In response to
the pandemic's impact on the market, we rapidly aligned spend with sales
and reduced discretionary spend by approximately $200 million in the second
quarter. We also pivoted to digital technology to engage our customers and
help them stay better connected to their patients. And we stayed focused on
progressing our strategic priorities, which have established a foundation for
Alcon as an independent company. Furthermore, through 2020, we continued
to fund our innovation engine and bring products to market that enhance
quality of life by helping people See Brilliantly.
Our financial performance
Innovation
in 2020 reflects strong
2020 was a significant year for new product launches, both in our Surgical and
commercial execution and Vision Care franchises. Our new product launches are meeting the needs of
the decisions we made to our customers and patients and driving share growth in key segments of our
business. In Surgical, PanOptix has become the leading trifocal lens for
protect our associates and cataract surgery and is expanding our leadership in the advanced technology
continue with our strategic intraocular lens category ("AT-IOL"). Vivity, the first-of-its-kind non-diffractive
extended depth of focus ("EDOF") lens, launched in Europe. In Vision Care,
investments. Precision1 is our newest silicone hydrogel ("SiHy") daily contact lens, which
brings long-lasting comfort and water gradient technology to a wider base of
wearers. Pataday is a family of ocular allergy products that we converted from
prescription to over-the-counter ("OTC") in the US to aid the millions of
Americans suffering from ocular allergies.

Completing Our Separation

2020 was a milestone year for us in advancing the complex process of
standing up and separating from our former parent as an independent
company. We have successfully completed the migration and installation of
enterprise-wide technology. We have also implemented systems that will
streamline our R&D, shorten our commercial lead-times and increase our
focus on talent management. As we wind down our Transition Service
Agreements with Novartis in early 2021, we will channel more energy toward
creating greater value in the eye care industry.

iv Alcon Annual Report 2020

Building a Strong Culture
Alcon employs 23,000+ associates across 100+ nationalities in the 75 countries we operate and we believe that it is
important to build an organization that reflects the diversity of our people and the communities we serve. The events of
2020 have sharpened our commitment to nurture an inclusive environment, and we will continue to look for ways to
enhance our culture to enable our associates to thrive and bring their best selves to work. We continue to make progress in
reinforcing Speed & Simplicity and Ownership & Accountability, which are key to building the culture of a competitive eye
care company. Our engagement surveys this year indicate we have made progress in removing barriers and supporting our
teams through a period of incredible change and uncertainty.

Acting with Purpose

Last September, a patient dropped by our Johns Creek facility and asked to speak with an Alcon representative. He recently
had a cataract removed and replaced with a PanOptix lens. While he had no idea who to contact at Alcon, he felt compelled
to visit and express his gratitude for his newly restored vision. He shared with us how the surgery had changed his life and
that he is now able to see the world from a different perspective. Moments like these remind us of the incredible
responsibility we have to make a lasting impact on society.
As we recap a challenging year, our mission to help people See Brilliantly inspires us every day. Our products offer the
freedom to live independently with better eyesight. With our dedication to innovation, market access, education, training,
and philanthropy, we will bring the benefits of modern ophthalmology to more people.
I want to thank our associates for their unfaltering commitment, and our patients, customers and shareholders for their
continued trust in Alcon.
Sincerely,

David J. Endicott
Chief Executive Officer

Our Strategic Journey

The foundation has been strengthened and we have advanced to the next phase.

AT-IOLs: PanOptix, Vivity Accelerate innovation

Daily SiHy lens: Dailies Total1, Precision1 Expand markets & adjacencies
Dry Eye: Systane New business models
Ocular Allergy: Pataday

Alcon Annual Report 2020 v

The Importance of Sight
1
Studies have shown that sight is rated as the most important of the five senses. Poor vision—whether due to age, disease or
trauma—creates profound social and economic costs, and one survey found that a fear of blindness outranks the loss of
2
memory, hearing or speech. Worldwide, approximately 2.2 billion people live with some form of visual impairment or
blindness, of which 1 billion people have unaddressed vision needs, even though approximately 80% of all visual
3,4
impairments are currently preventable or treatable.

Eye Care: A Resilient Market

5
We serve a $25 billion global market that we estimate will grow 4% annually from 2019 to 2025. This market is underpinned
by favorable megatrends: an aging population, a growing middle class, and increased interest in health and wellness.
Additionally, innovation has delivered a greater quality of care, accessibility and treatment of difficult and complex diseases.
6
The number of people aged 60 years or older is expected to more than double by 2050 to 2.1 billion. Cataract incidence
dramatically increases at the age of 65 years, and with the improved efficacy and safety of cataract surgery, more patients
are electing for cataract removal before permanent vision loss. Retinal disease is also driven by aging and has comorbidities
with diabetes, which has reached epidemic levels. Advancements in diagnostics have led to a higher discovery of retinal
conditions, and, given the central role of the retina to vision, the demand for retinal surgery is expected to grow.
Furthermore, by 2050, an estimated 50% of the world will be myopic, with a significant increase in myopia among young
8
children. We believe this trend will result in an increase in the number of patients who will need vision correction and ocular
health products.

Sizeable
opportunities
with large
unmet needs

153 million 1.8 billion 1.4 billion 65 million 146 million 76 million
with uncorrected have live with with moderate have diabetic live with
7 3 3
refractive presbyopia, dry eye to severe retinopathy glaucoma
9
errors projected to vision
increase to impairment
2.1 billion due to
3
in 2030
3 cataracts

See footnotes on page vii.

vi Alcon Annual Report 2020

 
Certain lifestyle changes and social adaptations resulting from the COVID-19 pandemic have created some potential
tailwinds for the demand for eye care. The shift to working from home has contributed to an increase in eyestrain and dry
eye as consumers spend more time on digital devices. During the pandemic, consumers have managed their personal spend
and focused on health and wellness, which contributed to the rebound in demand for products and services like contact
lenses and refractive surgery in the second half of the year. The continued use of personal protective equipment also
sparked demand for spectacle independence in order to eliminate the nuisance of fogging glasses while wearing facial
masks.
In the clinic, the current environment has created the opportunity to improve workflows through digital connectivity, provide
medical care virtually and simplify the customer experience. In cataract surgery, for instance, improved diagnostics, cloud
data management and artificial intelligence have the potential to increase efficiency and improve decision-making and
surgical outcomes. Eye surgery today requires manual diagnostics and data collection that can introduce human error and
longer lead times. In the operating room, new technologies, such as heads-up visualization, improve the surgeon’s ability to
navigate the anterior chamber of the eye, better manage information and facilitate real-time collaboration with the
operating room staff.

1. Enoch J, McDonald L, Jones L, Jones PR, Crabb DP. Evaluating Whether Sight Is the Most Valued Sense. JAMA Ophthalmol. 2019 Oct 3;137(11):1317–20.
2. Scott AW, Bressler NM, Ffolkes S, Wittenborn JS, Jorkasky J. Public Attitudes About Eye and Vision Health. JAMA Ophthalmol. 2016 Oct 1;134(10):1111-1118.
3. World Health Organization. World report on vision. 2019.
4. World Health Organization. World Sight Day: 10 October. 2002 Oct 10.
5. Alcon internal estimates.
6. World Health Organization. Multisectoral action for a life course approach to healthy ageing: draft global strategy and plan of action on ageing and health.
69th World Health Assembly, Geneva, 2016 April 22 (A69/17).
7. Market Scope: 2020 Dry Eye Products Market Report.
8. B. Holden, T. Fricke, et al. Global Prevalence of Myopia and High Myopia and Temporal Trends from 2000 through 2050. Ophthalmology, 2016.
9. World Health Organization. Online Q&A. 2013 Oct 7.

Alcon Annual Report 2020 vii

 Change % Change %
($ millions unless indicated otherwise) 2020 2019 $ cc* 2018 $ cc*
Net sales to third parties 6,763 7,362 (8) (8) 7,149 3 5
Operating (loss) (482) (187) (158) (138) (248) 25 54
Operating margin (%) (7.1) (2.5) (3.5)
Diluted (loss)/EPS ($) (1.09) (1.34) 19 24 (0.46) (191) (163)
 
Core results*
Core operating income 789 1,265 (38) (35) 1,212 4 11
Core operating margin (%) 11.7 17.2 17.0
Core diluted EPS ($) 1.04 1.89 (45) (42) 2.00 (6) 1

Cash flows from operating activities 823 920 1,140

Free cash flow* 350 367 616

Our 2020 IFRS results reflect the significant impact of the COVID-19 pandemic and the following items:

• Amortization of certain intangible assets of $1.0 billion

• Impairments of $167 million on certain intangible assets
• Separation costs of $217 million in 2020; life-to-date, separation costs were $454 million
• Transformation costs of $49 million in 2020; life-to-date, transformation costs were $101 million
• Net gain of $154 million on post-employment benefit plan amendments

Our 2019 IFRS results reflected the significant impact of the spin-off from Novartis and Swiss tax reform.

*  Constant currency (cc), core results and free cash flow are non-IFRS measures. Refer to Item 5 of this Annual Report for additional information and a
reconciliation to the most directly comparable measure presented in accordance with IFRS.

viii Alcon Annual Report 2020

Driving Growth and Outpacing the Market
We kicked off the year with strong momentum from the ongoing launches of PanOptix and Precision1, the pilot of Vivity in
Europe and the US OTC switch of Pataday. However, as the initial COVID-19 outbreak began to spread in more markets,
countries imposed a shutdown of most businesses and recommended the deferral of non-urgent care and demand for
surgical procedures came under pressure. Order buying patterns also shifted as retailers and distributors balanced working
capital needs with falling store traffic and increased online demand. As markets reopened and patient flow and traffic
resumed, we experienced a significant rebound in the second half of the year. This was driven by strong demand for our
new, innovative products, which outpaced the market and drove share gains that enabled the business to return to growth
by the fourth quarter.
Throughout the pandemic, we kept our associates fully employed and maintained manufacturing to support our customers.
We stayed engaged with our customers during this period through remote learning, digital marketing and virtual contact.
The slowdown also provided an opportunity to continue the expansion of our contact lens manufacturing lines, and, as a
result, we were able to establish unconstrained supply for our new products to meet the strong demand expected once
markets reopened. We also collaborated with the industry to help create new safety protocols and a roadmap for reopening.
We aggressively managed our discretionary expenses and kept our structure intact to best capture the market recovery. As a
result, we were able to reduce spending by nearly $200 million in the second quarter, and we postponed the initiation of our
first dividend proposal to maximize liquidity. We used our strong credit profile to raise $750 million in long-term notes in
May 2020 to solidify our liquidity position during an uncertain time. Our cash position enabled us to continue our separation
and transformation programs and advance our SAP implementation into the final stages. The progress we have made in
2020 puts us on track to wrap up our separation process in early 2021 as planned.
These actions drove a steep recovery in both of our franchises as businesses reopened and patients returned for care. Our
customer engagement strategies resulted in higher brand awareness, account conversion and adoption of innovative
technologies such as AT-IOLs. Although COVID-19 exerted significant pressure on cash flow over the summer, the rebound in
sales and the normalization of collection trends improved operating cash flows by the third quarter and resulted in healthy
operating cash flows by year-end.

Surgical Contact Lens

Illustrative Illustrative

For complete details of Alcon's 2020 financial performance, consult the Consolidated Financial Statements in this
Annual Report.
1. Source: Market Scope.
2. Source: GfK.

Alcon Annual Report 2020 ix

Surgical Portfolio

Implantables Consumables Equipment / Other

PanOptix, Alcon's trifocal AT-IOL, Alcon’s strong installed equipment Alcon provides a comprehensive
gained significant market share of the base drives sales of dedicated offering of surgical equipment. Demand
presbyopia-correcting category due to consumables specific to our for innovative new products creates
its recent launches in the US and equipment. We also offer CustomPak value for our existing installed base, like
Japan and its introduction in China in surgical procedure packs for the Active Sentry phaco handpiece,
2020. Vivity, a non-diffractive EDOF ophthalmic use, which allow which detects pressure in real time and
IOL which allows for extended range individual surgeons to customize their communicates with the Centurion phaco
of vision and presbyopia correction products included in their pack. system. Alcon also expanded into the
with the safety profile of a monofocal diagnostic market with the introduction
IOL, was introduced in Europe, of the ARGOS biometer, which was well-
Australia and Latin America. received by our customers.

Rich Pipeline to Fuel Growth into the Future

Selected Launches

Clareon with AutonoMe (Int'l) PanOptix trifocal (US) Vivity (US)

UltraSert Vivity non-diffractive PC-IOL (EU) New advanced IOL platforms
PanOptix trifocal (Int'l) Clareon with AutonoMe (US) Next generation cataract and
vitreoretinal technology platforms
ReSTOR Toric with ACTIVEFOCUS ORA System with VerifEye Lynk
(US) Integrative technologies to
Active Sentry Handpiece
connect the clinic to the operating
NGenuity 3D
Centurion Legion room

ARGOS biometer

*  A non-IFRS measure. Refer to Item 5 of this Annual Report for additional information and a reconciliation to the most directly comparable measure presente

x Alcon Annual Report 2020

Vision Care Portfolio

Contact Lenses Ocular Health

Alcon launched Precision1 sphere in the US at the Alcon advanced its rollout of Systane COMPLETE regionally
beginning of the year, and subsequently introduced and expanded the brand’s offerings with the launch of
Precision1 for Astigmatism in late 2020, expanding its Systane Ultra Multi-Dose Preservative-Free ("MDPF") in
portfolio of spherical, toric and multifocal lenses. The Germany. Systane MDPF is Alcon’s first entry into the fast-
launch of Precision1 for Astigmatism significantly growing international segment of artificial tears and will
strengthens Alcon's competitive position in the daily SiHy build on Alcon’s dry eye leadership. Alcon also launched
category, one of the fastest growing segments in the Pataday, our first OTC ocular allergy eye drops in the US,
market. which has driven Alcon’s market leadership in an exciting
category.

Rich Pipeline to Fuel Growth into the Future

Selected Launches

AIR OPTIX plus HydraGlyde Systane COMPLETE, Systane Dailies Total1 for Astigmatism
Hydration MDPF
Dailies Total1 Multifocal Pataday Extra Strength
AIR OPTIX plus HydraGlyde (toric
Clear Care Plus HydraGlyde Two innovative new contact lens
and multifocal lenses)
platforms
Precision1 sphere
Systane family expansion
Precision1 for Astigmatism
Pataday Once Daily
Pataday Twice Daily

Alcon Annual Report 2020 xi

 Maximize Potential of Our Near Term Portfolio
• Reinforced Dailies Total1 as premium daily SiHy contact lens for demanding eyes
• Continued regional launch of Systane COMPLETE
• Introduced Systane Ultra MDPF in Europe

Expand Markets and Pursue Adjacencies

• Launched Precision1, the latest daily SiHy contact lens • Introduced PanOptix in the US, Japan and China
for consumers looking for longer lasting comfort at an • Increased presence in ocular allergies with the US OTC
accessible price introduction of Pataday

1 2
2020 Contact Lens Market Growth PC-IOL Market Share

Accelerate Innovation Product Approvals (Major Markets)

• Introduced Vivity, the first-of-its kind non-diffractive EDOF
intraocular lens, in Europe
• Launched new diagnostic and visualization technology
• Expanded market access to advanced cataract surgery
with the development of Centurion Legion

Develop New Business Models Increase Operational Efficiencies

• Developed a digitally integrated suite of tools for • Transformation on track
cataract and vitreoretinal surgery
• Implementing processes, systems and culture to drive
Speed & Simplicity and Ownership & Accountability
principles
• Optimizing our cost structure and reinvesting savings
into R&D and marketing to drive top-line growth
• Standing up Alcon Global Service centers to deliver cross-
functional services with economies of scale

1. Source: GfK.
2. Source: Market Scope.

xii Alcon Annual Report 2020

Innovation
Alcon makes one of the largest annual R&D commitments of any
eye care company, which allows us to create value for our
customers and patients. Our expertise in optical design, surface
chemistry, materials science and precision manufacturing has
enabled us to make several breakthroughs in the field of
ophthalmology and optometry, with 11 first-in-market launches
this year.
For example, we developed a proprietary water gradient
technology called SmartSurface, a high performing moisture
layer with Precision1, which provides contact lens wearers with
longer lasting end of day comfort. This moisture stability
enables wearers to stay in their lenses for a longer period of
time. Our expanded manufacturing platform enables us to
leverage this expertise by designing contact lenses with
differentiated value propositions, especially for toric and
multifocal needs.
We also improved our innovation stage-gate process by aligning our R&D, manufacturing and commercial teams,
shortening lead times for product development and supporting future launches with inventory to maximize success. As
part of effective life cycle management, we are increasing the integration of sustainability into product design.
Our specialization in eye care also gives us a perspective into new and emerging needs and where new technologies can
address them. For example, we launched our new ARGOS biometer with Alcon’s proprietary Image Guidance System this
year. ARGOS reduces patient contact time with faster scanning speeds, and its integrated planning solution reduces the
time and error typically involved in the manual transmission of diagnostic data throughout the clinic.
ARGOS will be a cornerstone of Alcon’s upcoming Digital Health Suite. Alcon also continues to make solid progress piloting
its SMART Suite, designed exclusively for ophthalmology. The SMART Suite seamlessly connects devices and data systems
from the clinic to the operating room, helping increase simplicity, efficiency and precision for optimal surgical outcomes.
Innovation remains our highest capital priority and continues to generate strong returns while strengthening our position
as the leader in eye care.

Alcon Annual Report 2020 xiii

COVID-19
We are proud of the agility and resilience of our organization, which has enabled us to deliver on our commitments to our
customers and patients and preserve our path for long-term value creation. Summarized in the table below are the actions
we’ve taken and the results from our strong management of the business during a global health crisis.

• The impact of COVID-19 and government mandates on eye care practices made it challenging for us to
meet annual targets established prior to the pandemic.
• Sales performance saw a significant improvement in the second half of 2020 due to strong execution
and category outperformance of the market.
• Core operating margin* improved in the second half of 2020 due to a strong sales recovery, expense
Financial discipline and product flow.
Results
• Free cash flow* improved in the second half of 2020, driven by an improvement in sales and collections
as well as lower capital spending.
• Progress in the separation from our former parent puts Alcon on track to complete the process by early
2021. We also advanced the implementation of our transformation program. Both are key to standing
up Alcon as an independent company and unlocking long-term operating margin improvement.

• We executed mitigation plans to secure critical materials and minimize supply chain disruption during
COVID-19. Better demand forecasting and the use of enterprise-wide systems (e.g., SAP) and procedures
helped us maintain strategic inventory reserves for key products and new launches.
Business • We maintained financial flexibility with cost measures reducing nearly $200 million of discretionary
Continuity spend in the second quarter and by postponing our first dividend proposal to 2021. Our credit rating
enabled a successful bond offering which raised $750 million in long-term notes in May 2020.
• We continued our progress in R&D, helping secure an innovation pipeline critical for long-term value
creation.

• We maintained full employment and did not furlough associates and maintained pay levels
notwithstanding the significant reduction in manufacturing volumes and sales.
Protect our
• Under the supervision of the Alcon Crisis Management team, global health and safety protocols, such as
Associates
mandatory temperature checks, use of personal protective equipment, social distancing and capacity
restrictions were implemented across all office and manufacturing sites.

• We collaborated with the industry to develop new safety protocols and patient workflow strategies to
enable practitioners and patients to stay safe.
• We created a new COVID-19 resource center to provide US customers with information about
Serve our governmental economic relief programs and telehealth billing updates, and to provide access to
Customers educational content and other practice resources.
and • We accelerated digital training and engagement through Alcon Experience Academy.
Communities • We donated ophthalmic equipment, vision care products and personal protective equipment to support
frontline workers during the pandemic.
• We promoted the safe use of contact lenses, dry eye management and online fulfillment supported eye
care during the pandemic.

• Capital allocation in organic investments has resulted in the successful launch of new products such
Align with as PanOptix, Precision1 and Pataday and subsequent market share gains in their respective categories.
Shareholders • Alcon’s stock ended the year +17% in the NYSE and +7% in the SIX markets, outperformed direct
competitors' stock by 1700 basis points and maintained healthy valuation levels in a volatile market.

* A non-IFRS measure. Refer to Item 5 of this Annual Report for additional information and a reconciliation to the most directly comparable measure presented
in accordance with IFRS.

xiv Alcon Annual Report 2020

Corporate Citizenship
Our passion for responsible corporate citizenship is demonstrated through our associate and philanthropic initiatives, and
our response to COVID-19 exemplifies this commitment. As the public health crisis grew in scale, we acted decisively to
protect our associates with new safety protocols while our teams mobilized the manufacture and donation of personal
protective equipment and hand sanitizer to frontline workers. Since the start of the pandemic, we have intensified our
efforts to support communities needs in hunger, health and hygiene.
Each year, the Alcon Foundation supports programs that sit at the intersection of our purpose and communities in need. We
support organizations and efforts that focus on training eye care teams and providing eye care services to underserved
citizens in communities around the world. Good vision is essential to quality of life, and we will continue to lend our
expertise to increase access to eye care.

Shareholder and Board Engagement

2019 Earnings 2020 Annual 1st Corporate Fall governance Feedback from fall
General Meeting; Responsibility Report outreach, engaged governance outreach
Filed Swiss Annual
closed format due published with investors relayed to the Board
Report
to pandemic representing 25%
Outreach to ESG Performance
Published Say-on-Pay of Alcon ownership
Raised $750 million investors and rating evaluation, target
Report
long-term bonds agencies setting, compensation
planning
Associate
communications

Alcon Annual Report 2020 xv

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xvi Alcon Annual Report 2020

INDEX Page
Introduction and Use of Certain Terms 1
Market Information 1
Special Note About Forward-Looking Statements 2
PART I
Item 1. Identity of Directors, Senior Management and Advisers 4
Item 2. Offer Statistics and Expected Timetable 5
Item 3. Key Information 6
Item 4. Information on the Company 28
Item 4A. Unresolved Staff Comments 52
Item 5. Operating and Financial Review and Prospects 53
Item 6. Directors, Senior Management and Employees 80
Item 7. Major Shareholders and Related Party Transactions 138
Item 8. Financial Information 139
Item 9. The Offer and Listing 141
Item 10. Additional Information 142
Item 11. Quantitative and Qualitative Disclosures About Market Risk 153
Item 12. Description of Securities Other than Equity Securities 154
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies 155
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 156
Item 15. Controls and Procedures 157
Item 16A. Audit Committee and Financial Expert 158
Item 16B. Code of Ethics 158
Item 16C. Principal Accountant Fees and Services 158
Item 16D. Exemptions from the Listing Standards for Audit Committees 159
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 160
Item 16F. Change in Registrant's Certifying Accountant 161
Item 16G. Corporate Governance 162
Item 16H. Mine Safety Disclosure 162
PART III
Item 17. Financial Statements 163
Item 18. Financial Statements 163
Item 19. Exhibits 164
Consolidated Financial Statements of Alcon Inc. F-1
Financial Statements of Alcon Inc. A-1
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INTRODUCTION AND USE OF CERTAIN
TERMS
Alcon  Inc. publishes Consolidated Financial Statements expressed in US dollars. Our Consolidated Financial Statements
responsive to Item  18 of this Annual Report filed on Form  20-F with the US Securities and Exchange Commission (the
"Annual Report") are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB"). "Item 5. Operating and Financial Review and Prospects", together with
“Item 4.B. Business Overview” and “Item 6.D. Employees”, constitute the Operating and Financial Review ("Rapport
annuel"), as defined by the Swiss Code of Obligations.
Unless the context requires otherwise, the words "we", "our", "us", "Alcon", "Company" and similar words or phrases in
this Annual Report refer to Alcon  Inc. and its consolidated subsidiaries and the words "Novartis", "Novartis Group" and
"Former Parent" refer to Novartis AG and its consolidated affiliates. The term "Alcon Division" means the Alcon business as
it was operated under Novartis. The term "Spin-off" refers to the distribution of a dividend-in-kind of Alcon shares to
Novartis shareholders and ADR holders as approved by Novartis shareholders at their Annual General Meeting held on
February 28, 2019. In this Annual Report, references to the "eye care market" are to the eye care market in which we
participate, including the sale of ophthalmic surgical devices, contact lenses and ocular health products, but not including
the sale of spectacles and prescription ophthalmic pharmaceutical products; references to "United States dollars", "US
dollars", "USD" or "$" are to the lawful currency of the United States of America, and references to "CHF" are to Swiss
francs, the lawful currency of Switzerland; references to "Latin America" are to Central and South America, including the
Caribbean, unless the context otherwise requires; references to "associates" are to our employees; references to the "SEC"
are to the US Securities and Exchange Commission, references to the "FDA" are to the US Food and Drug Administration,
and references to "EMA" are to the European Medicines Agency, an agency of the EU; references to the "NYSE" are to the
New York Stock Exchange, and references to the "SIX" are to the SIX Swiss Exchange; references to "AT-IOL" mean
advanced technology intraocular lenses; and references to "Alcon shares" or "our shares" are to Alcon ordinary shares,
nominal value CHF 0.04 per share, with ticker symbol "ALC."
All product names appearing in italics are trademarks owned by or licensed to Alcon or its subsidiaries. Product names
identified by a "®" or a "™" are trademarks that are not owned by or licensed to Alcon or its subsidiaries and are the
property of their respective owners.

MARKET INFORMATION
This Annual Report contains certain industry and market data that were obtained from third-party sources, such as
industry surveys and industry publications, including, but not limited to, publications by Market Scope, GfK and Nielsen.
This Annual Report also contains other industry and market data, including market sizing estimates, growth and other
projections and information regarding our competitive position, prepared by our management on the basis of such
industry sources and our management's knowledge of and experience in the industry and markets in which we operate
(including management's estimates and assumptions relating to such industry and markets based on that knowledge). Our
management has developed its knowledge of such industry and markets through its experience and participation in these
markets.
In addition, industry surveys and industry publications generally state that the information they contain has been obtained
from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed and
that any projections they contain are based on a number of significant assumptions. Forecasts, projections and other
forward-looking information obtained from these sources involve risks and uncertainties and are subject to change based
on various factors, including those discussed in the section "Special Note About Forward-Looking Statements" below. You
should not place undue reliance on these statements.

1
SPECIAL NOTE ABOUT FORWARD-LOOKING
STATEMENTS
This Annual Report contains, and our officers and representatives may from time to time make, certain “forward-looking
statements” within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as “anticipate,” “intend,” “commitment,” “look forward,”
“maintain,” “plan,” “goal,” “seek,” “target,” “assume,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,”
“may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among
others, statements Alcon makes regarding its liquidity, revenue, gross margin, effective tax rate, foreign currency exchange
movements, earnings per share, its plans and decisions relating to various capital expenditures, capital allocation priorities
and other discretionary items, market growth assumptions, and generally, its expectations concerning its future
performance and the effects of the COVID-19 pandemic on its businesses. You should not place undue reliance on these
statements.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based
only on Alcon’s current beliefs, expectations and assumptions regarding the future of its business, future plans and
strategies and other future conditions. Because forward-looking statements relate to the future, they are subject to
inherent uncertainties and risks that are difficult to predict. Such forward-looking statements are subject to various risks
and uncertainties facing Alcon, including:
• the effect of the COVID-19 pandemic as well as other viral or disease outbreaks;
• the commercial success of its products and its ability to maintain and strengthen its position in its markets;
• the success of its research and development efforts, including its ability to innovate to compete effectively;
• its success in completing and integrating strategic acquisitions;
• pricing pressure from changes in third party payor coverage and reimbursement methodologies;
• global and regional economic, financial, legal, tax, political and social change;
• data breaches or other disruptions of its information technology systems;
• ongoing industry consolidation;
• its ability to properly educate and train healthcare providers on its products;
• changes in inventory levels or buying patterns of its customers;
• the impact of a disruption in its global supply chain or important facilities;
• ability to service its debt obligations;
• its ability to comply with the US Foreign Corrupt Practices Act of 1977 and other applicable anti-corruption laws,
particularly given that it has entered into a three-year Deferred Prosecution Agreement with the U.S. Department
of Justice;
• uncertainty and impact relating to the potential phasing out of LIBOR and transition to alternative reference rates;
• the need for additional financing through the issuance of debt or equity;
• its reliance on outsourcing key business functions;
• its ability to protect its intellectual property;
• the impact on unauthorized importation of its products from countries with lower prices to countries with higher
prices;
• uncertainties regarding the success of Alcon’s separation and Spin-off from Novartis and the subsequent
transformation program, including the expected separation and transformation costs, as well as any potential
savings, incurred or realized by Alcon;
• the effects of litigation, including product liability lawsuits and governmental investigations;
• its ability to comply with all laws to which it may be subject;
• effect of product recalls or voluntary market withdrawals;

2
 • the implementation of its enterprise resource planning system;
• its ability to attract and retain qualified personnel;
• the accuracy of its accounting estimates and assumptions, including pension and other post-employment benefit
plan obligations and the carrying value of intangible assets;
• the ability to obtain regulatory clearance and approval of its products as well as compliance with any post-
approval obligations, including quality control of its manufacturing;
• legislative and regulatory reform;
• the ability of Alcon Pharmaceuticals Ltd. to comply with its investment tax incentive agreement with the Swiss
State Secretariat for Economic Affairs in Switzerland and the Canton of Fribourg, Switzerland;
• its ability to manage environmental, social and governance matters to the satisfaction of its many stakeholders,
some of which may have competing interests;
• its ability to operate as a stand-alone company;
• whether the transitional services Novartis has agreed to provide Alcon are sufficient;
• the impact of the Spin-off from Novartis on Alcon’s shareholder base;
• the impact of being listed on two stock exchanges;
• the ability to declare and pay dividends;
• the different rights afforded to its shareholders as a Swiss corporation compared to a U.S. corporation; and
• the effect of maintaining or losing its foreign private issuer status under U.S. securities laws.
Some of these factors are discussed in more detail in this Annual Report, including under “Item 3. Key Information—3.D.
Risk Factors”, “Item 4. Information on the Company” and “Item 5. Operating and Financial Review and Prospects”. Should
one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this Annual Report as anticipated, believed, estimated or expected. We
provide the information in this Annual Report as of the date of its filing. We do not intend, and do not assume any
obligation, to update any information or forward-looking statements set out in this Annual Report as a result of new
information, future events or otherwise.

3
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR
MANAGEMENT AND ADVISERS
1.A. DIRECTORS AND SENIOR MANAGEMENT
Not Applicable.

1.B. ADVISERS
Not Applicable.

1.C. AUDITORS
Not Applicable.

4
ITEM 2. OFFER STATISTICS AND EXPECTED
TIMETABLE
Not Applicable.

5
ITEM 3. KEY INFORMATION
3.A. [RESERVED]
3.B. CAPITALIZATION AND INDEBTEDNESS
Not Applicable.

3.C. REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

6
3.D. RISK FACTORS
You should carefully consider the risks described below, together with all of the other information included in this Annual
Report, in evaluating Alcon and our securities. The following risk factors could adversely affect our business, financial
condition, results of operations and the price of our securities.

Risks Related to Our Business Generally

The effects of the ongoing COVID-19 pandemic have had, and may continue to have, a material adverse impact on our
business, net sales, profitability, financial condition, liquidity and cash flows.
An outbreak of a strain of coronavirus that was discovered in China in late 2019 evolved into a global pandemic. To stem
the spread of COVID-19 disease, in early 2020 nearly all major markets began to implement “stay-at-home” orders,
business shutdowns, including offices of eye care professionals, and the deferral of non-urgent surgical procedures,
leading to a global economic standstill. While these “stay-at-home” orders were largely lifted by mid-2020, some markets
reintroduced targeted “stay-at-home” orders throughout the remainder of 2020.
The spread of COVID-19 caused us to modify aspects of our business practices, including restricting associate travel,
encouraging office-based associates to work from home for a substantial part of 2020 and implementing social distancing
measures at our manufacturing sites and, upon the return of our associates, in our office locations. Such actions have
resulted in disruptions to our supply chain, operations, facilities and associate workforce. If “stay-at-home" orders,
business shutdowns and the deferral of non-urgent surgical procedures are re-implemented broadly to combat the
spread of COVID-19, our business, net sales, financial condition, liquidity and cash flows would be adversely affected
further.
The magnitude of the continued negative impact of the COVID-19 pandemic on our business, net sales, financial condition,
liquidity and cash flows depends on future developments that are unpredictable and most of which are outside of our
control, including the duration and scope of the pandemic, related governmental advisories and restrictions to contain
COVID-19, how quickly economic conditions improve once the COVID-19 pandemic subsides, the development of
therapeutic medicines and vaccines and whether there are subsequent outbreaks. We may be unable to prevent or
mitigate any or all of the pandemic's near- or long-term adverse impacts, which could be material, such as:
▪ Non-urgent medical procedures may be prohibited or restricted again. During 2020, most geographic markets
prohibited or restricted non-urgent medical procedures. As a result, many eye care professionals delayed or
canceled orders. While markets generally have reopened, some markets have reintroduced closures. Further,
some patients remain reluctant to seek medical attention, and, for those who do, there has been a substantial
backlog due to limited capacity and the need to social distance, which has had an adverse effect on our sales as
markets recover from the pandemic. Also, we could have difficulty timely collecting accounts receivable due from
eye care professionals as they themselves recover from the impact of the pandemic.
▪ We may be prevented from operating our manufacturing facilities or other workplaces due to the illness of our
associates, regulations and associate inability or reluctance to appear for work or travel to our facilities, which
may cause a material disruption to our supply chain. In 2020, we had some limited and temporary site shutdowns
and implemented alternative working arrangements for all of our office-based associates, including working from
home.
▪ The operations of our suppliers may be disrupted or may not operate effectively or efficiently, thereby negatively
impacting our ability to purchase supplies for our business at historical prices and in sufficient amounts.
▪ Generating lower cash from operations could adversely affect our financial condition and the achievement of our
strategic objectives. As a result, we may need to raise additional capital by incurring indebtedness or issuing
equity securities beyond the $750 million of additional debt that we raised in 2020. Additionally, we may face
credit rating downgrades as a result of weaker than anticipated performance of our businesses, higher debt
levels, or other factors.
To the extent COVID-19 continues to adversely affect our operations and global economic conditions more generally, it
may also have the effect of heightening many of the other risks described in this “Risk Factors” section including impeding
our ability to launch new products and develop innovative products, the inability of our customers or suppliers to operate
their businesses, the acceleration of industry consolidation, our inability to forecast demand accurately and our need to
obtain additional financing.

7
We operate in a highly competitive industry and if we fail to innovate, we may be unable to maintain our position in the
markets in which we compete and unable to build and expand our markets.
Our industry is highly competitive and, in both our surgical and vision care businesses, we face a mixture of competitors
and intense competition from competitors' products. While we currently enjoy leading positions within our industry, our
success highly depends on our ability to maintain or build on those leading positions. To compete effectively, we must
continue to create, invest in, or acquire advanced technology, incorporate this technology into our proprietary products,
obtain regulatory approvals in a timely manner where required and manufacture and successfully market our products.
We may experience design, manufacturing, marketing or other difficulties that could delay or prevent our development,
introduction or marketing of new products or new versions of our existing products. As a result of such difficulties and
delays, our development expenses may increase and, as a consequence, our results of operations could suffer. Our failure
to respond to competitive pressures in a timely manner could have a material adverse effect on our business, financial
condition and results of operations.
For example, in our surgical business, we face a mixture of competitors ranging from large manufacturers with multiple
business lines to small manufacturers that offer a limited selection of specialized products. Development by other
companies of new or improved products, processes, or technologies may make our products or proposed products less
competitive or obsolete. We also face competition from providers of alternative medical therapies such as pharmaceutical
companies that have the potential to disrupt core elements of our business.
Shifts in industry market share can occur in connection with product issues, physician advisories, safety alerts and
publications about our products. In the current environment of managed care, consolidation among healthcare providers,
increased competition and declining reimbursement rates, and absent innovation, we must increasingly compete on the
basis of price.
In addition, our vision care business operates within a highly competitive environment. In contact lenses, we face intense
competition from competitors' products and may face increasing competition as other new products enter the market, for
example, with increased product entries from contact lens manufacturers in Asia. New market entrants and existing
competitors are also challenging distribution models with innovation in non-traditional, disruptive models such as direct-
to-consumer, Internet and other e-commerce sales opportunities, which could adversely impact the traditional eye care
professional ("ECP") channel in which Alcon has a significant presence. Our major competitors in contact lenses offer
competitive products and differentiated materials, plus a variety of other eye care products including ophthalmic
pharmaceuticals, which may give them a competitive advantage in marketing their lenses. Our vision care business also
competes with manufacturers of eyeglasses and providers of other forms of vision correction including ophthalmic
surgery. The market for contact lenses is intensely competitive and is characterized by declining sales volumes for older
and reusable product lines and growing demand for daily lenses and advanced materials lenses. As the market for contact
lenses shifts toward daily lenses, we expect our sales in daily lenses to, at least in part, cannibalize sales of our reusable
contact lenses and contact lens care offerings. Furthermore, our ocular health product category is also highly competitive.
We cannot predict the timing or impact of the introduction of competitive products, including new market entries,
"generic" versions of our approved products, or private label products that treat the same conditions as those of our
products. In addition, the introduction of alternatives in medical devices and medical prescriptions could also alter the dry
eye product market and impede our sales growth. Our ability to respond to these competitive pressures will depend on
our ability to decrease our costs and maintain gross margins and operating results and to introduce new products
successfully and on a timely basis, and to achieve manufacturing efficiencies and sufficient manufacturing capacity and
capabilities for such products.
Finally, our financial performance also depends on our ability to successfully build and expand our markets. For example,
while we currently expect our key markets to grow, particularly in multifocal contact lenses and AT-IOLs, the size of the
markets in which we compete may not increase above existing levels, we may not be able to regain or gain market share,
expand our market penetration or the size of the market for our products, or compete effectively, and the number of
procedures in which our products are used may not increase above existing levels. Decreases in market sizes or our
market share and declines in average selling prices or procedural volumes could materially adversely affect our results of
operations or financial condition. Furthermore, our failure to expand our markets beyond existing levels could impact our
ability to grow in line with or above current industry standards.
Our research and development efforts may not succeed in bringing new products to market, or may fail to do so in a
cost-efficient manner, or in a manner sufficient to grow our business, replace lost sales or take advantage of new
technologies.
Our ability to continue to maintain and grow our business, to replace sales lost due to competition and to bring to market
products that take advantage of new and potentially disruptive technologies depends heavily on the success of our
research and development activities. Our success relies on our ability to identify and successfully develop cost-effective
new products that address unmet medical and consumer needs. To accomplish this, we commit substantial financial,
human and capital resources to product research and development, both through our internal dedicated resources and

8
through external investments, alliances, license arrangements, acquisitions and other transactions, which we collectively
refer to as "BD&L" transactions. Developing and marketing new products involves a costly, lengthy and uncertain process.
Since early 2020, COVID-19 related restrictions have delayed clinical trials and caused our research and development
associates to work from home, which could have the effect of delaying new product launches. Even when our new product
development projects make it to market, there have been, and in future may be, instances where projects are
subsequently discontinued for technical, clinical, regulatory or commercial reasons. In spite of our investments, our
research and development activities and external investments may not produce commercially successful new products
that will enable us to replace sales lost to our competitors or increase revenue to grow our business. We may not be able
to successfully identify and obtain value from our external business development and strategic collaborative efforts. In
addition, our new products may cannibalize a portion of the revenues we derive from existing products, therefore driving
replacement revenue instead of incremental revenue.
Further, even if we are able to secure regulatory approval and achieve initial commercial success of our products, our
products may abruptly cease to be commercially viable due to the discovery of adverse health effects. See "—We may
implement product recalls or voluntary market withdrawals of our products" below.
If we are unable to maintain a cost-effective flow of successful new products sufficient to maintain and grow our business,
cover any sales erosion due to competition and take advantage of market opportunities, this lack of innovation could have
a material adverse effect on our business, financial condition or results of operations. For a description of the government
approval processes which must be followed to market our products, see "—Regulatory clearance and approval processes
for our products are expensive, time-consuming and uncertain, and the failure to obtain and maintain required regulatory
clearances and approvals could prevent us from commercializing our products" below and "Item  4. Information on the
Company—4.B. Business Overview—Government Regulation".
We may not successfully complete and integrate strategic acquisitions to expand or complement our business.
As part of our growth strategy, we regularly evaluate and pursue strategic BD&L transactions to expand or complement
our business. Such ventures may bring new technologies, products, or customers to enhance our prominent position in
the ophthalmic industry. We may be unable to identify suitable acquisition candidates at attractive prices or at all.
Acquisition activities can be thwarted by overtures from competitors for the targeted candidates and governmental
regulation (including market concentration limitations and other competition laws).
Further, even if we are successful in completing an acquisition, we could face risks relating to our ability to:
▪ successfully integrate the venture due to corporate cultural differences, difficulties in retaining key personnel,
customers and suppliers, coordination with other products and changing market preferences;

▪ maintain uniform standards, controls, procedures and policies throughout acquired companies, including
effective integration of acquired companies into our internal control over financial reporting;

▪ achieve expected synergies and obtain the desired financial or strategic benefits from acquisitions within the
anticipated time periods, if at all; and

▪ successfully enter categories and markets in which we may have limited or no prior experience.
Moreover, acquisitions demand significant company resources and could divert management's attention from our existing
business, result in liabilities being incurred that were not known at the time of acquisition or create tax or accounting
issues. Furthermore, acquisitions or ventures could also result in potentially dilutive issuances of equity securities, the
incurrence of debt, the assumption of contingent liabilities, an increase in expenses related to certain assets and increased
operating expenses, all of which could adversely affect our financial condition and results of operations. In addition, to the
extent that the economic benefits associated with any of our acquisitions or investments diminish in the future, we may be
required to record impairment charges related to goodwill, intangible assets or other assets associated with such
transactions, which could adversely affect our financial condition and results of operations.
We often enter into option agreements to acquire early-stage technologies, which may fail in the development process or
proof-of-concept stage. Even if such a failure occurs before we exercise our option to acquire the technology, we may have
already made a significant investment in the failed technology. Further, if we complete the acquisition, we may not be able
to successfully integrate the acquired technology into our business or otherwise use it to develop commercialized
products. If we fail to timely recognize or address these matters or to devote adequate resources to them, we may fail to
achieve our growth strategy or otherwise not realize the intended benefits of an acquisition.
Changes in third-party payor coverage and reimbursement methodologies and potential regulatory price controls may
adversely impact our ability to sell our products at prices necessary to support our current business strategy.
The prices, sales and demand for some of our products, in particular our surgical products, could be adversely affected by
the increased emphasis managed care organizations and governments continue to place on the delivery of more cost-
effective medical therapies. In addition, some third-party payors will not provide reimbursement for a new product until

9
we demonstrate the innovative value or improved patient outcomes of the new product, which could impact our ability to
grow the market for sales of the product. There have also been recent initiatives by third-party payors to challenge the
prices charged for medical products. Physicians, eye care professionals and other healthcare providers may be reluctant
to purchase our products if they do not receive adequate reimbursement from third-party payors to cover the cost of
those products and for procedures performed using those products. Reductions in the prices for our products in response
to these trends could reduce our profit margins, which would adversely affect our ability to invest and grow our business.
Outside the US, governmental programs that typically reimburse at predetermined fixed rates may also decrease or
otherwise limit amounts available through reimbursement. For example, in the EU, member states impose controls on
whether products are reimbursable by national or regional health service providers and on the prices at which medical
devices are reimbursed under state-run healthcare schemes. Some member states operate reference pricing systems in
which they set national reimbursement prices by reference to those in other member states. Countries implementing a
volume-based procurement process, such as the one being introduced in China, can lead to decreased prices. Other
governmental funding restrictions, legislative proposals and interpretations of policy may negatively impact amounts
available through reimbursement, including by restricting payment increases to hospitals and other providers through
reimbursement systems, or by restricting whether reimbursement is available for our products at all.
We expect that additional health care reform measures will be adopted in the future in the countries in which we operate,
including those initiatives affecting coverage and reimbursement for our products, any of which could limit the amounts
that governments will pay for health care products and services, which could adversely affect the growth of the market for
our products or the demand for our products, or result in additional pricing pressures. We cannot predict the effect such
reforms or the prospect of their enactment may have on our business.
Changing economic and financial environments in many countries and increasing global political and social instability
may adversely impact our business.
We sell our products in more than 140 countries. As a result, local and regional economic and financial environments and
political and social conditions throughout the world influence and affect our results of operations and business.
Unpredictable political and social conditions currently exist in various parts of the world, including a backlash against free
trade, anti-immigrant sentiment, social unrest, a refugee crisis, food and water shortages, COVID-19 related actions,
terrorism and the risk of direct conflicts between nations. In addition, the current trade environment is extremely volatile,
including the imposition of trade tariffs, trade or economic sanctions, or other restrictions. Changes in trade policy vis-à-vis
countries that we operate in could affect our ability to and/or the cost of doing business in such countries. For example,
we expect that the ongoing trade dispute between the United States and China could potentially have an adverse effect on
the export of our surgical equipment to China. In the United States, the elimination of the Affordable Care Act's individual
mandate could have a negative impact on individuals' ability to afford health insurance. Similarly, following the UK's
"Brexit" and with the rise of nationalist, separatist and populist sentiment in various countries, there is a risk that barriers
to free trade and the free movement of people may rise in Europe. As we have a sizable commercial presence in the UK,
the uncertainty surrounding the implementation and effect of "Brexit" may impact our business in the UK and the rest of
Europe, including our costs and the distribution of our products in those markets. Further, significant conflicts continue in
parts of the Middle East, including conflicts involving Saudi Arabia and Iran, and with respect to places such as North
Korea. Collectively, such difficult conditions could, among other things, disturb the international flow of goods and
increase the costs and difficulties of international transactions.
In addition, local economic conditions may adversely affect the ability of payors, as well as our distributors, customers,
suppliers and service providers, to pay for our products, or otherwise to buy necessary inventory or raw materials, and to
perform their obligations under agreements with us. Although we make efforts to monitor these third parties' financial
condition and their liquidity, our ability to do so is limited, and some of them may become unable to pay their bills in a
timely manner, or may even become insolvent, which could negatively impact our business and results of operations.
These risks may be elevated with respect to our interactions with fiscally-challenged government payors, or with third
parties with substantial exposure to such payors. For example, we have significant outstanding receivable balances that
are dependent upon either direct or indirect payment by various governmental and non-governmental entities across the
world. The ultimate payment of these receivables is dependent on the ability of these governments to maintain liquidity
primarily through borrowing capacity, particularly in the EU. If certain governments are not able to maintain access to
liquidity through borrowing capacity, the ultimate payment of their respective portion of outstanding receivables could be
at risk and impact profits and cash flow.
Economic conditions in our markets may also deteriorate due to epidemics or pandemics; natural and man-made
disasters, including climatic events (including any potential effect of climate change), power grid failures, acts of war or
terrorism, political unrest, fires or explosions; and other external factors over which we have no control.
To the extent that economic and financial conditions directly affect consumers, some of our businesses, including the
elective surgical and contact lens businesses, may be particularly sensitive to declines in consumer spending, as the costs
of elective surgical procedures and discretionary purchases of contact lenses are typically borne by individuals with limited

10
reimbursement from their medical insurance providers or government programs. For example, while cataract surgery
involving our monofocal IOLs is generally fully covered by medical insurance providers or government reimbursement
programs, implantation of certain of our AT-IOL products may only be partially covered, with the individual paying out-of-
pocket for the non-covered component. Accordingly, individuals may be less willing to incur the costs of these private pay
or discretionary procedures or purchases in weak or uncertain economic conditions and may elect to forgo such
procedures or products or to trade down to more affordable options.
Significant breaches of data security or disruptions of information technology systems and the use of Internet, social
media and mobile technologies could adversely affect our business and expose people's personal information.
We are heavily dependent on critical, complex and interdependent information technology systems, including Internet-
based systems, to support our business processes. In addition, Alcon and our associates rely on the Internet, social media
tools and mobile technologies as a means of communication and to gather information, which can include personal
information. We are also increasingly seeking to develop technology-based products to improve patient welfare in a
variety of ways, which could also result in us gathering personal information about patients and others electronically.
The size and complexity of these information technology systems, and, in some instances, their age, make them
potentially vulnerable to external or internal security incidents, breakdowns, malicious intrusions, cybercrimes, including
state-sponsored cybercrimes, malware, misplaced or lost data, programming or human errors, or other similar events.
Furthermore, because cyber-threats continue to evolve, it is becoming increasingly difficult to detect and successfully
defend against them. Consequently, there is a risk that a breach remains undetected for a period of time.
We also currently rely on a number of older legacy information systems that are increasingly difficult to maintain as we
continue to upgrade and implement our new systems. By attempting to implement new systems while maintaining the
legacy systems, we may be unable to integrate all of our systems to work together. See "—We may experience difficulties
implementing our new enterprise resource planning system" below for more details on our ongoing implementation of a
new Enterprise Resource Planning ("ERP") system.
Like many companies, our technology landscape has become more complex as we also rely on our third party partners to
be cyber-resilient. We have experienced certain adverse incidents and expect to continue to experience them in the future
and, as the external cyber-attack threat only keeps growing, we may not be able to prevent future breakdowns or
breaches in our systems (or those of our third party partners) and we may not be able to prevent such events from having
a material adverse effect on our business, financial condition, results of operations or reputation.
Any disruptive event could negatively impact important business processes, such as the conduct of scientific research and
clinical trials, the submission of the results of such efforts to health authorities in support of requests for product
approvals, the functioning of our manufacturing and supply chain processes, our compliance with legal obligations and
our other key business activities, including our associates' ability to communicate with one another and with third parties.
These risks were heightened during the ongoing pandemic with our office-based associates largely working from home.
Such potential information technology issues could also lead to the loss of important information such as trade secrets or
other intellectual property and could accelerate the development or manufacturing of competing products by third
parties. Furthermore, malfunctions in software or in devices that make significant use of information technology, including
our surgical equipment, could lead to a risk of harm to patients.
In addition, our routine business operations, including through the use of information technologies such as the Internet,
social media, mobile technologies and technology-based medical devices like our surgical equipment, also increasingly
involve our gathering personal information (including sensitive personal information) about patients, vendors, customers,
associates, collaborators and others. Breaches of our systems or those of our third-party contractors, or other failures to
protect such information, could expose such people's personal information to unauthorized persons. Any such event
could give rise to significant potential liability and reputational harm, including potentially substantial monetary penalties.
We also make significant efforts to ensure that any international transfers of personal data are done in compliance with
applicable law. We are subject to certain privacy laws and regulations that continue to evolve, including Swiss privacy laws,
the EU's General Data Protection Regulation and the California Consumer Privacy Act, which include operational and
compliance requirements that are different than those previously in place and also includes significant penalties for non-
compliance. Failure to comply with these laws could lead to significant liability. In addition, any additional restraints that
may be placed on our ability to transfer such data could have a material adverse effect on our business, financial
condition, results of operations and reputation.
We also use Internet, social media and mobile tools as a means to communicate with the public, including about our
products or about the diseases our products are intended to treat. However, such uses create risks, such as the loss of
trade secrets or other intellectual property. In addition, there continue to be significant uncertainties as to the rules and
regulations that apply to such communications, and as to the interpretations that health authorities will apply in this
context to the rules that do exist. As a result, despite our efforts to comply with applicable rules and regulations, there is a
significant risk that our use of Internet, social media and mobile technologies for such purposes may cause us to
nonetheless be found in violation of them.

11
Breaches of data security, technology disruptions, privacy violations, or similar issues could cause the loss of trade secrets
or other intellectual property, expose personal information, interrupt our operations, all of which could result in
enforcement actions or liability, including potential government fines, claims for damages and shareholders' litigation. Any
such events could require us to expend significant resources beyond those we already invest to further modify or enhance
our protective measures, to remediate any damage and to enable the continuity of our business.
Financial markets, including inflation and volatile exchange rates, are unpredictable.
Financial markets may adversely affect our earnings, the return on our financial investments and the value of some of our
assets. For example, inflation could accelerate, which could lead to higher interest rates, increasing our costs of raising
capital. Uncertainties around future central bank and other economic policies in the United States and EU, as well as high
debt levels in certain other countries, could also impact world trade. Sudden increases in economic, currency or financial
market volatility in different countries have also impacted, and may continue to impact, our business and results of
operations, including the value of our investments in our pension plans. See "—We may be underestimating our future
pension and other post-employment benefit plan obligations" below.
Changes in exchange rates between the US dollar, our reporting currency and other currencies can also result in
significant increases or decreases in our reported sales, costs and earnings as expressed in US dollars, and in the reported
value of our assets, liabilities and cash flows. Despite any measures we may undertake in the future to reduce, or hedge
against, foreign currency exchange risks, because a significant portion of our earnings and expenditures are in currencies
other than the US dollar, and the fact that our expenditures in Swiss francs and US dollars are significantly higher than our
revenue in Swiss francs and US dollars, respectively, any such exchange rate volatility may negatively and materially
impact our business, results of operations and financial condition, and may impact the reported value of our net sales,
earnings, assets and liabilities. For more information on the effects of currency fluctuations on our Consolidated Financial
Statements and on how we manage currency risk, see "Item  5. Operating and Financial Review and Prospects—5.A.
Operating Results—Effects of Currency Fluctuations" and "Item 11. Quantitative and Qualitative Disclosures About Market
Risk".
Countries facing financial difficulties, including countries experiencing high inflation rates and highly indebted countries
facing large capital outflows, may impose controls on the exchange of foreign currency. Such exchange controls could limit
our ability to distribute retained earnings from our local affiliates, or to pay intercompany payables due from those
countries.
Ongoing consolidation among distributors, retailers and healthcare provider organizations could increase both the
purchasing leverage of key customers and the concentration of credit risk.
Increasingly, a significant portion of our global sales are made to a relatively small number of distributors, retail chains and
other purchasing organizations, as consolidation and vertical integration have the potential to disrupt existing channels.
The recent trend, which is present globally including in the United States (our largest market), has been toward further
consolidation among distributors, retailers and other eye care industry customers, such as eye care professionals,
including through the acquisition of consolidated ophthalmology practices by private equity and other venture fund
investors. As a result, our customers are gaining additional purchasing leverage, which increases the pricing pressures
facing our businesses.
In our surgical business, healthcare providers, physician practices, hospitals and surgery centers around the world
continue to consolidate in response to declining reimbursement rates and intensifying pressure to reduce healthcare
delivery expenses. In vision care, private label growth and retailer-branded lenses may drive the commoditization of
contact lenses and further boost the bargaining power of our distributors and retailers. This consolidation is increasing the
ability of large groups to negotiate price, accelerating the transition of the decision maker from physicians to cost-focused
professional buyers and potentially increasing price transparency or price referencing in instances of consolidation across
borders.
Further, as our customers consolidate, if one or more of our major customers experienced financial difficulties, the effect
on us would be substantially greater than in the past, and could include a substantial loss of sales and an inability to
collect amounts owed to us.
If we fail to properly educate and train healthcare providers on our products, then customers may not buy our products.
We market our surgical products to healthcare providers, including ECPs, public and private hospitals, ambulatory surgical
centers, eye clinics and ophthalmic surgeons' offices and group purchasing organizations and our vision care products to
retailers and distributors. We have developed, and strive to maintain, strong relationships with members of each of these
groups who assist in product research and development and advise us on how to satisfy the full range of consumer and
surgeon needs. We rely on these groups to recommend our products to their patients and to other members of their
organizations. Travel restrictions such as those due to the COVID-19 pandemic have increased the difficulty in maintaining
these strong relationships.

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Contact lens and lens care consumers have a tendency not to switch products regularly and are repeat consumers. As a
result, the success of these products relies on an ECP’s initial recommendation of our products, which may be based on
our ability to educate the ECP on our products. Even if we are successful at educating ECPs on our products, ECPs may
continue to lose influence in the consumer's selection of contact lenses, which would cause our business to become more
dependent upon the success of educating consumers directly. If we had to increase our direct-to-consumer marketing, we
could potentially face challenges in maintaining our good relationships with ECPs, who may view our direct-to-consumer
marketing as a threat to their business.
In our surgical business, ophthalmic surgeons play a significant role in determining the course of treatment and,
ultimately, the type of products that will be used to treat a patient for cataracts, vitreoretinal conditions, refractive errors
and glaucoma, among other things. As a result, it is important for us to properly and effectively market our surgical
products to surgeons. Acceptance of our surgical products also depends on our ability to train ophthalmic surgeons and
their clinical staff on the safe and appropriate use of our products, which takes time. This training process may take longer
than expected and may therefore affect our ability to increase sales. Following completion of training, we rely on the
trained ophthalmic surgeons to advocate the benefits of our products in the broader marketplace. Convincing ophthalmic
surgeons to dedicate the time and energy necessary for adequate training is challenging, and we may not be successful in
these efforts. If we are not successful in convincing ophthalmic surgeons of the merits of our products or educating them
on the use of our products, they may not use our products and we will be unable to fully commercialize or profit from
such products.
Our inability to forecast demand accurately may adversely affect our sales and earnings and add to sales variability
from quarter to quarter.
We balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of
inventory obsolescence because of changing customer requirements, fluctuating commodity prices, changes to our
products, product transfers or the life cycle of our products. To successfully manage our inventories, we must estimate
demand from our customers and produce products in sufficient quantity that substantially corresponds to that demand. If
we fail to adequately forecast demand for any product, or fail to determine the optimal product mix for production
purposes, we may face production capacity issues in manufacturing sufficient quantities of a given product, such as our
IOLs, daily contact lenses or certain ocular health products. In addition, failures in our information technology systems,
issues created by the implementation of our new ERP system or human error could also lead to inadequate forecasting of
our overall demand or product mix.
As the number of unique products (SKUs) we offer grows, particularly an increasing number of IOL and contact lens styles
with varying diopters, the demand forecasting precision required for us to avoid production capacity issues will also
increase. Accordingly, the continued proliferation of unique SKUs in our surgical and vision care portfolios could increase
the risk of product unavailability and lost sales. Moreover, an increasing number of SKUs could increase global inventory
requirements, especially for consigned products such as IOLs, negatively impacting our working capital performance and
leading to write-offs due to obsolescence and expired products.
Compounding the risk of inaccurate forecasts, the manufacturing process for our products has lengthy lead times to
acquire and install new equipment and product lines to ramp up production. Thus, if we fail to adequately forecast
demand, then we may be unable to scale production in a timely manner to meet unexpected higher demand.
Finally, a significant portion of our vision care products are sold to major healthcare distributors and major retail chains in
certain markets. Consequently, our sales and quarterly growth comparisons, as well as our estimates for required
inventory levels, may be affected by fluctuations in the buying patterns of such buyers. These fluctuations may result from
seasonality, pricing, a recall of a competitor’s product, large retailers' and distributors' buying decisions or other factors. If
we overestimate demand and produce too much of a particular product, we face a risk of inventory obsolescence, leaving
us with inventory that we cannot sell profitably or at all. By contrast, if we underestimate demand and produce insufficient
quantities of a product, we could be forced to choose between producing additional unexpected quantities of that product
at a higher price or foregoing sales.
Disruptions in our global supply chain or important facilities could cause production interruptions, delays and
inefficiencies.
We are engaged in manufacturing and sourcing of products and materials on a global scale. Our operations and those of
our suppliers could be disrupted by a number of factors, including: disruptions in logistics; strikes and other labor
disputes; loss or impairment of key manufacturing sites; loss of key suppliers; supplier capacity constraints; raw material
and product quality or safety issues; industrial accidents or other occupational health and safety issues; the impact on our
suppliers of tighter credit or capital markets; epidemics and pandemics; and natural and man-made disasters, including
climatic events (including any potential effect of climate change), power grid failures, acts of war or terrorism, political
unrest, fires or explosions and other external factors over which we have no control.

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In addition, we single-source or rely on limited sources of supply for many components, raw materials and production
services, such as sterilization, used in the production of our products. The loss of one of these suppliers or the inability of
any such supplier to meet performance and quality specifications, requested quantities or delivery schedules could cause
our sales and profitability to decline and have a negative impact on our customer relations. For example, some of our
products and product components are sterilized using ethylene oxide (“EtO”), which we purchase from large-scale
suppliers. Concerns about the impact of EtO on the environment when released at unsafe levels have led to regulatory
enforcement activities against EtO suppliers, including closures of their facilities. Any facility closures or disruption to the
operations of these EtO suppliers could delay or prevent our ability to commercialize our products and lead to product
back orders for our customers, which could have a materially negative impact on our sales and profitability. In addition,
any regulatory enforcement activities against us for our use of EtO could result in financial, legal, business and
reputational harm to us. The need to sterilize equipment and personal protective equipment to combat COVID-19 has
exacerbated the shortage of EtO. Moreover, a price increase from a supplier where we do not have a supply alternative
could cause our profitability to decline if we cannot increase our prices to our customers. To ensure sufficient supply, we
may determine that we need to provide financing to some of our single-source suppliers, which could increase our
financial exposure to such suppliers.
Finally, in some cases, we manufacture our products at a single manufacturing facility. In many cases, regulatory approvals
of our products are limited to a specifically approved manufacturing facility. If we fail to produce enough of a product at a
facility, or if our manufacturing process at that facility is disrupted, we may be unable to deliver that product to our
customers on a timely basis. Problems may arise during the manufacturing process for a variety of reasons, including
technical, labor or other difficulties, equipment malfunction, contamination, failure to follow specific protocols and
procedures, destruction of or damage to any facility (as a result of a natural or man-made disaster, use and storage of
hazardous materials or other events), power grid failures, or other reasons. In the event of a quality control issue, we may
voluntarily, or our regulators may require us to, close a facility indefinitely. If any such problems arise, we may be unable
to purchase substitute products from third-party manufacturers to make up any resulting shortfall in the production of a
product, as such third-party manufacturers may only exist in limited numbers or appropriate substitutes may not be
available. This risk is particularly relevant with respect to products for which we represent a substantial portion of the
market, such as vitreoretinal equipment and other vitreoretinal-related products. A failure to deliver products on a timely
basis could lead to customer dissatisfaction and damage to our reputation. Significant delays in the delivery of our
products or a delay in the delivery of a key product could also negatively impact our sales and profitability.
Our existing debt may limit our flexibility to operate our business or adversely affect our business and our liquidity
position.
We have outstanding debt of $4.1 billion as of December 31, 2020, and we may incur additional indebtedness in the future
for various reasons, including fluctuations in operating results, capital expenditures and potential acquisitions.
Our indebtedness may:
▪ make it difficult for us to satisfy our obligations, including making interest payments on our debt obligations;
▪ require us to dedicate a portion of our cash flows to payments on our debt, reducing our ability to use our cash
flows to fund capital expenditures, BD&L or other strategic transactions, working capital and other general
operational requirements, or to pay dividends to our shareholders;
▪ limit our flexibility to plan for and react to changes in our business;
▪ negatively impact our credit rating and increase the cost of servicing our debt;
▪ place us at a competitive disadvantage relative to some of our competitors that have less debt than us;
▪ increase our vulnerability to general adverse economic and industry conditions, including changes in interest
rates or a downturn in our business or the economy; and
▪ make it difficult to refinance our existing debt or incur new debt on terms that we would consider to be
commercially reasonable, if at all.
The occurrence of any one of these events could have a material adverse effect on our business, financial condition or
result of operations or cause a significant decrease in our liquidity and impair our ability to pay amounts due on our
indebtedness.
Investigations by government authorities under the FCPA and other applicable anti-corruption laws may result in
substantial fines and other adverse effects.
On June 25, 2020, Alcon entered into a three-year Deferred Prosecution Agreement ("DPA") with the U.S. Department of
Justice, or DoJ, regarding a charge that Alcon Pte Ltd. conspired to falsify financial books and records in violation of the US
Foreign Corrupt Practices Act of 1977, as amended, or FCPA. The charge relates to payments made by a former distributor

14
to health care providers in Vietnam between 2007 and 2014. Alcon agreed to pay the DoJ a penalty of $8.925 million, for
which Novartis has indemnified Alcon under the Separation and Distribution Agreement.
Under the DPA, the DoJ has agreed to defer prosecution for three years of the facts acknowledged by us that occurred
between 2007 and 2014, after which period the charges will be dismissed with prejudice if we do not violate the terms of
the DPA. If the DoJ determines that we have breached the DPA, the length of the DPA could be extended and/or we could
be subject to prosecution and additional fines or penalties, including the deferred charges. Criminal prosecution or
sanctions could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Uncertainty relating to the nature and timing of the potential phasing out of LIBOR and agreement on any new
alternative reference rates may adversely impact our borrowing costs.
On March 6, 2019, we entered into a $0.8 billion unsecured five-year term loan facility ("Facility B") and a $1.0 billion
unsecured five-year committed multicurrency revolving credit facility (the "Revolving Facility”). The Revolving Facility was
undrawn as of December 31, 2020. Facility B bears an interest rate equal to the interest rate benchmark (USD prevailing
London Interbank Offered Rate (“LIBOR”)), plus an applicable margin. In February 2021, the Revolving Facility term was
extended to March 2026.
On July 27, 2017, the UK’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop
persuading or compelling banks to submit rates for the calculation of LIBOR after 2021. The announcement indicates that
the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. It is impossible to predict
whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR, whether
LIBOR rates will cease to be published or supported before or after December 2021 or whether any additional reforms to
LIBOR may be enacted in the UK or elsewhere.
Our Facilities Agreement provides for an alternative reference rate in the event LIBOR is discontinued. The alternative
reference rate is based on the rate for which each of three reference banks could fund itself in USD for the relevant period
with reference to the unsecured wholesale funding market. This alternative reference rate may perform differently than
LIBOR for a number of reasons, including the fact that LIBOR is calculated using a greater number of participating banks.
As a result, we may incur significant costs to transition our borrowing arrangements from LIBOR, which may have an
adverse effect on our results of operations.
We may need to obtain additional financing which may not be available or, if it is available, may not be on favorable
terms and may result in dilution of our then-existing shareholders.
We may need to raise additional funds to:
▪ finance unanticipated working capital requirements or refinance our existing indebtedness;
▪ develop or enhance our infrastructure and our existing products and services;
▪ maintain sufficient liquidity as a result of the impact from COVID-19;
▪ engage in mergers and acquisitions or other strategic BD&L transactions;
▪ fund strategic relationships; and
▪ respond to competitive pressures.
If we raise additional funds by issuing equity or convertible debt securities, the percentage ownership of our then-existing
shareholders may be diluted, and holders of these securities may have rights, preferences or privileges senior to those of
our then-existing shareholders.
Our reliance on outsourcing key business functions to third parties heightens the risks faced by our businesses.
We outsource the performance of certain key business functions to third parties and invest a significant amount of effort
and resources into doing so. Such outsourced functions can include research and development collaborations, clinical trial
activities, manufacturing operations, human resources, warehousing and distribution activities, certain finance functions,
submission of regulatory applications, marketing activities, data management and others. Outsourcing of services to third
parties could expose us to suboptimal quality of service delivery or deliverables and potentially result in repercussions
such as missed deadlines or other timeliness issues, erroneous data, supply disruptions, non-compliance (including with
applicable legal or regulatory requirements and industry standards) and/or reputational harm, with potential negative
effects on our results.
We continue to rely on our former parent for certain key business functions, including certain transitional services that are
covered under the Transitional Services Agreement, certain manufacturing needs that are covered under the
Manufacturing and Supply Agreement and certain transitional distribution services that are covered under a Transitional
Distribution and Services Agreement. For example, we continue to rely on our former parent company for the production
of our entire supply of viscoelastics. We currently sell viscoelastics on a standalone basis for procedures using our

15
products and also use them as a component in our surgical pack offerings. As a result, a shortage in our supply of
viscoelastics could not only cause a failure in our ability to meet our commitments to our customers, but could also have
significant collateral impacts on other parts of our business due to related decreases in the rates of procedures requiring
viscoelastics that feature our equipment or other products.
Ultimately, if the third parties, including our former parent company, fail to meet their obligations to us, we may lose our
investment in the collaborations and fail to receive the expected benefits of these arrangements. Contractual remedies
may be inadequate to compensate us for the damage to our business or lost profits. In addition, many of the companies
to which we outsource key business functions may have more limited resources compared to us, and, in particular, may
not have internal compliance resources comparable to those within our organization. Should any of these third parties fail
to carry out their contractual duties or regulatory obligations or fail to comply with the law, including laws relating to
export and trade controls, or should they act inappropriately in the course of their performance of services for us, there is
a risk that we could be held responsible for their acts, that our reputation may suffer and that penalties may be imposed
upon us. Any such failures by third parties could have a material adverse effect on our business, financial condition,
results of operations or reputation.
Even if we protect our intellectual property to the fullest extent permitted by applicable law, our competitors and other
third parties could develop and commercialize products similar or identical to ours, which could impair our ability to
compete.
We rely on a combination of patents, trademarks and copyrights to protect our intellectual property. The scope, strength
and duration of those intellectual property rights can vary significantly from product to product and country to country.
We also rely on a variety of trade secrets, know-how and other confidential information to supplement these protections.
In the aggregate, these intellectual property rights are of material importance to our business.
The protections afforded by these intellectual property rights may limit the ability of competitors to commercialize
products covered by the applicable intellectual property rights, but they do not prevent competitors from marketing
alternative products that compete with our products. In addition, these intellectual property rights may be challenged by
third parties and regulatory agencies, and intellectual property treated as trade secrets and protected through
confidentiality agreements may be independently developed by third parties and/or subject to misappropriation by
others. Furthermore, in certain countries, particularly in China, due to ambiguities in the law and enforcement difficulties,
intellectual property rights may not be as effective as in Western Europe or the United States. Therefore, even if we protect
our intellectual property to the fullest extent permitted by applicable law, competitors and other third parties may
nonetheless develop and commercialize products similar or identical to ours, which could impair our ability to compete
and have an adverse effect on our business, financial condition and results of operations.
Unauthorized or illegal distribution may harm our business and reputation.
In the United States and elsewhere, our products are subject to competition from lower priced versions of our products
and competing products from countries where there are government imposed price controls or other market dynamics
that make the products lower priced. Despite government regulations aimed at limiting such imports, the volume of
imports may continue to rise in certain countries. This importation may adversely affect our profitability in the United
States and elsewhere and could become more significant in the future.
In addition, our industry continues to be challenged by the vulnerability of distribution channels to counterfeiting. Reports
of increased levels of counterfeiting could materially affect consumer confidence in the authentic product and harm our
business or lead to litigation.
Litigation, including product liability lawsuits, and governmental investigations may harm our business or otherwise
distract our management.
We, from time to time, are, and may in the future be, subject to various investigations and legal proceedings that arise or
may arise.
We also periodically receive inquiries from antitrust and competition authorities in various jurisdictions and, from time to
time, are named as a defendant in antitrust lawsuits. For example, since the first quarter of 2015, more than 50 putative
class action complaints have been filed in several courts across the US naming as defendants contact lens manufacturers,
including Alcon, and alleging violations of federal antitrust law, as well as the antitrust, consumer protection and unfair
competition laws of various states, in connection with the implementation of unilateral price policies by the defendants in
the sale of contact lenses. The cases have been consolidated in the Middle District of Florida by the Judicial Panel on
Multidistrict Litigation and the claims are being vigorously contested. See "Item 8. Financial Information—8.A. Consolidated
Statements and Other Financial Information—Legal Proceedings".
In addition, from time to time, we are named as a defendant in product liability lawsuits and, to the extent we are, we may
in the future incur material liabilities relating to such product liability claims, including claims alleging product defects and/
or alleged failure to warn of product risks. The risk of material product liability litigation is increased in connection with

16
product recalls and voluntary market withdrawals. We have voluntarily taken products off the market in the past, including
global voluntary market withdrawal of the CyPass micro-stent. The combination of our insurance coverage, cash flows and
provisions may not be adequate to satisfy product liabilities that we may incur in the future. Successful product liability
claims brought against us or recalls of any of our products could have a material adverse effect on our business, results of
operations or our financial condition.
Because of our extensive international operations, we could be adversely affected by violations of worldwide anti-bribery
laws, including those that prohibit companies and their intermediaries from making improper payments to government
officials or other third parties for the purpose of obtaining or retaining business, such as the US Foreign Corrupt Practices
Act (the “FCPA”), and laws that prohibit commercial bribery. Our internal control policies and procedures may not always
protect us from reckless or criminal acts committed by our associates or agents. Violations of these laws, or allegations of
such violations, could disrupt our business and adversely affect our reputation and our business, results of operations,
cash flows and financial condition.
Substantial, complex or extended litigation could cause us to incur large expenditures, affect our ability to market and
distribute our products and distract our management. For example, intellectual property litigation in which we are named
as a defendant from time to time could result in significant damage awards and injunctions that could prevent the
manufacture and sale of the affected products or require us to make significant royalty payments to continue to sell the
affected products. Lawsuits by associates, shareholders, customers or competitors, or potential indemnification
obligations and limitations of our director and officer liability insurance, could be very costly and substantially disrupt our
business. Disputes with such companies or individuals from time to time are not uncommon, and we may be unable to
resolve such disputes on terms favorable to us.
Even meritless claims could subject us to adverse publicity, hinder us from securing insurance coverage in the future or
require us to incur significant legal costs. As a result, significant claims or legal proceedings to which we are a party could
have a material adverse effect on our business, prospects, financial condition and results of operations.
Failure to comply with law, legal proceedings and government investigations may have a significant negative effect on
our results of operations.
We are obligated to comply with the laws of all of the countries around the world in which we operate and sell products.
These laws cover an extremely wide and growing range of activities. Such legal requirements can vary from country to
country and new requirements may be imposed on us from time to time as government and public expectations
regarding acceptable corporate behavior change, and enforcement authorities modify interpretations of legal and
regulatory provisions and change enforcement priorities. In addition, our associates, independent contractors,
consultants, commercial partners and vendors may engage in misconduct or other improper activities, including
noncompliance with regulatory standards and requirements, in violation of such laws and public expectations.
For example, we are faced with increasing pressures, including new laws and regulations from around the world, to be
more transparent with respect to how we do business, including with respect to our interactions with healthcare
professionals and organizations. These laws and regulations include requirements that we disclose payments or other
transfers of value made to healthcare professionals and organizations, including by our associates or third parties acting
on our behalf, as well as with regard to the prices for our products. We are also subject to certain privacy laws, including
Swiss privacy laws, the EU's General Data Protection Regulation and the California Consumer Privacy Act, which include
operational and compliance requirements that are different than those previously in place and also includes significant
penalties for non-compliance.
In addition, we have significant activities in a number of developing countries around the world, both through our own
associates and through third parties retained to assist us. In some of these countries, a culture of compliance with law may
not be as fully developed as in other countries.
To help us in our efforts to comply with the many requirements that impact us, we have a significant global ethics and
compliance program in place, and we devote substantial time and resources to efforts to conduct our business in a lawful
and publicly acceptable manner. Nonetheless, our ethics and compliance program may be insufficient or associates may
fail to comply with the training they received, and any actual or alleged failure to comply with law or with heightened
public expectations could lead to substantial liabilities that may not be covered by insurance, or to other significant losses,
and could affect our business, financial position and reputation.
In particular, in recent years, there has been a trend of increasing government investigations, legal proceedings and law
enforcement activities against companies and executives operating in our industry. Increasingly, such activities can involve
criminal proceedings and can retroactively challenge practices previously considered to be acceptable. For instance, in
2017 and 2018, Alcon and Novartis, as well as certain present and former executives and associates of Alcon and Novartis,
received document requests and subpoenas from the DoJ and the SEC requesting information concerning Alcon
accounting, internal controls and business practices in Asia and Russia, including revenue recognition for surgical
equipment and related products and services and relationships with third-party distributors, both before and after Alcon

17
became part of the Novartis Group. The investigations by the DoJ and the SEC have concluded. Under our final settlement
with the DoJ, we are subject to a three-year deferred prosecution agreement. Our failure to comply with the terms of the
deferred prosecution agreement with the DoJ could result in resumed prosecution and other regulatory sanctions and
could otherwise negatively affect our operations.
For additional information, including with respect to certain Novartis obligations to indemnify Alcon, see "Item 8. Financial
Information—8.A. Consolidated Statements and Other Financial Information—Legal Proceedings".
Such proceedings are inherently unpredictable, and large judgments or penalties sometimes occur. As a consequence, we
may in the future incur judgments or penalties that could involve large cash payments, including the potential repayment
of amounts allegedly obtained improperly and other penalties, including enhanced damages. In addition, such
proceedings may affect our reputation, create a risk of potential exclusion from government reimbursement programs
and may lead to civil litigation. As a result, having taken into account all relevant factors, we may in the future enter into
major settlements of such claims without bringing them to final legal adjudication by courts or other such bodies, despite
having potentially significant defenses against them, in order to limit the risks they pose to our business and reputation.
Such settlements may require us to pay significant sums of money and to enter into corporate integrity or similar
agreements intended to regulate company behavior for a period of years, which can be costly to operate under.
Any such judgments or settlements, and any accruals that we may take with respect to potential judgments or settlements,
could have a material adverse impact on our business, financial condition or results of operations, as well as on our
reputation.
We may implement product recalls or voluntary market withdrawals of our products.
The manufacturing and marketing of medical devices, including surgical equipment and instruments, involve an inherent
risk that our products may prove to be defective and cause a health risk. We are also subject to a number of laws and
regulations requiring us to report adverse events associated with our products. Such adverse events and potential health
risks identified in our monitoring efforts or from ongoing clinical studies may lead to voluntary or mandatory market
actions, including recalls, product withdrawals or changes to the instructions for using our devices.
Governmental authorities throughout the world, including the FDA, have the authority to require the recall of our
commercialized products in the event of material deficiencies or defects in, for example, design, labeling or manufacture.
We may also voluntarily initiate certain field actions, such as a correction or removal of our products in the future as a
result of component failures, manufacturing errors, design or labeling defects or other deficiencies and issues. If a
correction or removal of one of our devices is initiated to reduce a health risk posed by the device, or to remedy a violation
of the Federal Food, Drug, and Cosmetic Act ("FDCA") caused by the device that may present a risk to health, the correction
or removal must be reported to the FDA. Similarly, field actions conducted for safety reasons in the European Economic
Area must be reported to the regulatory authority in each country where the field action occurs.
We have voluntarily taken products off the market in the past, including the global voluntary market withdrawal of the
CyPass micro-stent. In the year ended December 31, 2018, we recognized an impairment charge of $337 million in relation
to the CyPass micro-stent market withdrawal. Based on this experience, we believe that the occurrence of a recall could
result in significant costs to us, potential disruptions in the supply of our products to our customers and adverse publicity,
all of which could harm our ability to market our products. A recall of one of our products or a similar competing product
manufactured by another manufacturer could impair sales and subsequent regulatory approvals of other similar products
we market and lead to a general loss of customer confidence in our products. A product recall could also lead to a health
authority inspection or other regulatory action or to us being named as a defendant in lawsuits. See "—Litigation, including
product liability lawsuits, and governmental investigations may harm our business or otherwise distract our management"
above.
We may experience difficulties implementing our new enterprise resource planning system.
We are engaged in a multi-year implementation of a new ERP system across our global commercial and manufacturing
operations, which is intended to enhance and streamline our existing ERP system. ERP implementations are inherently
complex and time-consuming projects that involve substantial expenditures on system software, implementation activities
and business process reengineering. Any significant disruption or deficiency in the design and implementation of our new
ERP system could adversely affect our ability to process orders, ship our products, provide services and customer support,
fulfill contractual obligations or otherwise operate our business. For additional information, see "Item  4. Information on
the Company—4.A. History and Development of the Company—Significant Acquisitions, Dispositions and other Events".
We may be unable to attract and retain qualified personnel.
We are highly dependent upon skilled personnel in key parts of our organization, and we invest heavily in recruiting,
training and retaining qualified individuals, including significant efforts to enhance the diversity of our workforce. The loss
of the service of key members of our organization—including senior members of our scientific and management teams,

18
high-quality researchers and development specialists and skilled personnel in developing countries—could delay or
prevent the achievement of major business objectives.
In addition, our ability to hire qualified personnel also depends on the flexibility to reward superior performance and to
pay competitive compensation. Laws, regulations and customary practice on executive compensation, including legislation
and customary practice in our home country, Switzerland, may restrict our ability to attract, motivate and retain the
required level of qualified personnel. For example, pay benchmarks for Swiss and other European companies may be
inconsistent with the current market in the United States, making it more difficult to recruit US talent. Further, certain
associates will be required to travel frequently between Switzerland and the US. These associates may be unwilling or
unable to make such a commitment. Finally, changes to immigration policies in the numerous countries in which we
operate, including the United States, as well as restrictions on global travel as a result of local or global public health crises
requiring quarantines or other precautions to limit exposure to infectious diseases, may limit our ability to hire or retain
talent in, or transfer talent to, specific locations.
We may be underestimating our future pension and other post-employment benefit plan obligations.
We sponsor pension and other post-employment benefit plans in various forms. While most of our plans are now defined
contribution plans, certain of our associates remain under defined benefit plans. For these defined benefit plans, we are
required to make significant assumptions and estimates about future events in calculating the present value of expected
future plan expenses and liabilities. These include assumptions used to determine the discount rates we apply to
estimated future liabilities and rates of future compensation increases. Assumptions and estimates we use may differ
materially from the actual results we experience in the future, due to changing market and economic conditions, higher or
lower withdrawal rates, or longer or shorter life spans of participants, among other variables. For example, in 2020, a
decrease in the interest rate we apply in determining the present value of expected future total defined benefit plan
obligations (consisting of pension and other post-employment benefit obligations) of one-quarter of one percent would
have increased our year-end defined benefit obligation by $46 million. Any differences between our assumptions and
estimates and our actual experience could require us to make additional contributions to our pension funds. Further,
additional employer contributions might be required if plan funding falls below the levels required by local rules.
Our operations in emerging markets, particularly China, expose us to heightened risks associated with conditions in
those markets.
Economic, social and political conditions, laws, practices and local customs vary widely among the countries, particularly in
emerging markets, in which we sell our products. Our operations in emerging markets, particularly China, are subject to a
number of heightened risks and potential costs, including lower profit margins, less stringent protection of intellectual
property and economic, political and social uncertainty. For example, many emerging markets have currencies that
fluctuate substantially. If currencies devalue and we cannot offset with price increases, our products may become less
profitable. Inflation in emerging markets also can make our products less profitable and increase our exposure to credit
risks. We have previously experienced currency fluctuations, unstable social and political conditions, inflation and volatile
economic conditions in emerging markets, which have impacted our profitability in the emerging markets in which we
operate and we may experience such impacts in the future.
Further, in many emerging markets, average income levels are relatively low, government reimbursement for the cost of
healthcare products and services is limited and prices and demand are sensitive to general economic conditions. These
challenges may prevent us from realizing the expected benefits of our investments in such emerging markets, which could
have an adverse impact on our business, financial condition and results of operations.
Regulatory clearance and approval processes for our products are expensive, time-consuming and uncertain, and the
failure to obtain and maintain required regulatory clearances and approvals could prevent us from commercializing our
products.
Our businesses are subject to varying degrees of governmental regulation in the countries in which we operate, and the
general trend is toward increasingly stringent regulation. The exercise of broad regulatory powers by the FDA continues to
result in increases in the amounts of testing and documentation required for the commercialization of regulated products
and a corresponding increase in the expense of product introduction. Similar trends are also evident in the EU and in
other markets throughout the world. Compliance with these laws and regulations is costly and materially affects our
business. Among other effects, health care regulations substantially increase the time, difficulty and costs incurred in
obtaining and maintaining approval to market newly developed and existing products.
Most of our products are regulated as medical devices and face difficult development and approval processes in most
jurisdictions we operate in, particularly in the US and EU; however other products may be regulated as other categories
such as lasers, drug products, dietary supplements and medical foods. We discuss these regulations more thoroughly
"Item 4. Information on the Company—4.B. Business Overview—Government Regulation—Product Approval and
Monitoring".

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The process of developing new products and obtaining necessary FDA clearance or approval, CE marking, or other
regulatory marketing authorization is lengthy, expensive and uncertain. Our potential products could take a significantly
longer time than we expect to gain marketing authorization or may never gain such marketing authorization. Regulatory
authorities may require additional testing or clinical data to support marketing authorization, delaying authorization and
market entry of our products. Even if the FDA or another regulatory agency or notified body approves a product, the
approval may limit the indicated uses for a product, may otherwise limit our ability to promote, sell and distribute a
product or may require post-marketing studies or impose other post-marketing obligations. We may be unable to obtain
the necessary regulatory clearances or approvals for any product on a timely basis or at all. If a regulatory authority delays
authorization of a potentially significant product, our market value and operating results may decline. Similarly, if we are
unable to obtain regulatory approval or CE marking of our products, we will not be able to market these products, which
would result in a decrease in our sales.
We may be unable to successfully maintain the registrations, licenses, clearances or other authorizations we have received
or may receive in the future. We also routinely make minor modifications to our products, labeling, instructions for use,
manufacturing process and packaging that may trigger a requirement to notify regulatory authorities or to update such
registrations or authorizations. This may subsequently require us to manage multiple versions of individual products
around the world, depending on the status of any re-registration approvals. Managing such multiple versions may require
additional inventory in the form of "bridging stock", extensive redress operations and inventory increases that could
exceed our manufacturing capacity or supply chain ability at the time. This could result in prolonged product shortages
that could negatively impact our sales, both in terms of any unavailable products and the potential loss of customers that
opt for another supplier.
The loss of previously received clearances or approvals, or the failure to comply with existing or future regulatory
requirements could also have a material adverse effect on our business. For example, we offer custom surgical pack
products that combine both Alcon and third-party products. Changes in local regulatory statutes, health authority
practices, or local importation laws, or the failure of Alcon or our suppliers comply with them, could result in our products
being barred from importation into a given territory. Continued growth in our sales and profits will depend, in part, on the
timely and successful introduction and marketing of some or all of the products for which we are currently pursuing
approval.
The manufacture of our products is highly regulated and complex.
The manufacture of our product portfolio is complex and heavily regulated by governmental health authorities around the
world, including the FDA. Whether our products are manufactured at our own dedicated manufacturing facilities or by
third parties, we must ensure that all manufacturing processes comply with current Good Manufacturing Practices, quality
system requirements and other applicable regulations, as well as with our own high quality standards. In recent years,
health authorities have substantially intensified their scrutiny of manufacturers' compliance with such requirements.
Any significant failure by us or our third-party suppliers to comply with these requirements or the health authorities'
expectations may cause us to shut down our production facilities or production lines or we could be prevented from
importing our products from one country to another. Moreover, if we fail to properly plan for manufacturing capacity, the
complexity of our manufacturing process could lead to a long lead time to increase capacity. Any of these events could
lead to product shortages, or to our being entirely unable to supply products to customers and consumers for an
extended period of time. Such shortages or shutdowns have led to, and could continue to lead to, significant losses of
sales revenue and to potential third-party litigation. In addition, health authorities have in some cases imposed significant
penalties for such failures to comply with regulatory requirements. A failure to comply fully with regulatory requirements
could also lead to a delay in the approval of new products to be manufactured at the impacted site.
We may be subject to penalties if we fail to comply with post-approval legal and regulatory requirements and our
products could be subject to restrictions or withdrawal from the market.
The research, development, testing, manufacturing, sale and marketing of our products are subject to extensive
governmental regulation. Government regulation includes inspection of and controls over testing, manufacturing, safety
and environmental controls, efficacy, labeling, advertising, marketing, promotion, record keeping, tracking, reporting,
distributing, import, export, samples, electronic records and electronic signatures.
Among other requirements, we are required to comply with applicable adverse event and malfunction reporting
requirements for our products. For example, for our medical device products, in the US, we are required to report to the
FDA any incident in which one of our marketed devices may have caused or contributed to a death or serious injury or has
malfunctioned and the malfunction of the device or a similar device that we market would be likely to cause or contribute
to death or serious injury if the malfunction were to recur. In addition, all manufacturers placing medical devices on the
market in the European Economic Area are legally required to report any serious or potentially serious incidents involving
devices produced or sold by the manufacturer to the relevant authority in those jurisdictions where any such incident
occurred.

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Our advertising and promotional activities are also subject to stringent regulatory rules and oversight. The marketing
approvals from the FDA and other regulators of certain of our products are, or are expected to be, limited to specific uses.
We are prohibited from marketing or promoting any uncleared or unapproved use of our product, referred to as "off-
label" use. In addition to promoting our products in a manner consistent with our clearances and approvals, we must have
adequate substantiation for the claims we make for our products. If any of our claims are determined to be false,
misleading or deceptive, we could be subject to enforcement action. As Alcon and our associates increasingly use social
media to communicate, and given the speed of dissemination of information online, there is a heightened risk that Alcon
or one of our associates sends a message that may be deemed inappropriate or prohibited by a regulatory authority. In
addition, unsubstantiated claims also present a risk of consumer class action or consumer protection litigation and
competitor challenges. In the past, we have had to change or discontinue promotional materials because of regulatory
agency requests, and we are exposed to that possibility in the future.
Failure to comply with statutes and regulations administered by the FDA and other regulatory bodies or failure to
adequately respond to any notices of violation or any similar reports could result in, among other things, any of the
following enforcement actions:
▪ warning letters or untitled letters issued by the FDA;
▪ fines, civil penalties, in rem forfeiture proceedings, injunctions, consent decrees and criminal prosecution;
▪ detention of imported products;
▪ delays in approving, or refusal to approve, our products;
▪ withdrawal or suspension of approval of our products or those of our third-party suppliers by the FDA or other
regulatory bodies;
▪ product recall or seizure;
▪ operating restrictions or interruption of production; and
▪ inability to export to certain countries.
If any of these items were to occur, it could result in unanticipated expenditures to address or defend such actions, could
harm our reputation and could adversely affect our business, financial condition and results of operations.
We are subject to laws targeting fraud and abuse in the healthcare industry.
We are subject to various global laws pertaining to healthcare fraud and abuse, including anti-kickback laws and physician
self-referral laws. For example, the US federal healthcare program anti-kickback statute prohibits, among other things,
knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing,
ordering, arranging for or recommending the purchase, lease or order of any healthcare item or service reimbursable
under Medicare, Medicaid or other federally financed healthcare programs. These US laws have been interpreted to apply
to arrangements between medical device manufacturers, on the one hand, and prescribers, purchasers, formulary
managers and other healthcare-related professionals, on the other hand. The US government may assert that a claim
including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent
claim for purposes of the false claims statutes. Pricing and rebate programs for drugs reimbursed under federal
healthcare programs must comply with the Medicaid drug rebate requirements of the Omnibus Budget Reconciliation Act
of 1990, as amended, the Veterans Health Care Act of 1992, as amended, and the Deficit Reduction Act of 2005, as
amended. The statutes and regulations governing the various price reporting requirements are complex and have
changed over time, and the US government has not given clear guidance on many issues. In addition, recent statutory and
regulatory developments have not yet been applied by the government or courts to specific factual situations. We believe
that we are in compliance with all applicable government price reporting requirements, but there is the potential that the
Centers for Medicare & Medicaid Services ("CMS"), other regulatory and law enforcement agencies or a court could arrive
at different interpretations, with adverse financial or other consequences for us. If products are made available to
authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements
apply. All of these activities are also potentially subject to federal and state consumer protection and unfair competition
laws. Some European Union bodies and most European Union member states and Japan impose controls and restrictions
that are similar in nature or effect to those described above.
In recent years, the US government and several US states have enacted legislation requiring medical device companies to
establish marketing compliance programs and file other periodic reports. Similar legislation is being considered in other
US states. Many of these requirements are new and uncertain, and available guidance is limited. We could face
enforcement action, fines and other penalties and could receive adverse publicity, all of which could harm our business, if
it is alleged that we have failed to fully comply with such laws and regulations. Similarly, if the physicians or other
providers or entities that we do business with are found to have not complied with applicable laws, they may be subject to
sanctions, which could also have a negative impact on our business.

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Depending on the circumstances, failure to meet these applicable legal and regulatory requirements can result in criminal
prosecution, fines or other penalties, injunctions, recall or seizure of products, total or partial suspension of production,
denial or withdrawal of pre-marketing product approvals, private "qui tam" actions brought by individual whistleblowers in
the name of the government, or refusal to allow us to enter into supply contracts, including government contracts, any of
which could have a material adverse effect on our business, financial condition or results of operations.
Legislative and regulatory reforms may impact our ability to develop and commercialize our products.
The global regulatory environment is increasingly stringent and unpredictable. Unexpected changes can have an adverse
impact on our business, financial condition and results of operations.
First, it could be costly and onerous to comply with changes or new requirements relating to the regulatory approval
process or postmarket requirements applicable to our products in various jurisdictions. As discussed in "Item 4.
Information on the Company—4.B. Business Overview—Government Regulation—Product Approval and Monitoring" the
EU has made recent changes to its regulatory regime. In addition, several countries that did not have regulatory
requirements for medical devices have established such requirements in recent years, and other countries have
expanded, or plan to expand, their existing regulations. While harmonization of global regulations has been pursued,
requirements continue to differ significantly among countries. Further, the FDA is also pursuing various efforts to
modernize its regulation of devices, including potential changes to the 510(k) pathway such as limiting reliance on older
predicate devices and establishing an alternative 510(k) pathway that permits reliance on objective performance criteria.
We expect this global regulatory environment to continue to evolve, which could impact the cost of, the time needed to
approve and, ultimately, our ability to maintain existing approvals or obtain future approvals for, our products.
Second, new legislation and new regulations and interpretations of existing health care statutes and regulations are
frequently adopted, any of which could affect our future business and results of operations. For example, in the US, there
have been a number of health care reform legislative and regulatory measures proposed and adopted at the federal and
state government levels that affect the health care system generally and that have had significant impact on our business.
Third, changes to current regulations in certain countries, including the United States, requiring a prescription for the
purchase of contact lenses could have a significant impact on the way we market and distribute contact lens and contact
lens care products, by limiting the role of the ECP as an intermediary in the sale of our vision care products. Such changes
could require us to incur significant costs to update our marketing and distribution methodologies and could adversely
affect the sales of our vision care products.
Finally, within our surgical business, a considerable portion of our sales and sales growth rely on patient-pay premium
technologies, in markets where access to these technologies has been established. For example, in the US, two landmark
rulings issued by the CMS established a bifurcated payment system for certain of our AT-IOLs pursuant to which part of
the cost of the cataract surgery with such AT-IOLs would be reimbursed under Medicare, with the remaining cost paid out-
of-pocket. For more details, see "Item 4. Information on the Company—4.B. Business Overview—Our Products—Surgical".
To the extent regulatory bodies in the US, such as CMS, or other health authorities outside the US, decide to amend the
regulations governing patient-pay reimbursement for advanced technologies, our sales and sales growth could be
negatively impacted.
We are subject to environmental, health and safety laws and regulations.
We are subject to numerous national and local environmental, health and safety laws and regulations, including relating to
the discharge of regulated materials into the environment, human health and safety, laboratory procedures and the
generation, handling, use, storage, treatment, release and disposal of hazardous materials and wastes. Our operations
involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also
produce hazardous waste products. We generally contract with third parties for the disposal of these hazardous materials
and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or
injury resulting from our generation, handling, use, storage, treatment, release or disposal of hazardous materials or
wastes, we could be held liable for any resulting damages, and any liability could materially adversely affect our business,
operating results or financial condition. Our insurance may not provide adequate coverage against potential liabilities. If
we fail to comply with applicable environmental, health and safety laws and regulations, we may face significant
administrative, civil or criminal fines, penalties or other sanctions. In addition, we may incur substantial costs to comply
with current or future environmental, health and safety laws and regulations, which have tended to become more
stringent over time, including any potential laws and regulations that may be implemented in the future to address global
climate change concerns. Compliance with current or future environmental, health and safety laws and regulations may
increase our costs or impair our research, development or production efforts.
We must comply with certain tax incentive agreements in Switzerland.
While operating as a division of Novartis, our subsidiary, Alcon Pharmaceuticals Ltd. (“APL”), benefited from an investment
tax incentive granted by the Swiss State Secretariat for Economic Affairs in Switzerland and the Canton of Fribourg,
Switzerland in respect of both Swiss federal taxes and Fribourg cantonal / communal taxes for the fiscal years ended

22
December 31, 2007 through December 31, 2017. This tax incentive is subject to a five year "claw-back" period if Alcon does
not continue to meet certain requirements related to its operations in Fribourg.
In connection with the Spin-off, our former parent retained certain assets of APL related to APL’s former pharmaceutical
business. As a result, Novartis agreed with the Canton of Fribourg that each of APL and a subsidiary of Novartis (Novartis
Ophthalmics AG, Fribourg) will have separate and standalone obligations and potential liabilities in connection with the
five year claw-back period relating to the Fribourg investment tax incentive granted to APL. In particular, APL may be
required to pay a "claw-back" amount of up to CHF 1.3 billion to the Fribourg tax authorities if APL fails to continue certain
business activities in Fribourg and if Alcon Inc., APL and Alcon Services AG fail to (i) remain tax resident in Fribourg, and
(ii) employ a certain minimum number of associates in Fribourg. Since December 31, 2018, our "claw-back" obligation has
begun to be reduced each year by 20% of the original maximum amount and will expire on December  31, 2022. As of
December 31, 2020, the "claw-back" obligation amounted to CHF 520 million.
We intend to conduct APL's operations so as to comply with these requirements in all respects; however, we may be
unable to meet, or the Canton of Fribourg may successfully challenge our compliance with, these requirements. If the
Canton of Fribourg successfully challenges our compliance with these requirements, we would be required to pay all or a
portion of the "claw-back" amount.
We are a multinational business that operates in numerous tax jurisdictions.
We conduct operations in multiple tax jurisdictions, and the tax laws of those jurisdictions generally require that the
transfer prices between affiliated companies in different jurisdictions be the same as those between unrelated companies
dealing at arm's length and that such prices are supported by contemporaneous documentation. While we believe that we
operate in compliance with applicable transfer pricing laws and intend to continue to do so, our transfer pricing
procedures are not binding on applicable tax authorities. If tax authorities in any of these jurisdictions were to successfully
challenge our transfer prices as not reflecting arm's length transactions, they could require us to adjust our transfer prices
and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher overall tax liability
to us and possibly interest and penalties.
Additionally, the integrated nature of our worldwide operations can produce conflicting claims from tax authorities in
different countries as to the profits to be taxed in the individual countries. The majority of the jurisdictions in which we
operate have double tax treaties with other foreign jurisdictions, which provide a framework for mitigating the impact of
double taxation on our revenues and capital gains. However, mechanisms developed to resolve such conflicting claims are
largely untested, can be expected to be very lengthy and do not always contain a mandatory dispute resolution clause.
In recent years, tax authorities around the world have increased their scrutiny of company tax filings and have become
more rigid in exercising any discretion they may have. As part of this, the Organization for Economic Co-operation and
Development ("OECD") has proposed certain changes to the International tax standards that have resulted and will
continue to result in local tax law changes under its Base Erosion and Profit Shifting ("BEPS") Action Plans to address issues
of transparency, coherence and substance. Most recently, the OECD has released its plans for proposing further
amendments to the international tax standards, including a new attribution of the right to tax corporate profits where
customers are located and a mechanism ensuring that all corporate profits would be subject to a minimum taxation level.
Furthermore, Switzerland and the various Swiss cantons in which Alcon is present have adopted their own corporate tax
reform. The main elements of the Swiss tax reform became effective in 2020 and have resulted in an increase in Alcon’s
tax burden and effective tax rate in Switzerland.
In general, tax reform efforts, including with respect to tax base or rate, transfer pricing, intercompany dividends, cross
border transactions, controlled corporations and limitations on tax relief allowed on the interest on intercompany debt,
will require us to continually assess our organizational structure and could lead to an increased risk of international tax
disputes, an increase in our effective tax rate and an adverse effect on our financial condition.
Goodwill and other intangible assets on our books may lead to significant noncash impairment charges.
We carry a significant amount of goodwill and other intangible assets on our consolidated balance sheet, primarily due to
the value of the Alcon brand name, but also intangible assets associated with our technologies, acquired research and
development, currently marketed products and marketing know-how. As a result, we may incur significant noncash
impairment charges if the fair value of the intangible assets and the groupings of cash generating units containing
goodwill would be less than their carrying value on our consolidated balance sheet at any point in time.
For a detailed discussion of how we determine whether an impairment has occurred, what factors could result in an
impairment and the impact of impairment charges on our results of operations, see "Note 3. Selected Accounting Policies
—Goodwill and intangible assets—Impairment of goodwill, Alcon brand name and definite lived intangible assets" to our
Consolidated Financial Statements included elsewhere in this Annual Report.

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Our previously announced estimates for the costs we expect to incur in connection with our separation from Novartis
and our previously announced transformation program may be inaccurate.
We have previously announced that we expect to incur costs of $500 million in connection with our separation from
Novartis. We have also previously announced that we expect to incur costs of $300 million and realize savings of $200 to
$225 million on an annualized run rate by 2023 in connection with our transformation program. While we believe that
these estimates are reasonable under the circumstances, they are subject to significant uncertainties, some of which are
beyond our control. In addition, we may not be able to obtain the estimated cost savings and benefits that were initially
anticipated in connection with our transformation program in a timely manner or at all. Should any of these estimates or
underlying assumptions change or prove to have been incorrect, it could adversely affect our results of operations.
Environmental, social and governance matters may impact our business and reputation.
Increasingly, in addition to the importance of their financial performance, companies are being judged by their
performance on a variety of environmental, social and governance ("ESG") matters, which are considered to contribute to
the long-term sustainability of companies’ performance.
A variety of organizations measure the performance of companies on such ESG topics, and the results of these
assessments are widely publicized. In addition, investment in funds that specialize in companies that perform well in such
assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such
ESG measures to their investment decisions. Topics taken into account in such assessments include, among others, the
company’s efforts and impacts on climate change and human rights, ethics and compliance with law and the role of the
company’s board of directors in supervising various sustainability issues. In addition to the topics typically considered in
such assessments, in the healthcare industry, issues of the public’s ability to access our products and solutions are of
particular importance.
We actively manage a broad range of such ESG matters, taking into consideration their expected impact on the
sustainability of our business over time and the potential impact of our business on society and the environment.
However, in light of investors’ increased focus on ESG matters, there can be no certainty that we will manage such issues
successfully, or that we will successfully meet society’s expectations as to our proper role. Any failure or perceived failure
by us in this regard could have a material adverse effect on our reputation and on our business, share price, financial
condition, or results of operations, including the sustainability of our business over time.

Risks Related to the Separation from Novartis

Our ability to operate our business effectively may suffer if we do not, quickly and cost effectively, establish our own
administrative and support functions necessary to operate as a stand-alone public company.
As a division of Novartis, we historically relied on financial (including financial and compliance controls) and certain legal,
administrative and other resources of Novartis to operate our business. In particular, Novartis Business Services ("NBS"),
the Novartis shared service organization, historically provided us with services across the following service domains:
human resources operations, real estate and facility services, procurement, information technology, commercial and
medical support services and financial reporting and accounting operations.
Since our separation from Novartis, we have continued to expand our own financial, administrative, corporate governance
and listed company compliance and other support systems, including for the services NBS had historically provided to us,
or have contracted with third parties to replace Novartis systems that we are not establishing internally. This process has
been complex, time consuming and costly.
Novartis will continue to provide support for certain of our key business functions until April 2021 pursuant to a
Transitional Services Agreement and certain other agreements. Any failure or significant downtime in our own financial,
administrative or other support systems or in the Novartis financial, administrative or other support systems during the
transitional period in which Novartis provides us with support could negatively impact our results of operations or prevent
us from paying our suppliers and associates, executing business combinations and foreign currency transactions or
performing administrative or other services on a timely basis, which could negatively affect our results of operations.
The transitional services Novartis has agreed to provide us may not be sufficient for our needs. In addition, we or
Novartis may fail to perform under various transaction agreements that will be executed as part of the separation or we
may fail to have necessary systems and services in place when certain of the transaction agreements expire.
In connection with the separation, we entered into a Separation and Distribution Agreement and various other
agreements with Novartis, including the Transitional Services Agreement, Tax Matters Agreement, Employee Matters
Agreement, Manufacturing and Supply Agreement and other separation-related agreements. See "Item  10. Additional
Information—10.C. Material Contracts—Our Agreements with Novartis". Certain of these agreements will provide for the
performance of key business services by Novartis for our benefit for a period of time after the separation. These services

24
may not be sufficient to meet our needs and the terms of such services may not be equal to or better than the terms we
may have received from unaffiliated third parties, including our ability to obtain redress.
We rely on Novartis to satisfy its performance and payment obligations under these agreements. If Novartis does not
satisfactorily perform its obligations under these agreements, including its indemnification obligations, we could incur
operational difficulties or losses. If we do not have in place our own systems and services, or if we do not have agreements
with other providers of these services once certain transitional agreements expire, we may not be able to operate our
business effectively. In addition, after our agreements with Novartis expire, we may not be able to obtain these services at
as favorable prices or on as favorable terms.
The separation and Spin-off could result in significant tax liability. In addition, we agreed to certain restrictions
designed to preserve the tax treatment of the separation and Spin-off.
The relevant Swiss tax consequences of the separation and Spin-off have been taken up with the Swiss tax authorities.
Novartis received written confirmations (the "Swiss Tax Rulings") from the Swiss Federal Tax Administration and from the
tax administrations of the Canton of Basel-Stadt and the Canton of Fribourg addressing the relevant Swiss tax
consequences of the separation and Spin-off. In addition, Novartis received a private letter ruling from the US Internal
Revenue Service (the "IRS", and such ruling, the "IRS Ruling") and obtained a written opinion of Cravath, Swaine  &
Moore  LLP, counsel to Novartis (the "Tax Opinion") to the effect that the separation and Spin-off should qualify for
nonrecognition of gain and loss to Novartis and its shareholders under Section 355 of the Code.
If the separation and/or Spin-off were determined not to qualify for the treatments described in the Tax Rulings and Tax
Opinion, or if any conditions in the Tax Rulings or Tax Opinion are not observed, then we could suffer adverse Swiss stamp
duty and Novartis could suffer Swiss and US income, withholding and capital gains tax consequences and, under certain
circumstances, we could have an indemnification obligation to Novartis with respect to some or all of the resulting tax to
Novartis under the tax matters agreement (the "Tax Matters Agreement") we entered into with Novartis, as described in
"Item 10. Additional Information—10.C. Material Contracts—Our Agreements with Novartis—Tax Matters Agreement".
In addition, under the Tax Matters Agreement, we agreed to certain restrictions designed to preserve the expected tax
neutral nature of the separation and the Spin-off for Swiss tax and US federal income tax purposes. These restrictions may
limit our ability to pursue strategic transactions or engage in new businesses or other transactions that might be beneficial
and could discourage or delay strategic transactions that our shareholders may consider favorable. See "Item  10.
Additional Information—10.C. Material Contracts—Our Agreements with Novartis—Tax Matters Agreement" for more
information.

Risks related to the Ownership of our Shares

Your percentage ownership in Alcon may be diluted in the future.
In the future, your percentage ownership in Alcon may be diluted because of equity issuances from acquisitions, capital
markets transactions or otherwise, including equity awards that we may grant to our directors, officers and associates
under our associate participation plans. These additional issuances will have a dilutive effect on our earnings per share,
which could adversely affect the market price of our shares.
Our maintenance of two exchange listings could result in pricing differentials of our ordinary shares between the two
exchanges.
Our shares trade on the NYSE in US dollars and on the SIX in Swiss francs, which may result in price differentials between
the two exchanges for a variety of factors, including fluctuations in the US dollar/Swiss franc exchange rate and differences
in trading schedules.
We may not pay or declare dividends.
Although Alcon expects that it will recommend the payment of a regular cash dividend based upon the prior year’s core
net income, we may not pay or declare dividends in the future. Due to the economic uncertainties resulting from the
COVID-19 pandemic, our Board chose to recommend not paying a dividend in 2020. The declaration, timing and amount
of any dividends to be paid by Alcon will be subject to the approval of shareholders at the relevant General Meeting of
shareholders. The determination by the Board as to whether to recommend a dividend and the approval of any such
proposed dividend by the shareholders will depend upon many factors, including our financial condition, earnings,
corporate strategy, capital requirements of our operating subsidiaries, covenants, legal requirements and other factors
deemed relevant by the Board and shareholders.
In addition, any dividends that we may declare will be denominated in Swiss francs. Consequently, exchange rate
fluctuations will affect the US dollar equivalent of dividends received by holders of shares held via DTC or shares directly
registered with Computershare Trust Company, N.A. in the US If the value of the Swiss franc decreases against the US
dollar, the value of the US dollar equivalent of any dividend will decrease accordingly.

25
See "Item  8. Financial Information—8.A. Consolidated Statements and Other Financial Information—Dividend Policy" for
more information.
As a foreign private issuer, we are subject to different US securities laws and rules than a domestic issuer, which may
limit the information publicly available to US shareholders.
We report under the Securities Exchange Act of 1934 ("Exchange Act") as a non-US company with foreign private issuer
status. Because we qualify as a foreign private issuer under the Exchange Act and although we are subject to Swiss laws
and regulations with regard to such matters and intend to continue to furnish quarterly financial information to the SEC,
we are exempt from certain provisions of the Exchange Act that are applicable to US domestic public companies, including
(i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security
registered under the Exchange Act, (ii)  the sections of the Exchange Act requiring insiders to file public reports of their
stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time and
(iii)  the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form  10-Q containing
unaudited financial and other specified information, or current reports on Form  8-K, upon the occurrence of specified
significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until four
months after the end of each financial year, while US domestic issuers that are large accelerated filers are required to file
their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt
from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material
information.
In addition, as a foreign private issuer, we are entitled to rely on exceptions from certain corporate governance
requirements of the NYSE. As a result of the above, you may not have the same protections afforded to shareholders of
companies that are not foreign private issuers.
Furthermore, we prepare our financial statements under IFRS. There are, and may continue to be, certain significant
differences between IFRS and US Generally Accepted Accounting Principles, or US  GAAP, including but not limited to
potentially significant differences related to the accounting and disclosure requirements relating to associate benefits,
nonfinancial assets, taxation and impairment of long-lived assets. As a result, our financial information and reported
earnings for historical or future periods could be significantly different if they were prepared in accordance with US GAAP,
and you may not be able to meaningfully compare our financial statements under IFRS with those companies that prepare
financial statements under US GAAP.
We may lose our foreign private issuer status.
We are a foreign private issuer and therefore we are not required to comply with all of the periodic disclosure and current
reporting requirements of the Exchange Act applicable to US domestic issuers. To maintain our status as a foreign private
issuer, either (a)  a majority of our shares must be directly or indirectly owned of record by non-residents of the United
States or (b)(i) a majority of our executive officers or directors may not be United States citizens or residents, (ii) more than
50  percent of our assets cannot be located in the United States and (iii)  our business must be administered principally
outside the United States.
If we were to lose our foreign private issuer status, we would be required to comply with the Exchange Act reporting and
other requirements applicable to US domestic issuers, which are more detailed and extensive than the requirements for
foreign private issuers. For instance, we would be required to change our basis of accounting from IFRS as issued by the
IASB to US  GAAP, which we expect would be difficult and costly and could also result in potentially material changes to
historical financial statements previously prepared on the basis of IFRS. We may also be required to make changes in our
corporate governance practices in accordance with various SEC and NYSE rules. The regulatory and compliance costs to us
under US securities laws could be significantly higher than the costs we will incur as a foreign private issuer. As a result, a
loss of foreign private issuer status would increase our legal and financial compliance costs and would make some
activities highly time-consuming and costly. If we were required to comply with the rules and regulations applicable to US
domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and
we could be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and
regulations could also make it more difficult for us to attract and retain qualified members of our Board.
Our status as a Swiss corporation means that our shareholders enjoy certain rights that may limit our flexibility to raise
capital, issue dividends and otherwise manage ongoing capital needs.
Swiss law reserves for approval by shareholders certain corporate actions over which a board of directors would have
authority in some other jurisdictions. For example, shareholders must approve the payment of dividends and cancellation
of treasury shares. Swiss law also requires that our shareholders themselves resolve to, or authorize our Board to,
increase our share capital. While our shareholders may authorize share capital that can be issued by our Board without
additional shareholder approval, Swiss law limits this authorization to 50% of the issued share capital at the time of the
authorization. The authorization, furthermore, has a limited duration of up to two years and must be renewed by the
shareholders from time to time thereafter in order to be available for raising capital. Additionally, Swiss law grants pre-

26
emptive rights to existing shareholders to subscribe for new issuances of shares and advance-subscription rights to
subscribe for convertible bonds or similar instruments with conversion or option rights. A resolution adopted at a
shareholders' meeting by a qualified majority of two-thirds of the votes represented, and the absolute majority of the
nominal value of the shares represented, may restrict or exclude such pre-emptive or advance-subscription rights in
certain limited circumstances. In June 2020, the Swiss Parliament approved certain changes to Swiss corporate law
including permitting the payment of interim dividends, subject to shareholders' approval, and providing a board of
directors more flexibility to increase share capital. The enactment date for these changes has not yet been determined
and may require an amendment to Alcon’s articles of incorporation. Despite these prospective changes, Swiss law also
does not provide as much flexibility in the various rights and regulations that can attach to different categories of shares
as do the laws of some other jurisdictions. These Swiss law requirements relating to our capital management may limit our
flexibility, and situations may arise where greater flexibility would have provided benefits to our shareholders.
It may be difficult to enforce US judgments against us.
We are organized under the laws of Switzerland. As a result, it may not be possible for investors to effect service of
process within the United States upon us or upon such persons or to enforce against them judgments obtained in US
courts, including judgments in actions predicated upon the civil liability provisions of the federal securities laws of the
United States. We have been advised by our Swiss counsel that there is doubt as to the enforceability in Switzerland of
original actions, or in actions for enforcement of judgments of US courts, of civil liabilities to the extent predicated upon
the federal and state securities laws of the United States. Original actions against persons in Switzerland based solely upon
the US federal or state securities laws are governed, among other things, by the principles set forth in the Swiss Federal
Act on International Private Law. This statute provides that the application of provisions of non-Swiss law by the courts in
Switzerland shall be precluded if the result is incompatible with Swiss public policy. Also, mandatory provisions of Swiss
law may be applicable regardless of any other law that would otherwise apply.
Switzerland and the United States do not have a treaty providing for reciprocal recognition and enforcement of judgments
in civil and commercial matters. The recognition and enforcement of a judgment of the courts of the United States in
Switzerland are governed by the principles set forth in the Swiss Federal Act on Private International Law. This statute
provides in principle that a judgment rendered by a non-Swiss court may be enforced in Switzerland only if:
▪ the non-Swiss court had jurisdiction pursuant to the Swiss Federal Act on Private International Law;
▪ the judgment of such non-Swiss court has become final and non-appealable;
▪ the judgment does not contravene Swiss public policy;
▪ the court procedures and the service of documents leading to the judgment were in accordance with the due
process of law; and
▪ no proceeding involving the same position and the same subject matter was first brought in Switzerland, or
adjudicated in Switzerland, or was earlier adjudicated in a third state and this decision is recognizable in
Switzerland.

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ITEM 4. INFORMATION ON THE COMPANY
4.A. HISTORY AND DEVELOPMENT OF THE COMPANY

General Corporate Information

Alcon is a stock corporation (Aktiengesellschaft) organized under the laws of Switzerland in accordance with
article 620 et seq. of the Swiss Code of Obligations and registered with the Swiss Register of Commerce under registration
number CHE‑234.781.164. Alcon is registered in the Swiss Register of Commerce under each of Alcon  AG, Alcon  SA and
Alcon  Inc., all of which are stated in Alcon's Articles of Incorporation (our "Articles of Incorporation") as our corporate
name. Alcon was formed for an unlimited duration, effective as of the date of the registration of Alcon in the Swiss Register
of Commerce on September 21, 2018. As a result of Novartis’ Spin-off of Alcon and its consolidated subsidiaries on April 9,
2019, Alcon became an independent, standalone corporation. Alcon’s shares are listed on the SIX and the NYSE under the
ticker symbol “ALC.”
Alcon is domiciled in Fribourg, Switzerland and our registered office is located at Rue Louis‑d’Affry 6, 1701  Fribourg,
Switzerland. Our headquarters is located in Geneva, Switzerland at the following address: Chemin de Blandonnet 8, 1214
Vernier, Geneva, Switzerland. Our telephone number is +41 58 911 2110. Our principal website is www.alcon.com. The
information contained on our website is not a part of this Form 20‑F.

General Development of Business

Alcon was originally founded in 1945 by pharmacists Robert Alexander and William Conner, who opened a small pharmacy
under the “Alcon” name in Fort Worth, Texas. In 1947, Alcon Laboratories,  Inc. was first incorporated and began
manufacturing specialty pharmaceutical products to address ocular health needs. In the succeeding years, Alcon began
operating internationally with the opening of an office in Canada and first formed its surgical division.
In 1977, Alcon was acquired by a Swiss subsidiary of Nestlé S.A. and, consequently, Alcon began operating as a wholly
owned subsidiary of Nestlé until 2002. In 2001, the name of the entity was officially changed to Alcon,  Inc. and, on
March  20, 2002, Nestlé completed an initial public offering of approximately 25% of the outstanding common shares of
Alcon, Inc. From March 20, 2002 until its 2011 merger into Novartis discussed below, Alcon was publicly listed and traded
on the NYSE under the symbol “ACL”.
On July 7, 2008, Nestlé sold to Novartis approximately 25% of the then outstanding Alcon shares and granted Novartis an
option for Novartis to acquire Nestlé’s remaining shares in Alcon beginning in 2010. On August 25, 2010, Novartis
exercised its option and purchased the remaining approximately 52% of the total outstanding Alcon shares owned by
Nestlé. Following this purchase, Novartis owned an approximate 77% interest in Alcon. On December 14, 2010, Novartis
entered into a definitive agreement to acquire the remaining 23% of Alcon through a merger of Alcon, Inc. into Novartis in
consideration for Novartis shares and a contingent value amount. The merger was consummated on April  8, 2011,
creating the Alcon Division within Novartis. In connection with the Novartis acquisition of Alcon, Novartis also merged its
then‑existing contact lens and contact lens care unit, CIBA Vision, and certain of its ophthalmic pharmaceutical products
into Alcon and moved the generic ophthalmic pharmaceutical business conducted by Alcon prior to the merger into the
Sandoz Division of Novartis. In 2016, Novartis moved the management and reporting of Alcon ophthalmic pharmaceutical
and over‑the‑counter ocular health products to the Innovative Medicines Division of Novartis. Subsequently, effective
January  1, 2018, Novartis returned to Alcon the management and reporting of over‑the‑counter ocular health products
and certain surgical diagnostic medications previously transferred from Alcon in 2016.
On June  29, 2018, Novartis announced its intention to seek shareholder approval for the Spin‑off of its Alcon Division,
following the complete legal and structural separation of Alcon into a stand-alone company consisting of Alcon Inc. and its
consolidated subsidiaries. Novartis shareholders approved the Spin-off on February 28, 2019, and the Spin-off transaction
was consummated on April 9, 2019. Following the Spin-off, Alcon became a stand-alone, independent company.

Significant Acquisitions, Dispositions and other Events

COVID-19 Pandemic
The COVID-19 pandemic had a significant impact on our financial results and operations in 2020, and we expect the
pandemic to continue to have an impact on our financial results and operations into 2021. The 2020 financial impact is
discussed in more detail in this Annual Report, including under “Item 5. Operating and Financial Review and Prospects”.

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Associate safety

To protect our associates, we implemented a response framework with recommended COVID-19 prevention, containment
and mitigation measures. For example, we implemented procedures in early 2020 including limiting the number of people
in one area at a time, modifying workstation arrangements, screening temperatures daily, minimizing the cross flow of
people between shifts to reduce potential exposure and enhancing cleaning of our facilities. We have also mandated
wearing masks, implemented robust contact tracing and are managing our return to the workplace in line with local
conditions. Our sales and customer service teams are equipped with the tools to keep them healthy and safe, including
pre-visit checklists and appropriate personal protective equipment ("PPE").

Community support

To assist vulnerable populations affected, directly or indirectly, by COVID-19, the Alcon Foundation has made monetary
donations to local, national and global organizations to support meal programs for children and seniors, provide essential
supplies to shelters and aid public health emergency relief efforts. We donated PPE, including Alcon-manufactured hand
sanitizer and splash guards, as well as eye drops for front line workers. We have also donated eye care products to
support eye surgeries and other eye care services for under-served patients.

Supply chain continuity

To protect our customers and the patients who depend on our products, we continue to manufacture and supply our
products and are actively working to mitigate any potential supply chain disruptions. Prior to the current crisis, we
developed a diverse manufacturing footprint, which has enabled us to maintain sufficient inventory on hand. We have
enhanced our business continuity plans to ensure our supply chain is maintained. We generally target 12 weeks of
customer-ready products in our supply chain and, for most of our products, we are at or close to this level. Our
Procurement teams have stayed in close contact with our critical suppliers to maintain access to raw materials and other
components. When necessary, we are also utilizing alternative methods of product distribution and supplier sourcing, as
well as alternative shipping options where possible. In addition, we have partnered with industry trade groups and the
medical community as they developed new protocols to serve patients safely during the pandemic.

Significant Investments
In 2012, we began a multi‑year software implementation project to standardize our processes, enhance data transparency
and globally integrate our fragmented and aging information technology systems across our commercial, supply and
manufacturing operations worldwide, through a new foundation of Systems, Applications and Products in Data Processing
("SAP"), which is an ERP software platform. We expect to pay a total of approximately $850 million relating to the
implementation of the new ERP system. Through December  31, 2020, the total amount paid with respect to the
implementation was $688 million.
In addition, we have made significant investments in certain of our manufacturing facilities to enhance our production
capabilities. For more information, see “Item 4.D. Property, Plants and Equipment—Major Facilities”.

Acquisitions
In the past three years, we have also entered into certain acquisition transactions, including the acquisition of 100% of the
outstanding shares and equity of PowerVision, Inc. on March 13, 2019, TrueVision Systems, Inc. on December 19, 2018 and
Tear Film Innovations,  Inc. on December  17, 2018. For further details on certain of our significant transactions in 2020,
2019 and 2018, see “Note 4 to the Consolidated Financial Statements."

Debt Issuances
In connection with the Spin-off, as discussed in greater detail in "Item 10. Additional Information—10.C. Material
Contracts," on March 6, 2019 we entered into a $1.5 billion Bridge Facility and the Facilities, including Facility A.
On September 23, 2019, AFC issued Senior Notes ("Notes") with maturity dates in 2026, 2029 and 2049, which are
guaranteed by the Company. The Notes are unsecured senior obligations of AFC issued in a private placement. The total
principal amount of the Notes is $2.0 billion. The Notes were issued at a discount totaling $7.0 million, which was recorded
as a reduction to the carrying value of the Notes and will be amortized to Interest expense over the term of the Notes. AFC
incurred $15 million of debt issuance costs, which were recorded as a reduction to the carrying value of the Notes and will
be amortized to Other financial income & expense over the term of the Notes.

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The Notes consist of the following:
▪ Series 2026 Notes - $0.5 billion due in 2026 issued at 99.5%, 2.750% interest is payable twice per year in
March and September, beginning in March 2020.
▪ Series 2029 Notes - $1.0 billion due in 2029 issued at 99.6%, 3.000% interest is payable twice per year in
March and September, beginning March 2020.
▪ Series 2049 Notes - $0.5 billion due in 2049 issued at 99.8%, 3.800% interest is payable twice per year in
March and September, beginning March 2020.
The funds borrowed through the issuance of the Initial Notes were used to repay the $1.5 billion Bridge Facility and $0.5
billion Facility A, both of which had been entered into on March 6, 2019. For more information on the Notes, see Note 17
to our Consolidated Financial Statements.
On May 27, 2020, AFC issued senior notes due in 2030 (“Series 2030 Notes”), which are guaranteed by the Company. The
Series 2030 Notes are unsecured senior obligations of AFC issued in a private placement and rank equally in right of
payment with the Series 2026, Series 2029 and Series 2049 notes. The total principal amount of the Senior 2030 Notes is
$750 million. The Senior 2030 Notes were issued at 99.8% with 2.600% interest payable twice per year in May and
November, beginning in November 2020. The Series 2030 Notes were issued at a discount totaling $1 million, which was
recorded as a reduction to the carrying value of the Series 2030 notes and will be amortized to Interest expense over the
term of the Series 2030 Notes. AFC incurred $5 million of debt issuance costs, which were recorded as a reduction to the
carrying value of the Series 2030 Notes and will be amortized to Other financial income & expense over the term of the
Series 2030 Notes. For more information on the Series 2030 Notes, see Note 17 to our Consolidated Financial Statements.

Transformation Program
On November 19, 2019, we announced a multi-year transformation program to better align our organizational structure
with the scope of Alcon's business operations globally. We created four shared business centers designed to create
efficiencies for reinvestment into key growth drivers. We estimate that the transformation program will result in total
charges of approximately $300 million by 2023. Through December 31, 2020, the total expense recognized with respect to
the transformation program was $101 million.

Additional Information
The SEC maintains an Internet website at www.sec.gov that contains reports, proxy and information statements and other
information regarding companies that file documents electronically with the SEC. Our Internet website is www.alcon.com.
The information included on our internet website or the information that might be accessed through such website is not
included in this Annual Report and is not incorporated into this Annual Report by reference.

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4.B. BUSINESS OVERVIEW

Overview
Alcon is the global leader in eye care with $6.8 billion in net sales during the year ended December 31, 2020. We research,
develop, manufacture, distribute and sell a full suite of eye care products within two key businesses: Surgical and Vision
Care. Based on sales for the year ended December 31, 2020, we are the number one company by global market share in
the ophthalmic surgical market and a leader by global market share in the branded vision care market. We employ over
23,000 associates from more than 100 nationalities, operating in 75 countries and serving consumers and patients in over
140 countries. We believe our market leading position and global footprint allow us to benefit from economies of scale,
maximize the potential of our commercialized products and pipeline and will permit us to effectively grow the market and
expand into new product categories.

Our Surgical business is focused on ophthalmic products for cataract surgery, vitreoretinal surgery, refractive laser surgery
and glaucoma surgery. Our broad surgical portfolio includes implantables, consumables and surgical equipment required
for these procedures and supports the end-to-end needs of the ophthalmic surgeon. Our Vision Care business comprises
daily disposable, reusable and color-enhancing contact lenses and a comprehensive portfolio of ocular health products,
including devices and over-the-counter products for dry eye, contact lens care and ocular allergies, as well as ocular
vitamins and redness relievers. Alongside our world-class products, Alcon provides best-in-class service, training,
education and technical support for our customers.

Our Surgical and Vision Care businesses are complementary and benefit from synergies in research and development,
manufacturing, distribution and consumer awareness and education. This allows us to position ourselves as a trusted
partner for eye care products across the continuum of care from retail consumer, to optometry, to surgical
ophthalmology. For example, in research and development, we can apply our expertise in material and surface chemistry
to develop innovative next-generation products for both our IOL and contact lens product lines. Similarly, our global
commercial footprint and expertise as a global organization provide us with product development, manufacturing,
distribution and commercial promotion and marketing knowledge that can be applied to both of our businesses.

We are dedicated to providing innovative products that enhance quality of life by helping people see brilliantly. Our strong
foundation is based on our longstanding success as a trusted brand, our legacy of industry firsts and advancements, our
leading positions in the markets in which we compete and our continued commitment to substantial investment in
innovation. With 75  years of history in the ophthalmic industry, we believe the Alcon brand name is synonymous with
innovation, quality, service and leadership among eye care professionals worldwide.

Our Markets
Overview
We currently operate in the global ophthalmic surgical and vision care markets, which are large, dynamic and growing. As
the world population grows and ages, the need for quality eye care is expanding and evolving, and we estimate that the
size of the eye care market in which we operate is approximately $25 billion and is projected to grow at approximately 4%
per year from 2019 to 2025.

Although it is estimated that 80% of all visual impairments are currently preventable, treatable or curable, we operate in
markets that have substantial unmet medical and consumer needs. For example, based on market research, it is
estimated that there are currently 65 million people with moderate to severe vision impairment due to cataracts,
1.8  billion who suffer from presbyopia, 153  million with uncorrected refractive errors, 146  million with diabetic
retinopathy, 76 million living with glaucoma and approximately 1.4 billion who suffer from symptoms of dry eye, among
other unaddressed ocular health conditions. In addition, there are 1 billion people living with some form of unaddressed
visual impairment, as well as 70% of the global population needing basic vision correction. Below is a brief description of
these ocular disorders.

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Our Surgical and Vision Care products are targeted at addressing many of these unmet medical and consumer needs. We
expect the surgical and vision care markets to continue to grow, driven by multiple factors and trends, including but not
limited to:

• Aging population with growing eye care needs:    A growing aging population continues to drive the increased
prevalence of eye care conditions worldwide, as the number of persons aged 60 years or over is expected to more
than double by 2050, rising from 962 million globally in 2017 to 2.1 billion in 2050.

• Innovation improving the quality of eye care:  Technology innovation in eye care is driving an increased variety of
products that more effectively treat eye conditions. Given the importance of vision correction and preservation,
which can provide a high return on healthcare spend, the resulting better patient outcomes are leading to
increased coverage and reimbursement opportunities from governmental and private third-party payors,
expanding patient access to such eye care products.

• Increasing wealth and growth from emerging economies:    It is estimated that by 2030 the global middle class
population could exceed 5 billion people with the majority of growth coming in emerging markets. This major
demographic shift is generating a large, new customer base with increased access to eye care products and
services along with the resources to pay for them. The expansion of training opportunities for eye care
professionals in emerging markets is also leading to increased patient awareness and access to premium eye care
products and surgical procedures, facilitating their growth.

• Increasing prevalence of myopia, progressive myopia and digital eye strain:  It is estimated that by 2050, half of
the world's population (nearly five billion people) will be myopic. Further, the modern work environment, along
with leisure preferences, have increased the number of hours people spend in front of a screen, adversely
impacting vision and increasing the risk of progressive myopia and digital eye strain.

The Surgical Market

The surgical market in which we operate is estimated to be $10 billion and is projected to grow at 4% per year from 2019
to 2025. The surgical market includes sales of implantables, consumables and surgical equipment, including associated
technical, clinical and service support and training. Surgical implantables are medical devices designed to remain in the
eye, such as monofocal and AT-IOLs placed in the eye during cataract surgery. Consumables include hand-held
instruments, surgical solutions, equipment cassettes, patient interfaces and other disposable items typically used during a
single ophthalmic surgical procedure. Finally, surgical equipment includes multi-use surgical consoles, lasers and
diagnostic instruments used across procedures to enable surgeons to visualize and conduct ophthalmic surgeries. Market
growth is expected to be driven mainly by:

▪ Global growth of cataract and vitreoretinal procedures, driven by an aging population;

▪ Increased access to care, for example, in emerging markets and other markets outside the US where the cataract
surgery rate is 2.5 procedures per 1,000 people as compared to 9.7 in the US;

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 ▪ Higher uptake of premium patient-pay technologies, for example AT-IOL penetration is only 9.8% outside the US
versus 16.2% in the US;

▪ Increased adoption of advanced technologies, for example, improved diagnostic instruments, surgical options for
glaucoma management and the growing use of phacoemulsification during cataract removal, which is utilized in
less than 50% of cases in emerging markets versus over 95% in the US; and

▪ The increasing prevalence of diabetes, the incidence of which has nearly doubled from 4.7% in 1980 to 8.5% in
2014, and for which eye disease is a comorbidity, combined with improving diagnostics capabilities and new
product innovations, is expected to drive an uptake of premium procedures.

The vision care market in which we operate is estimated to be $15 billion and is projected to grow at 4% per year from
2019 to 2025. The vision care market is comprised of products designed for use by eye care professionals and consumers.
Products are largely categorized across two product lines: contact lenses and ocular health. Market growth is expected to
be driven mainly by:

• Continued modality shift to daily disposable lenses from reusable lenses and the resulting sales premium (an
increase of 2-3x sales per patient, after customary rebates and discounts) associated with daily disposable
wearers as compared to users of reusable lenses;

• Advancements in specialty lenses combined with increasing demand for toric, multifocal and cosmetic lenses,
which command an approximately 15-30% pricing premium over spherical lenses, allowing patients to continue
wearing contact lenses as they become older and helping to expand the market;

• A significant population of approximately 194 million undiagnosed dry eye patients, with an additional 42 million
self-diagnosed dry eye patients using unsuitable products for treatment, and advances in diagnostics and ocular
health treatments, facilitating the increase in patient awareness of dry eye and treatment;

• Growing access and consumption of vision care products in emerging markets such as Asia, which had an
estimated single-digit contact lens penetration as compared to double digits in the developed world; and

• Increasing consumer access through the expansion of distribution models, including internet sales and other
direct-to-consumer channels.

Our Business
Overview
With $6.8 billion in net sales during the year ended December 31, 2020, we are the global leader in eye care. Our broad
range of products represents one of the most complete portfolios in the ophthalmic device industry and comprises high-
quality and technologically advanced products across all major product categories in the surgical and vision care markets.
Our Surgical and Vision Care products are used in treating multiple ocular health conditions and offer leading eye care
solutions for patients throughout their lives.

33
Our leadership position across most of our product categories enhances our ability to extend our product offering
through the launch of new and innovative products and to expand our geographic reach into ophthalmic markets
worldwide. Our Surgical business had approximately $3.7 billion in net sales of implantables, consumables and
equipment, as well as services and other surgical products, and our Vision Care business had approximately $3.1 billion in
net sales of our contact lens and ocular health products, during the year ended December 31, 2020. The US accounted for
44% of our sales during the year ended December 31, 2020.

We believe the Alcon brand name is synonymous with innovation, quality, service and leadership among eye care
professionals worldwide. In each of our markets, we rely on our strong relationships with eye care professionals and
consumers to attract and retain customers and expand the market. We customize our selling efforts with the goal of
surrounding eye care professionals with Alcon representatives that can help address each aspect of a customer's needs.
Our field force supplements the direct promotion of our products by providing customers with access to clinical education
programs, hands on training, data from clinical studies and technical service assistance.

We have 18 state-of-the-art manufacturing facilities that employ our proprietary technologies and know-how. We believe
our global footprint, knowledge base in manufacturing, state-of-the-art facilities and capacity planning enable us to handle
increased levels of product demand and product complexity. Furthermore, our global manufacturing and supply chain
allows us to leverage economies of scale and reduce cost per unit as we ramp up production.

We have also made one of the largest commitments to research and development of any surgical and vision care
company, with over 1,400 associates worldwide researching and developing treatments for vision conditions and eye

34
diseases, and have sought innovation from both internal and external sources. In 2020, we invested $673 million in
research and development. In addition to our in-house research and development capabilities, we also consider external
innovation opportunities and routinely screen for companies developing emerging technologies that we believe could
enhance our existing product offerings or develop into innovative new products. We intend to continue to pursue
acquisition, licensing and collaboration opportunities as part of our goal of remaining a market leader in innovation.

Our Surgical Business

We hold the number one position in the global surgical market, offering implantable products, consumables and
equipment for use in surgical procedures to address cataracts, vitreoretinal conditions, refractive errors and glaucoma.
Our Surgical business has the most complete line of ophthalmic surgical devices in the industry, creating a "one-stop
shop" for our customers that we consider to be a key differentiator for our business. For the year ended December 31,
2020, our Surgical business had $3.7 billion in net sales.

Our Vision Care Business

Our Vision Care business consists of an extensive portfolio of contact lens and ocular health products, aimed at helping
consumers see better. Our product lines include daily disposable, reusable and color-enhancing contact lenses. We also
offer a comprehensive portfolio of ocular health products, including devices and over-the-counter products for dry eye,
over-the-counter products for contact lens care and ocular allergies, as well as ocular vitamins and redness relievers. With
$3.1 billion in vision care net sales for the year ended December 31, 2020, we aim to continue to innovate across our vision
care portfolio to improve the lives of consumers and eye care professionals around the world.

Our Strengths
We have a strong foundation based on robust industry expertise, leading brands and excellence in customer service,
backed by 75 years of history as a trusted brand. Our strengths include:

• Global leader in highly attractive markets with the most complete brand portfolio.  With $6.8 billion in net
sales in the year ended December 31, 2020, we are the leader in an attractive eye care market, which is supported
by favorable population megatrends and is expected to grow at approximately 4% per year from 2019 to 2025.
Our Surgical business is the market leader in sales of ophthalmic equipment used in the operating room and is
supported by the largest installed base of equipment worldwide, which we use to cross-promote our surgical
consumables and IOLs. In our Vision Care business, our extensive portfolio of contact lens and ocular health
products includes well-recognized brands such as DAILIES, Systane and Opti-Free. We believe our global leadership
position and extensive brand portfolio allow us to benefit and build on the robust fundamentals driving growth in
our markets.

• Innovation-focused with market leading development capabilities and investment.  We have made one of
the largest commitments to research and development in the eye care market, with proven research and
development capabilities in the areas of optical design, material and surface chemistry, automation and
equipment platforms. Currently, we employ over 1,400 individuals dedicated to our research and development
efforts, including physicians, doctors of optometry and PhDs. In addition, we actively seek opportunities to
collaborate with third parties on advanced technologies to support our eye care business.

• Global scale and reach supported by high-quality manufacturing network.    We have an extensive global
commercial footprint that provides us with the scale and reach to support future growth, maximize the potential
of new launches, enter new geographies efficiently and to take advantage of the large, dynamic and growing
surgical and vision care markets. Our commercial footprint, which includes operations in 75 countries, reaches
consumers and patients in over 140 countries and is supported by over 3,500 sales force associates, 18 state-of-
the-art manufacturing facilities employing our proprietary technologies and know-how and our extensive global
regulatory capability. Our extensive sales and distribution network, supported by our market leadership position
and focus on innovation and customer experience, enhances our ability to expand our geographic reach and
extend our product offerings through the launch of new and innovative products worldwide.

• Outstanding customer relationships and a trusted reputation for customer service, training and
education. We believe that maintaining the highest levels of service excellence in our customer experience is a
critical success factor in our industry. In our Vision Care business, we regularly meet with eye care practitioners to
gain feedback and insights on our products and consumers' needs. We also provide training support at over 70
state-of-the-art interactive training centers around the world, as well as through numerous digital and event-
based training programs that we provide for practitioners, clinical support staff, students, residents, patients and

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 consumers. In each of our businesses, we have built and maintained our relationships with key stakeholders to
establish our trusted reputation in the industry.

• World leading expertise in eye care led by a first-class management team.    Our expertise in eye care is
driven by our 75-year history in the industry and is supported by a high-quality workforce of more than 23,000
associates. We believe our institutional knowledge provides a competitive advantage because our associates'
industry expertise, relationships with our customers and understanding of the development, manufacture and
sale of our products helps us to better identify new customer needs, assess markets for entry and identify
promising technologies. In addition, we believe the diverse experience of our management team in running
complex businesses allows them to add significant value to our company. In particular, we benefit from having a
management team with an extensive background in the eye care industry. Led by David J. Endicott, our Chief
Executive Officer, our management team's deep knowledge of eye care has created excitement among our
workforce for our mission,

Our Strategy
Our going-forward strategy builds on five key pillars in order to generate sustainable and profitable growth:

• Maximize the potential of our near-term portfolio by growing key products.  In Surgical, we plan to build on
our leading position in the IOL market through the launch of new AT-IOLs, where premium pricing drives market
value. In addition, we expect improved diagnostics and new optical designs will address historical barriers to AT-
IOL adoption to further grow this patient-pay market. We will also continue to invest behind our presbyopia-
correcting products (e.g., PanOptix, Vivity) and execute on the development of our next generation equipment
ecosystem for the operating room and office, leading to integration and intra-operability. In Vision Care, we intend
to maintain and grow our leading position in most of our product categories through increased eye care
professional and consumer education, supported by continuous production innovation. We intend to expand our
position in the daily disposable category behind our DAILIES TOTAL1 and PRECISION1 family of products. We also
aim to expand the dry eye product market by leveraging our well-recognized Systane family of eye drops and
increasing investment in dry eye education and awareness, as well as address the allergy relief market with the
Pataday family of products, where we see a significant unmet need and an opportunity for robust market growth.

• Accelerate innovation and deliver the next wave of technologies.    We are committed to accelerating
innovation by continuing to be one of the market leaders in investment in ophthalmic research and development.
The research and development activities of our Surgical business are focused on expanding our AT-IOL portfolio
to optimize the function of the IOL in restoring vision and reducing outcome variability, including through the use
of advanced optics, light adjustable materials, accommodating lenses and modular platforms. We are also
developing next-generation lasers, robotics and other equipment for cataract, vitreoretinal and laser-refractive
surgery, as well as improved visualization equipment. In our Vision Care business, our focus is on developing and
launching new contact lens materials, coatings and designs to extend our product lines and improve patient
comfort, as well as on new products to expand our portfolio of dry eye diagnostic and treatment, presbyopia and
ocular health products. Finally, we expect to continue to supplement our internal innovation investments by
identifying and executing on attractive BD&L opportunities with leading academic institutions and early-stage
companies.

• Capture opportunities to expand markets and pursue adjacencies.    We believe there is a significant
opportunity for growth in markets around the world due to under-penetration of both premium surgical devices,
such as AT-IOLs, and of our Vision Care portfolio. We intend to facilitate this growth by continued investment in
promotion and customer education across all of our markets. In emerging markets in particular, we believe that
the growing number of eye care professionals and dedicated eye hospitals, increased levels of affluence,
improving technology access and better patient awareness will increase the adoption of our products. In addition,
we believe we have significant opportunities to expand into adjacent product categories in which Alcon has not
significantly participated in the past, through a combination of internal development efforts and potential
mergers and acquisitions activity. These opportunities include office-based diagnostics, surgical visualization,
pharmaceuticals, solutions for myopia control and consumer driven ocular health products, where we expect our
eye care expertise and global commercial footprint will allow us to attract and retain new customers.

• Support new business models to expand customer experience.  In Surgical, we intend to continue to identify
new business models that benefit healthcare providers and improve access to leading Alcon products and
technologies. For example, we are pursuing value-based business models that reward improved patient
outcomes, as well as models that contract the entire procedure versus individual products. In Vision Care, where
e-commerce entries have created some disruption of traditional sales channels, we believe that digital technology
can address pain points experienced in existing paths to purchase. We intend to continue investing and

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 innovating in digital capabilities to develop new business models in response to channel shifts and the increase in
direct-to-consumer influence.

• Leverage infrastructure to improve operating efficiencies and margin profile over time.  With the significant
organizational and infrastructure investments we have made over the last several years, we believe we have
established a stable foundation that will allow us to continue to enhance the productivity of our commercial
resources and meaningfully improve our core operating income margins over time. Further, we intend to improve
the mix of our products, implement further supply chain efficiency initiatives and support new lower-cost
manufacturing platforms to drive future operating profit and cash flows.

Our Industry
Selected Conditions that are Treated by Eye Surgery and Surgical Products
Cataracts

A cataract is the progressive clouding of the normally transparent natural lens in the eye. This clouding is usually caused
by the aging process, although it can also be caused by heredity, diabetes, environmental factors and, in some cases,
medications. As cataracts grow, they typically result in blurred vision and increased sensitivity to light. Cataract formations
occur at different rates and may affect one or both eyes. Cataract surgery is one of the most frequently performed surgical
procedures. According to the National Eye Institute, cataracts are the leading cause of blindness worldwide even though
effective surgical treatment exists. Currently, surgical removal of the clouded lens followed by insertion of a transparent
artificial replacement lens, called an IOL, is the preferred treatment for cataracts. The clouded lens is usually removed
through a process known as phacoemulsification. During phacoemulsification, an ophthalmic surgeon makes a small
surgical incision in the cornea (approximately 2-3 millimeters wide) and inserts an ultrasonic probe that breaks up, or
emulsifies, the clouded lens while a hollow needle removes the pieces of the lens. Once the cataract is removed, the
surgeon inserts an intraocular lens through the same surgical incision. An AT-IOL is a type of IOL that also corrects for
refractive errors, like presbyopia and astigmatism, at the time of cataract surgery.

Retinal Disorders
Vitreoretinal procedures involve surgery on the back portion of the eye, namely the retina and surrounding structures.
Vitrectomy is the removal of the gel-like substance, known as vitreous, that fills the back portion of the eye. Removal of the
vitreous allows a vitreoretinal surgeon to operate directly on the retina or on membranes or tissues that have covered the
retina. These procedures typically treat conditions such as diabetic retinopathy, retinal detachment or tears, macular
holes, complications of surgery on the front of the eye, diabetic macular edema, trauma, tumors and pediatric disorders.
Vitreoretinal surgery can also involve electronic surgical equipment, lasers and hand-held microsurgical instruments as
well as gases and liquids that are injected into the eye.

Refractive Errors
Refractive errors, such as myopia, commonly known as near-sightedness, hyperopia, commonly known as far-sightedness,
and astigmatism, a condition in which images are not focused at any one point, result from an inability of the cornea and
the lens to focus images on the retina properly. If the curvature of the cornea is incorrect, light passing through it onto the
retina is not properly focused and a blurred image results. For many years, eyeglasses and contact lenses were the only
solutions for individuals afflicted with common visual impairments; however, they are not always convenient or attractive
solutions. Laser refractive surgery offers an alternative to eyeglasses and contact lenses. Excimer lasers, which are low-
temperature lasers that remove tissue without burning, are currently used to correct refractive errors by removing small
amounts of tissue to reshape the cornea. These lasers remove tissue precisely without the use of heat and without
affecting the surrounding tissue. In the LASIK procedure, the surgeon uses either a femtosecond laser or an automated
microsurgical instrument, called a microkeratome, to create a thin corneal flap that remains hinged to the eye. The corneal
flap is then folded back and excimer laser pulses are applied to the exposed layer of the cornea to change the shape of the
cornea. The corneal flap is then returned to its normal position. LASIK has become the most commonly practiced form of
laser refractive surgery globally.

Presbyopia

Presbyopia occurs when the natural crystalline lens inside the eye becomes less flexible and loses the ability to focus on
close objects. Presbyopia is a vision condition that accompanies the natural aging process of the eye. It cannot be
prevented and affects nearly two billion people worldwide. Although the onset of presbyopia among patients may seem to
occur suddenly, generally becoming noticeable when patients reach their mid- to late 30s or early to mid-40s, sight
reduction typically occurs gradually over time and continues for the rest of the patient's life. Some signs of presbyopia

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include difficulty reading materials held close to the reader, blurred vision while viewing a computer screen and eye
fatigue along with headaches when reading. Presbyopia can be accompanied by other common vision conditions, such as
myopia, hyperopia and astigmatism. Presbyopia, while most commonly managed with reading glasses, can be addressed
surgically by the implantation of an AT-IOL that allows for the correction of presbyopia at the time of cataract surgery.

Glaucoma

Glaucoma, a group of eye conditions that damage the optic nerve, is the second leading cause of blindness worldwide.
While elevated intraocular pressure was historically considered to be synonymous with glaucoma, it is now known that
many patients with glaucoma have normal intraocular pressure. Treating glaucoma is typically aimed at lowering
intraocular pressure for patients with normal or elevated pressure.

Most commonly, glaucoma is managed using medication (e.g.,  drops). For cases requiring additional intervention, laser-
based procedures and conventional surgical techniques, such as filtration surgery and tube shunts, have typically been
used to lower IOP. Filtration surgeries, such as trabeculectomy, involve the creation of a new channel to drain aqueous
humor from inside the eye. Similarly, tube shunts establish a route for fluid to exit through an implanted device. More
recently, a new category of device and procedure-based surgical intervention, known as MIGS, has emerged and is
experiencing rapid adoption among both glaucoma and cataract specialists.

Selected Conditions and Eye Care Considerations that are Addressed by Vision Care
Products
Refractive Errors

Refractive errors such as myopia, hyperopia, astigmatism and presbyopia are commonly addressed by the use of contact
lenses. Presbyopia, for example, can be addressed by the use of multifocal contact lenses.

Dry Eye Disease

Dry eye disease is a ubiquitous, complex and multifactorial condition, and its effect on patients ranges from intermittent
and irritating discomfort to a serious, chronic, progressive and irreversible vision-threatening disorder. The incidence of
dry eyes rises with age, and longer life spans and aging populations throughout the world are key contributors to
increased demand for treatment. Evolving patterns of work and play also contribute to increased demand for treatment,
as more people spend significant amounts of time working on computers and other digital devices. Wealthier, professional
and urban population segments are expanding in rapidly emerging economies and other developing nations, and these
populations have greater access to health care and more resources with which to acquire treatment. In addition, more
sophisticated diagnostic tools and a greater variety of dry eye products and treatments, such as artificial tear products, are
offering improved effectiveness and greater relief as they simultaneously stimulate demand.

Infections and Contamination due to Inadequate Contact Lens Care

Proper care of contact lenses through compliance with disinfection regimens is important in reducing the risk of infection
and irritation associated with the use of reusable contact lenses, as contact lenses are subject to contamination from
cosmetics, grease, bacteria, soaps, hand lotions and atmospheric pollutants, and from proteins contained in natural tears.
When used properly, contact lens care products remove such contaminants from the surface of the contact lens. In
addition, lens rewetting drops may be used to rehydrate the lens during wear and to clear away surface material.

Ocular Allergies

Allergic conjunctivitis occurs when the conjunctiva of the eye becomes swollen from inflammation due to a reaction to
pollen, dander, mold or other allergy-causing substances. When the eyes are exposed to allergy-causing substances, which
can vary from person-to-person and are often dependent on geography, a substance called histamine is released by the
body and causes blood vessels in the conjunctiva to swell. "Allergy eyes" can become red and itchy very quickly. Seasonal
Allergic Conjunctivitis ("SAC") is the most common type of eye allergy. People affected by SAC experience symptoms during
certain seasons of the year. Allergy eye can be treated with various ocular health products including medications, such as
antihistamines, and combinations of antihistamines and redness relievers.

Our Products
We research, develop, manufacture, distribute and sell eye care products. Our broad range of products represents one of
the strongest portfolios in the eye care industry, with high-quality and technologically advanced products across all major

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product categories in ophthalmic surgical devices and vision care. We are organized into two global business segments:
Surgical and Vision Care.

Surgical
We hold the number one position in the global ophthalmic surgical market, offering implantable products, consumables
and equipment for use in surgical procedures to address cataracts, vitreoretinal conditions, refractive errors and
glaucoma. Our Surgical portfolio includes equipment, instrumentation and diagnostics, IOLs and other implantables and a
broad line of consumables, including viscoelastics, surgical solutions, incisional instruments, surgical custom packs and
other products. For the year ended December 31, 2020, net sales for our implantables, consumables and equipment and
other surgical products were $1.1 billion, $2.0 billion and $0.6 billion, respectively.

Cataract, vitreoretinal, refractive and glaucoma surgeries are generally performed in hospitals or ambulatory surgery
centers and are supported through a network of eye clinics, ophthalmic surgery offices and group purchasing
organizations. The primary ophthalmic surgical procedures for cataract, vitreoretinal and glaucoma surgery are broadly
reimbursed in most mature markets. Third-party coverage or patient co-pay options are also available for refractive laser
correction and AT-IOLs. Finally, a growing private pay market for premium surgical devices provides a mutually beneficial
environment for patients, providers and medical device companies by allowing patients to pay the non-reimbursable cost
of a procedure associated with selecting premium devices, such as AT-IOLs.

Our installed base of equipment is core to our market leading position in our Surgical business, with best-in-class
platforms in cataract and vitreoretinal equipment and the largest installed base of cataract phacoemulsification consoles,
vitrectomy consoles and refractive lasers in the industry. These platforms each have long buying cycles that last
approximately seven to ten years and act as anchoring technologies that drive recurring sales of our consumables and
help cross-promote sales of our implantable devices.

Across our Surgical portfolio, we sell a tiered offering of products intended to meet the specific needs of customers in
markets around the world at different price points. Newly launched offerings that bring considerable technology
innovation to the market are typically introduced at a price premium to offset the cost of research and development. As
these products age and/or competitive products advance, prices typically trend downward, requiring continuous
innovation cycles to maintain and/or grow our margins. We also develop specific products to match customer needs in
different customer segments, for example, premium-tier and mid-tier surgical consoles that can be manufactured and
sold at different price points in different markets.

Our strong installed base of equipment and extensive clinician relationships drive sales of our IOLs and consumables. We
consider the quality and breadth of our portfolio to be a key differentiator as a "one-stop-shop" offering for our
customers, synonymous with quality, reliability and accessibility. Our Cataract Refractive Suite covers every stage of the
surgical workflow from clinical planning to cataract removal and post-operative optimization.

In 2013, we launched our Centurion vision system for cataract surgery. This system includes Active Fluidics technology, an
automated system that optimizes anterior chamber stability by allowing surgeons to proactively set and maintain target
IOP within the eye during the cataract removal procedure, thereby delivering an unprecedented level of intraoperative
control.

We also sell the LenSx laser system. The first femtosecond laser to receive FDA clearance for use in cataract surgery, LenSx
is used to create incisions in the cornea, create a capsulorhexis and complete lens fragmentation as part of the cataract
procedure. This enables surgeons to perform some of the most delicate manual steps of cataract surgery with image-
guided visualization and micron precision.

Our Verion reference unit and Verion digital marker together form an advanced surgical planning, imaging and guidance
technology designed to provide greater accuracy and efficiency during cataract surgery. Our ORA System also provides key
intra-operative measurements to improve the placement precision of an implanted IOL during cataract surgery, for
example, by aligning the rotation of a toric IOL to the axis of astigmatism. Post-operatively, our ORA System aids with
outcomes analysis and ongoing optimization for improved outcomes.

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Finally, the NGENUITY 3D visualization system provides surgeons improved visualization by combining a high-dynamic 3D
camera, advanced high-speed image optimization, polarizing surgeon glasses and an ultra-high definition 4K OLED 3D
display that offers improved depth perception. Within visualization, we also sell the LuxOR surgical ophthalmic microscope
with its proprietary ILLUMIN-i technology, which provides an expanded illumination field with a 6x-larger, highly stable red
reflex zone.

An IOL is a tiny, artificial lens for the eye, which replaces the eye's natural lens that is removed during cataract surgery. Our
AcrySof IOL is the most implanted IOL in the world. AcrySof IOLs are made of the first material specifically engineered for
use in intraocular lens.

We have a longstanding record of innovation within the IOL market. In 2005, we introduced a new class of IOLs to correct
presbyopia with our multifocal AcrySof ReSTOR offering. In 2006, we also launched the AcrySof Toric IOL, designed to correct
various levels of preexisting astigmatism in cataract patients. In 2009, the AcrySof IQ Toric lens was launched globally,
incorporating the aspheric technology into a toric design.
We have continued to grow our ReSTOR portfolio. In 2016, the AcrySof IQ ReSTOR 3.0D Toric IOL was approved by the FDA
and launched in the US to address presbyopia and preexisting astigmatism at the time of cataract surgery in adult patients
who desire improved near, intermediate and distance vision with an increased potential for spectacle independence. In
2017, the AcrySof IQ ReSTOR +2.5D Toric IOL was approved by the FDA and launched in the US.

In recent years, presbyopia correction lenses have evolved to include trifocal designs. In 2015, we launched the AcrySof IQ
PanOptix trifocal IOL in select markets outside the US to complement our ReSTOR multifocal offering. This novel diffractive
optic sends light to three foci to support near, intermediate and distance vision. In 2017, the AcrySof IQ PanOptix Toric lens
was launched in select markets outside the US to address both astigmatism and presbyopia. We launched the AcrySof IQ
PanOptix trifocal IOL in the US and Japan in 2019. We also launched the AcrySof IQ Vivity non-diffractive extended depth of
focus ("EDoF") IOL in 2019 in Europe, Australia and Latin America. This optic design allows for extended range of vision and
presbyopia correction with the visual disturbance profile of a monofocal IOL.

We have also introduced several innovations to the delivery device used for introducing an IOL into the capsular bag
during cataract surgery. Our UltraSert pre-loaded IOL delivery system combines the control of a manually loaded device
with the safety and convenience of a disposable, pre-loaded injector to optimize the implantation of the AcrySof IQ
Aspheric IOL into the cataract patient's eye.

In 2017, we received a European CE Mark for the Clareon IOL with the AutonoMe delivery system. AutonoMe is the first
automated, disposable, pre-loaded IOL delivery system that enables precise delivery of the IOL into the capsular bag in
patients undergoing cataract surgery. The new device is being introduced with the Clareon IOL, a new material with an
advanced design that enables sharp, crisp vision, low edge glare and unsurpassed optic clarity.

Our AT-IOLs provide significant visual benefits to patients above standard monofocal IOLs. Accordingly, the price for these
AT-IOLs is higher than the price for monofocal styles. This impacts the market penetration of AT-IOLs in the majority of
countries, as patients must pay incremental charges above the cost of traditional cataract surgery to obtain an AT-IOL and,
in some markets, must pay out-of-pocket for the entire surgical procedure and the AT-IOL.

In the US, our monofocal IOLs are generally fully covered by medical insurance providers or government reimbursement
programs, whereas certain of our AT-IOLs may only be partially covered. This payment model was established by two
landmark rulings issued by CMS in May 2005 and January 2007. The CMS rulings provide Medicare beneficiaries a choice
between cataract surgery with a monofocal IOL, which would be reimbursed as a covered benefit under Medicare, or
cataract surgery with an AT-IOL, such as our AcrySof ReSTOR lens and AcrySof Toric lens, which would be partially
reimbursed under Medicare and partially paid out-of-pocket. Many commercial insurance plans mirror the CMS rulings,
although commercial plans may vary based on third-party payor. The bifurcated payment for the implantation of AT-IOLs
has increased the market acceptance of our AT-IOLs in the US Outside the US, payment and reimbursement models vary
widely from country to country, generally depending on the policy adopted by the relevant local healthcare authority on
coverage and payment.

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To provide convenience, efficiency and value for ophthalmic surgeons, Alcon offers Custom Pak surgical procedure packs
for use in ophthalmic surgery. Unlike conventional surgical procedure packs, our Custom Pak surgical procedure packs
allow individual surgeons to customize the products included in their pack. Our Custom Pak surgical procedure packs
include both our single-use products as well as third-party items not manufactured by Alcon. We believe that our Custom
Pak offering allows ophthalmic surgeons to improve their efficiency in the operating room, while avoiding the complexity
and cost of having to kit surgical items for each respective procedure. We offer more than 11,000 configurations of our
Custom Pak surgical procedure packs globally, using more than 1,700 components.

Our vitreoretinal surgical product offering is one of the most comprehensive in the industry for surgical procedures for the
back of the eye. We currently market our vitreoretinal surgical products in substantially all of the countries in which we sell
products.

For vitrectomy procedures, we sell our Constellation vision system globally. We believe this system delivers a higher level of
control to the physician through higher vitreous cutting rates and embedded laser technology. The Constellation vision
system platform continues to drive our market share in the global premium segment of vitrectomy packs.

In addition to our Constellation vision system, we also sell a full line of vitreoretinal products, including procedure packs,
lasers and hand-held microsurgical instruments, as well as our Grieshaber and MIVS lines of disposable retinal surgery
instruments. We also sell a full line of scissors, forceps and micro-instruments in varying gauge sizes, as well as a range of
medical grade vitreous tamponades, which replace vitreous humor during many retinal procedures.

We continue to advance our portfolio with smaller gauge (27+) instruments and higher cut speed vitrectomy probes. We
also sell Hypervit high speed vitrectomy probes, which operate at a speed of 20,000 cuts per minute ("cpm"). This increased
speed helps reduce traction that can cause iatrogenic tears and post-operative complications.

Our refractive products include lasers, disposable patient interfaces used during laser correction procedures, technology
fees and diagnostic devices necessary to plan the refractive procedures. Our WaveLight refractive suite includes the EX500
excimer laser, designed to reshape the cornea, and the FS200 femtosecond laser, designed to create a corneal flap and to
deliver laser refractive therapy as part of the LASIK refractive procedure.

We also launched Contoura Vision, a topography-guided LASIK treatment designed to provide surgeons with the ability to
perform more personalized laser procedures for patients with near-sightedness, or near-sightedness with astigmatism.
This procedure is based on the unique corneal topography of each eye, as measured through the WaveLight Topolyzer
VARIO diagnostic device.

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Our EX-PRESS glaucoma filtration device is approved and marketed in the US, Europe, Canada, Australia and several other
markets. This shunt is implanted under the scleral flap to enhance outflow of aqueous humor and reduce intraocular
pressure in patients with open-angle glaucoma. The EX-PRESS glaucoma filtration device creates consistent and predictable
outcomes when used as part of a trabeculectomy.

Vision Care

Our Vision Care portfolio comprises daily disposable, reusable and color-enhancing contact lenses, as well as a
comprehensive portfolio of ocular health products, including devices and over-the-counter products for dry eye, over-the-
counter products for contact lens care and ocular allergies, as well as ocular vitamins and redness relievers. For the year
ended December  31, 2020, net sales of our contact lens and ocular health products were $1.8 billion and $1.2 billion,
respectively.

We serve our customers and patients through optometrists, ophthalmologists and other eye care professionals, retailers,
optical chains and pharmacies, as well as distributors that resell directly to smaller retailers and eye care professionals,
who sell the products to end-users. The vision care market is primarily private pay, with patients substantially paying for
contact lenses and ocular health products out-of-pocket. Partial reimbursement is available in some countries for visits to
eye care professionals and a portion of either spectacle or contact lens costs.

Sales of our contact lens and ocular health products are influenced by optometrist and other eye care professional
recommendations, our marketing and consumer education efforts and consumer preferences. In addition to price, contact
lenses compete on functionality, design and comfort, while ocular health products compete largely on product attributes,
brand familiarity and professional recommendations. For our contact lens and ocular health products, we typically
compete in the premium price segments of the market and we use improvements in functionality, design and consumer
convenience to maintain our pricing position over time.

Alcon is the number two company in the branded contact lens market based on net sales in 2020. This position is driven
largely by our core brands TOTAL, PRECISION, DAILIES AquaComfort PLUS and Air Optix.

Our TOTAL product line includes DAILIES TOTAL1, the first and only water gradient contact lens in the market, which is also
offered in a multifocal design to address the fast growing presbyopia market. DAILIES TOTAL1 with its water gradient
technology reduces end-of-day dryness, as the water content approaches nearly 100% at the outermost surface of the
lens, is designed to be a super-premium lens positioned to compete at the highest levels across the contact lens market.
DAILIES TOTAL1 in the multifocal offering provides a platform for expanding the presbyopia market, which we believe is a
potential multibillion dollar opportunity for market participants.

PRECISION1, our new mainstream daily disposable silicone-hydrogel ("SiHy") lens with aqueous extraction and surface
treatment, is priced in between the super-premium DAILIES TOTAL1 and the more value-conscious DAILIES AquaComfort
PLUS. PRECISION1 was designed for long lasting performance and delivers precise vision, dependable comfort and ease of
handing. We piloted PRECISION1 for Astigmatism with US key opinion leaders in 2020 and expect to continue launching in
different jurisdictions in 2021 to address the needs of astigmatic patients.

DAILIES AquaComfort PLUS, our most affordable daily disposable contact lens in monofocal, astigmatism-correcting and
multifocal options, delivers dependable performance by working with tears to release moisture with every blink. Designed
for value-conscious wearers who want the flexibility and simplicity of a daily disposable lens.

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Our Air Optix monthly replacement product line features SiHy contact lenses in monofocal, astigmatism-correcting and
multifocal options, as well as Air Optix Colors and Air Optix plus HydraGlyde contact lenses. Air Optix plus HydraGlyde brings
together two innovative technologies—SmartShield technology and HydraGlyde moisture matrix—for a unique combination
of deposit protection and longer-lasting lens surface moisture.

We continue to experience market growth driven by trade-up to premium lenses, expansion of toric and multifocal
specialty lenses, as well as increasing penetration in emerging markets.

Our key brands in our ocular health portfolio include the Systane family of artificial tear and related dry eye products,
including the Systane iLux MGD thermal pulsation system, PATADAY family of eye allergy products, as well as the Opti-Free
and Clear Care lines of multi-purpose and hydrogen peroxide disinfecting solutions, respectively. Select ocular health
products include artificial tear and related dry eye products marketed under the Tears Naturale and Genteal brands,
Naphcon-A and Zaditor eye drops for the temporary relief of ocular itching due to allergies and vitamins for ocular health
marketed under the ICAPS and Vitalux brands.

Alcon currently holds a market leading position in artificial tears. We continue to focus on core product performance while
increasing promotion behind a best-in-class innovation portfolio under the brand leadership of Systane artificial tears. The
Systane portfolio is a comprehensive offering of ocular health solutions, most of which are indicated for the temporary
relief of burning and irritation due to dryness of the eye. The Systane portfolio includes products for daily and nighttime
relief, as well as products for discomfort associated with contact lens wear. In 2020, we received CE Mark for Systane Ultra
MDPF and Systane Hydration MDPF. By adding the option of multi-dose preservative free presentations to our portfolio, we
address a key need by many eye care practitioners for effective dry eye relief without preservatives. We launched Systane
Ultra MDPF in the EU and Systane Ultra Hydration MDPF in Canada in 2020. The Systane portfolio also includes the Systane
iLux thermal pulsation dry eye device, designed to address the large unmet needs for dry eye and meibomian gland
dysfunction patients.

In 2020, we successfully switched from prescription to over-the-counter the PATADAY family of allergy relief eye drops.
PATADAY Twice Daily Relief and PATADAY Once Daily Relief eye drops were approved by the FDA and launched in the US in
2020. PATADAY Once Daily Extra Strength was approved in July 2020. The PATADAY brand contains olopatadine, the number
one doctor-prescribed active ingredient for eye allergy relief. Since 2008, over 40 million prescriptions have been written
for olopatadine.

Alcon is also a market leader in contact lens care in both multi-purpose (Opti-Free PureMoist) and hydrogen peroxide
solutions (Clear Care and AOSEPT PLUS). The vast majority of our contact lens care products are comprised of disinfecting
solutions to remove harmful micro-organisms on contact lenses, with a smaller amount of sales coming from cleaners to
remove undesirable film and deposits from contact lenses and lens rewetting drops to improve wearing comfort for
contact lenses. We benefit from strong synergies between our contact lens business and our contact lens care products;
however, we expect demand for disinfecting solutions to continue to decrease as contact lens wearers shift their
preference from reusable contact lenses to daily disposable lenses.

Finally, our ocular health portfolio also includes artificial tear and related dry eye products marketed under the Tears
Naturale and Genteal brands, products for the temporary relief of ocular itching due to ocular allergies marketed under the
Naphcon-A and Zaditor brands and vitamins for the maintenance of general ocular health marketed under the ICAPS and
Vitalux brands.

Our ocular health portfolio is typically over the counter but, in a small number of our markets, certain of our ocular health
products are regulated as pharmaceuticals and require a prescription.

Principal Markets
Alcon serves consumers and patients in over 140 countries worldwide. The US is our largest market with 44% of our net
sales in 2020, see Note 5. Segment information to the Consolidated Financial Statements for net sales by geography. US
sales of the vast majority of our products are not subject to material changes in seasonal demand. However, sales of

43
certain of our vision care products, including those for allergies and dry eye, are subject to seasonal variation. In addition,
sales of our surgical equipment are also subject to variation based on hospital or clinic purchasing cycles.

Research and Development

Alcon has made one of the largest commitments to research and development in the eye care market, with proven
research and development capabilities in the areas of optical design, material and surface chemistry, automation and
equipment platforms. Currently, our research and development organization employs over 1,400 individuals dedicated to
our research and development efforts, including physicians, doctors of optometry and PhDs. Our researchers have
extensive experience in the field of ophthalmology and frequently have academic or practitioner backgrounds to
complement their product development expertise.

We organize cross-functional development teams to drive new innovations to our customers and our patients around the
world. New projects for our Surgical and Vision Care pipelines originate either from concepts developed internally by staff
scientists and engineers, ideas from eye care professionals in ophthalmology, or through strategic partnerships with
academic institutions or other companies. We have designed our research and development organization to achieve
global registration of products through the efforts of a global clinical and regulatory affairs organization.

We invested approximately $673 million, $656 million and $587 million in research and development in 2020, 2019 and
2018, respectively. In addition to our in-house research and development capabilities, as part of our efforts to pursue
strategic research and development partnerships with third parties, our dedicated business development team has
completed over 30 BD&L transactions since 2016. For example, in 2019 we acquired US-based PowerVision, Inc., which is
developing fluid-based accommodating IOLs for cataract patients. In addition, we expect our partnership with Philips
Healthcare to enable us to launch a new digital health platform to support our cataract equipment that will allow us to
deliver fully integrated information to ophthalmic surgeons. We continually review and refine our operating model to
optimize for efficiency and productivity. Recent improvements in productivity coupled with a number of strategic
partnerships have collectively led to more than 60% growth in the number of projects within our portfolio of internal and
external innovation over the past five years. Across our Surgical and Vision Care pipelines, we have more than 100+
pipeline projects in process as of December  31, 2020, including 30 that have achieved positive proof of concept or are
undergoing regulatory review.

Our research and development organization maintains an extensive network of relationships with top-tier scientists in
academia and with leading healthcare professionals, surgeons, inventors and clinician-scientists working in
ophthalmology. The principal purpose of these collaborative scientific interactions is to supplement our internal pipeline
and leverage technological advancements in academia and the clinical setting.

While our primary focus is on delivering new products to our patients and customers, we also support the advancement of
basic science through the Alcon Research Institute, which seeks to encourage, advance and support vision research. The
Alcon Research Institute is one of the largest corporately funded research organizations devoted to vision research in the
world. The Institute's activities are planned and directed by an autonomous Executive Steering Committee that is
comprised of distinguished ophthalmologists and vision researchers. The Institute has worldwide representation and
operates under the premise that improvements in the diagnosis and treatment of ocular diseases are dependent upon
advances in basic science and clinical research carried out by independent investigators in institutions throughout the
world. The Institute has also awarded more than 365 awards and research grants over the past 39 years.

Research and development activities within our Surgical business are focused on expanding intraocular lens capabilities to
further improve surgical and refractive outcomes and on developing equipment and instrumentation for cataract,
vitreoretinal, refractive and glaucoma surgeries, as well as new platforms for diagnostics and visualization. Our focus
within the Vision Care business is on the research and development of new manufacturing platforms and novel contact
lens materials, coatings and optical designs for various lens replacement schedules, with the ultimate goal of improving
patient outcomes. In addition to our efforts to develop next-generation contact lens technologies, we are strengthening
our ocular health portfolio with new products and novel technologies that safely provide relief from symptoms of dry eye
and ocular allergies.

We continue to seek opportunities to collaborate with third parties on advanced technologies for various ophthalmic
conditions. These include the potential to provide accommodative contact and intraocular lenses for patients living with
presbyopia.

Marketing and Sales

Alcon conducts sales and marketing activities throughout the world. During the year ended December  31, 2020, 44% of
our sales were in the US. We are present in every significant market in the world where ophthalmology and optometry are

44
practiced, with operations in 75 countries supported by over 3,500 associates dedicated to direct sales and with products
sold in over 140 countries.
Our global commercial capability is organized around sales and marketing organizations dedicated to our Surgical and
Vision Care businesses and we customize these efforts to the medical practice needs of each customer. In addition to
direct promotion of our products, our sales representatives provide customers with access to clinical education programs,
data from clinical studies and technical service assistance. Our selling models also include focused efforts in key channels,
including strategic accounts, key accounts and pharmacies.
In each of our markets, we rely on our strong relationships with eye care professionals to attract and retain customers. We
engage healthcare professionals to serve as clinical consultants, to participate on advisory boards and to conduct
presentations regarding our products. In addition, we have established or sponsor several long-standing programs that
provide training and education to eye care professionals, including providing training support at over 70 state-of-the-art
interactive training centers around the world. These facilities introduce ophthalmologists to our surgical equipment and
cataract products through hands-on training in surgical techniques while exposing them to leading ophthalmologists.
In our Surgical business, our marketing efforts are supported by global advertising campaigns, claims from clinical
registration and post-approval studies and by the participation of marketing and sales representatives in regional and
global medical conferences. Technical service after the sale is provided using an integrated customer relationship
management system in place in many markets. All of our technical service in the US, and a high percentage of that service
outside the US, is provided by service technicians employed directly by Alcon. In countries where we do not have local
operations or a scientific office, we use distributors to sell and handle the physical distribution of our products. Within our
Surgical business, the practices of our marketing and sales representatives continue to change to meet emerging market
trends, namely consolidation of providers, increasing pricing pressures, proliferation of smaller competitors, increasing
demands for outcome evidence and a shift from relationship-based selling orientated toward physicians versus
professional economic buyers focused on cost.
In our Vision Care business, we support our products with direct-to-consumer marketing campaigns, including advertising,
promotions and other marketing materials, and with retailer-focused marketing and promotional materials. The fast-
evolving landscape for our Vision Care business varies significantly by country. Three key trends in marketing and sales
help drive the continuing evolution of our Vision Care business: (1)  Internet-based purchasing is increasing, as online
players grow and the Internet plays a bigger role as a source of consumer information and a platform for price
referencing, (2) channel consolidation is accelerating, as chains grow in size and vertically integrate, and (3) independent
eye care professionals vary in influence, as many align more closely with retailers. We see an opportunity to leverage
digital technology to address pain points experienced by consumers and patients in existing paths to purchase. We also
intend to continue investing and innovating in digital capabilities to develop new business models and practice
implementation support in response to channel shifts and increases in direct-to-consumer influence.
While we market all of our products by calling on medical professionals, direct customers and distribution methods differ
across our business lines. Surgical products are sold directly to hospitals and ambulatory surgical centers, although we sell
through distributors in certain markets outside the US where we do not have local operations or a scientific office. In many
countries, contact lenses are available only by prescription. Our contact lenses can be purchased from eye care
professionals, optical chains and large retailers, subject to country regulation. Our ocular health products can be found in
major drugstores, pharmacies, food stores and mass merchandising and optical retail chains globally, with access subject
to country regulations, including free-sale, pharmacy-only and prescription regulations. No single customer accounted for
more than 10% of our global sales in 2020.

Manufacturing, Quality and Supplies

Manufacturing
We generally organize our manufacturing facilities along product categories, with most plants being primarily dedicated to
the manufacture of either our Surgical or Vision Care product offerings. As of December 2020, we employed
approximately 4,000 people to manufacture surgical products at 10 facilities in the US, Belgium, Switzerland, Ireland,
Germany and Israel and approximately 5,300 people to manufacture Vision Care products at eight facilities in the US,
Germany, Singapore, Malaysia and Indonesia. Our functional division of plants reflects the unique differences in regulatory
requirements governing the production of surgical medical devices as well as the different technical skills required of
associates in these manufacturing environments. All of our manufacturing plants are ISO 13485 and ISO 14001:2015
certified. Currently, we manufacture approximately 90% of our products internally and rely on third-party manufacturers
(including Novartis) for a limited number of products.
The goal of our supply chain strategy is to efficiently produce and distribute high quality products. To that end, we employ
cost-reduction programs, known as continuous improvement programs, involving activities such as cycle-time reductions,

45
efficiency improvements, automation, plant consolidations and procurement savings programs as a means to reduce
manufacturing and component costs. To comply with good manufacturing practices and to improve the skills of our
associates, we train our direct labor manufacturing staff throughout the year. Our professional associates are trained in
various aspects of management, regulatory and technical issues through a combination of in-house seminars, local
university classes and trade meetings.
The manufacture of our products is complex, involves advanced technology and is heavily regulated by governmental
health authorities around the world, including the FDA. Risks inherent to the medical device industry, specifically as they
relate to Class  III devices, are part of our operations. If we or our third-party manufacturers fail to comply fully with
regulations, there could be a product recall or other shutdown or disruption of our production activities. We have
implemented a global manufacturing strategy to maximize business continuity in case of such events or other unforeseen
catastrophic events.

Quality
Product quality and patient safety are vitally important for Alcon and our industry. Our customers and patients must
always feel safe when using our products. Our Quality Management Systems group ("QMS") is responsible for establishing
and maintaining a robust and compliant quality control system across Alcon. QMS regularly monitors industry trends, as
well as global and regulatory changes, and adjusts our processes and procedures to adhere to current standards and best
practices. In addition, our Quality Compliance group audits our internal processes and suppliers for compliance with
approved processes and procedures.

Supplies
The components used in certain of our Surgical products, such as viscoelastics, and our ocular health products, such as
our products for dry eye, are sourced from facilities that meet the regulatory requirements of the FDA or other applicable
health regulatory authorities. Because of the proprietary nature and complexity of the production of these components, a
number of them are only available from a single or limited number of FDA-approved sources. The majority of active
chemicals, biological raw materials and selected inactive chemicals used in our products are acquired pursuant to long
term supply contracts. The sourcing of components used in our Surgical products differs widely due to the breadth and
variety of products, with a number of the components sourced from a single or limited number of suppliers. When we rely
upon a sole source or limited sources of supply for certain components, we try to maintain a sufficient inventory
consistent with prudent practice and production lead-times and to take other steps necessary to ensure our continued
supply. The prices of our supplies are generally not volatile.

Human Capital Management

Alcon's culture is summarized in the Alcon Blueprint. The Alcon Blueprint lists Alcon's values and behaviors and is the
bedrock for how we attract, develop and retain top talent. We seek diverse talent that embodies our values and
contributes to a culture that enables people to see brilliantly. Our talent acquisition process encompasses all facets of
workforce planning, employer branding, talent assessment and selection and onboarding of new associates. Alcon focuses
on the care and growth of associates through learning and development, performance management, career progress and
associate engagement. We work with associates to set challenging performance and career goals, offer training and
development opportunities and encourage growth through mentoring, challenging roles and assignments—all while
ensuring competitive compensation and benefits. Our Chief Human Resources Officer, working with the Global Heads of
Talent Acquisition and Talent Management and Organization Development, develops policies to support Alcon's ability to
attract the best talent and promote diversity and cultural inclusivity.

Intellectual Property
We strive to protect our investment in the research, development, manufacturing and marketing of our products through
the use of patents, trademarks, copyrights, trade secrets and other intellectual property. We own or have rights to a
number of patents, trademarks, copyrights, trade secrets and other intellectual property directly related and important to
our businesses. As of December 31, 2020, we owned approximately 1,900 patent families.
We believe that our patents are important to our business but that no single patent, or group of related patents, currently
is of material importance in relation to our business as a whole. Our strategy is to develop patent portfolios for our
research and development projects in order to obtain market exclusivity for the innovative features of our products in our
major markets. The scope and duration of protection provided by a patent can vary significantly from country to country.

46
However, even after the expiration of all patents covering a product, we may continue to derive commercial benefits from
such product.
We routinely monitor the activities of our competitors and other third parties with respect to their use of our intellectual
property. When appropriate, we will enforce our intellectual property rights to ensure that we are receiving the protections
they afford us. Similarly, we will staunchly defend our right to develop and market products against unfounded claims of
infringement by others. We will aggressively pursue or defend our position in the appropriate courts if the dispute cannot
otherwise be promptly resolved.
In addition to our patents and pending patent applications in the US and selected non-US markets, we rely on proprietary
know-how and trade secrets in our businesses and work to ensure the confidentiality of this information, including
through the use of confidentiality agreements with associates and third parties. In some instances, we also acquire, or
obtain licenses to, intellectual property rights that are important to our businesses from third parties.
All of our major products are sold under trademarks that we consider in the aggregate to be important to our businesses
as a whole. We consider trademark protection to be particularly important in the protection of our investment in the sales
and marketing of our contact lens care and ocular health products. The scope and duration of trademark protection varies
widely throughout the world.
We also rely on copyright protection in various jurisdictions to protect the software and printed materials our business
relies upon, including software used in our surgical and diagnostic equipment. The scope and duration of copyright
protection for these materials also varies widely throughout the world.

Competition
The eye care industry is highly competitive and subject to rapid technological change and evolving industry requirements
and standards. We compete with a number of different companies across our two business segments—Surgical and Vision
Care. Companies within our industry compete on technological leadership and innovation, quality and efficacy of their
products, relationships with eye care professionals and healthcare providers, breadth and depth of product offerings and
pricing. The presence of these factors varies across our Surgical and Vision Care product offerings. Our principal
competitors also sometimes form strategic alliances and enter into co-marketing agreements in an effort to better
compete. We face strong local competitors in some markets, especially in developed markets, such as the US, Western
Europe and Japan.

Surgical
The surgical market is highly competitive. Superior technology and product performance give rise to category leadership in
the surgical market. Service and long term relationships are also key factors in this competitive environment. Surgeons
rely on the quality, convenience, value and efficiency of a product and the availability and quality of technical service. We
primarily compete with Carl Zeiss Meditec AG, Bausch Health Companies Inc., Hoya Corporation and Johnson & Johnson in
the surgical market.
We expect to compete against companies that offer alternative surgical treatment methodologies, including multifocal,
tunable and accommodating AT-IOL approaches, and companies that promote alternative approaches for responding to
the conditions our products address. At any time, our known competitors and other potential market entrants may
develop new devices or treatment alternatives that may compete directly with our products. In addition, they may gain a
market advantage by developing and patenting competitive products or processes earlier than we can or by obtaining
regulatory approvals / clearances or market registrations more rapidly than we can.
We believe that the principal competitive factors in our surgical market include:
• disruptive product technology;
• alternative treatment modalities;
• breadth of product lines and product services;
• ability to identify new market trends;
• acceptance by ophthalmic surgeons;
• customer and clinical support;
• regulatory status and speed to market;
• price;

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 • product quality, reliability and performance;
• capacity to recruit engineers, scientists and other qualified associates;
• digital initiatives that change business models;
• reimbursement approval from governmental payors and private healthcare insurance providers; and
• reputation for technical leadership.
Shifts in industry market share can occur in connection with product issues, physician advisories, safety alerts and
publications about our products. In the current environment of managed care, with consolidation among healthcare
providers, increased competition and declining reimbursement rates, there is also increasing pressure on price.

Vision Care
The vision care market is also highly competitive, and our primary competitors are Johnson  & Johnson, Bausch Health
Companies, Inc. and The Cooper Companies, Inc. For ocular health, our largest competitor is Allergan, Inc.
In contact lenses, all companies continue to focus on growing the daily disposable SiHy segment due to the price trade-up
opportunity from non-SiHy and reusable lenses. We believe our DAILIES TOTAL1 provides the most advanced daily
disposable SiHy contact lens with its advanced "water gradient" technology, but currently only caters to the premium
market given its higher price point. We also compete with manufacturers of eyeglasses and with surgical procedures that
correct visual defects. We believe that there are opportunities for contact lenses to attract new customers in the markets
in which we operate, particularly in markets where the penetration of contact lenses in the vision correction market is low.
Additionally, we compete with new market entrants with disruptive distribution models that could potentially innovate to
challenge traditional models, including the eye care professional channel in which we have a significant presence. We also
believe that laser vision correction is not a significant threat to our sales of contact lenses based on the growth of the
contact lens market over the past decade and our involvement in the laser vision correction market through our Surgical
business.
In ocular health, the market is characterized by competition for market share through the introduction of products that
provide superior effectiveness and reduced burden for treating eye conditions. Recommendations from eye care
professionals and customer brand loyalty, as well as our product quality and price, are key factors in maintaining market
share in these products.

Government Regulation
Overview
Our businesses are subject to varying degrees of governmental regulation in the countries in which we operate, and the
general trend is toward increasingly stringent regulation. In the US, the drug, device and dietary supplement industries
have long been subject to regulation by various federal and state agencies, primarily as to product safety, efficacy,
manufacturing, advertising, labeling and safety reporting. The exercise of broad regulatory powers by the FDA continues
to result in increases in the amounts of testing and documentation required for the commercialization of regulated
products and a corresponding increase in the expense of product introduction. Similar trends are also evident in the EU
and in other markets throughout the world. In addition to market access regulation, our businesses are also subject to
other forms of regulation, such as those relating to anti-bribery, data privacy and cybersecurity and trade regulation
matters. We are also subject to regulations related to environmental and safety matters, which are discussed in greater
detail in "Item 4.D. Property, Plants and Equipment—Environmental Matters".

Product Approval and Monitoring

Most of our products are regulated as medical devices in the US and the EU. These jurisdictions each use a risk-based
classification system to determine the type of information that must be provided to the local regulatory bodies in order to
obtain the right to market a product. In the US, the FDA classifies devices into three classes: Class  I (low risk), Class  II
(moderate risk) and Class III (high risk). Many of our devices are Class II or III devices that require premarket review by the
FDA. The primary pathway for our Class II devices is FDA clearance of a premarket notification under section 510(k) of the
FDCA. With a 510(k) submission, the manufacturer must submit a notification to the FDA that includes performance data
that establish that the product is substantially equivalent to a "predicate device", which is typically another Class  II
previously-cleared device. Our Class  III devices require FDA approval of a Premarket Approval application. With a
Premarket Approval application, the manufacturer must submit extensive supporting evidence, including clinical data,
sufficient to demonstrate a reasonable assurance that the device is safe and effective for its intended use.

48
In the EU, CE marking is required for all medical devices sold. Prior to affixing the CE Mark, the manufacturer must
demonstrate that their device conforms to the relevant essential requirements of the EU's Medical Device Directive
through a conformity assessment procedure. The nature of the assessment depends upon the classification of the device.
The method of assessing conformity varies depending on the type and classification of the product. For most Class  I
devices, the assessment is a self-certification process by the manufacturer. For all other devices, the conformity
assessment procedure requires review by a "notified body", which is authorized or licensed to perform conformity
assessments by national device regulatory authorities. The conformity assessment procedures require a technical review
of the manufacturer's product and an assessment of relevant clinical data. Notified bodies may also perform audits of the
manufacturer's quality system. If satisfied that the product conforms to the relevant essential requirements, the notified
body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity and
application of the CE mark.
The EU published a new Medical Device Regulation in 2017 which will impose significant additional requirements on
medical device manufacturers, including with respect to clinical development, labeling, technical documentation and
quality management systems. The regulation has a three-year implementation period. Medical devices placed on the
market in the EU after May 2021 will require certification according to these new requirements, except that devices with
valid CE certificates, issued pursuant to the Medical Device Directives before May 2022, can be placed on the market until
those certificates expire, at the latest in May 2025, provided there are no significant changes in the design or intended
purpose of the device.
We also market products that are regulated in other product categories, including lasers, drug products, dietary
supplements and medical foods. These products are also subject to extensive government regulation, which vary by
jurisdiction. For example, in the US, our drug products must either be marketed in compliance with an applicable over-the-
counter drug monograph or receive FDA approval of a New Drug Application. In the European Economic Area, our drug
products must receive a marketing authorization from the competent regulatory authority before they may be placed on
the market. There are various application procedures available, depending on the type of product involved.
Clinical trials may be required to support the marketing of our drug or device products. In the US, clinical trials must be
conducted in accordance with FDA requirements, including informed consent from study participants, and review and
approval by an institutional review board ("IRB"), among other requirements. Additionally, FDA authorization of an
Investigational Device Exemption ("IDE") application must be obtained for studies involving significant risk devices prior to
commencing the studies. In the EU, clinical trials usually require the approval of an ethics review board and the prior
notification to, or authorization of the study from, the regulatory authority in each country in which the trial will be
conducted.
Regulations of the FDA and other regulatory agencies in and outside the US impose extensive manufacturing
requirements as well as postmarket compliance and monitoring obligations on our business. The manufacture of our
device, drug and dietary supplement products is subject to extensive and complex good manufacturing practice and
quality system requirements, which govern the methods used in, and the facilities and controls used for, the design,
manufacture, packaging, storage, handling and servicing of our products. We are also subject to requirements for product
labeling and advertising, recordkeeping, reporting of adverse experiences and other information to identify potential
problems with our marketed products, as well as recalls and field actions. We are also subject to periodic inspections for
compliance with these requirements. We expect this regulatory environment will continue to require significant technical
expertise and capital investment to ensure compliance.
Medical device, drug and dietary supplement manufacturers are also subject to taxes, as well as application, product, user,
establishment and other fees. For example, in 2010, the Patient Protection and Affordable Care Act imposed an excise tax
on medical device manufacturers and importers. This excise tax was subsequently repealed in December 2018; however,
other similar taxes can be imposed in the future.

Price Controls

The prices of our medical devices and drugs that require prescriptions are subject to reimbursement programs and price
control mechanisms that vary from country to country. Due to increasing political pressure and governmental budget
constraints, we expect these programs and mechanisms to remain robust and to potentially even be strengthened. As a
result, such programs and mechanisms could have a negative influence on the prices we are able to charge for our
medical device products, particularly those used in cataract and vitreoretinal surgeries.

Regulations Governing Reimbursement

In the US, patient access to our drug and device products that require a prescription is determined in large part by the
coverage and reimbursement policies of third-party health insurers, including government programs such as Medicare

49
and Medicaid. Both government and commercial health insurers are increasingly focused on containing health care costs
and have imposed, and are continuing to consider, additional measures to exert downward pressure on device and drug
prices. Outside the US, global trends toward cost-containment measures likewise may influence prices for healthcare
products in those countries. Adverse decisions relating to either coverage for our products or the amount of
reimbursement for our products, could significantly reduce the acceptance of and demand for our products and the prices
that our customers are willing to pay for them.

Health Care Fraud and Abuse; Anti-Bribery

We are subject to health care fraud and abuse and anti-bribery laws and regulations in the US and around the world,
including state and federal anti-kickback, anti-self-referral and false claims laws in the US. These laws are complex and
subject to evolving interpretation by government agencies and courts. For example, in the US, relationships between
manufacturers of products paid for by federal and state healthcare programs and healthcare professionals are regulated
by a series of federal and state laws and regulations, such as the Federal Anti-Kickback Statute, that restrict the types of
financial relationships with referral sources that are permissible. As discussed in "Item 4.B. Business Overview—Marketing
and Sales", we engage in marketing activities targeted at healthcare professionals, which include among others the
provision of training programs. If one or more of these activities were found to be in violation of the Federal Anti-Kickback
Statute or comparable state laws, or if we otherwise generally fail to comply with any of the health care fraud and abuse
and anti-bribery laws and regulations or any other law or governmental regulation, or there are changes to the
interpretation of any of the foregoing, we could be subject to, among other things, civil and criminal penalties, damages,
fines, exclusion from the Medicare and Medicaid programs and the curtailment or restructuring of our operations.

Data Privacy and Cybersecurity

The regulation of data privacy and security, and the protection of the confidentiality of certain personal information
(including patient health information and financial information), is increasing. For example, the EU General Data Protection
Regulation contains enhanced financial penalties for noncompliance. Similarly, the US Department of Health and Human
Services has issued rules governing the use, disclosure and security of protected health information, and the FDA has
issued further guidance concerning cybersecurity for medical devices.
In addition, certain countries have issued or are considering data localization laws, which limit companies' ability to
transfer protected data across country borders. Failure to comply with data privacy and cybersecurity laws and regulations
can result in enforcement actions, including civil or criminal penalties.

Trade Regulation
The movement of products, services and investment across borders subject us to extensive trade regulations. A variety of
laws and regulations in the countries in which we transact business apply to the sale, shipment and provision of goods,
services and technology across borders. These laws and regulations govern, among other things, our import, export and
other business activities. We are also subject to the risk that these laws and regulations could change in a way that would
expose us to additional costs, penalties or liabilities. Some governments also impose economic sanctions against certain
countries, persons or entities.
In addition to our need to comply with such regulations in connection with our direct activities, we also sell and provide
goods, technology and services to agents, representatives and distributors who may export such items to customers and
end-users. Failure by us or the third parties through which we do business to comply with applicable import, export
control or economic sanctions laws and regulations may subject us to civil or criminal enforcement action and varying
degrees of liability.

4.C. ORGANIZATIONAL STRUCTURE

Organizational Structure
See "Item 4.B. Business Overview” for additional information.

Significant Subsidiaries
See "Item 6.C. Board Practice” for additional information.

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4.D. PROPERTY, PLANTS AND EQUIPMENT
Our corporate headquarters is located in Geneva, Switzerland. The principal office for our Swiss and international
operations, which is also our registered office, is located in Fribourg, Switzerland, and the principal office for our US
operations is located in Fort Worth, Texas.
We believe that our current manufacturing and production facilities have adequate capacity for our medium‑term needs.
To ensure that we have sufficient manufacturing capacity to meet future production needs, we regularly review the
capacity and utilization of our manufacturing facilities. The FDA and other regulatory agencies regulate the approval for
use of manufacturing facilities for medical devices, and compliance with these regulations requires a substantial amount
of validation time prior to start‑up and approval. Accordingly, it is important to our business that we ensure we have
sufficient manufacturing capacity to meet our future production needs.

Major Facilities
The following table sets forth our most significant production and research and development facilities:

Size of Site
2
Location (in m ) Major Activity
Fort Worth, Texas 315,200 Production, research and development for Surgical and Vision Care
businesses
Johns Creek, Georgia 84,100 Production, research and development for Vision Care business
Grosswallstadt, Germany 82,300 Production, research and development for Vision Care business
Singapore 69,000 Production for Vision Care business
Johor, Malaysia 43,900 Production for Vision Care business
Irvine, California 40,800 Production, research and development for Surgical business
Houston, Texas 37,400 Production for Surgical business
Batam, Indonesia 35,000 Production for Vision Care business
Huntington, West Virginia 27,500 Production for Surgical business
Sinking Spring, Pennsylvania 21,800 Production for Surgical business
Cork, Ireland 13,600 Production for Surgical business
Erlangen/Pressath/Teltow, 10,700 Production, research and development for Vision Care business
Germany
Puurs, Belgium 8,000 Production for Surgical business
Schaffhausen, Switzerland 4,100 Production for Surgical business

We launched an expansion of our Johns Creek, Georgia facility in 2017 to add three production lines of DAILIES TOTAL1
contact lenses. We completed the project in 2019 and incurred costs of approximately $100 million.
In March 2018, we commenced the second phase of expansion of our Grosswallstadt, Germany facility relating to the
production of contact lenses. We expect to pay a total amount of approximately $450 million and the total amount paid
and committed through December 31, 2020 is approximately $445 million. We expect to complete the project in mid-2021.
Also in March 2018, we commenced the second phase of expansion of our Singapore facility relating to the production of
contact lenses. We completed the project in the second quarter of 2020 and paid a total of approximately $125 million.
In September 2019, we launched a further expansion of our Johns Creek, Georgia facility to add four production lines for
PRECISION1 and DAILIES TOTAL1 contact lenses. This project is ongoing and was expanded in 2020. We expect to pay a total
amount of approximately $224 million on this project. Through December 31, 2020, the total amount paid and committed
was approximately $175 million.
We funded each of the projects discussed above from working capital.

Environmental Matters
We integrate core values of environmental protection into our business strategy to protect the environment, to add value
to the business, manage risk and enhance our reputation.

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We are subject to laws and regulations concerning the environment, safety matters, regulation of chemicals and product
safety in the countries where we manufacture and sell our products or otherwise operate our business. As a result, we
have established internal policies and standards that aid our operations in systematically identifying relevant hazards,
assessing and mitigating risks and communicating risk information. These internal policies and standards are in place to
ensure our operations comply with relevant environmental, health and safety laws and regulations and that periodic
audits of our operations are conducted. The potential risks we identify are integrated into our business planning, including
investments in reducing safety and health risks to our associates and reducing our impact on the environment. We have
also dedicated resources to monitor legislative and regulatory developments and emerging issues to anticipate future
requirements and undertake policy advocacy when strategically relevant.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

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ITEM 5. OPERATING AND FINANCIAL
REVIEW AND PROSPECTS
5.A. OPERATING RESULTS
This operating and financial review should be read together with the section captioned "Item  4. Information on the
Company—4.B. Business Overview" and our Consolidated Financial Statements and the related notes to those statements
included elsewhere in this Annual Report. Among other things, those financial statements include more detailed
information regarding the basis of preparation for the following information. This discussion contains forward-looking
statements that involve risks and uncertainties. As a result of many factors, such as those set forth under "Item 3. Key
Information —3.D. Risk Factors" and elsewhere in this Annual Report, Alcon's actual results may differ materially from
those anticipated in these forward-looking statements. Please see "Special Note About Forward-Looking Statements" in
this Annual Report. “Item 5. Operating and Financial Review and Prospects”, together with “Item 4.B. Business Overview”
and “Item 6.D. Employees”, constitute the Operating and Financial Review (“Rapport annuel”), as defined by the Swiss Code
of Obligations.

Overview
Alcon researches, develops, manufactures, distributes and sells a full suite of eye care products within two segments:
Surgical and Vision Care. The Surgical segment is focused on ophthalmic products for cataract surgery, vitreoretinal
surgery, refractive laser surgery and glaucoma surgery, and includes implantables, consumables and surgical equipment
required for these procedures. The Vision Care segment comprises daily disposable, reusable and color-enhancing contact
lenses and a comprehensive portfolio of ocular health products, including products for dry eye, contact lens care and
ocular allergies, as well as ocular vitamins and redness relievers.
We are dedicated to providing innovative products that enhance quality of life by helping people see better. Our strong
foundation is based on our longstanding success as a trusted brand, our legacy of industry firsts and advancements, our
leading positions in the markets in which we compete and our continued commitment to substantial investment in
innovation. With 75  years of history in the ophthalmic industry, we believe the Alcon brand name is synonymous with
innovation, quality, service and leadership among eye care professionals worldwide. We employ over 23,000 associates
from more than 100 nationalities, operating in 75 countries and serving consumers and patients in over 140 countries.
In 2020, Alcon's net sales to third parties amounted to $6.8 billion. The United States accounted for $3.0 billion, or 44%, of
total net sales, Japan accounted for $0.7 billion, or 10%, of total net sales, China accounted for $0.4 billion or 6%, of total
net sales, Switzerland accounted for $55 million, or 1%, of total net sales, and the rest of the world accounted for the
remaining $2.7 billion of total net sales.
Between 2011, when we were acquired by Novartis, and April 9, 2019, we operated as a division within Novartis. Novartis
transferred to us substantially all of the assets and liabilities of its eye care devices business, consisting of our surgical and
vision care businesses. Our financial statements include, in all periods presented, the assets, liabilities and results of
operations of the ophthalmic over-the-counter products and a small portfolio of surgical diagnostics medications, which
was transferred to Alcon from Novartis, effective as of January 1, 2018.

Basis of preparation
The Consolidated Financial Statements included elsewhere in this Annual Report, which present our financial position,
results of operations, comprehensive loss, and cash flows have been prepared in accordance with International Financial
Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
The preparation of the Consolidated Financial Statements requires management to make certain estimates and
assumptions, either at the balance sheet date or during the year, that affect the reported amounts of assets and liabilities
as well as revenues and expenses. Actual outcomes and results could differ from those estimates and assumptions.
The businesses of Alcon did not form a separate legal group of companies prior to the Spin-off in 2019. For periods prior
to the Spin-off, the financial statements were prepared on a combined basis and are derived (carved-out) from the
Novartis Consolidated Financial Statements and accounting records, as if Alcon was a stand-alone company for all periods
presented. Our Consolidated Financial Statements include the assets and liabilities within Novartis subsidiaries in such
historical periods that are attributable to Alcon and exclude the assets and liabilities within Alcon subsidiaries in such
historical periods not attributable to its businesses. For periods prior to the Spin-off, the Consolidated Financial

53
Statements include charges and allocation of expenses related to certain Novartis business support functions across the
following service domains: human resources operations, real estate and facility services, including site security and
executive protection, procurement, information technology, commercial and medical support services and financial
reporting and accounting operations. In addition, allocations were made for Novartis corporate general and administrative
functions in the areas of corporate governance, including board of directors, corporate responsibility and other corporate
functions, such as tax, listed company compliance, investor relations, internal audit, treasury and communications
functions.
Management believes that the allocation methodology used was reasonable and all allocations have been performed on a
basis that reasonably reflects the services received by Alcon, the cost incurred on behalf of Alcon and the assets and
liabilities of Alcon. Although the Consolidated Financial Statements reflect management's best estimate of all historical
costs related to Alcon, this may however not necessarily reflect what the results of operations, financial position or cash
flows of Alcon would have been had Alcon operated as an independent, publicly traded company for the periods prior to
the Spin-off.
Agreements entered into between Alcon and Novartis in connection with the Spin-off govern the relationship between the
parties following the Spin-off and provide for the allocation of various assets, liabilities, rights and obligations. These
agreements also include arrangements for transition services to be provided on a temporary basis between the parties.
For further information on the basis of preparation of the Consolidated Financial Statements see Note  2 to the
Consolidated Financial Statements included elsewhere in this Annual Report.

Items you should consider when evaluating our consolidated financial statements

COVID-19

In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The COVID-19 pandemic
has negatively impacted the global economy, disrupted global supply chains and created significant volatility and
disruption of financial markets, resulting in widespread shelter-in-place orders, business shut-downs and the deferral of
non-urgent surgeries. This has had an adverse effect on our net sales, operating results and cash flow.

Periods prior to the Spin-off

For periods prior to the Spin-off, our results of operations, financial position and cash flows could differ from those that
would have resulted if we operated autonomously or as an entity independent of Novartis. As a result, you should
consider the following facts when evaluating our historical results of operations:
• For certain of the periods covered by our Consolidated Financial Statements, our business was operated within
legal entities which hosted portions of other Novartis businesses. In addition, in all the periods presented, our
Consolidated Financial Statements include the ophthalmic over-the-counter products and a small portfolio of
surgical diagnostics medications, the management and reporting of which was transferred to Alcon from the
Innovative Medicines Division of Novartis effective as of January 1, 2018.
• For periods prior to the Spin-off, income taxes attributable to the Alcon Division were determined using the
separate return approach, under which current and deferred income taxes were calculated as if a separate tax
return had been prepared in each tax jurisdiction. In various tax jurisdictions, Alcon and Novartis businesses
operated within the same legal entity and certain Alcon subsidiaries were part of a Novartis tax group. This
required an assumption that the subsidiaries and operations of Alcon in those tax jurisdictions operated on a
standalone basis and constitute separate taxable entities. Actual outcomes and results could differ from these
separate tax return estimates, including those estimates and assumptions related to realization of tax benefits
within these Novartis tax groups.
• For periods prior to the Spin-off, our Consolidated Financial Statements also include an allocation and charges of
expenses related to certain Novartis functions. However, the allocations and charges may not be indicative of the
actual expense that would have been incurred had we operated as an independent, publicly traded company
during those periods. For example, historically, our business has been charged with a significant portion of
appropriate administrative costs, such as those related to services Alcon has received from Novartis across the
following service domains: human resources operations, real estate and facility services, including site security
and executive protection, procurement, information technology, commercial and medical support services and
financial reporting and accounting operations, and these have been reflected in our Consolidated Financial
Statements based on historical allocations and charges. Accordingly, these overhead costs were affected by the
historical arrangements that existed between the historical reporting units of the Alcon Division and Novartis and
typically did not include a profit margin.

54
 • For periods prior to the Spin-off, our Consolidated Financial Statements also include an allocation from Novartis
of certain corporate related general and administrative expenses that we would have incurred as a publicly
traded company. These include costs associated with corporate governance, including board of directors,
corporate responsibility and other corporate functions, such as tax, corporate governance and listed company
compliance, investor relations, internal audit, treasury and communications functions. The allocation of these
additional expenses may not be indicative of the actual expense that would have been incurred had we operated
as an independent, publicly traded company for those periods.

CyPass voluntary market withdrawal

On August  28, 2018, we announced our immediate, voluntary market withdrawal of our CyPass micro-stent surgical
glaucoma product from the global market. Our Consolidated Financial Statements include the sales of CyPass micro-stent
products from and after the launch of the product in 2016 until our withdrawal of the product from the market in August
2018. As a result, in the year ended December 31, 2018, we recognized a one-time pre-tax charge of $282 million (after tax
$206 million). This consisted of $11 million for the costs associated with the market withdrawal and $337 million for the
impairment of the CyPass intangible assets. These charges were partially offset by the $66 million gain for the reduction in
the related contingent consideration liability.

Use of estimates and assumptions

The preparation of financial statements requires management to make certain estimates and assumptions, either at the
balance sheet date or during the period that affects the reported amounts of assets and liabilities as well as revenues and
expenses. In particular, due to the unknown future impacts of the ongoing COVID-19 pandemic and the fact that the
presented Consolidated Financial Statements for periods prior to the Spin-off have been carved out from Novartis
financial statements, actual outcomes and results could differ from those estimates and assumptions as indicated in the
Critical accounting policies and estimates section of this document. See Note 3 to the Consolidated Financial Statements
included elsewhere in this Annual Report and in the "Critical accounting policies and estimates" section within this
Item 5.A.

Segment description
Alcon has two identified reportable segments: Surgical and Vision Care. Both segments are supported by Research and
Development and Manufacturing and Technical Operations, whose results are incorporated into the respective segment
contribution. Segment contribution excludes amortization and impairment charges for acquired product rights or other
intangibles, general and administrative expenses for corporate activities, spin readiness and separation costs,
transformation costs, fair value adjustments of contingent consideration liabilities, past service costs primarily for post-
employment benefit plan amendments, and certain other income and expense items. See Note  5 to the Consolidated
Financial Statements included elsewhere in this Annual Report.

In Surgical, Alcon researches, develops, manufactures, distributes and sells ophthalmic products for cataract surgery,
vitreoretinal surgery, refractive laser surgery and glaucoma surgery. The surgical portfolio also includes implantables,
consumables and surgical equipment required for these procedures and supports the end-to-end procedure needs of the
ophthalmic surgeon. Alcon also provides services, training, education and technical support for the Surgical business. In
2020, the Surgical segment accounted for $3.7 billion, or 55%, of Alcon net sales to third parties, and contributed $672
million, or 62%, of Alcon operating income (excluding unallocated income and expenses).

In Vision Care, Alcon researches, develops, manufactures, distributes and sells daily disposable, reusable, and color-
enhancing contact lenses and a comprehensive portfolio of ocular health products, including products for dry eye, contact
lens care and ocular allergies, as well as ocular vitamins and redness relievers. Alcon also provides services, training,
education and technical support for the Vision Care business. In 2020, the Vision Care segment accounted for $3.1 billion,
or 45%, of Alcon net sales to third parties, and contributed $419 million, or 38%, of Alcon operating income (excluding
unallocated income and expenses).

Opportunity and risk summary

The surgical and vision care markets in which Alcon operates are large, dynamic and growing. As the world population
grows and ages, the need for quality eye care is expanding and evolving. In addition, although it is estimated that 80% of
all visual impairments are currently preventable, treatable or curable, we operate in markets that have substantial unmet
medical and consumer needs. Our surgical and vision care products are targeted at addressing many of these unmet
medical and consumer needs through products that are used in treating multiple ocular health conditions and offer
leading eye care solutions for patients throughout their lives.

55
The surgical market in which we operate includes sales of implantables, consumables and surgical equipment, including
associated technical, clinical and service support and training, and is projected to grow at approximately 4% per year from
2019 to 2025. Growth drivers in the surgical market include: global growth of cataract and vitreoretinal procedures, driven
by an aging population; increased access to care; higher uptake of premium patient-pay technologies; increased adoption
of advanced technologies; and eye disease as a comorbidity linked to the global prevalence of diabetes.

The vision care market in which we operate is comprised of products designed for ocular care and consumer use, and is
projected to grow at approximately 4% per year from 2019 to 2025. Growth drivers in the vision care market include:
continued modality shift to daily disposable lenses from reusable lenses and the resulting sales premium; advancements
in specialty lenses combined with increasing demand for toric, multifocal and cosmetic lenses; a significant population of
approximately 194  million undiagnosed dry eye patients, with an additional 42  million self-diagnosed dry eye patients
using unsuitable products for treatment; growing access and consumption of vision care products in emerging markets;
and increasing consumer access through the expansion of distribution models.

In each of our markets, we rely on our strong relationships with eye care professionals and consumers to attract and
retain customers and expand the market. We have also made one of the largest commitments to research and
development in the eye care market, which we expect to continue through internal innovation investments and identifying
and executing on attractive acquisition, licensing and collaboration opportunities.

We are in the middle of executing a turnaround plan to return Alcon to sustainable, profitable growth and address existing
challenges. Prior to 2016, Alcon, as a division of Novartis, experienced challenges resulting from an under-investment in
the business. In preparation for Alcon’s Spin-off, we separated our strategic priorities plan into three phases:

▪ Fix the foundation (2016–2017): We started re-investing in promotion, capital and systems, reinvigorating the
innovation pipeline and strengthening our customer relationships after a challenging period of under-investment.
We increased our focus on fostering a culture of speed and simplicity, ownership and accountability necessary to
sustain our leadership in the eye care business.

▪ Execute the growth plan (2018–2020): During the second phase of our plan, we focused on superior execution
and accelerating our product development cycle in attractive markets. We introduced our leading advanced
intraocular lens (AT-IOL), PanOptix, in our three largest markets—the US, Japan and China—and initiated a pilot
program for a unique non-diffractive IOL, Vivity. The successful introduction of PanOptix enabled us to continue
driving our share of the AT-IOL market. We expanded our vitreoretinal business by introducing innovative
instrumentation and accelerating conversion from optical to digital surgery. In our vision care business, DAILIES
TOTAL1 continued to grow, and we launched Precision1 in the US successfully, despite the COVID-19 pandemic. We
have also expanded our offerings in the presbyopia category with DAILIES TOTAL1 multifocals and expanded our
toric parameters for DAILIES AquaComfort PLUS. We continued the global roll-out of Systane COMPLETE and
introduced our first multi-dose preservative-free formation with Systane Hydration, opening the door for regional
growth in the artificial tears category. Finally, we successfully made the over-the-counter switch for Pataday for
ocular allergies in the US. Although we faced the challenges of a global health crisis in 2020, we were able to make
significant progress in our separation and transformation programs.

▪ Deliver leading-edge solutions (2021 and beyond): As we complete the standing up and separation of Alcon as an
independent company, we expect to increase our focus on creating breakthrough innovation, expanding market
access and developing new business models to address market needs. The successful implementation of new
enterprise systems enables us to increase efficiency from better data, increased analytics and automation. We
have also started to build a new ecosystem for digital health by connecting our diagnostic equipment in the clinic
with surgical equipment in the operating room and managing data in the cloud. We expect to increase
investments in cutting-edge technology to deliver better patient outcomes and overcome barriers for visual acuity
for customers and patients in every market.

Alcon's future expectations are subject to various risks and uncertainties, including market dynamics in the surgical and
vision care markets, general economic conditions, the effects of the ongoing COVID-19 pandemic and the pace of
innovation in our industry, as well as successfully achieving our growth strategies and efficiency initiatives. These
expectations were, in the view of management, prepared on a reasonable basis, reflect the best currently available
estimates and judgments and present, to the best of management's knowledge and belief, the expected future financial
performance of Alcon. However, this information is not fact and should not be relied upon as necessarily indicative of
future results, and you are cautioned not to place undue reliance on the prospective financial information. There will likely
be differences between Alcon expectations and the actual results and those differences could be material. Alcon's
expectations may not be achieved and we do not undertake any obligation to release publicly the results of any future
revisions we may make to our expectations. When considering Alcon's expectations, you should keep in mind the risk

56
factors and other cautionary statements in "Item 3. Key Information—3.D Risk Factors" and "Special Note About Forward-
Looking Statements" in this Annual Report.

Our financial results are affected to varying degrees by internal and external factors. For example, the effect of the
Covid-19 pandemic (or other viral or disease outbreaks) may continue to impact our business. Further, our ability to grow
depends on the commercial success of our products and our ability to maintain our position in the highly competitive
markets in which we operate. Even if we protect our intellectual property to the fullest extent permitted by applicable law,
competitors may market products that compete with our products. Our ability to grow also depends on the success of our
research and development efforts and BD&L activities in bringing new products to market, as well as the commercial
acceptance of our products. Increased pricing pressure in the healthcare industry in general could also impact our ability
to generate returns and invest for the future. Additionally, our products are subject to competition from lower priced
versions of our products, and our industry continues to be challenged by the vulnerability of distribution channels to
counterfeiting. Product recalls or voluntary market withdrawals in connection with defects or unanticipated use of our
products could also have a material adverse effect upon our business. We are also implementing new information
technology systems and integrating those new systems into our legacy systems. All of our operations, including our
information technology systems, can be vulnerable to a variety of business interruptions. We have incurred debt that we
must continue to service, and we may need additional financing in debt or equity.

Further, our ability to grow may be impacted by the ongoing consolidation among distributors, retailers and healthcare
provider organizations, which could increase both the purchasing leverage of key customers and the concentration of
credit risk. We also may be adversely affected by changes in inventory levels or fluctuations in buying patterns by our large
distributor and retail customers. If we overestimate demand and produce too much of a particular product, we face a risk
of inventory obsolescence. In addition, for certain materials, components and services, we rely on sole or limited sources
of supply. Our customer relations could be negatively impacted by the loss of our significant suppliers or the inability of
any such supplier to meet certain specifications or delivery schedules. Further, we have developed strong relationships
with numerous healthcare providers and rely on them to recommend our products to their patients and to other
members of their organizations. Consumers in the eye health industry have a tendency not to switch products regularly
and are repeat consumers, meaning that a physician's initial recommendation of our products, and a consumer's initial
choice to use our products, have an impact on the success of our products. Therefore, it is important to our business and
results of operations to retain and grow these relationships.

Given our global presence, our operations and business results are also influenced and affected by the global economic
and financial environment, including unpredictable political conditions that currently exist in various parts of the world.
Additionally, a portion of our operations are conducted in emerging markets and are subject to risks and potential costs
such as economic, political and social uncertainty, as well as relatively low average income levels and limited government
reimbursement for the cost of healthcare products and services. Our operations and business results are also affected by
the varying degrees of governmental regulation in the countries in which we operate, making the process of developing
new products and obtaining necessary regulatory marketing authorization lengthy, expensive and uncertain. The
manufacture of our products is also highly regulated. Any changes or new requirements related to the regulatory approval
process or postmarket requirements applicable to our products in any jurisdiction could be costly and onerous to comply
with.

For more details on these trends and how they could impact our results, see "Item 3. Key Information—3.D. Risk Factors".

Components of results of operations

Net sales to third parties
Revenue on the sale of Alcon products and services, which is recorded as "Net sales to third parties" in the consolidated
income statement, is recognized when a contractual promise to a customer (i.e., a performance obligation) has been
fulfilled by transferring control over the promised goods and services to the customer, substantially all of which is at the
point in time of shipment to or receipt of the products by the customer or when the services are performed. If contracts
contain customer acceptance provisions, revenue would be recognized upon the satisfaction of acceptance criteria. The
amount of revenue to be recognized is based on the consideration Alcon expects to receive in exchange for its goods and
services which may be fixed or variable. Variable consideration may include rebates, discounts including cash discounts,
and sales returns. Variable consideration is only recognized when it is highly probable that a significant reversal of
cumulative sales will not occur.

Surgical equipment may be sold together with other products and services under a single contract. The total consideration
is allocated to the separate performance obligations based on the relative standalone selling price for each performance
obligation. Revenue is recognized upon satisfaction of each performance obligation under the contract.

57
Other revenues
"Other revenues" mainly include revenue from contract manufacturing services provided to our Former Parent which are
recognized over time as the service obligations are completed. Associated costs incurred are recognized in "Cost of other
revenues".

Inventories
Inventory is valued at acquisition or production cost determined on a first-in, first-out basis. This value is used for the
"Cost of net sales" and "Cost of other revenues" in the consolidated income statement. Unsalable inventory is fully written
off in the consolidated income statement under "Cost of net sales" and "Cost of other revenues".

Research & development
Internal research and development costs are fully charged to "Research  & development" in the consolidated income
statement in the period in which they are incurred. Alcon considers that regulatory and other uncertainties inherent in the
development of new products preclude the capitalization of internal development expenses as an intangible asset until
marketing approval from a regulatory authority is obtained in relevant major markets, such as the United States, the
European Union, Switzerland, China or Japan.

Critical accounting policies and estimates

Selected accounting policies are set out in Note  3 to the Consolidated Financial Statements included elsewhere in this
Annual Report, which are prepared in accordance with IFRS as issued by the IASB.
Given the uncertainties inherent in our business activities, we must make certain estimates and assumptions that require
difficult, subjective and complex judgments. Because of uncertainties inherent in such judgments, actual outcomes and
results may differ from our assumptions and estimates, which could materially affect our Consolidated Financial
Statements. We have assessed various accounting estimates and other matters, including those that require consideration
of forecasted financial information, in context of the unknown future impacts of COVID-19 using information reasonably
available to us at this time. The inherent uncertainties of COVID-19 including the duration, scope, and severity of the
pandemic may result in actual outcomes that differ materially from our current assumptions and estimates.
Application of the following accounting policies requires certain assumptions and estimates that have the potential for the
most significant impact on the Consolidated Financial Statements.

Impairment of goodwill and intangible assets

We review long-lived intangible assets for impairment whenever events or changes in circumstance indicate that the
carrying amount may not be recoverable. Goodwill, the Alcon brand name and intangible assets not yet ready for use are
not amortized but are reviewed for impairment at least annually. Our annual impairment testing date is Alcon's year-end,
December 31.
A cash generating unit to which goodwill has been allocated (reportable segments) is considered impaired when its
carrying amount, including the goodwill, exceeds its recoverable amount, which is defined as the higher of its fair value
less costs of disposal and its value in use. If the recoverable amount of the reportable segment is less than its carrying
amount, an impairment loss shall be recognized.
An intangible asset other than goodwill is considered impaired when its balance sheet carrying amount exceeds its
estimated recoverable amount, which is defined as the higher of its fair value less costs of disposal and its value in use.
Usually, Alcon applies the fair value less costs of disposal method for its impairment assessment. In most cases, no direct
or indirect observable market prices for identical or similar assets are available to measure the fair value less costs of
disposal. Therefore, an estimate of fair value less costs of disposal is based on net present value techniques utilizing post-
tax cash flows and discount rates. In the limited cases where the value in use method would be applied, net present value
techniques would be applied using pre-tax cash flows and discount rates.

58
Fair value less costs of disposal reflects estimates of assumptions that market participants would be expected to use when
pricing the asset or cash generating units, and for this purpose management considers the range of economic conditions
that are expected to exist over the remaining useful life of the asset. The estimates used in calculating net present values
involve significant judgment by management and include assumptions with measurement uncertainty, such as the
following:
• the amount and timing of projected cash flows;
• long-term sales forecasts for up to 25 years including sales growth rates;
• the timing and probability of regulatory and commercial success;
• the royalty rate for the Alcon brand name;
• the terminal growth rate; and
• the discount rate.
Generally, for intangible assets with a definite useful life Alcon uses cash flow projections for the whole useful life of these
assets. For goodwill and the Alcon brand name, Alcon generally utilizes cash flow projections for a five-year period based
on management forecasts, with a terminal value based on cash flow projections considering the long-term expected
inflation rates and impact of demographic trends of the population to which Alcon products are prescribed, for later
periods. Probability-weighted scenarios are typically used.
Discount rates used consider Alcon estimated weighted average cost of capital adjusted for specific country and currency
risks associated with cash flow projections to approximate the weighted average cost of capital of a comparable market
participant.
Due to the above factors and those further described in the "Opportunity and risk summary" section above, actual cash
flows and values could vary significantly from forecasted future cash flows and related values derived using discounting
techniques.
For additional information on intangible assets and impairment charges recognized, see Note  10 to the Consolidated
Financial Statements included elsewhere in this Annual Report.
Goodwill and other intangible assets represent a significant part of our consolidated balance sheet, primarily due to
acquisitions. Although no significant additional impairments are currently anticipated, impairment evaluation could lead to
material impairment charges in the future.

Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. Identifiable assets acquired and liabilities assumed in a business combination
are measured initially at their fair values at the acquisition date. The excess of the consideration transferred over the fair
value of the net identifiable assets acquired is recorded as goodwill, or directly in the income statement if it is a bargain
purchase. Alcon primarily uses net present value techniques, utilizing post-tax cash flows and discount rates in calculating
the fair value of identifiable assets acquired when allocating the purchase consideration paid for the acquisition. The
estimates used in calculating fair values involve significant judgment by management and include assumptions with
measurement uncertainty, such as the following:
• the amount and timing of projected cash flows;
• long-term sales forecasts;
• the timing and probability of regulatory and commercial success; and
• the discount rate.
Alcon may elect on a transaction-by-transaction basis to apply the optional concentration test to assess whether a trans-
action qualifies as a business. Under the test, when substantially all of the fair value of the gross assets acquired is
concentrated in a single identifiable asset or a group of similar identifiable assets, Alcon will account for the transaction as
an asset purchase and not a business combination.
If the concentration test is not met, or Alcon elects not to apply this optional test, Alcon will perform an assessment
focusing on the existence of inputs and processes that have the ability to create outputs to determine whether the
transaction is an asset purchase or a business combination.

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Contingent consideration
In a business combination, it is necessary to recognize contingent future payments to previous owners, representing
contractually defined potential amounts as a liability. Usually for Alcon these are linked to development or commercial
milestones related to certain assets and are recognized as a financial liability at their fair value, which is then re-measured
at each subsequent reporting date.
For the determination of the fair value of contingent consideration various unobservable inputs are used. A change in
these inputs might result in a significantly higher or lower fair value measurement. The inputs used are, among others, the
timing and probability of regulatory and commercial success, sales forecast and assumptions regarding the discount rate,
timing and different scenarios of triggering events. The significance and usage of these inputs to each contingent
consideration may vary due to differences in the timing and triggering events for payments or in the nature of the asset
related to the contingent consideration. These estimations typically depend on factors such as technical milestones or
market performance and are adjusted for the probability of their likelihood of payment, and if material, are appropriately
discounted to reflect the impact of time.
Changes in the fair value of contingent consideration liabilities in subsequent periods are recognized in the consolidated
income statement in "Cost of net sales" for currently marketed products and in "Research & development" for in-process
research & development.
The effect of unwinding the discount over time is recognized in "Interest expense" in the consolidated income statement.

Taxes
The estimated amounts for current and deferred tax assets or liabilities, including any amounts related to any uncertain
tax positions, are based on currently known facts and circumstances. Tax returns are based on an interpretation of tax
laws and regulations and reflect estimates based on these judgments and interpretations. The tax returns are subject to
examination by the competent taxing authorities which may result in an assessment being made requiring payments of
additional tax, interest or penalties. Inherent uncertainties exist in the estimates of the tax positions.

Research & development

Internal research & development costs are fully charged to "Research & development" in the consolidated income
statement in the period in which they are incurred. Alcon considers that regulatory and other uncertainties inherent in the
development of new products preclude the capitalization of internal development expenses as an intangible asset usually
until marketing approval from the regulatory authority is obtained in a relevant major market, such as the United States,
the European Union, Switzerland, China or Japan.

Factors affecting comparability of period to period results of operations

The comparability of the period to period results of our operations can be significantly affected by the COVID-19
pandemic, our Spin-off from Novartis, the issuance and refinancing of financial debts, and acquisitions. Our net sales,
operating results and cash flows in 2020 were adversely affected by COVID-19. Additionally, one transaction of significance
in 2020 is the issuance of senior notes due in 2030. The transactions of significance during 2019 included the acquisition of
PowerVision, Inc., Spin-off from Novartis through a dividend in kind distribution to Novartis shareholders, and refinancing
of the bridge and term loans which had been issued in April 2019. Transactions of significance during 2018 included the
acquisitions of TrueVision Systems, Inc. and Tear Film Innovations, Inc. Refer to Note 4 to the Consolidated Financial
Statements for details related to each of these significant transactions.

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Results of operations
In evaluating our performance, we consider not only the IFRS results, but also certain non-IFRS measures, including
various "core" results and constant currency ("cc") results. These measures assist us in evaluating our ongoing
performance from period to period and we believe this additional information is useful to investors in understanding the
performance of our business. Refer to "Item 5.A. Operating Results —Non-IFRS measures as defined by the Company"
section for additional information and reconciliation tables. These measures are not intended to be substitutes for the
equivalent measures of financial performance prepared in accordance with IFRS and may differ from similarly titled non-
IFRS measures of other companies.

Key figures

2020 compared to 2019 2019 compared to 2018

Change % Change %
(1) (1)
($ millions unless indicated otherwise) 2020 2019 $ cc 2018 $ cc
 
Net sales to third parties 6,763 7,362 (8) (8) 7,149 3 5
Gross profit 2,940 3,662 (20) (19) 3,192 15 19
Operating (loss) (482) (187) (158) (138) (248) 25 54
Operating margin (%) (7.1) (2.5) (3.5)
Net (loss) (531) (656) 19 24 (227) (189) (163)
(2)
Basic and diluted (loss) per share ($) (1.09) (1.34) 19 24 (0.46) (191) (163)

(1)
Core results
Core operating income 789 1,265 (38) (35) 1,212 4 11
Core operating margin % 11.7 17.2 17.0
Core net income 512 925 (45) (42) 974 (5) 1
(2)
Core basic earnings per share ($) 1.05 1.89 (44) (42) 2.00 (6) 1
(3)
Core diluted earnings per share ($) 1.04 1.89 (45) (42) 2.00 (6) 1
(1) Core results and constant currencies (cc) as presented in this table are non-IFRS measures. Alcon uses certain non-IFRS metrics when
measuring performance, including when measuring current period results against prior periods. Refer to "Item 5.A. Operating
Results —Non-IFRS measures as defined by the Company" section for additional information and reconciliation tables.

(2) Calculated using 489.0 million weighted-average shares for the year ended December  31, 2020 and 488.2 million shares for prior
year periods.

(3) Calculated using 491.8 million, 490.1 million and 488.2 million weighted average diluted shares for the years ended December 31,
2020, 2019 and 2018, respectively.

61
All comments below focus on constant currencies (cc) movements for the year ended December  31, 2020 compared to
2019 unless otherwise noted. Commentary for the year ended December  31, 2019 compared to 2018 may be found in
Item 5 of the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission ("SEC") on
February 25, 2020, ("2019 Form 20-F").

Net sales by segment

The following table provides an overview of net sales to third parties by segment:

2020 compared to 2019 2019 compared to 2018

Change % Change %
(1) (1)
($ millions unless indicated otherwise) 2020 2019 $ cc 2018 $ cc

Surgical          
Implantables 1,126 1,210 (7) (6) 1,136 7 9
Consumables 1,952 2,304 (15) (15) 2,227 3 6
Equipment/other 632 660 (4) (3) 636 4 6
Total Surgical 3,710 4,174 (11) (11) 3,999 4 7

Vision Care
Contact lenses 1,838 1,969 (7) (7) 1,928 2 4
Ocular health 1,215 1,219 — 1 1,222 — 2
Total Vision Care 3,053 3,188 (4) (4) 3,150 1 3
Net sales to third parties 6,763 7,362 (8) (8) 7,149 3 5
(1) Constant currencies is a non-IFRS measure. Refer to "Item 5.A. Operating Results—Non-IFRS measures as defined by the Company"
section for additional information.

Surgical

Surgical net sales were $3.7 billion (-11%, -11% cc), impacted by a broad slowdown in non-urgent surgeries due to the
COVID-19 pandemic in the second quarter with substantial recovery in the second half of the year. Implantables declined
(-7%, -6% cc) with lower demand in monofocal IOLs, partially offset by growth in Advanced Technology IOLs, mainly AcrySof
IQ PanOptix. Consumables declined (-15%, -15% cc), primarily impacted by declining procedures due to the COVID-19
pandemic. Equipment/other declined (-4%, -3% cc), primarily due to a broad slowdown from the COVID-19 pandemic.

Vision Care

Vision Care net sales were $3.1 billion (-4%, -4% cc), impacted by lower demand due to the COVID-19 pandemic. Contact
lenses declined (-7%, -7% cc) across most categories and geographies, partially offset by the launch of Precision1. Ocular
health grew slightly in cc (0%, +1% cc), as the strong Pataday launch was able to offset declines from the pandemic.

62
Operating (loss)/income

2020 compared to 2019 2019 compared to 2018

Change % Change %
(1) (1)
($ millions unless indicated otherwise) 2020 2019 $ cc 2018 $ cc

Gross profit 2,940 3,662 (20) (19) 3,192 15 19

Selling, general & administration (2,694) (2,847) 5 5 (2,801) (2) (4)
Research & development (673) (656) (3) (3) (587) (12) (12)
Other income 235 55 nm nm 47 17 19
Other expense (290) (401) 28 28 (99) nm nm
Operating (loss) (482) (187) (158) (138) (248) 25 54
Operating margin (%) (7.1) (2.5) (3.5)

(1)
Core results
Core gross profit 4,092 4,663 (12) (12) 4,541 3 6
Core operating income 789 1,265 (38) (35) 1,212 4 11
Core operating margin (%) 11.7 17.2 17.0
nm = not meaningful

(1) Core results and constant currencies are non-IFRS measures. Refer to "Item 5.A. Operating Results—Non-IFRS measures as defined
by the Company" section for additional information and reconciliation tables.

Operating loss was $482 million, compared to $187 million in the prior year period. The COVID-19 pandemic resulted in
lower sales, higher unabsorbed fixed overhead costs and labor inefficiencies of $120 million for manufacturing plants
operating at below normal capacity, and increased provisions for expected credit losses, partially offset by reductions in
discretionary spending. The current year period benefited from a $154 million net gain on post-employment benefit plan
amendments, a gain relating to an extinguishment of certain potential liabilities under the employee matters agreement
executed at Spin-off and lower separation costs. The current year period also included $167 million in impairments of
intangible assets, increased inventory provisions, losses for manufacturing asset retirements, and higher investments in
research and development. The prior year period included $72 million of spin readiness costs and $32 million in legal
settlement costs. There was a negative 0.6 percentage point impact on operating margin from currency.
Adjustments to arrive at core operating income were $1.3 billion mainly due to $1.0 billion of amortization, $217 million of
separation costs, $167 million in impairments of intangible assets, and $49 million of transformation program costs,
partially offset by a $154 million net gain on post-employment benefit plan amendments and a $63 million benefit for fair
value adjustments of contingent liabilities.
Core operating income was $789 million (-38%, -35% cc), compared to $1.3 billion in the prior year period. The COVID-19
pandemic resulted in lower sales, higher unabsorbed fixed overhead costs and labor inefficiencies of $120 million and
increased provisions for expected credit losses, partially offset by reductions in discretionary spending. The current year
period also included increased inventory provisions and higher investments in research and development. There was a
negative 0.4 percentage point impact on core operating margin from currency.

63
Segment contribution
Certain income and expense items, primarily related to fair value adjustments of contingent consideration liabilities and
option rights and integration related expenses, previously included in segment contribution in the prior year periods have
been reclassified to conform with reporting of segment contribution to the CODM in the current period. The
reclassifications resulted in an increase in Surgical and Vision Care segment contribution of $34 million and $17 million,
respectively, in the year ended December  31, 2019 and an increase in Surgical and Vision Care segment contribution of
$33 million and $6 million, respectively, in the year ended December  31, 2018. For additional information regarding
segment contribution please refer to Note 5 to the Consolidated Financial Statements.

2020 compared to 2019 2019 compared to 2018

Change % Change %
(1) (1)
($ millions unless indicated otherwise) 2020 2019 % cc 2018 $ cc

Surgical segment contribution 672 957 (30) (28) 846 13 19

As % of net sales 18.1 22.9 21.2
Vision Care segment contribution 419 580 (28) (25) 600 (3) 1
As % of net sales 13.7 18.2 19.0
Not allocated to segments (1,573) (1,724) 9 9 (1,694) (2) (2)
Operating (loss) (482) (187) (158) (138) (248) 25 54
(1)
Core adjustments 1,271 1,452 1,460
(1)
Core operating income 789 1,265 (38) (35) 1,212 4 11
(1) Core results and constant currencies are non-IFRS measures. Refer to "Item 5.A. Operating Results—Non-IFRS measures as defined
by the Company" section for additional information and reconciliation tables.

Surgical

Surgical segment contribution was $672 million (-30%, -28% cc), compared to $957 million in the prior year period. The
COVID-19 pandemic resulted in a slowdown in sales, and higher unabsorbed fixed overhead costs and labor inefficiencies
and provisions for expected credit losses, partially offset by reductions in discretionary spending. The current year period
also included higher investments in research and development. There was a negative 0.4 percentage point impact on
segment contribution margin from currency.

Vision Care

Vision Care segment contribution was $419 million (-28%, -25% cc), compared to $580 million in the prior year period. The
COVID-19 pandemic resulted in lower sales and higher unabsorbed fixed overhead costs and labor inefficiencies, partially
offset by reductions in discretionary spending. The current year period also included higher inventory provisions. There
was a negative 0.4 percentage point impact on segment contribution margin from currency.

Not allocated to segments

Operating loss not allocated to segments totaled $1.6 billion (+9%,+9% cc), compared to $1.7 billion in the prior year
period. The prior year period was higher primarily due to $72 million of spin readiness costs and $32 million in legal
settlement costs.

64
Non-operating income & expense

2020 compared to 2019 2019 compared to 2018

Change % Change %
(1) (1)
($ millions unless indicated otherwise) 2020 2019 $ cc 2018 $ cc

Operating (loss) (482) (187) (158) (138) (248) 25 54

Interest expense (124) (113) (10) (11) (24) nm nm
Other financial income & expense (29) (32) 9 6 (28) (14) (15)
(Loss) before taxes (635) (332) (91) (81) (300) (11) 13
Taxes 104 (324) nm nm 73 nm nm
Net (loss) (531) (656) 19 24 (227) (189) (163)
Basic and diluted (loss) per share ($) (1.09) (1.34) 19 24 (0.46) (191) (163)

(1)
Core results
Core taxes (124) (195) 36 34 (186) (5) (12)
Core net income 512 925 (45) (42) 974 (5) 1
Core basic earnings per share ($) 1.05 1.89 (44) (42) 2.00 (6) 1
Core diluted earnings per share ($) 1.04 1.89 (45) (42) 2.00 (6) 1
nm = not meaningful

(1) Core results and constant currencies are non-IFRS measures. Refer to "Item 5.A. Operating Results—Non-IFRS measures as defined
by the Company" section for additional information and reconciliation tables.

Interest expense

Interest expense was $124 million, compared with $113 million in the prior year period, driven by an increase in third
party debt following the Spin-off from Novartis and additional senior notes issued in May 2020.

Other financial income & expense

Other financial income & expense was a net expense of $29 million, compared with $32 million in the prior year period.

Taxes

Tax benefit was $104 million, compared to a tax expense of $324 million in the prior year period. Taxes recognized in the
prior year period include $304 million in non-cash tax expense related to the re-measurement of deferred tax assets and
liabilities as a result of Swiss tax reform, tax expense related to rate changes in the US following legal entity
reorganizations executed related to the Spin-off, non-cash tax expense related to re-measurement of deferred tax assets
and liabilities following a tax rate change in India, and net changes in uncertain tax positions.
Adjustments to arrive at core tax expense were $228 million, primarily related to tax associated with operating income
core adjustments.
Core tax expense was $124 million, compared to $195 million in the prior year period. The average core tax rate increased
to 19.5% from 17.4% in the prior year period. The increase in the core effective tax rate was primarily driven by the
increase in the Swiss tax rate, partially offset by a favorable mix of pre-tax income/(loss) across geographical tax
jurisdictions, the tax benefit from a build of inventory in certain international markets, and net changes in uncertain tax
positions.

Net (loss)/income and (loss)/earnings per share

Net loss was $531 million, compared to $656 million in the prior year period. The change was mainly attributable to the
increased operating loss, offset by the tax benefit in the current period compared to the large tax expense in the prior
year period. The associated basic and diluted loss per share were $1.09, compared to $1.34 in the prior year period.

65
Core net income was $512 million, compared to $925 million  in the prior year period, primarily due to lower core
operating income. The associated core basic earnings per share were $1.05 compared to $1.89 in the prior year period,
and core diluted earnings per share were $1.04 compared to $1.89 in the prior year period.

Effects of currency fluctuations

We prepare our Consolidated Financial Statements in US dollars. As a result, fluctuations in the exchange rates between
the US dollar and other currencies can have a significant effect on both our results of operations as well as on the
reported value of our assets, liabilities and cash flows. This in turn may significantly affect reported earnings (both
positively and negatively) and the comparability of period-to-period results of operations.
For purposes of our consolidated balance sheet, we translate assets and liabilities denominated in other currencies into
US dollars at the prevailing market exchange rates as of the relevant balance sheet date. For purposes of our consolidated
income statement and statement of cash flows, revenue, expense and cash flow items in local currencies are translated
into US dollars at average exchange rates prevailing during the relevant period. As a result, even if the amounts or values
of these items remain unchanged in the respective local currency, changes in exchange rates have an impact on the
amounts or values of these items in our Consolidated Financial Statements.
Alcon manages its global currency exposure by engaging in hedging transactions where management deems appropriate
(forward contracts and swaps). Specifically, Alcon enters into various contracts that reflect the changes in the value of
foreign currency exchange rates to preserve the value of assets.
There is also a risk that certain countries could devalue their currency. If this occurs, then it could impact the effective
prices we would be able to charge for our products and also have an adverse impact on both our consolidated income
statement and balance sheet. Alcon is exposed to a potential adverse devaluation risk on its intercompany funding and
total investment in certain subsidiaries operating in countries with exchange controls.
The hyperinflationary economies in which we operate are Argentina and Venezuela. Venezuela was hyperinflationary for
all years presented, and Argentina became hyperinflationary effective July  1, 2018, requiring implementation of
hyperinflation accounting as of January  1, 2018. Refer to Note 3 to the Consolidated Financial Statements included
elsewhere in this Annual Report for additional information.

66
Foreign exchange rates for foreign currency translation
The following tables set forth the foreign exchange rates of the US dollar against key currencies used for foreign currency
translation when preparing the Consolidated Financial Statements:

  Average for year As of December 31

($ per unit unless
indicated otherwise) 2020 2019 Change % 2020 2019 Change %
AUD 0.690 0.695 (1) 0.771 0.701 10
BRL 0.196 0.254 (23) 0.193 0.249 (22)
CAD 0.746 0.754 (1) 0.784 0.767 2
CHF 1.066 1.006 6 1.135 1.032 10
CNY 0.145 0.145 — 0.153 0.144 6
EUR 1.141 1.120 2 1.229 1.121 10
GBP 1.284 1.277 1 1.365 1.313 4
JPY (100) 0.937 0.917 2 0.970 0.920 5
RUB (100) 1.390 1.546 (10) 1.337 1.613 (17)

  Average for year As of December 31

($ per unit unless
indicated otherwise) 2019 2018 Change % 2019 2018 Change %
AUD 0.695 0.748 (7) 0.701 0.707 (1)
BRL 0.254 0.275 (8) 0.249 0.258 (3)
CAD 0.754 0.772 (2) 0.767 0.735 4
CHF 1.006 1.023 (2) 1.032 1.014 2
CNY 0.145 0.151 (4) 0.144 0.145 (1)
EUR 1.120 1.181 (5) 1.121 1.144 (2)
GBP 1.277 1.336 (4) 1.313 1.274 3
JPY (100) 0.917 0.906 1 0.920 0.907 1
RUB (100) 1.546 1.600 (3) 1.613 1.437 12

67
The following table shows information concerning the rate of exchange of US dollar per Swiss franc based on exchange
rate information found on Bloomberg Market System. The exchange rate in effect on February 19, 2021 as found on
Bloomberg Market System was CHF 1.00 = USD 1.12.
(1) (1)
($ per CHF) Low High
January 2020 1.03 1.04
February 2020 1.03 1.04
March 2020 1.03 1.04
April 2020 1.02 1.04
May 2020 1.04 1.04
June 2020 1.05 1.06
July 2020 1.09 1.10
August 2020 1.10 1.11
September 2020 1.08 1.09
October 2020 1.09 1.09
November 2020 1.10 1.11
December 2020 1.13 1.14
January 2021 1.12 1.13
February 2021 (through February 19, 2021) 1.11 1.12

(1) Represents the lowest and highest, respectively, of the exchange rates on the last day of each month during the year.

Currency impact on key figures

The following table provides a summary of the currency impact on key company figures due to their conversion into US
dollars, Alcon's reporting currency, of the financial data from entities reporting in non-US dollars.

2020 compared to 2019 2019 compared to 2018

Change % Change %
(1)
Percentage point (1)
Percentage point
$ cc currency impact $ cc currency impact

Net sales to third parties (8) (8) — 3 5 (2)

Gross profit (20) (19) (1) 15 19 (4)
Operating (loss) (158) (138) (20) 25 54 (29)
Net (loss) 19 24 (5) (189) (163) (26)
Basic and diluted (loss) per share 19 24 (5) (191) (163) (28)

(1)
Core results
Core operating income (38) (35) (3) 4 11 (7)
Core net income (45) (42) (3) (5) 1 (6)
Core basic earnings per share (44) (42) (2) (6) 1 (7)
Core diluted earnings per share (45) (42) (3) (6) 1 (7)
(1) Core results and constant currencies (cc) as presented in this table are non-IFRS measures. Alcon uses certain non-IFRS metrics when
measuring performance, including when measuring current period results against prior periods. Refer to "Item 5.A. Operating
Results—Non-IFRS measures as defined by the Company" section for additional information.

A 1% movement in the USD versus our basket of currencies would have resulted in a $38 million change in annual net
sales and a $12 million change in both annual operating income and core operating income.

68
Non-IFRS measures as defined by the Company
Alcon uses certain non-IFRS metrics when measuring performance, including when measuring current period results
against prior periods, including core results, percentage changes measured in constant currencies, EBITDA, free cash flow,
and net (debt)/liquidity.
Because of their non-standardized definitions, the non-IFRS measures (unlike IFRS measures) may not be comparable to
the calculation of similar measures of other companies. These supplemental non-IFRS measures are presented solely to
permit investors to more fully understand how Alcon management assesses underlying performance. These supplemental
non-IFRS measures are not, and should not be viewed as, a substitute for IFRS measures.

Core results
Alcon core results, including core operating income and core net income, exclude all amortization and impairment charges
of intangible assets, excluding software, net gains and losses on fund investments and equity securities valued at fair value
through profit and loss ("FVPL"), fair value adjustments of financial assets in the form of options to acquire a company
carried at FVPL, obligations related to product recalls, and certain acquisition related items. The following items that
exceed a threshold of $10  million and are deemed exceptional are also excluded from core results: integration and
divestment related income and expenses, divestment gains and losses, restructuring charges/releases and related items,
legal related items, gains/losses on early extinguishment of debt or debt modifications, past service costs for post-
employment benefit plans, impairments of property, plant and equipment and software, as well as income and expense
items that management deems exceptional and that are or are expected to accumulate within the year to be over a
$10 million threshold.
Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the
adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will
finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-
related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although
this is not always the case for items arising from legal settlements in certain jurisdictions.
Alcon believes that investor understanding of its performance is enhanced by disclosing core measures of performance
because, since they exclude items that can vary significantly from period to period, the core measures enable a helpful
comparison of business performance across periods. For this same reason, Alcon uses these core measures in addition to
IFRS and other measures as important factors in assessing its performance.
A limitation of the core measures is that they provide a view of Alcon operations without including all events during a
period, such as the effects of an acquisition, divestment, or amortization/impairments of purchased intangible assets and
restructurings.

Constant currencies
Changes in the relative values of non-US currencies to the US dollar can affect Alcon's financial results and financial
position. To provide additional information that may be useful to investors, including changes in sales volume, we present
information about changes in our net sales and various values relating to operating and net income that are adjusted for
such foreign currency effects.
Constant currency calculations have the goal of eliminating two exchange rate effects so that an estimate can be made of
underlying changes in the consolidated income statement excluding:
• the impact of translating the income statement of consolidated entities from their non-US dollar functional
currencies to the US dollar; and
• the impact of exchange rate movements on the major transactions of consolidated entities performed in
currencies other than their functional currency.
Alcon calculates constant currency measures by translating the current year's foreign currency values for sales and other
income statement items into US dollars, using the average exchange rates from the prior year and comparing them to the
prior year values in US dollars.
For additional information on the effects of foreign currencies, refer to "Item 5.A. Operating Results-Effects of currency
fluctuations" section.

69
EBITDA
Alcon defines earnings before interest, tax, depreciation and amortization ("EBITDA") as net (loss)/income excluding
income taxes, depreciation of property, plant and equipment (including any related impairment charges), depreciation of
right-of-use assets, amortization of intangible assets (including any related impairment charges), interest expense and
other financial income and expense. Alcon management primarily uses EBITDA together with net (debt)/liquidity to
monitor leverage associated with financial debts. For a reconciliation of EBITDA to the most directly comparable measure
presented in accordance with IFRS, see "Item 5.B. Liquidity and Capital Resources—EBITDA (non-IFRS measure)" section.

Free cash flow

Alcon defines free cash flow as net cash flows from operating activities less cash flow associated with the purchase or sale
of property, plant and equipment. Free cash flow is presented as additional information because Alcon management
believes it is a useful supplemental indicator of Alcon's ability to operate without reliance on additional borrowing or use
of existing cash. Free cash flow is not intended to be a substitute measure for net cash flows from operating activities as
determined under IFRS. For a reconciliation of free cash flow to the most directly comparable measure presented in
accordance with IFRS, see "Item 5.B. Liquidity and Capital Resources—Free cash flow (non-IFRS measure)" section.

Net (debt)/liquidity
Alcon defines net (debt)/liquidity as current and non-current financial debt less cash and cash equivalents, current
investments and derivative financial instruments. Net (debt)/liquidity is presented as additional information because
management believes it is a useful supplemental indicator of Alcon's ability to pay dividends, to meet financial
commitments and to invest in new strategic opportunities, including strengthening its balance sheet. For a reconciliation
of net (debt)/liquidity to the most directly comparable measure presented in accordance with IFRS, see "Item 5.B. Liquidity
and Capital Resources—Net (debt)/liquidity (non-IFRS measure)" section.

Growth rate and margin calculations

For ease of understanding, Alcon uses a sign convention for its growth rates such that a reduction in operating expenses
or losses compared to the prior year is shown as a positive growth.
Gross margins, operating income/(loss) margins and core operating income margins are calculated based upon net sales
to third parties unless otherwise noted.

70
Reconciliation of IFRS results to core results
2020
Amortization Post-
of certain employ-
($ millions except (loss)/earnings per IFRS intangible Separation Transformation ment Other Core
(1) (2) (3) (4) (5) (8)
share) results assets Impairments costs costs benefits items results

Gross profit 2,940 1,001 106 13 — — 32 4,092

Operating (loss)/income (482) 1,021 167 217 49 (154) (29) 789

(Loss)/income before taxes (635) 1,021 167 217 49 (154) (29) 636
(9)
Taxes 104 (172) (34) (37) (10) 38 (13) (124)

Net (loss)/income (531) 849 133 180 39 (116) (42) 512

Basic (loss)/earnings per share ($) (1.09) 1.05

Diluted (loss)/earnings per share ($) (1.09) 1.04

Basic - weighted average shares
(10)
outstanding (millions) 489.0 489.0
Diluted - weighted average shares
(10)
outstanding (millions) 489.0 491.8

Adjustments to arrive at core operating income

Selling, general & administration (2,694) — — 22 — — — (2,672)

Research & development (673) 20 61 — — — (25) (617)

Other income 235 — — — — (166) (36) 33

Other expense (290) — — 182 49 12 — (47)

Refer to the following page for associated explanatory footnotes.

2019
Amortization
of certain
IFRS intangible
(1)
Separation
(3)
Transformation
(4)
Legal
(6)
Other
(8)
Core
($ millions except (loss)/earnings per share) results assets costs Costs items items results

Gross profit 3,662 1,007 10 — — (16) 4,663

Operating (loss)/income (187) 1,040 237 52 32 91 1,265

(Loss)/income before taxes (332) 1,040 237 52 32 91 1,120

(9)
Taxes (324) (140) (54) (7) (8) 338 (195)

Net (loss)/income (656) 900 183 45 24 429 925

Basic (loss)/earnings per share ($) (1.34) 1.89

Diluted (loss)/earnings per share ($) (1.34) 1.89

Basic - weighted average shares outstanding
(10)
(millions) 488.2 488.2
Diluted - weighted average shares outstanding
(10)
(millions) 488.2 490.1

Adjustments to arrive at core operating income

Selling, general & administration (2,847) — 30 — — 15 (2,802)

Research & development (656) 33 4 — — 35 (584)

Other income 55 — — — — (9) 46

Other expense (401) — 193 52 32 66 (58)

Refer to the following page for associated explanatory footnotes.

71
Reconciliation of IFRS results to core results (continued)
2018

Amortization
of certain
IFRS intangible Legal Restructuring Other Core
(1) (2) (6) (7) (8)
($ millions except (loss)/earnings per share) results assets Impairments items items items results
Gross profit 3,192 996 376 — — (23) 4,541
Operating (loss)/income (248) 1,007 378 28 9 38 1,212
(Loss)/income before taxes (300) 1,007 378 28 9 38 1,160
(9)
Taxes 73 (186)
Net (loss)/income (227) 974
Basic (loss)/earnings per share ($) (0.46) 2.00
Diluted (loss)/earnings per share ($) (0.46) 2.00
Basic - weighted average shares outstanding
(10)
(millions) 488.2 488.2
Diluted - weighted
(10)
average shares outstanding
(millions) 488.2 488.2

Adjustments to arrive at core operating income

Selling, general & administration (2,801) — 2 — — 13 (2,786)
Research & development (587) 11 — — — 47 (529)
Other income 47 — — — (4) (19) 24
Other expense (99) — — 28 13 20 (38)

Explanatory footnotes to IFRS to Core reconciliation tables

(1) Includes recurring amortization for all intangible assets other than software.

(2) Includes impairment charges related to intangible assets.

(3) Separation costs are expected to be incurred over the two to three-year period following the completion of the Spin-off from
Novartis and primarily include costs related to IT and third party consulting fees.

(4) Transformation costs, primarily related to restructuring and third party consulting fees, for the multi-year transformation program.

(5) Includes impacts from pension and other post-employment benefit plan amendments.

(6) For 2019, includes legal settlement costs and certain external legal fees. For 2018, includes legal costs related to an investigation.

(7) Includes restructuring income and charges and related items.

(8) For 2020, Gross profit includes $35  million primarily for losses on disposal of property, plant & equipment partially offset by
$3 million in fair value adjustments of contingent consideration liabilities. Research & development includes $60 million in fair value
adjustments of contingent consideration liabilities, partially offset by $35 million in expenses primarily related to the amortization of
option rights. Other income includes a gain relating to an extinguishment of certain potential liabilities under the employee matters
agreement executed at Spin-off and fair value adjustments of financial assets.

For 2019, Gross profit includes $37  million in fair value adjustments of contingent consideration liabilities, partially offset by $21
million in spin readiness costs, manufacturing sites consolidation activities, and integration of recent acquisitions. Selling, general &
administration primarily includes spin readiness costs and the integration of recent acquisitions. Research & development includes
$73 million for the amortization of option rights, post-marketing study following a product's voluntary market withdrawal, and the
integration of recent acquisitions, partially offset by $38  million in fair value adjustments for contingent consideration liabilities.
Other income primarily includes a realized gain on a financial asset. Other expense primarily includes spin readiness costs, fair value
adjustments of a financial asset and other items.

For 2018, Gross profit, selling, general & administration and research & development include charges and reversal of charges related
to a product’s voluntary market withdrawal. Research & development also includes amortization of option rights and a fair value
adjustment of a contingent consideration liability. Other income includes fair value adjustments on a financial asset. Other expense
includes spin-readiness costs and other items.

72
(9) For 2020, total tax adjustments of $228  million include tax associated with operating income core adjustments and discrete tax
items. Tax associated with operating income core adjustments of $1.3 billion totaled $221 million with an average tax rate of 17.4%.
Core tax adjustments for discrete items totaled $7 million.

For 2019, total tax adjustments of $129 million include tax associated with operating income core adjustments and discrete tax
items. Tax associated with operating income core adjustments of $1.5 billion totaled $215 million with an average tax rate of 14.8%.
Core tax adjustments for discrete items totaled $344 million, primarily including $304 million in non-cash tax expense for re-
measurement of deferred tax balances as a result of Swiss tax reform, tax expense related to rate changes in the US following legal
entity reorganizations executed related to the Spin-off, non-cash tax expense related to the re-measurement of deferred tax assets
and liabilities following a tax rate change in India, and net changes in uncertain tax positions.

For 2018, total tax adjustments of $259 million included tax associated with operating income core adjustments and discrete tax
items. Tax associated with operating income core adjustments of $1.5 billion totaled $237 million with an average tax rate of 16.2%.
Core tax adjustments for discrete items totaled $22 million, including a net out of period income tax benefit of $55 million partially
offset by net changes in uncertain tax positions of $33 million.

(10) Core basic earnings per share is calculated using the weighted-average shares of common stock outstanding during the period. Core
diluted earnings per share also contemplate dilutive shares associated with unvested equity-based awards as described in Note 8 to
the Consolidated Financial Statements.

For periods prior to the Spin-off, the denominator for both core basic and diluted earnings per share was calculated using the shares
of common stock distributed in the Spin-off.

73
5.B. LIQUIDITY AND CAPITAL RESOURCES
Our sources of funds have consisted principally of cash flows from operations, issuance of senior notes, bank debt, credit
facilities with lenders, and other financial liabilities to our Former Parent. Our uses of those funds (other than for
operations) have consisted principally of investments in our growth plan, capital expenditures, cash paid for acquisitions
and associated expenses and other obligations.
We believe that we have adequate liquidity to meet our needs. At December 31, 2020, we had cash and cash equivalents
of $1.6 billion, compared to $822 million at December 31, 2019. At December 31, 2020, we had current financial debt of
$169 million, compared to $261 million at December  31, 2019, consisting of bank and other financial debt. At
December 31, 2020 we had non-current financial debt of $3.9 billion consisting of bank debt and senior notes primarily as
a result of the Spin-off.
To date, all of our sales are generated by our subsidiaries and not directly by us. Thus, we are dependent on dividends,
other payments or loans from our subsidiaries to meet our liquidity needs. Some of our subsidiaries may be subject to
legal requirements of their respective jurisdictions of organization that may restrict their paying dividends or other
payments, or making loans, to us.
Potential future uses of our liquidity include capital expenditures, acquisitions, debt repayments, dividend payments, and
other general corporate purposes. As of December 31, 2020, commitments for purchases of property, plant & equipment
were $136 million.
We use the US Dollar as our reporting currency and are therefore exposed to foreign currency exchange movements,
primarily in Euros, Japanese Yen, Chinese Renminbi, Swiss Francs, and emerging market currencies. We manage our global
currency exposure by engaging in hedging transactions where management deems appropriate (forward contracts and
swaps) to preserve the value of assets. As of December  31, 2020 unsettled derivative positions included $3 million in
unrealized gains and $7 million in unrealized losses.
All comments in this section relate to the year ended December  31, 2020 compared to 2019. Commentary for the year
ended December 31, 2019 compared to 2018 may be found in Item 5 of the 2019 Form 20-F.

Free cash flow (non-IFRS measure)

The following is a summary of Alcon free cash flow for 2020, 2019 and 2018, together with a reconciliation to net cash
flows from operating activities, the most directly comparable IFRS measure.

($ millions) 2020 2019 2018

Net cash flows from operating activities 823 920 1,140
Purchase of property, plant & equipment (479) (553) (524)
Proceeds from sale of property, plant & equipment 6 — —
Free cash flow 350 367 616
Free cash flow amounted to an inflow of $350 million, compared to an inflow of $367 million in the prior year period,
driven by decreased cash flows from operating activities partially offset by lower purchases of property, plant and
equipment.
For additional information refer to "Item 5.A. Operating Results—Non-IFRS measures as defined by the Company".

74
Cash flow and net (debt)/liquidity

($ millions) 2020 2019

Net cash flows from operating activities 823 920

Net cash flows used in investing activities (572) (1,011)
Net cash flows from financing activities 466 659
Effect of exchange rate changes on cash and cash equivalents 18 27
Net change in cash and cash equivalents 735 595
Change in derivative financial instrument assets 2 1
Change in current and non-current financial debts (639) (3,432)
Change in other financial liabilities to former parent — 67
Change in other financial receivables from former parent — (39)
Change in net (debt) 98 (2,808)
Net (debt)/liquidity at January 1 (2,656) 152
Net (debt) at December 31 (2,558) (2,656)
Net cash flows from operating activities amounted to $823 million in 2020, compared to $920 million in the prior year
period. The current year was impacted by lower sales and reductions in discretionary spending due to the COVID-19
pandemic, changes in net working capital, decreased taxes paid due to the timing of payments and the COVID-19
pandemic, increased payments for restructuring activities, and increased interest payments on our financial debts
following the Spin-off. The prior year period was impacted by changes in net working capital and payments due to a legal
settlement.
Changes in net working capital in the current year were mainly due to increases in inventories, partially offset by changes
in other current assets. The increases in inventories were primarily driven by inventory builds for new product launches
and decreased demand due to the COVID-19 pandemic, while the reductions in other current assets were due to
decreases in the current portion of long-term receivables and finance lease agreements from customers and other
receivables. There were also decreases in trade payables related to operating activities due to management of
discretionary spending and decreases in trade receivables as collections outpaced new sales. The net change in other
current liabilities was driven by decreased accruals for annual associate short-term incentive payments and for obligations
under the employee matters agreement executed at Spin-off, partially offset by increases in accruals for taxes other than
income taxes. Changes in net working capital in the prior year period were primarily driven by increased trade receivables,
in line with sales. The prior year period also included increases in other current assets due to manufacturing receivables
from our Former Parent and increases in trade payables and other current liabilities primarily due to various transition
agreements and separation costs incurred. Refer to Note 21 to the Consolidated Financial Statements for additional details
regarding changes within net working capital.
Net cash flows used in investing activities amounted to $572 million, compared to $1.0 billion in the prior year period,
primarily due to the acquisition of PowerVision in March 2019 and reduced capital spending in 2020 as a result of the
COVID-19 pandemic. Refer to Notes 4 and 21 of the Consolidated Financial Statements for additional information on the
PowerVision acquisition.
Net cash flows from financing activities amounted to $466 million, compared to $659 million in the prior year period. Cash
inflows in the current year include the issuance of senior notes in May 2020, partially offset by repayments of current
financial debts, realized foreign exchange losses, lease payments and withholding taxes paid upon net settlements of
equity-based compensation. Cash inflows in the prior year period were attributable to net proceeds totaling $3.4 billion
from the issuance and repayment of non-current and current financial debts, partially offset by $2.7 billion for net cash
payments made to our Former Parent and its affiliates prior to the Spin-off. Refer to Notes 4, 17 and 21 of the
Consolidated Financial Statements for additional information.

75
Balance sheet
Assets
Total non-current assets were $22.6 billion as of December 31, 2020, a decrease of $806 million compared to $23.4 billion
as of December 31, 2019. There was a decrease of $1.1 billion in Intangible assets other than goodwill related to recurring
amortization and asset impairments. Financial assets decreased $89  million primarily due to movement of balances to
Other current assets as maturity has become less than twelve months. Property, plant, and equipment increased $312
million primarily due to capital expenditures, partially offset by depreciation.
Total current assets were $5.0 billion as of December 31, 2020, an increase of $751 million when compared to $4.2 billion
as of December 31, 2019. Cash and cash equivalents increased $735 million attributable to the net impact of operating,
investing, and financing activities as described in the preceding section. Inventories increased $139 million primarily driven
by inventory builds for new product launches and decreased demand due to the COVID-19 pandemic. Other current
assets decreased $98 million primarily due to utilization of amounts in escrow to settle contingent consideration
obligations, amortization of option rights, decreases in the current portion of long-term receivables and finance lease
agreements from customers, and other receivables.
The majority of the outstanding trade receivables from Greece, Italy, Portugal, Spain, Brazil, Russia, Turkey, Saudi Arabia,
and Argentina (the closely monitored countries) are due directly from local governments or from government-funded
entities except for Russia, Brazil, and Turkey. We evaluate trade receivables in these countries for potential collection risk.
Should there be a substantial deterioration in our economic exposure with respect to those countries, we may increase
our level of provisions by updating our expected loss provision or may change the terms of trade on which we operate.
The gross trade receivables from these countries at December  31, 2020 amounted to $211 million ($209 million at
December 31, 2019), of which $14 million are past due for more than one year ($10 million at December 31, 2019) and for
which provisions of $15 million have been recorded ($13 million at December 31, 2019). At December 31, 2020, amounts
past due for more than one year are not significant in any of these countries.
The following table summarizes the aging of trade receivables as of December 31, 2020 and 2019:

($ millions) 2020 2019

Not overdue 1,137 1,135
Past due for not more than one month 109 118
Past due for more than one month but less than three months 67 81
Past due for more than three months but less than six months 36 47
Past due for more than six months but less than one year 31 21
Past due for more than one year 49 36
Provisions for doubtful trade receivables (68) (48)
Total trade receivables, net 1,361 1,390
There is also a risk that certain countries could devalue their currency. Currency exposures are described in more detail in
the "Item 5.A. Operating Results — Effects of currency fluctuations" section.

Liabilities
Total non-current liabilities were $6.5 billion as of December 31, 2020, an increase of $468 million when compared to $6.1
billion as of December 31, 2019. Financial debts increased $731 million, primarily due to the issuance of $750 million of
senior notes on May 27, 2020. Deferred tax liabilities decreased $190  million in line with recurring amortization of
intangible assets. Provisions and other non-current liabilities decreased $108 million primarily due to reductions in post-
employment benefit obligations and contingent consideration liabilities.
Total current liabilities were $2.3 billion as of December 31, 2020, in line with prior year.

Equity
Equity was $18.8 billion as of December  31, 2020, a decrease of $481 million when compared to $19.3 billion as of
December 31, 2019.

76
Net (debt)/liquidity (non-IFRS measure)
The following is a summary of net (debt) as of December 31, 2020 and 2019, together with a reconciliation to total financial
debt, the most directly comparable IFRS measure.

($ millions) 2020 2019

Current financial debt (169) (261)

Non-current financial debt (3,949) (3,218)
Total financial debt (4,118) (3,479)

Less liquidity:
Cash and cash equivalents 1,557 822
Derivative financial instruments 3 1
Total liquidity 1,560 823
Net (debt) (2,558) (2,656)

Net debt of $2.6 billion as of December 31, 2020 decreased $98 million compared to $2.7 billion as of December 31, 2019.
Alcon's liquidity amounted to $1.6 billion as of December 31, 2020, compared to $823 million as of December 31, 2019.
Total financial debt amounted to $4.1 billion as of December 31, 2020, compared to $3.5 billion as of December 31, 2019.
The average maturity of financial debts outstanding as of December 31, 2020 is 8.9 years.
The increase in non-current financial debts and corresponding increase in cash and cash equivalents are primarily
attributable to the issuance of and proceeds from the $750 million of senior notes on May 27, 2020. Refer to Notes 4 and
17 to the Consolidated Financial Statements for additional information. The $1 billion revolving credit facility remained
undrawn as of December 31, 2020 and February 23, 2021. For additional information regarding net (debt)/liquidity, which
is a non-IFRS measure, see the explanation of non-IFRS measures in "Item 5. Operating and Financial Review and
Prospects — 5.A. Operating Results —Non-IFRS measures as defined by the Company".

Additional COVID-19 considerations

Net sales trends
Surgical and Vision Care sales were primarily impacted by the COVID-19 pandemic in the second quarter of 2020. Surgical
and Vision Care net sales substantially improved in the second half of the year with the fourth quarter of 2020 in line with
prior year, led by North America and partially offset by International. Uncertainty remains as we expect the pace of
recovery will continue to vary on a market by market basis, depending on existing capacity, differences between private
and public channels, hospitals and non-hospital settings, the nature of patient needs and sense of safety. Based on these
factors, we believe we will likely see a continued impact from COVID-19 during the first half of 2021.

Financial measures
We ended 2020 with $1.6 billion in cash and cash equivalents, following the issuance of $750 million of senior notes in May
2020. Collections improved in the second half of the year and trade receivables are beginning to normalize; however, we
may see delays or reductions in collections in the coming months as we work with our customers during this pandemic. As
a result, we have taken significant steps to manage our cash flow as markets recover. These actions have included:
• Adjusting production volumes to align with demand expectations;
• Managing discretionary spending, in line with sales recovery, and phasing capital expenditures while continuing
with separation, transformation and strategic investment priorities;
• Delaying initiation of our first dividend to 2021; and
• Issuing $750 million of senior notes in May 2020.
Because we believe these conditions are transitory, we are not making structural changes to our operational costs that
could impede our ability to fully ramp up when most geographic markets recover.

77
Key assumptions
Management has assessed the past and potential impact of the adverse effects of COVID-19 on Alcon’s results of
operation, cash flows, and liquidity. The preparation of financial statements requires management to make certain
estimates and assumptions, either at the balance sheet date or during the period that affects the reported amounts of
assets and liabilities as well as revenues and expenses. In particular, the Consolidated Financial Statements for the period
ended December 31, 2020 required the use of significant estimates and assumptions pertaining to the impact of COVID-19
on Alcon's operations, results, and liquidity. Key assumptions include:
• The COVID-19 outbreak will have a continued impact on the the first half of 2021, but the pace of recovery will
continue to vary on a market by market basis;
• Our manufacturing sites expect operating capacity to start to normalize in the first quarter 2021;
• We will retain our associates and meet supplier obligations while managing discretionary costs and phasing
certain capital expenditures; and
• Separation, transformation and strategic investment priorities will continue.
Actual outcomes and results could differ materially from our estimates and assumptions. For example, extended or new
COVID-19 related shut-down periods or slower recovery periods could result in an inability to manufacture products,
reduced sales, incremental provisions for expected customer credit losses and inventory, incremental costs, reduced cash
on hand, and increased debt or impairments of assets. We use the US Dollar as our reporting currency and are therefore
also exposed to foreign currency exchange movements, primarily in Euros, Japanese Yen, Chinese Renminbi, Swiss Francs,
and emerging market currencies.

Financial debts

Our financial debts do not have any major maturities before 2024 and do not contain any financial covenants. Our $1
billion revolving credit facility remained undrawn as of February  23, 2021 and there are no current limitations on our
ability to borrow under the facility.

EBITDA (non-IFRS measure)

($ millions) 2020 2019 2018

Net (loss) (531) (656) (227)
Taxes (104) 324 (73)
Depreciation of property, plant & equipment 293 267 239
Depreciation on right-of-use assets 79 66 —
Amortization of intangible assets 1,078 1,084 1,019
Impairments of property, plant & equipment, and intangible assets 173 8 380
Interest expense 124 113 24
Other financial income & expense 29 32 28
EBITDA 1,141 1,238 1,390

78
Liquidity and financial debt by currency
The following table summarizes liquidity and financial debts by currency as of December 31, 2020 and 2019.
(1) (2)
Liquidity (%) Financial debts (%)
2020 2019 2020 2019
USD 90 63 86 80
EUR 3 6 11 11
CHF 1 1 — —
JPY — — 2 5
Other 6 30 1 4
Total 100 100 100 100
(1) Liquidity includes cash and cash equivalents and time deposits.

(2) Financial debts includes non-current and current financial debts.

5.C. RESEARCH AND DEVELOPMENT, PATENTS AND

LICENSES, ETC.
Alcon research & development spending totaled $673 million, $656 million and $587 million for the years 2020, 2019 and
2018, respectively. As described in the "Risk Factors" section and elsewhere in this Annual Report, we are subject to
varying degrees of governmental regulation in the countries in which we operate, which makes the process of developing
new products and obtaining necessary regulatory marketing authorization lengthy, expensive and uncertain. See "Item 3.
Key Information—3.D. Risk Factors". For further information on Alcon research and development policies and additional
product information, as well as a description of the regulatory approval process, see "Item 4. Information on the Company
—4.B. Business Overview".

5.D. TREND INFORMATION

Please see "Item 5.A. Operating Results—Opportunity and risk summary" and "Item 4. Information on the Company—4.B.
Business Overview" for trend information.

5.E. OFF-BALANCE SHEET ARRANGEMENTS

We have no unconsolidated special purpose financing or partnership entities or other off balance sheet arrangements that
have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that is material to
investors. See also Note 26 to the Consolidated Financial Statements included elsewhere in this Annual Report.

79
ITEM 6. DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES
6.A. DIRECTORS AND SENIOR MANAGEMENT
The information set forth under “Item 6.C. Board Practices—Corporate Governance—Board of Directors—Composition”
and “Item 6.C. Board Practices—Corporate Governance—Executive Committee—Composition of the Executive Committee”
is incorporated by reference.

80
6.B. COMPENSATION

Introduction
Dear Shareholder
On behalf of the Alcon Board of Directors ("Board") and Compensation Committee ("CC"), I am pleased to introduce the
2020 Compensation Report. It was the second financial year for Alcon as an independent, stand-alone company with
listings on both the SIX Swiss Exchange ("SIX") and the New York Stock Exchange ("NYSE"). This report outlines Alcon’s
overall 2020 compensation framework and philosophy for the members of the Board of Directors as well as for the
members of the Executive Committee of Alcon ("ECA").
This Compensation Report covers the financial year 2020 from January to December.

Activities of the Compensation Committee in 2020

We believe in a strong pay-for-performance compensation philosophy that motivates our senior executives to create long-
term value for the Company and its shareholders. During 2020, we continued to evaluate our overall compensation
programs to ensure they support the Company's business objectives and reflect the best interests of our shareholders.
Throughout the year, we engaged with our shareholders to seek their views on our compensation programs.

Business Overview and Assessment of the COVID-19 Impact

2020 was a year like no other for our world, the medical device industry and our Company; the pandemic has significantly
impacted all aspects of daily life. In response to the pandemic, Company management immediately took steps to protect
the short-term and long-term health of our associates, customers and shareholders. These actions, summarized below,
protected the Company and enabled the business to rebound and resume key product launches in the second half of
2020.

Protect our Associates

• Maintained full employment and did not furlough associates;

• Maintained pay levels notwithstanding the significant reduction in manufacturing volumes and sales; and
• Implemented global health and safety protocols, such as mandatory temperature checks, use of personal
protective equipment, social distancing and capacity restrictions across all campus and manufacturing sites under
the supervision of the Alcon Crisis Management team.

Serve our Customers

• Collaborated with the industry to develop new safety protocols and patient workflow strategies to enable
practitioners and patients to stay safe;
• Allocated capital in organic investments resulting in the successful launch of new products such as PanOptix,
PRECISION1 and Pataday; and
• Donated ophthalmic equipment, vision care products and personal protective equipment to support frontline
workers during the pandemic.

Align with Shareholders

• Outperformed direct competitors’ stock by 1700 basis points, maintained healthy valuation levels in a volatile
market and ended the year +17% in the NYSE and +7% in the SIX markets;
• Gained market share in the US OTC ocular allergy category, daily disposable SiHy segment and global AT-IOL
market; and
• Maintained financial flexibility with cost measures reducing $200 million of discretionary spend and by
postponing our first dividend proposal to 2021.

81
The impact of COVID-19 and government mandates on eye care practices made it challenging for the Company to achieve
its performance goals for the year since both short-term and long-term incentive plan targets were approved in February
2020 prior to the full knowledge of the COVID-19 impact on our global business.
Throughout the year, the Board and the CC were actively involved in monitoring Alcon’s response to the pandemic and its
impact on the entire medical device industry. Although Alcon did not meet the threshold performance level for the 2020
short-term incentive payout, the Board and CC approved a 2020 short-term incentive partial payout of 75% of target to the
ECA based on their performance in stabilizing the business in these crucial times, rebounding in second half of the year
from a financial perspective and positioning Alcon for success beyond 2020. On average, short-term incentive payout for
all other Alcon associates inclusive of their individual performance factor was approximately 85% of target. Alcon essential
workers, who came to work each day throughout the pandemic to ensure the continued delivery of critical medical
products, received a 100% payout in recognition of their efforts. For the 2018 long-term incentive award, the Board and CC
approved a payout of 83% based on actual performance against the existing performance metrics with no modification
due to the pandemic. In addition, no modifications have been made to the in-flight 2019 and 2020 long-term incentive
awards or their respective performance metrics.

CEO Compensation Increase

In February 2020, the Board made the decision to increase the CEO’s total direct compensation opportunity in line with the
median CEO compensation of Alcon's peer group. Although both fixed and variable elements of the CEO’s total direct
compensation were below median, the Board decided to increase only the long-term incentive component, entirely paid in
the form of performance shares vesting in three years, in order to align the increase with our pay-for-performance
philosophy and focus on long-term value creation. The new 2020 CEO long-term incentive target is 430% of his base salary,
bringing his total direct compensation closer to the median of our peer group.

Engagement with Shareholders

We value shareholder engagement and feedback and take every opportunity to get better acquainted with our
shareholder base. Therefore, we continued our extensive formal outreach to engage with shareholders.
During our formal outreach in the fall of 2020, we discussed our pay-for-performance commitment, sought feedback on
our compensation programs and explained our approach to measuring performance as it relates to long-term
shareholder value creation. We are pleased to find that investors are broadly supportive of our compensation approach. It
is our intention to continue this dialogue with our shareholders and evaluate and consider their feedback to ensure better
alignment between our compensation programs and shareholder interests.

2021 Annual General Meeting

In line with the Articles of Incorporation, we will ask our shareholders to cast a binding vote on the maximum aggregate
amount of compensation for members of the Board for their term of office from the 2021 AGM to the 2022 AGM. We will
also ask our shareholders to cast a binding vote on the maximum aggregate amount of compensation for members of the
ECA for the 2022 financial year. In addition, we will ask our shareholders to endorse this 2020 Compensation Report in an
advisory vote.
On behalf of the Board and the members of the CC, we thank you for your trust in Alcon and for your feedback.
Sincerely,

Karen May
Chair of the Compensation Committee

82
Compensation at a Glance
2020 ECA Compensation-Summary
The year 2020 represented the first full calendar year for Alcon as an independent, stand-alone company following the
Spin-off from Novartis in April 2019 (the "Spin-off). In 2020, we continued to build, with a few further minor modifications,
the executive compensation program Alcon adopted in 2019.
The compensation program consisted of a balanced set of fixed and variable elements rewarding short-term and long-
term performance through the delivery of cash payments and equity awards. Performance goals were aligned to the
strategic plan in a mix of absolute and relative measures including financial and non-financial metrics.
Exhibit 1

Annual Base Salary Short-Term Incentive Long-Term Incentive Benefits

(annual incentive)
Purpose In line with global pay Rewards annual Rewards long-term Retirement savings and
practices, reflects performance against value creation in line insurances in line with
responsibilities, key objectives with Alcon’s strategy local market practices
experience and skills and business priorities and benefits associated
with global mobility
and international
relocation
Payment Cash Cash Equity (Performance Cash or in-kind,
Stock Units) contributions to
retirement savings and
insurance policies
Performance — One year Three-year cliff vesting —
period
Performance — Three financial Four equally weighted —
measures performance performance measures
measures, individual including financial,
performance rating external and
and a funding innovation metrics
mechanism

Payout range — 0%-200% of the 0%-200% of the —

individual target number of
award Performance Stock
Units granted
Basis Fixed Variable Variable Fixed in proportion
of pay

83
Total Compensation for 2020
From January 1, 2020 to December 31, 2020, we awarded the ECA members the amounts set out below. For more detailed
information, see section "ECA Compensation 2020" in this 2020 Compensation Report.
Exhibit 2

Additional
Compensation Fixed compensation Variable compensation compensation Totals
2020 2020-2022
Annual Pension and short-term long-term
From January 1, 2020 base insurance incentive incentive Other Total
1
to December 31, 2020 salary benefits award awards benefits compensation
David J. Endicott, CEO 1,225,049 160,771 1,102,544 4,975,110 635,708 8,099,182
Other ECA members 4,088,839 791,750 2,546,652 6,651,981 3,209,254 17,288,476
2
Totals in USD 5,313,888 952,521 3,649,196 11,627,091 3,844,962 25,387,658
3
Totals in CHF 4,988,348 894,168 3,425,639 10,914,792 3,609,412 23,832,358
1
Performance Stock Units.
2
Includes the CEO and six other ECA members.
3
The amounts were converted at the rate of 1.0 CHF : 1.06526 USD.

2020 Board of Directors Compensation-Summary

We paid our Directors a fixed fee for services covering the term of their office from the 2020 Annual General Meeting
("2020 AGM") to the 2021 Annual General Meeting ("2021 AGM").
The fixed compensation consists of a base fee for Board membership and additional fees for service on Board
committees. Board members and the Board Chair receive fifty percent of their compensation in cash and fifty percent in
unrestricted Alcon shares. On a voluntary basis, a Board member may opt to receive all or part of the cash portion in
additional shares. Alcon does not provide any performance-based components of pay to the members of the Board.
Effective as of the date of our 2020 AGM, the Board split the current responsibilities of the previous Compensation,
Governance and Nomination Committee ("CGNC") into two separate committees: the Compensation Committee ("CC") and
the Governance and Nomination Committee ("GNC"). The Board recognized the heavy workload assigned to the CC since
the spin-off from Novartis; this split enables the two newly created committees to better focus on their respective key
responsibilities. For the GNC, this includes a focus on leading governance practices and ESG topics in general, and for the
CC, this includes a focus on human resource strategy and executive compensation. Finally, this reorganization is in line
with best corporate governance standards. The annual fee for the Chair of the GNC is USD 53,263 (CHF 50,000) and each
member received USD 26,632 (CHF 25,000). The fees for the Chair and the members of the CC are the same as the GNC.

84
Exhibit 3

Fee for the period

from the 2020 AGM
to the 2021 AGM
1
Board function USD CHF
Annual base fee:
Board Chair 1,011,997 950 000
Board member base fee (Board retainer fee) 213,052 200 000
Additional fees:
Vice Chair 42,610 40 000
Chair of the Audit and Risk Committee 74,568 70 000
Chair of the Compensation Committee 53,263 50 000
Chair of the Governance and Nomination Committee 53,263 50 000
Chair of the Innovation Committee 53,263 50 000
Member of the Audit and Risk Committee 37,284 35 000
Member of the Compensation Committee 26,632 25 000
Member of the Governance and Nomination Committee 26,632 25 000
Member of the Innovation Committee 26,632 25 000
1
The Board fees are paid in Swiss Francs (CHF), converted at the rate of 1.0 CHF : 1.06526 USD.

Alcon Board Fee Payments in 2020

In 2020, Alcon paid the members of the Board the following total amounts.
Exhibit 4

Payment in Payment in Number of Other

cash shares shares payments Total fees
1
Total fees paid in 2020 in USD 904,346 2,167,600 39,913 73,985 3,145,931
2
Total fees paid in 2020 in CHF 848,944 2,034,808 39,913 69,453 2,953,205
1
Represents compensation for nine out of ten members of the Board as David J. Endicott does not receive additional compensation for
his service as a member of the Board.
2
The payments in cash were made in Swiss Francs (CHF). For consistency all compensation payments are reported in USD in this report.
The amounts were converted at the rate of 1.0 CHF : 1.06526 USD. All amounts are before deduction of the social security contributions
and income tax due by the Board member.

For more details regarding the compensation paid to the individual members of the Board, see section "Board of Directors
Compensation 2020" in this Compensation Report.

85
2021 Compensation Outlook
ECA Compensation
The CC is committed to a pay-for-performance compensation framework to align Company and executive performance
with shareholder interests. Our executive compensation framework will continue to be benchmarked against a carefully
selected peer group, consisting of European and North American companies with a blend of similar size, industry and
geographic characteristics to Alcon. The inclusion of European and North American companies reflects our global
footprint, business mix and source for management talent.
Based on the Company’s business strategy, compensation philosophy and the analysis of peer group compensation
practices, below are the key features of ECA compensation for 2021:
• Same overall structure of ECA compensation as compared to 2020 (base pay, STI, LTI and benefits);
• Broadly no significant change to the ECA members' compensation levels;
• Continuation of robust share ownership requirements; and
• No material changes to benefits provisions.

Board Compensation
The Board compensation framework will remain unchanged for the upcoming term of office from the 2021 AGM to the
2022 AGM, including:
• Board Chair and Board member fees unchanged compared to 2020; and
• Same mix of fees payable in cash and shares as in 2020, including the option to elect a higher percentage in
shares in lieu of cash.

In 2020, the CC commissioned a benchmarking study of Board pay against other SMI companies. The results of the study
indicated that our Board pay is below the median level of SMI companies. Due to the magnitude of COVID-19 impact on
the Company's financial results, the Board made the decision to not propose any compensation change at the 2021 AGM
for the term 2021 AGM - 2022 AGM. The CC will reconsider possible increases to Board Pay in 2022.

Corporate Governance
The Board makes decisions regarding Board compensation upon proposals from the CC. These proposals are based on
analysis and review of board compensation practices, policies and benchmarking information. Similarly, the Board makes
decisions regarding CEO compensation upon proposals from the CC. The CC makes decisions with regard to compensation
of the other ECA members based upon the analysis of relevant executive compensation practices, policies and
benchmarking information.
The Board is responsible for approving the Compensation Report and for the proposal of the aggregate budget of Board
compensation and ECA compensation to the shareholders at the AGM. The Corporate Governance Report contained in our
2020 Annual Report in "Item 6.C. Board Practices" provides further details regarding the responsibilities of the CC.

86
Adherence to Strong Governance Practices
The CC evaluates many governance factors when designing and establishing compensation for members of the ECA. It
uses these mechanisms to help guide its decisions to ensure that the Company is rewarding long-term success,
discouraging excessive risk-taking and aligning executive and shareholder interests.
Exhibit 5

What we do What we don’t do

• Provide a majority of executive pay in variable, rather • No severance agreements

than fixed, compensation in order to ensure pay for
performance
• Tie 100% of Short-Term and Long-Term Incentive to • No single-trigger change in control payments
appropriately ambitious performance metrics
• Follow best practices in executive compensation design • No change in control related excise tax gross ups
• Prohibit hedging, pledging and short sales of Company • No termination notice period in excess of twelve months
stock by executive officers and Directors
• Have robust share ownership requirements to reinforce • No stock option awards
alignment between executives and shareholders
• Include forfeiture and claw-back provisions for all • No active defined benefit pension plans
variable compensation payments
• Ensure that STI and LTI plans have target and maximum • No guaranteed compensation
payout limits
• Award all equity grants at market value
• Conduct ongoing investor outreach

87
ECA Compensation 2020
Compensation Program
In the financial year 2020, Alcon’s ECA compensation framework includes the strategic objectives of:
• Paying for performance and the execution of the Alcon strategy;
• Pursuing value for shareholders over the long-term;
• Creating alignment in the interests of executives and shareholders; and
• Motivating and retaining executives for the long-term.
The general principles for ECA compensation are defined in Articles 31 and 32 of our Articles of Incorporation (http://
investor.alcon.com/governance//default.aspx). ECA compensation comprises fixed and variable elements. Fixed elements
include an annual base salary and benefits. Variable compensation consists of elements from short-term and long-term
incentive plans, which are subject to performance measures and caps.

Pay for Performance

Variable compensation represents a majority of total compensation and affirms our pay-for-performance philosophy (see
more information in Exhibits 11 and 21). Actual payout is contingent on the achievement of Company and individual
performance goals. Performance metrics and goals are aligned with the Company’s business strategy and compensation
philosophy as well as long-term value creation for shareholders and are approved annually by the CC and the Board.

Peer Group
External peer compensation is an important reference point for consideration of market competitive compensation for the
members of the ECA, including our CEO.
The CC believes that a consistent and relevant set of peer companies that are similar in size and scope enables
shareholders to assess the appropriate levels and practices of compensation and allows for pay-for-performance
comparisons. Alcon’s revenue and market capitalization are approximately at the median of the peer group companies.

88
Exhibit 6

Global Peer Group

Agilent Technologies Inc. EssilorLuxottica
Align Technology Inc. Fresenius Medical Care
1
Allergan plc Givaudan
BauschHealthCompanies Inc. Lonza Group
Baxter International Inc. Merck KGaA
Becton Dickinson & Company Smith & Nephew
Biogen Inc. Stryker Corporation
Boston Scientific The Cooper Companies Inc.
Dentsply Sirona Incl UCB
Edwards Lifesciences Corporation Zimmer Biomet Holding Inc.

Revenue Market capitalization

1
acquired by AbbVie, will no longer be part of the peer group in 2021.

The annual total compensation of ECA members is targeted to the market median of benchmarks for comparable roles
within this peer group. The CC considers compensation practices, structures and levels based on benchmarking
information and advice provided by the committee’s independent external advisors (see more information under the
section "Compensation Governance").
The CC and the Board review the compensation of the CEO and the other ECA members periodically and consider relevant
benchmark information. The CC will also review periodically the peer group and make adjustments to its composition as
appropriate.

Forfeiture and Claw-back Rules

Any variable compensation paid or payable to ECA members is subject to forfeiture and claw-back rules under our short-
term incentive ("STI") and long-term incentive ("LTI") plans, which allow the Company to retain unpaid or unvested
compensation (forfeiture) or even recover compensation already paid in cash or shares (claw-back). Such rules apply in
cases where the action or behavior of an executive violates internal codes, guidelines or policies or conflicts with
management standards, including Company and accounting rules and regulations or violates laws. These forfeiture or
claw-back rules apply to payments under both the STI and LTI plans. The action to retain or recover variable compensation
is subject to applicable law of the jurisdiction involved.

Share Ownership Requirements for ECA Members

The Board has established share ownership requirements for members of the ECA in order to align executives’ interests
with those of shareholders. The ownership requirement is expressed as a multiple of the executive’s annual base salary
and is in line with the practices of our peer group. The following Exhibit illustrates those requirements.
Exhibit 7

Leadership level Share ownership requirement

David J. Endicott, CEO 5 times annual base salary
Other members of the ECA 3 times annual base salary
All members of the ECA must meet these requirements within five years of service from the later of the date of the Spin-
off or commencement of employment. If any of the ECA members fail to meet the requirement, or if they are not on track
with the requirements, the CC may take several actions such as prohibiting the sale of Alcon shares until such time the
requirement is met. At the end of 2020, each member of the ECA is on track to meet the applicable ownership
requirement.

89
Compensation Governance
Authority for ECA Compensation Decisions
All decisions regarding CEO compensation and performance are made by the Board as a whole, excluding the CEO who is
recused from such matters. The Board has delegated the authority to make compensation decisions for ECA members,
excluding the CEO, to the CC.
The CEO makes recommendations to the CC regarding the executive compensation policy and principles and incentive
plan design and makes proposals to the CC regarding the compensation and performance targets of members of the ECA.
The CEO also makes proposals regarding the assessment of performance achievements of members of the ECA. The CEO
does not make proposals regarding his own compensation or performance.
Exhibit 8

Authority levels in ECA compensation CEO CC Board AGM

ECA compensation policy and principles R A

CEO compensation and benefits R A

Other ECA member compensation and benefits R A

CEO performance targets and assessment of achievements R A

Other ECA members' performance targets and assessment of achievements R A

Share ownership requirements for the CEO and other members of the ECA R A
1
Maximum aggregate ECA compensation R P A

Incentive plan design and rules R P A

2
Compensation report of the Company R P A
R   Recommend     P   Propose     A   Approve
1
binding vote
2
advisory vote

Compensation Elements
Alcon’s compensation program has three broad components: annual base salary, variable compensation elements and
employment benefits. Variable compensation elements are geared towards encouraging executives to deliver outstanding
results and create sustainable shareholder value. They are also designed to prevent executives from taking excessive risks.
The compensation program balances:
• fixed and variable compensation elements;
• short-term and long-term incentive compensation; and
• Company and individual performance.
Exhibit 9
Annual Base Salary

Annual Base Salary Annual base salary is set and reviewed considering:
• Market value of the role
• Benchmark information of peer companies
• Market median within the peer companies
• Executive’s role, performance, experience and potential
• Increases in line with inflation and market
• Business performance and the external environment

90
Exhibit 10
Variable Compensation

Short-Term Incentive The Short-Term Incentive (STI) is designed and delivers awards based on:
Target value
• Annual base salary (ABS) x STI target (% of ABS) = STI target value in USD/CHF
Performance measurement
• Measurement of financial performance (Business Performance Factor “BPF”) and
individual performance (Individual Performance Factor “IPF”), see the description of the
STI below for more information
• Utilize Core Net Income (CNI) as a funding mechanism to ensure achievement of CNI
targets prior to exceeding target STI payouts
Payout
• Performance period: 1 year
• Range 0%-200% of the target value
• Payout formula: STI target value x IPF x BPF = STI payout
• Paid in the first quarter of the following year
• Delivered in cash

Long-Term Incentive The Long-Term Incentive (LTI) is designed and delivers awards based on:
Target value
• Annual Base Salary (ABS) x LTI target (% of ABS) = Target value in USD/CHF
Target award
• Target value divided by the Alcon share price at grant date = number of Performance
Stock Units (PSUs) at target
• Granted at the onset of the performance period
Performance measurement
• Measurement of metrics (see the description of the LTI below for more information)
Payout
• Performance period: 3 years
• Range 0%-200% of the target number of PSUs
• Payout formula: Target number of PSUs x LTI payout factor = number of PSUs vested
• Cliff vesting of PSUs (i.e., all PSUs vest at the end of the performance period, subject to
performance conditions)
• Conversion of vested PSUs to Alcon shares
• Payout delivered in unrestricted Alcon shares
• Paid in the first quarter of the year following the performance period
• PSUs carry dividend equivalents payable in shares at the end of the performance period
based on the number of PSU vested

Variable compensation represents a large majority of total direct compensation for ECA members. At target opportunity,
the variable compensation represents 85% of the CEO’s total direct compensation. The average variable compensation of
the other ECA members represents 71% of total direct compensation.

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Exhibit 11
Mix of Fixed and Variable Compensation at Target

CEO Other ECA members (excl. CEO)

CEO ratios and average ratios of other ECA members are based on 2020 values of ABS, target STI and target 2020-2022 LTI.
Graphics exclude retirement savings and insurance benefits as well as any other benefits

CEO Compensation Increase

As a new stand alone company, in 2019 the CC spent significant time establishing a robust benchmarking ECA Peer Group
(PG) in order for Alcon to competitively compensate executives. The benchmarking analysis against the established PG
indicated that CEO target total direct compensation was significantly below the market median.
Based on this analysis, the CC indicated in the 2020 Outlook section of the 2019 Compensation Report the desire to adjust
the 2020 target CEO compensation to the market median. In February 2020, the Board made the decision to increase the
CEO’s target total compensation opportunity in line with Mr. Endicott’s deep experience in the industry and the median
CEO compensation of Alcon’s peer group. Although both fixed and variable elements of the CEO’s compensation were
below median, the Board made the decision to increase only the long-term incentive component, entirely paid in the form
of performance shares vesting in three years, in order to align with our pay-for-performance philosophy and focus on
long-term value creation. The new 2020 CEO long-term incentive target is 430% of his base salary and as such his total
direct compensation is closer to the median of the peer group. This approach also ensures that any potential increase in
realized pay is only earned if the company’s long-term goals are achieved.

Short-Term Incentive
The short-term incentive compensation element is designed to reward the ECA members for their contribution towards
achieving annual Company results and for their individual annual performance. The metrics used for the Business
Performance Factor are the same for all ECA members. The Individual Performance Factor varies by individual. Based on
this design, each member of the ECA participates in the overall Company’s success while also being rewarded for their
individual contributions. The annual STI award value at target is based on a percentage of the ECA member’s annual base
salary.

Exhibit 12

STI payout opportunity as a % of annual base salary at target at maximum

David J. Endicott, CEO 120% 240%
Other members of the ECA (average) 80% 160%

The financial metrics for short-term performance in 2020 are set out in the Exhibit below. The payout of STI is calculated
by multiplying the target award by the BPF and IPF.

92
Exhibit 13

1 2
Financial metrics Non-financial metric
Metric
Group Net Sales Core Operating Income Free Cash Flow Individual performance

Measures the Measures the Measures the Measures the

Company's top line Company’s operating Company’s capacity to achievement of
performance income realize cash individual objectives
Definition
and individual values
and behaviors

Fosters the Recognizes the Indicates the cash Considers individual

Company’s top line primary indicator of realized from operating contribution to the
performance profitability activities Company’s results
Rationale

Weighting 40% 40% 20% 100%

Performance
BPF (total weightings of financial metrics 100%) IPF
factors

STI STI
ABS X X BPF X IPF =
Payout Target Payout
formula
BPF maximum 150% x IPF maximum 150% = maximum 225% (capped at 200%)

Payout range 0 - 200%

Note
1
Financial achievements are measured in constant currencies to reflect operational performance.
2
Measures individual contribution to both short-term and long-term business results, execution of key strategic objectives, leadership
capability and behavior, company values, succession planning.

Performance, thresholds, targets and maximum values for the financial performance metrics are determined at the onset
of the one-year performance period. In line with good governance practice, the Board and the CC set targets that are
appropriately ambitious and in support of the Company’s business strategy and the Board’s strategic plan without
encouraging the ECA member to take undue risks.
At the end of the performance period, the Board and the CC determine the financial performance achievements against
the targets originally set and determine the BPF. In addition, they consider the Individual Performance Factor (IPF) of the
ECA members. The IPF is determined by the achievement of individual objectives and the demonstration of values and
behaviors. The performance rating is the basis for setting the IPF between 0% and 150%. The CEO and other ECA members
are not present when their IPF are discussed and determined.
The Board and the CC may apply discretion in determining the final outcome of the STI payout. At the end of the
performance period of each STI award, the Company intends to disclose the details of the outcome of the final STI payout,
in the applicable compensation report.

93
Long-Term Incentive
The long-term incentive program is designed to make a significant portion of compensation of ECA members contingent
on long-term Company performance and to ensure alignment with shareholders’ interests. LTI awards consist of PSUs,
which convert to shares at vesting, contingent on the achievement of the performance measures. The annual LTI grant
value at target is based on a percentage of the ECA member’s annual base salary.
Exhibit 14
1
LTI payout opportunity as a % of annual base salary Below threshold at target at maximum
David J. Endicott, CEO 0% 430% 860%
Other members of the ECA (average) 0% 170% 340%
1
The maximum number of units that may be awarded is limited to 200% of the target number of units granted.

The financial metrics for the measurement of long-term performance are set out in the Exhibit below. The payout is
calculated by adding the weighted achievements of the individual financial targets in a range from 0-200% and multiplying
the number of PSUs granted by the resulting performance factor. We intend to disclose the outcome of the final LTI
payout at the end of their respective performance period, in the applicable compensation report.
Exhibit 15

1,2 2 3 Innovation
Metric Group Net Sales CAGR Core EPS CAGR Share of Peers 4
scorecard
Definition Measures the Measure of the A set of measures to Measure of key
Company's top-line profitability by the compare the Company product pipeline
performance earnings per share to the market shares and achievement of
of competitors milestones
Rationale Fosters the Company’s Aligns ECA with Indicates relative Delivery of future
top line performance shareholders by competitive position products and key
measuring earnings per against peers in terms future growth
share of market share drivers
Weighting 25% 25% 25% 25%

Metric Metric Metric Metric

1 + 2 + 3 + 4
25% 25% 25% 25%

Payout Payout/
LTI Addition of weighted metrics
formula ABS X X = Number of
Target = Performance Factor PSUs

Weighted achievements of metrics = additive payout factor maximum 200% (cap)

Payout range 0-200%

Notes
1
CAGR means Compound Annual Growth Rate.
2
Financial achievements are measured in constant currencies to reflect operational performance.
3
Metric “Share of peers” measures Alcon’s market share of key products in the Surgical and Vision Care segments against a peer group
of competitors.
4
The innovation scorecard for 2020-2022 includes 10 milestones: one sales-related; one related to the cost of a development program;
and eight related to the timeline of achievements. Each milestone is tied to a key internal development project. The LTI payout for the
innovation metric will depend upon the overall achievement of the 10 milestones, within the relevant performance period. The
milestones established are approved by the Board’s Innovation Committee.

94
Similar to the performance target-setting and measurement of the STI award, the thresholds, targets and maximum values
for the LTI performance metrics are determined at the onset of the three-year performance period. In line with good
governance practice, the Board and the CC set targets and ensure they are appropriately ambitious and in support of the
strategic plan but do not encourage the ECA member to take undue risks.
At the end of the three-year performance period of each LTI award, the Board and the CC determine the performance
achievements of each metric against the targets originally set. The Board's Innovation Committee is responsible for
establishing and assessing the achievements and results of the innovation scorecard. The Board and the CC may apply
discretion in determining the final outcome of the performance results used for the vesting of LTI awards. At the end of
the performance period of each LTI award, the Company intends to disclose in the applicable compensation report details
of the outcome of the final LTI payout.

Benefits
All ECA members except one are enrolled in local benefit plans providing for retirement income savings and insurance for
disability and loss of life. These plans are in line with local market practices and legislation and are subject to the
Company's plan rules and policies. The ECA members and the Company pay statutory contributions. The sole ECA
member with an employment contract governed by US law is enrolled in a Company-provided health insurance plan.
Exhibit 16

Retirement savings Retirement and insurance benefits plan contributions provided in line with local
and insurance market practice (most governed by legal provisions)
contributions Employer-paid
• Contributions to retirement savings plan
• Insurance premiums for disability and survivor benefits
• Health insurance (only in the US)
• Contributions to mandatory social security systems
Other benefits • Expense and representation allowance in line with Swiss market practice (covering small
expenses)
• Mandatory allowances for children and education (only in Switzerland)
• Car allowance
• Employer-paid international benefits (e.g. relocation cost, cost of living adjustments,
settling in allowance, international health insurance, housing, schooling/education fees) in
line with Alcon’s global mobility policies

Alcon is a global company headquartered in Switzerland with multinational operations and international business
strategies. As a result, from time to time, executives are relocated to Switzerland or will be relocated from their home
country in the future. Relocated executives receive relocation support and are provided with international benefits in line
with Alcon’s global mobility and relocation policies (e.g. relocation support, tax and social security equalization, benefit
equalization and other international benefits as appropriate).

95
Compensation Payments to the ECA Members
ECA Compensation Payments FY 2020
The following Exhibit 17 sets forth the total compensation received by the CEO (highest paid member of the ECA) and the
aggregate total compensation received by all of the other ECA members for the period from January 1, 2020 to December
31, 2020.
The compensation Alcon paid to the ECA members in 2020 remained within the 2020 budget.
Exhibit 17

Additional
Compensation Fixed compensation Variable compensation compensation Totals
Annual Pension 2020 2020-2022
From January 1, 2020 base and short-term long-term Other Total
1 2 3 4 5
to December 31, 2020 salary insurance incentive incentive benefits compensation

David J. Endicott, CEO 1,225,049 160,771 1,102,544 4,975,110 635,708 8,099,182

Aggregate amount of
6 other ECA
members 4,088,839 791,750 2,546,652 6,651,981 3,209,254 17,288,476
6
Totals in USD 5,313,888 952,521 3,649,196 11,627,091 3,844,962 25,387,658
Totals in CHF 4,988,348 894,168 3,425,639 10,914,792 3,609,412 23,832,358

Notes
1
The total of Annual Base Salaries paid for the period from January 1, 2020 to December 31, 2020, including increases effective March 1
if applicable.
2
The retirement pension and insurance benefits are the actual contributions paid to benefit plans for the period from January 1 to
December 31, 2020. It also includes the amount of USD 37,303 for mandatory contributions paid by Alcon to governmental social
security systems for all ECA members, which provide the ECA members with the right to the maximum future insured government
pension benefit. The aforementioned amount is a portion of a total amount of contributions of USD 1,138,868 paid by Alcon to the
social security systems.
3
The STI award disclosed is the amount earned for the performance year 2020. It will be paid in March 2021 in cash.
4
The amounts of the 2020-2022 LTI awards represent the total value of the target number of PSUs granted to the seven active ECA
members on February 18, 2020. The value of the PSUs is based on the closing price of the underlying Alcon share on the date of grant
of USD 63.00.
5
The amounts of other benefits include the Company-paid benefits, values of benefits in kind, payments made and payments or values
promised to ECA members for the relevant period in 2020. They include mostly benefits for international assignment (e.g. housing,
schooling, tax and social security equalization, benefit equalization, other international relocation benefits).
6
Payments to ECA members were made in CHF and/or USD. The amounts were converted at the rate of 1.0 CHF : 1.06526 USD.

Alcon reports the 2020-2022 Long-Term Incentive Awards at the value at grant in accordance with Swiss market practice.
The basis for disclosure is the target value of the PSU at grant, reflecting the assumption that the awards will vest at 100%
achievement, excluding any share price movement that may occur over the performance period. The future payout will be
determined only after the conclusion of the performance period in three years (i.e. at the end of 2022) and the awards will
vest in February 2023. The payout range is between 0% and 200% of the target number of PSUs.

96
ECA Compensation Payments FY 2019
The following Exhibit 18 sets forth the total compensation received by the CEO (highest paid member of the ECA) and the
aggregate total compensation received by all of the other ECA members for the period from January 1, 2019 to December
31, 2019. These details were disclosed in our Compensation Report 2019.
Exhibit 18

Additional
Compensation Fixed compensation Variable compensation compensation Totals
2019
Annual Pension short-term 2019-2021
3, 4
From January 1, 2019 base and incentive long-term Other Total
1 2 5-9 10 11
to December 31, 2019 salary insurance cash shares incentive benefits compensation
David J. Endicott,
12
CEO 1,134,358 279,851 745,380 745,380 2,738,036 1,177,487 6,820,492
Aggregate amount of
6 other ECA
13
members 3,541,122 960,531 2,459,312 1,053,990 7,821,030 3,396,392 19,232,377
14
Totals in USD 4,675,480 1,240,382 3,204,692 1,799,370 10,559,066 4,573,879 26,052,869
14
Totals in CHF 4,647,132 1,232,862 3,185,262 1,788,460 10,495,046 4,546,148 25,894,910

Notes
1
Includes six designated ECA members pre-Spin-off date (including the CEO) and the seven active ECA members post Spin-off date
(including the CEO).
2
Includes the amount of USD 71,994 for mandatory contributions, of a total amount of USD 622,142 paid by Alcon to the social security
systems.
3
The STI award for the performance year 2019, paid in March 2020.
4
The aggregate Short-Term Incentive awards includes the STI award at target value paid to Alcon's former CFO.
5
The total amount of the 2019-2021 LTI awards includes the total values of the target number of PSUs based on the closing price of the
underlying Novartis share on the date of grant of USD 88.32 or CHF 88.14 respectively.
6
Includes the prorated value of the target number of PSUs of the 2019-2021 LTI award granted to the seventh ECA member based on
the underlying Novartis share price as described above.
7
Includes the prorated value of the target number of PSUs of the 2019-2021 LTI award granted to the new CFO on April 10, 2019 based
on the closing price of the underlying Alcon share on the date of grant of CHF 58.05.
8
Includes the total value of the target PSUs of additional 2019-2021 LTI awards granted to the ECA members (excluding the CFO) on April
10, 2019 based on the closing price of the underlying Alcon share on the date of grant of USD 58.04 and CHF 58.05 respectively.
9
Includes the value of the target number of PSUs of the special LTI award granted to the new CFO on April 10, 2019, based on the closing
price of the underlying Alcon share as described above.
10
The amounts of other benefits include the Company-paid benefits, values of benefits in kind, payments made and payments or values
promised to ECA members for the relevant period in 2019.
11
The vesting and forfeiture of Novartis shares and their replacement by Alcon shares is not included in the total compensation because
they did not provide additional values.
12
The total compensation of the CEO from January 1, 2019 to December 31, 2019 including compensation under the Novartis
compensation structure and terms up to the Spin-off date.
13
The compensation of the six other members of the ECA from January 1, 2019 to December 31, 2019 including compensation under the
Novartis compensation structure up to the Spin-off date.
14
Payments to ECA members were made in CHF and/or USD. The amounts were converted at the rate of 1.0 CHF : 1.0061 USD.
For further details to the compensation payments FY 2019, please refer to the 2019 Compensation Report.

Alcon reported the 2019-2021 Long-Term Incentive Awards at the value at grant in accordance with Swiss market practice.
The basis for disclosure is the target value of the PSU at grant, reflecting the assumption that the awards will vest at 100%
achievement, excluding any share price movement that may occur over the performance period. The future payout will be
determined only after the conclusion of the performance period in three years (i.e. at the end of 2021) and the awards will
vest in January 2022. The payout range is between 0% and 200% of the target number of PSUs.

97
Outcome of Performance Awards 2020

2020 Short-Term Incentive

Ambitious performance goals targeting above market growth in our global markets for the 2020 Alcon annual short-term
incentive program were set and approved in mid-February 2020, prior to the full impacts of COVID-19 being known. These
goals were based on an assumed market growth of 4.6% in 2020, but, due to the impacts of COVID-19, markets suffered
significant declines during 2020.
Due to the COVID-19 impact on overall 2020 business results, we did not achieve the threshold financial performance set
out under the short-term incentive plan goals. Based on the overall assessment of Alcon’s 2020 financial and business
performance, individual contributions of each ECA member including the factors outlined below; the CC applied discretion
and approved a payout of 75% of target for the ECA. For all other Alcon associates, the average short-term incentive
payout inclusive of their individual performance factor was approximately 85% of target. Alcon essential workers, who
came to work each day throughout the pandemic to ensure the continued delivery of critical medical products, received a
100% payout in recognition of their efforts.
Exhibit 19

• We maintained full employment of, and did not furlough, associates and maintained pay levels
notwithstanding the significant reduction in manufacturing volumes and sales.
Protect our • Under the supervision of the Alcon Crisis Management team, global health and safety protocols, such as
Associates mandatory temperature checks, use of personal protective equipment, social distancing and capacity
restrictions, were implemented across all campus and manufacturing sites.

• The company collaborated with the industry to develop new safety protocols and patient workflow
strategies to enable practitioners and patients to stay safe.
• Capital allocation in organic investments has resulted in the successful launch of new products such
Serve our as PanOptix, Precision1 and Pataday.
Customers • We accelerated digital training and engagement through Alcon Experience Academy.
• We also donated ophthalmic equipment, vision care products and personal protective equipment to
support frontline workers during the pandemic.

• Alcon’s stock outperformed direct competitors’ stock by 1700 basis points, maintained healthy valuation
levels in a volatile market and ended the year +17% in the NYSE and +7% in the SIX markets.
• We gained market share in the US OTC ocular allergy category, daily disposable SiHy segment and global
AT-IOL market
• Sales performance saw a significant improvement in the second half of 2020 due to strong execution
and category out performance of the market.
• We maintained financial flexibility with cost measures reducing nearly $200 million of discretionary
spend in the second quarter and by postponing our first dividend proposal to 2021. Our credit rating
Align with enabled a successful bond offering which raised $750 million in long-term notes in May 2020.
Shareholders
• Free cash flow* improved in the second half of 2020, driven by an improvement in sales and collections
as well as lower capital spending.
• Core operating margin* improved in the second half of 2020 due to a strong sales recovery, expense
discipline and product flow.
• Progress in its separation puts the company on track to complete the process by early 2021. The
company also advanced the implementation of its transformation program. Both are key to standing up
Alcon as an independent company and unlocking long-term operating margin improvement.

*A non-IFRS measure. Refer to Item 5 of this Annual Report for additional information and a reconciliation to the most directly comparable measure
presented in accordance with IFRS.

98
2018-2020 Long-Term Incentive
The 2018-2020 LTI awards for the CEO and other ECA members will vest in early 2021. As a result of Alcon being a division
of Novartis prior to April 9, 2019, payouts under the program have been split into two periods (pre and post spin-off). For
the first fifteen-month period while Alcon was a division of Novartis, ECA payouts were determined based upon overall
Novartis performance, which is not disclosed in Alcon's 2020 Compensation Report.
For the truncated twenty-one-month period from post spin-off to the end of the performance period in December 2020
(Refill Awards), PSUs were subject to Alcon stand-alone performance.
The Alcon LTI program for the ECA consists of 100% PSUs. Currently, performance for the PSU consists of the following
four metrics: Sales CAGR, EPS CAGR, Share of Peers and Innovation weighted equally. At spin, Alcon underwent a rigorous
goal setting process to establish the construction of ambitious goals while balancing against incentivizing excessive risk
taking. The CC considers a number of factors, both external and internal such as Alcon's forward-looking strategic plan,
shareholders’ and analysts’ expectations regarding our future performance, general market outlook and the performance
of our direct competitors to set targets that are appropriately challenging and aligned with shareholder expectations.
In contrast to the STI, PSU payout is based on a holistic evaluation of the Company's achievements against the stated
metrics over the performance period. No modifications were made to the 2018-2020 PSU targets, and the CC did not apply
discretion to override performance against these metrics despite the unanticipated impacts that COVID-19 visited on
Alcon's financial performance.
As a result, we did not achieve the threshold levels for both the Sales and EPS CAGR metrics. However, we significantly
outperformed our targets with respect to Share of Peer metric as we continued to gain share in the global AT-IOL market,
driven by key launches in the US and Japan. The launches of PRECISION1 and DAILIES TOTAL1 multifocal also helped us to
take share in the fast growing daily disposable SiHy segments. Furthermore, the successful over-the-counter switch of
PATADAY Once Daily and PATADAY Twice Daily in the US contributed to share gains in the US OTC ocular allergy category,
where Alcon continues to remain the leader. We have continued to execute on our research and development strategy
during the pandemic and exceeded expectations on the innovation milestones set out for the 2018-2020 PSU cycle,
bolstered, in part, by the success of Alcon's PanOptix IOL.
Exhibit 20

Performance metric Weighting Achievement Level Weighted Payout % (0-200%)

Sales CAGR 25% 0% 0%
EPS CAGR 25% 0% 0%
Share of Peers 25% 200% 50%
Innovation 25% 130% 33%
PSU payout 83%

Based on our results, the performance factor for the 2018-2020 PSU award was 83%.

99
Fixed and Variable Compensation
Based on the compensation disclosed in Exhibit 17 that ECA members received over the period from January 1, 2020 to
December 31, 2020, the mix of fixed and variable compensation is as follows:
Exhibit 21
Mix of Fixed and Variable Compensation at Actual 2020 STI Payout and 2020-2022 LTI at Grant

CEO Other ECA members (excl. CEO)

Average ratios are based on ABS, payout of 2020 STI (in March 2021) and grants of 2020-2022 LTI awards at grant value.
Mix excludes retirement savings and insurance benefits as well as any other benefits.

100
Equity Instruments Granted to the ECA Members
Equity Instruments Granted in FY 2020
The LTI awards (in PSUs) for the performance period 2020-2022 were granted on February 18, 2020 to the CEO and the six
other members of the ECA. The number of PSU are set out in Exhibit 22 below. The values of the awards are based on the
closing price of the underlying Alcon share on the date of grant and disclosed in section "ECA Compensation Payments FY
2020", Exhibit 17.

Exhibit 22

2020 2020
RSUs based on the PSUs based on the
2019 STI 2020-2022 LTI
1 2
Number of units granted to Award target Award
David J. Endicott, CEO 14,032 78,970
Other ECA members 19,320 105,587
Total 33,352 184,557

Notes
1
Although these shares were granted based on 2019 STI awards, the number of RSUs that were to be granted to the ECA members were
not available at the time the 2019 Compensation Report was published. They are included in Exhibit 22 for reference. The value
attributable to these RSUs is disclosed under "ECA compensation payments FY 2019" (Exhibit 18).
2
The values of the awards in PSU are disclosed under "ECA compensation payments FY 2020" (Exhibit 17).

Equity Instruments Granted in FY 2019

Equity Grants in Alcon Shares
The LTI awards (in PSUs) for the performance period 2019-2021 were granted on January 22, 2019 to the seven members
of the ECA in Novartis shares. Additional LTI awards were granted in April 2019. The number of PSUs are shown in Exhibit
23-25 respectively. The values of the awards were disclosed in the 2019 Compensation Report (see also Exhibit 18).

Exhibit 23

Deferred Share Plan PSUs based on the

1 2, 3
Number of units granted to 2019 STI Award 2019-2021 LTI target Award
David J. Endicott, CEO 0 9,317
Other ECA members 0 85,086
Total 0 94,403

Notes
1
The numbers of RSUs granted to the ECA members in 2020 on the basis of a portion of the STI 2019 delivered in equity were not
available at the time of editing and publishing the 2019 Compensation Report. They relate to compensation for the year 2019 and are
disclosed in Exhibit 22 above.
2
Number of PSUs granted to the new CFO of a prorated LTI award for the performance period 2019-2021 and of a special LTI award
subject to the same the performance period and conditions.
3
Number of PSU granted to the ECA members (excluding the CFO) for increasing their pre-Spin-off target LTI award to the new target
award level effective from Spin-off.

101
The following Exhibit 24 sets out the number of Alcon share-based instruments granted to ECA members pursuant to the
Alcon equity restoration plan applied in 2019 (Keep Whole and Refill Awards).
Exhibit 24

Alcon equity units granted as Alcon equity units granted as

1 2
Number of units granted to Refill awards Keep Whole awards
David, J. Endicott, CEO 124,062 23,639
Other ECA members 222,966 39,764
Total 347,028 63,403

Notes
1
Number of Alcon shares granted to replace the forfeited value of Novartis share-based instruments.
2
Number of Alcon shares granted to compensate for the dividend in kind based on Novartis unvested PSUs and RSUs.

Equity Grants in Novartis Shares

The LTI awards (in PSUs) for the performance period 2019-2021 were granted on January 22, 2019 to the then designated
members of the ECA prior to the Alcon spin-off in Novartis shares.

Exhibit 25

PSUs based on the

Number of units granted to 2019-2021 LTI target Award
David J. Endicott, CEO 24,740
1
Other ECA members 32,086
Total 56,826

Notes
1
Includes the number of Novartis PSUs, based on the underlying Novartis shares, granted to Alcon's former CFO who stepped down
from the function when Alcon was a division of Novartis (prorated from January 1 to April 8, 2019). Furthermore it includes the number
of Novartis PSUs granted to the seventh ECA member on the ECA (prorated from April 9, 2019 to the end of the performance period).

102
Share Ownership of the ECA Members
The number of Alcon shares or share-based units held by ECA members and “persons closely linked” (as defined below) to
them as of each of December 31, 2020 and December 31, 2019 is set out in the Exhibit below. As of each of these dates, no
ECA members, either individually or together with “persons closely linked”, owned 1% or more of the outstanding shares
of Alcon.
Exhibit 26

Number of units December 31 Vested shares Unvested RSUs Unvested target PSUs Total
2020 88,953 21,162 150,013 260,128
David J. Endicott
2019 25,346 69,798 82,187 177,331
2020 16,820 2,602 29,922 49,344
Laurent Attias
2019 0 24,855 22,435 47,290
2020 19,527 7,508 39,266 66,301
Ian Bell
2019 0 36,432 27,836 64,268
2020 16,530 8,174 38,610 63,314
Leon Sergio Duplan Fraustro
2019 4,183 29,393 26,595 60,171
2020 10,622 2,795 31,046 44,463
Rajkumar Narayanan
2019 0 21,293 19,380 40,673
2020 28,241 9,056 49,825 87,122
Michael Onuscheck
2019 6,424 36,524 35,877 78,825
2020 20,000 4,989 93,611 118,600
Tim C. Stonesifer
2019 0 0 61,672 61,672
2020 200,693 56,286 432,293 689,272
Total
2019 35,953 218,295 275,982 530,230

Additional Disclosures
Employment Agreements
The Company and the members of the ECA entered into employment agreements for an indefinite period of time. Six of
seven ECA members’ employment agreements are governed by Swiss law. The seventh ECA member’s employment
agreement is governed by US law.
All employment contracts with ECA members provide for advanced notice of termination of employment, none of which
exceed a 12-month period in accordance with our Articles of Incorporation. None of the employment agreements with the
ECA members provide for any severance payment.
Such employment agreements also prohibit the ECA member from competing against Alcon for a period up to 12 months
after termination in accordance with our Articles of Incorporation.

Payments to Current or Former Members of the ECA

During 2020, no payments (or waivers of claims) other than those set out in Exhibit 17 (including the related notes) under
section "ECA Compensation Payments FY 2020" were made to current or former members of the ECA or to “persons
closely linked” to them.

Loans to Members of the ECA

Alcon’s Articles of Incorporation and corporate policies do not permit loans to current or former members of the ECA or to
“persons closely linked” to them. As a result, no loans were granted in 2020, and none were outstanding as of December
31, 2020.

103
Persons Closely Linked
Persons closely linked to members of the ECA are (i) their spouse, (ii) their children below age 18, (iii) any legal entities that
they own or otherwise control, and (iv) any legal or natural person who is acting as their fiduciary or agent.

Compensation Expense 2020

The total expense for the year 2020 for compensation awarded to ECA members, using International Financial Reporting
Standards (IFRS) measurement rules, is presented in Note 25 to the Company’s audited consolidated financial statements.
The numbers for compensation expense in the Note 25 may differ from the numbers reported in this 2020 Compensation
Report due to the accounting and disclosure standards applied.

Alcon Share-Based Units Awarded to Alcon Associates in 2020

In the financial year 2020, the total of approximately 2.1 million restricted shares, RSUs and target PSUs (all unvested) were
granted, and approximately 1.1 million Alcon shares vested and were delivered to Alcon associates under the various
equity-based incentive or participation plans. Current unvested equity instruments (restricted shares, RSUs and target
PSUs) represent approximately 1% of issued shares. Alcon delivers treasury shares to associates to fulfill these obligations.

104
Board of Directors Compensation 2020
Compensation Framework
The Board compensation was set at a level that allowed for the attraction and appointment of high-caliber talent for Board
roles with the relevant background and skills, including global experience in the medical devices and ophthalmology
industry. The Board is comprised of both Swiss and international members.
Non-executive Board members are awarded a base fee. Further, they are entitled to additional fees for their roles of Chair
and/or member on the Board committees. The Vice Chair also receives an additional fee. The Board Chair does not receive
additional fees for work in committees. David J. Endicott, the CEO of Alcon, does not receive any fees for his Board
membership.
Effective as of the date of our 2020 AGM, the Board split the current responsibilities of the previous Compensation,
Governance and Nomination Committee ("CGNC") into two separate committees: the Compensation Committee ("CC") and
the Governance and Nomination Committee ("GNC"). The Board recognized the heavy workload assigned to the CC since
the spin-off from Novartis; this split enables the two newly created committees to better focus on their respective key
responsibilities. For the GNC, this includes a focus on leading governance practices and ESG topics in general, and for the
CC, this includes a focus on human resource strategy and executive compensation. Finally, this reorganization is line with
best corporate governance standards. The annual fee for the Chair of the GNC is USD 53,263 (CHF 50,000) and each
member received USD 26,632 (CHF 25,000). The fees for the Chair and the members of the CC are the same as the GNC.
The following table sets out the compensation for the non-executive members of the Board from the 2020 AGM to the
2021 AGM:
Exhibit 27

Fee for the period from

2020 AGM to 2021 AGM
1
Board function USD CHF
Annual base fee:
Board Chair 1,011,997 950 000
Board member base fee (Board retainer fee) 213,052 200 000
Additional fees:
Vice Chair 42,610 40 000
Chair of the Audit and Risk Committee 74,568 70 000
Chair of the Compensation Committee 53,263 50 000
Chair of the Governance and Nomination Committee 53,263 50 000
Chair of the Innovation Committee 53,263 50 000
Member of the Audit and Risk Committee 37,284 35 000
Member of the Compensation Committee 26,632 25 000
Member of the Governance and Nomination Committee 26,632 25 000
Member of the Innovation Committee 26,632 25 000
Notes:
1
Converted into USD at a rate of CHF 1.0 = USD 1.06526.

In 2020, the following framework applied to the compensation of non-executive Board members:
• Fifty percent of the total fees is paid in shares on a mandatory basis in two installments: September 2020 and
March 2021;
• Fifty percent of the total fees is paid in cash in four installments: June, September and December 2020 and March
2021;
• Each Board member may elect to receive up to one hundred percent of their fees in shares;
• The fees are paid in Swiss Francs;

105
 • The shares delivered are unrestricted (free shares) listed at the SIX Swiss Exchange;
• The members of the Board are subject to share ownership requirements (see below);
• Board members bear the full cost of their own social security contributions; and
• Board members do not receive variable compensation, in line with their focus on corporate strategy, supervision
and governance. Their payment in shares is in unrestricted shares. They do not receive share options or other
share-based instruments.
The general principles of compensation of the members of the Board are defined in our Articles of Incorporation.
According to our Articles of Incorporation, Alcon may enter into agreements with members of the Board relating to their
compensation for a fixed term of up to one year.

Share Ownership Requirements for Members of the Board

Board members are committed to align their interests with those of shareholders. The Board has set forth share
ownership requirements which apply to the non-executive members of the Board.
Each member of the Board, including the Board Chair, is required to own Alcon shares that represent the value of his or
her annual base fee. This requirement needs to be met within four years in office.
Exhibit 28

Board level Share ownership requirement

Board Chair 1 times annual base fee, within 4 years
Other Board members 1 times annual base fee, within 4 years
Each member of the Board is on track to meet the ownership requirement. Board members are prohibited from hedging
or pledging their ownership positions in Alcon shares that are part of the share ownership requirement.

Compensation Governance
Authority for Board Compensation Decisions
Decisions regarding Board compensation are taken by the Board upon proposals from the CC. The CC's proposals are
based on analysis and review of compensation practices, policies and benchmarking information.
The Board is responsible for approving the Compensation Report and for proposing the aggregate budget of Board
compensation subject to a shareholders’ vote at the applicable AGM.
Exhibit 29

Authority levels in Board compensation CC Board AGM

Board compensation policy and principles P A

Board Chair compensation P A
Other Board member compensation P A
Share ownership requirements for Board members P A
1
Maximum aggregate compensation of the Board members R P A
2
Compensation Report of the company R P A
R   Recommend     P   Propose     A   Approve
1
binding vote
2
advisory vote

The Corporate Governance Report in Item 6.C. Board Practices of this Annual Report provides further details to the
authorities of the CC.

106
Independence of Members of the Compensation Committee
Each of the members of the CC meets the independence criteria set forth in our Board Regulations. Effective from the
2020 AGM, the CC has been comprised of the following four members: Karen J. May (Chair), Thomas H. Glanzmann, D.
Keith Grossman and Ines Pöschel. At each AGM, the shareholders elect the CC Chair and its members individually for a
term of office of one year. Our Articles of Incorporation permit re-election. The 2020 Corporate Governance Report in Item
6.B. of the Alcon 2020 Annual Report provides details regarding the members of the Board and the independence criteria
for Board members. The Board Chair, the CEO and the Secretary of the Board attend the CC meetings by invitation. None
is present when decisions relating to their own interest are taken.

The Compensation Committee’s External Advisors

During 2020, the CC retained Willis Towers Watson ("WTW") as its external compensation advisor. For the same period, the
CC also retained HCM International (Switzerland) ("HCM") for advice with regard to Swiss compensation matters. The CC
appointed each of them in 2019 following a thorough process of evaluating proposals from various consulting firms.
During 2020, WTW provided additional services to Alcon related to, among other things, compensation programs, pension
and benefit plans. During the same period, HCM did not provide additional services to Alcon.
At the end of 2020, the CC conducted a review of the support received from the selected external advisors and is satisfied
with the result of the work completed in 2020. At least annually, the CC will evaluate the quality of the consulting services
received and the need to use an additional advisor for specific matters.

Compensation of the Members of the Board of Directors

Board Compensation FY 2020
The following Exhibit 30 sets out the total compensation received by non-executive members of the Board during 2020.
They received the compensation for their services on the Board from January 1, 2020 to December 31, 2020.
The disclosed compensation represents (i) the fees paid to the members of the Board in March 2020, which was the last
installment of the fees for their term of office up to the 2020 AGM, and (ii) the fees paid up to December 31, 2020 for their
term of office from the 2020 AGM to the 2021 AGM.
The installment of the fees paid in March 2020 completed the delivery of all fees due for the term of office from spin-off on
April 9, 2019 to the 2020 AGM. The total of fees paid for that term remained within the approved budget.
The fees paid between the 2020 AGM and December 31, 2020 to the members of the Board of Directors are only a part of
the total fees they will receive for the service on the Board during the term of office from the 2020 AGM to the 2021 AGM
(three of four installments). In accordance with our normal payout schedule, a further payment of fees in cash and shares
will be made in March 2021.
All members of the current Board of Alcon have taken their office from the AGM 2020. No payments (or waivers of claims)
were made to them in 2020.
The CEO of Alcon, David J. Endicott, is not included in this Exhibit as he is not compensated for his Board membership.

107
Exhibit 30

Payment in Tax and Payment in Number of Other Total

1 2 3 4 5
Board members, functions cash other cash shares shares payments fees 2020
F. Michael Ball
Board Chair 126,500 189,784 569,213 10,476 - 885,497
Lynn D. Bleil
Member ARC and IC 17,310 60,637 181,710 3,346 - 259,657
Arthur B. Cummings
Member IC 119,842 37,220 82,623 1,522 59,603 299,288
Thomas H. Glanzmann
Chair IC, member GNC, CC - 16,405 289,857 5,339 4,794 311,056
D. Keith Grossman
Vice Chair, Chair GNC, member CC, IC 38,616 64,639 193,687 3,564 - 296,942
Scott H. Maw
Chair ARC - 71,945 215,676 3,973 - 287,621
Karen J. May
Chair CC, member ARC - 75,927 227,673 4,194 - 303,600
Ines Pöschel
Member GNC, CC 63,916 6,378 172,053 3,168 4,794 247,141
Dieter P. Spälti
Member ARC - 15,227 235,108 4,331 4,794 255,129
6
Total fees paid in 2020 in USD 366,184 538,162 2,167,600 39,913 73,985 3,145,931
7
Total fees paid in 2020 in CHF 343,751 505,193 2,034,808 39,913 69,453 2,953,205

Notes
1
Board Committees: “ARC” Audit and Risk Committee; "CC" Compensation Committee; “GNC” Governance and Nomination Committee;
“IC” Innovation Committee.
2
These amounts represent the values of tax and, if applicable, social security due upon the allocation of shares, which were delivered in
cash to the accounts. They were then deducted and paid to the applicable authorities. Further, the amounts include the residual
amount of cash resulting from rounding down the number of shares to the next whole share.
3
The amounts in USD represent the converted value in CHF based on the Alcon shares granted on March 11, 2020 at the closing price of
CHF 50.82 per share on the date of grant and on September 11, 2020, at the closing price of CHF 51.10 on September 10, 2020. The
shares granted are listed at the SIX Swiss Exchange.
4
The total number of shares reported were delivered to each Board member in (i) the second installment of the fee in shares in March
2020 (term April 9, 2019 - 2020 AGM), and (ii) the first installment of the fee in shares (term 2020 AGM - 2021 AGM) . The second and
final installment in shares for the services from the 2020 AGM to the 2021 AGM will be delivered in March 2021.
5
Includes (i) an amount of USD 19,176 for mandatory employer contributions paid by Alcon to governmental social security systems,
which provides the relevant members of the Board with a right to the maximum future insured government pension benefit (this
amount is a part out of total mandatory employer contributions of USD 87,533 to the governmental social security systems) and (ii) USD
54,809 paid to Dr. Cummings (or his related entities) for consulting services, including assistance with clinical trials that Dr. Cummings,
as an ophthalmologist, provided to Alcon (these services were unrelated to Dr. Cummings' board service).
6
All amounts include the payments made and the shares delivered in March 2020 as installment of the fee for the term of office April 9,
2019 - 2020 AGM.
7
The payments in cash were made in Swiss Francs (CHF). For consistency they are reported in USD as all compensation in this 2020
Compensation Report. The amounts in CHF were converted to USD at the exchange rate of 1.0 CHF : 1.06526 USD. All amounts are
before deductions of social security contributions and income tax paid by the Board members.

108
Board Compensation FY 2019
The following Exhibit 31 sets out the total compensation received by non-executive members of the Board during 2019.
The compensation disclosed in this Exhibit was received for their service on the Board from Spin-off April 9, 2019 to
December 31, 2019 including a one time fee paid in March 2019 for activities prior to the Spin-off date.

The fees payable in March 2020 as shown in this Exhibit 32 are included in the total compensation 2020 disclosed in
Exhibit 31. The CEO of Alcon, David J. Endicott, is not included in this Exhibit as he was not compensated for his Board
membership. His compensation was disclosed as CEO and member of the ECA in the 2019 Compensation Report (see
Exhibit 18).
Exhibit 31

Payment in Payment in Number of Other Total Fee paid in6 Total fees
9 1,2 3 4 5 7
Board members, functions cash shares shares payments fees 2019 March 2020 for term
F. Michael Ball
Board Chair 418,206 179,166 3,000 — 597,372 358,423 955,795
Lynn D. Bleil
Member ARC and IC 83,685 73,518 1,231 — 157,203 114,444 271,647
Arthur B. Cummings
Member IC 112,486 39,058 654 89,243 240,787 84,890 325,677
Thomas H. Glanzmann
Chair IC, member CGNC 16,474 131,926 2,209 4,399 152,799 138,339 291,138
D. Keith Grossman
Vice Chair, member CGNC, IC 137,711 54,706 916 — 192,417 109,413 301,830
Scott H. Maw
Chair ARC 44,058 101,826 1,705 — 145,884 135,824 281,708
Karen J. May
Chair CGNC, member ARC 45,930 107,500 1,800 — 153,430 143,369 296,799
Ines Pöschel
Member CGNC 77,980 67,904 1,137 4,399 150,283 90,549 240,832
Dieter P. Spälti
Member ARC 17,195 111,084 1,860 4,399 132,678 118,217 250,895

Total fees paid in 2019 in USD 953,725 866,688 14,512 102,440 1,922,853 1,293,468 3,216,321
8
Total fees paid in 2019 in CHF 947,943 861,433 14,512 101,819 1,911,195 1,285,626 3,196,820
Notes
1
The totals include the USD 10,061 (CHF 10,000) on-boarding fee paid in March 2019.
2
Includes the fees paid in cash or the value of tax and, if applicable, social security withheld upon the allocation of shares to be paid in
cash to the applicable authorities.
3
The amounts in USD represent the converted value in CHF based on the Alcon shares granted on September 11, 2019 at the closing
price of CHF 59.36 per share on the date of grant.
4
The number of shares reported were delivered to each Board member in September 2019. The second and final installment in shares
for the services from the Spin-off date April 9, 2019 to the 2020 AGM will be delivered in March 2020.
5
Includes the amount of USD 17,596 for mandatory employer contributions, of a total of USD 47,826 paid by Alcon to the social security
systems) and USD 84,844 paid to Dr. Cummings (or his related entities) for consulting services.
6
Fees payable in March 2020, the final installment of the total fees payable for service from the Spin-off to the 2020 AGM.
7
Total fees that will be paid for the Board members' term of office from the Spin-off to the 2020 AGM.
8
The payments in cash were made in Swiss Francs (CHF), for consistency they are reported in USD. The amounts were converted at the
rate of 1.0 CHF : 1.0061 USD.
9
Board Committees: “ARC” Audit and Risk Committee; “CGNC” Compensation, Governance and Nomination Committee; “IC” Innovation
Committee.
For further details to the compensation payments in the FY 2019, please refer to the 2019 Compensation Report.

109
Share Ownership of the Members of the Board of Directors
The number of Alcon shares held by members of the Board and “persons closely linked” to them as of December 31, 2020
are set out in the Exhibit below. As of this same date, no Board member, either individually or together with “persons
closely linked”, owned 1% or more of the outstanding shares of Alcon. The CEO of Alcon and Board member, David J.
Endicott, is not included in this Exhibit as his share ownership is disclosed in Exhibit 26.
The number of shares held as of December 31, 2019 is shown for comparison.
Exhibit 32

2020 2019
Board member Total shares Total shares
F. Michael Ball 23,678 13,202
D. Keith Grossman 4,480 916
Lynn D. Bleil 4,577 1,231
Arthur B. Cummings 2,309 787
Thomas H. Glanzmann 7,812 2,473
Scott H. Maw 5,678 1,705
Karen J. May 15,994 1,800
Ines Pöschel 4,847 1,679
Dieter P. Spälti 13,191 8,860
Total 82,566 32,653

Additional Disclosures
Loans to Board Members
Alcon’s Articles of Incorporation and corporate policies do not permit loans to current or former members of the Board or
to persons closely linked to them. No loans were granted in 2020, and none were outstanding as of December 31, 2020.

Other Payments to Board Members

No payments (or waivers of claims) other than those set out in Exhibit 30 (including the related notes) under section
"Board compensation FY 2020" were made to current Board members or to persons closely linked to them.

Persons Closely Linked

Persons closely linked to members of the Board are (i) their spouse, (ii) their children below age 18, (iii) any legal entities
that they own or otherwise control, and (iv) any legal or natural person who is acting as their fiduciary or agent.

Payments to Former Board Members

None.

110
Outlook for 2021
Compensation Philosophy and Principles
The Company will continue to adopt a compensation philosophy which:
• Ensures a broadly competitive level of remuneration appropriate to each executives’ scale of responsibility and
individual performance;
• Attracts, retains and motivates a world-class executive team to drive performance;
• Supports long-term value creation for shareholders;
• Considers the geographic and industry-specific nature of our talent pool and the medical device industry;
• Aligns the compensation program for the senior executives with the broader management and employee
population; and
• Fully embraces Swiss governance expectations and follows principles of simplicity and transparency.

Exhibit 33

Pay for • Programs are designed to compensate short-term performance and long-term success
performance • Rewards are achieved if financial and non-financial performance metrics are met
Alignment with • A significant part of compensation is delivered in Alcon equity
shareholders • Executives are expected to hold a meaningful level of Alcon shares
Market • Overall compensation is competitive with other companies in the medical device and other
competitiveness industries in which Alcon competes for talent
• Total opportunity is targeted at market median
Motivation and • Compensation is designed to attract, retain and motivate executives to achieve Company
retention objectives
• Compensation is reviewed periodically to ensure competitiveness and alignment to key
strategic objectives

ECA Compensation
The CC is committed to a pay-for-performance framework to align Company and executive performance with shareholder
interests. Following a thorough review of Alcon's compensation structures during 2020, we have made refinements to our
overall compensation structures to better reflect Alcon's status as an independent, stand-alone company.
Headquartered in Switzerland, Alcon operates on a truly global basis. Our main business competitors are found in both
Europe and North America, which is where we compete for talent. Consequently, our executive compensation framework
has been benchmarked against a carefully selected peer group, consisting of European and North American companies
with a blend of similar size, industry and geographic characteristics to Alcon. The inclusion of European and North
American companies reflects our global footprint, business mix and source for management talent. Based on the
Company’s business strategy, compensation philosophy and the analysis of peer group compensation practices, below
are the key features of ECA compensation for 2021:
• Same overall structure of ECA compensation as compared to 2020 (base pay, STI, LTI and benefits);
• Broadly no significant change to the ECA members' compensation levels;
• Continuation of robust share ownership requirements; and
• No material changes to benefits provisions.

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Board Compensation
The Board compensation framework will remain unchanged for the upcoming term of office from the 2021 AGM to the
2022 AGM, including:
• The overall framework of Board compensation from the 2020 AGM to the 2021 AGM will be carried forward to the
term from the 2021 AGM to 2022 AGM;
• The Board Chair fee and Board member fees will remain unchanged; and
• The payment of fifty percent in shares (mandatory) and a voluntary election of a higher percentage in shares will
continue.
In 2020, the CC commissioned a comprehensive study of benchmarking the compensation of the Board members,
including the Board Chair, against the other companies in the Swiss Market Index SMI. As a Swiss based company,
governed by Swiss law, the study compared the compensation of Alcon's Board against the Board compensation of other
SMI companies. In addition, the CC sought advice regarding compensation practices prepared by its external advisors.

The results of the study indicated that certain areas of Board compensation were below the median compensation levels
of the SMI companies. However, due to the magnitude of COVID-19 impact on the Company's financial results, the Board
made the decision to not propose any changes to shareholders at the 2021 AGM for the term 2021 AGM - 2022 AGM. The
CC and the Board will reconsider possible increases to Board compensation in 2022 for future terms.

Shareholder Vote at the 2021 AGM

In accordance with Article 29 of the Articles of Incorporation (http://investor.alcon.com/governance//default.aspx), the
Board will ask shareholders at the 2021 AGM meeting to cast a binding vote on:
• The aggregate amount of compensation payable to non-executive members of the Board for their term of office
from the 2021 AGM to the 2022 AGM; and
• The aggregate amount of compensation payable to ECA members in the financial year 2022.
In addition, the Board will ask shareholders to cast an advisory vote on the 2020 Compensation Report.
The procedures of voting on the compensation of ECA members and the Board are defined in our Articles of
Incorporation. Our Articles allow for an additional amount of compensation to be used when promoting or adding new
members to the ECA.
The Exhibit below depicts the voting at the 2021 AGM and the respective period of the compensation affected by the vote.
Exhibit 34

112
REPORT OF THE STATUTORY AUDITOR
on the Compensation Report of Alcon Inc.
to the General Meeting of Alcon Inc., Fribourg, Switzerland

We have audited the Compensation Report of Alcon Inc. for the year ended December 31, 2020. The audit was limited to
the information according to articles 14-16 of the Ordinance against Excessive Compensation in Stock Exchange Listed
Companies (Ordinance) contained in Exhibits 2 through 4, Exhibit 11, Exhibits 17 through 18, Exhibits 21 through 27 and
Exhibits 30 through 32, as well as the additional disclosures on pages 103 through 104 and page 110 (hereinafter referred
to as “disclosures made on the exhibits and pages defined as subject to audit”).

Board of Directors’ responsibility

The Board of Directors is responsible for the preparation and overall fair presentation of the Compensation Report in
accordance with Swiss law and the Ordinance. The Board of Directors is also responsible for designing the remuneration
system and defining individual remuneration packages.

Auditor’s responsibility
Our responsibility is to express an opinion on the accompanying disclosures made on the exhibits and pages defined as
subject to audit. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
disclosures made on the exhibits and pages defined as subject to audit comply with Swiss law and articles 14–16 of the
Ordinance.

An audit involves performing procedures to obtain audit evidence on the disclosures made on the exhibits and pages
defined as subject to audit with regard to compensation, loans and credits in accordance with articles 14–16 of the
Ordinance. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatements in disclosures made on the exhibits and pages defined as subject to audit, whether due to fraud or error.
This audit also includes evaluating the reasonableness of the methods applied to value components of remuneration, as
well as assessing the overall presentation of the disclosures made on the exhibits and pages defined as subject to audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion
In our opinion, the disclosures made on the exhibits and pages defined as subject to audit of the accompanying
Compensation Report of Alcon Inc. for the year ended December 31, 2020, comply with Swiss law and articles 14–16 of the
Ordinance.

PricewaterhouseCoopers SA

Michael Foley Colin Johnson

Audit expert
Auditor in charge

Geneva, February 23, 2021

113
6.C. BOARD PRACTICE

Corporate Governance
Group Structure and Shareholders
Operational Group Structure
The Company, with its registered office at Rue Louis-d’Affry 6, 1701 Fribourg, Switzerland, is a corporation organized under
Swiss law and is the ultimate parent company of Alcon. As of December 31, 2020, the market capitalization of the
Company was $32.279 billion (CHF 28.785 billion).
Alcon is the global leader in eye care with $6.8 billion in net sales during the year ended December 31, 2020. We research,
develop, manufacture, distribute and sell a full suite of eye care products within two key businesses: Surgical and Vision
Care. Our Surgical business is focused on ophthalmic products for cataract surgery, vitreoretinal surgery, refractive laser
surgery and glaucoma surgery. Our Vision Care business is comprised of various contact lenses and a comprehensive
portfolio of ocular health products, including devices and over-the-counter products for dry eye, contact lens care and
ocular allergies, as well as ocular vitamins and redness relievers. Further information is available under "Item 4.
Information on the Company".

Listed and Non-listed Companies Belonging to the Alcon Group

The registered shares of the Company are listed on the SIX Swiss Exchange (Valor 43249246 / ISIN code CH0432492467)
and the New York Stock Exchange (CUSIP code H01301128). The Company owns directly or indirectly all consolidated
entities of Alcon, none of which has its shares otherwise listed.
The following table lists the most significant subsidiaries of the Company, including those entities with total assets or net
sales to third parties in excess of 5% of the Company’s consolidated total assets or net sales to third parties, as applicable,
at December 31, 2020. The referenced share capital may not reflect the taxable share capital and does not include any
paid in surplus. Further information regarding the Company’s subsidiaries is disclosed in Note 28 of the Consolidated
Financial Statements. The combination of the Company’s subsidiaries disclosed in the table below and in Note 28 of the
Consolidated Financial Statements does not cover all subsidiaries of the Company.

Equity Principal Place of Share Capital

Country of Organization/ Entity Name Interest Business
China
Alcon (China) Ophthalmic Product Co., Ltd. 100% Beijing USD 60,000,000
Japan
Alcon Japan Ltd. 100% Tokyo JPY 500,000,000
Switzerland
Alcon Pharmaceuticals Ltd. 100% Fribourg CHF 200,000
United States
Alcon Finance Corporation 100% Fort Worth, TX USD 1
Alcon Laboratories, Inc. 100% Fort Worth, TX USD 1
Alcon Research, LLC 100% Fort Worth, TX USD 1,000
Alcon Vision, LLC 100% Fort Worth, TX USD 1,000

114
Significant Shareholders
According to the Alcon share register, the following nominee shareholders held more than 3% of the share capital of Alcon
Inc. as of December 31, 2020:

Holder Number of Shares Percentage

Chase Nominee Ltd., London (UK) 45,288,915 9.06%
Cede & Co (DTC nominee), New York, NY (USA) 112,244,037 22.46%
Nortrust Nominees Limited, London (UK) 20,031,841 4.01%

In addition, according solely to disclosure of shareholdings notifications filed with Alcon and the SIX Swiss Exchange ("SIX
Threshold Notifications") pursuant to the obligations set forth in the Swiss Federal Act on Financial Market Infrastructure
and Market Conduct in Securities and Derivatives Trading ("FMIA") and the rules and regulations promulgated thereunder,
there is one shareholder that held shares representing at least 3% of the Company’s total share capital as of December 31,
2020, but was not registered with the Alcon share register. This shareholder is identified in the table below.
The information required to be included in the SIX Threshold Notifications regarding this shareholder varies from the
information required to be included in beneficial ownership statements filed with the SEC (“SEC Notification”).
Interested persons can access the relevant SIX Threshold Notifications online at the SIX Swiss Exchange: https://www.six-
exchange-regulation.com/en/home/publications/significant-shareholders.html.
The below table shows the information available to the Company, based on both notification regimes, with respect to
shareholders reported to have significant positions in Alcon’s share capital as of December 31, 2020:

Number of Number of
shares and shares
voting rights as beneficially
per SIX Percentage as per owned as Percentage as
Threshold SIX Threshold per SEC per SEC
1 2
Holder Notification Notification Notification Notification
BlackRock, Inc.
c/o BlackRock Investment Management (UK) Limited
3
12 Throgmorton Ave, London, EC2N 2DL, UK 24,679,231 5.06 % N/A N/A

1
Percentages indicated in this column have been established based on the share capital of the Company registered with the commercial
register of the Canton of Fribourg on the date on which the respective disclosure obligation pursuant to the FMIA was triggered.
Furthermore, according to the FMIA, this shareholder is required to notify Alcon and the SIX Swiss Exchange only at the time it reaches,
exceeds or falls below any of the thresholds set forth in the FMIA; therefore, its shareholding as of December 31, 2020 may differ from
the figures indicated as per the contents of the relevant SIX Threshold Notification.
2
In general, under SEC rules, "beneficial ownership", for the purposes of this column, refers to shares that an entity had the power to
vote or the power to dispose of and shares that such entity or individual had the right to acquire within 60 days after December 31,
2020.
3
Based solely on a SIX Threshold Notification dated November 9, 2019. This figure does not include its derivative position.

Cross-Shareholdings
Neither the Company nor any of its consolidated entities has any shareholdings exceeding 5% of the holdings of capital or
voting rights in any entity that also has shareholdings exceeding 5% of the holdings of the capital or voting rights in the
Company or any of its consolidated entities.

115
Capital Structure
Share Capital
As of December 31, 2020, the share capital of Alcon Inc. was CHF 19,988,000, fully paid-in and divided into 499,700,000
registered shares, each with a nominal value of CHF 0.04.

Authorized and Conditional Share Capital

On January 29, 2019, the Company’s annual general meeting approved the creation of an authorized share capital.
According to this shareholder resolution, the Board was authorized, at any time until January 29, 2021, to increase the
Company’s share capital by a maximum of CHF 977,400 through the issue of up to 24,435,000 fully paid up new shares of
CHF 0.04 nominal value each for the purpose of any share-based incentive or other participation plans, schemes or
arrangements for directors, associates or advisors of the Company or its consolidated subsidiaries (“Employees
Participation Plans”). Additional terms and conditions of this authorized share capital are set forth in Article 4a of the
Articles of Incorporation (http://investor.alcon.com/governance/default.aspx).
The Board resolved on November 19, 2019 to increase the share capital by CHF 120,000 through the issuance of 3,000,000
new registered shares under the authorized share capital in order to comply with Alcon’s obligations under the relevant
Employees Participation Plans.
On November 10, 2020, the Board resolved to further increase the share capital by CHF 320,000 through the issuance of
8,000,000 new registered shares under the remaining authority available under the authorized share capital, i.e.
21,435,000 shares, in order comply with Alcon’s obligations under the relevant Employees Participation Plans.
As of December 31, 2020, the Board remained authorized, at any time until January 29, 2021, to further increase the
Company’s share capital by a maximum of CHF 537,400 through the issue of up to 13,435,000 fully paid up new shares of
CHF 0.04 nominal value each for the purpose of any Employees Participation Plans.
The Company did not have any conditional share capital available on December 31, 2020.

Changes in Capital
The Company was formed on September 21, 2018 with a share capital of CHF 100,000 divided into 2,500,000 registered
shares with a nominal value of CHF 0.04 each. In view of the contemplated Spin-off from the Novartis group, the
Company’s share capital was increased on January 29, 2019 to CHF 19,548,000 divided into 488,700,000 registered shares
with a par value of CHF 0.04 each. Following the two successive increases through the authorized share capital, as
described above under “Authorized and Conditional Share Capital”, the share capital of the Company was, as of December
31, 2020, CHF 19,988,000 divided into 499,700,000 registered shares.
No other historical data is available regarding changes in capital during the last three financial years.

Shares, Participation Certificates and Profit-sharing Certificates

The Company has a single class of shares, being registered shares in the form of uncertificated securities (in the sense of
the Swiss Code of Obligations). A portion of these uncertificated shares is issued as intermediated securities (titres
intermédiés) within the meaning of the Swiss Federal Intermediated Securities Act via the settlement system operated by
SIX SIS, with the remaining shares directly held through Computershare Trust Company, N.A. in the US (including shares
held through Computershare Trust Company, N.A. via DTC). All Alcon shares have equal voting rights and carry equal
entitlements to dividends. No participation certificates (bons de participations) or profit-sharing certificates (bons de
jouissance) have been issued.
Based solely upon shares registered in the Alcon share registry, as of December 31, 2020, approximately 15.16% of the
Company's total share capital was held in Switzerland by 82,783 registered shareholders.

Limitations on Transferability and Nominees Registrations

The Articles of Incorporation of the Company do not provide for any limitation on transferability of shares or nominees
registration.

116
Convertible Bonds and Options
As of December 31, 2020, Alcon did not have any convertible bonds, warrants, options or other securities granting rights to
Alcon shares.

Board of Directors
Composition
The Board consists of eight to 13 members according to the Articles of Incorporation. As of December 31, 2020, the size of
the Board was 10 members and the Board was comprised of the following members:

F. Michael Ball, Chairman

A seasoned healthcare executive with nearly four decades of experience with global
healthcare companies, including nearly a decade as the CEO of medical device and
pharmaceutical companies, F. Michael Ball brings extensive executive leadership experience
as well as in-depth industry and Alcon-specific knowledge to the Board. He previously held
the position of Chief Executive Officer of the Alcon Division and served as a member of the
Novartis Executive Committee from February 1, 2016 until June 30, 2018. He previously
served as Chief Executive Officer of Hospira, Inc. from 2011 to 2015. Prior to that, Mr. Ball
held a number of senior leadership positions at Allergan, Inc., including President from 2006
Age: 65 to 2011. Before joining Allergan, Inc. in 1995, he held roles of increasing responsibility in
marketing and sales at Syntex Corporation and Eli Lilly & Co. Mr. Ball served on the board of
Citizenship:
directors of several organizations, including Kythera Biopharmaceuticals Inc., Hospira, Inc.,
Canada and United States
IntraLase Corp., AdvaMed and sTec, Inc. He began his career in the healthcare industry in
Year of initial 1981.
appointment:
He holds a Bachelor of Science and a Master of Business Administration from Queen’s
2019
University in Canada.
Expiration of current
Key Competencies: Global Business Operations, Healthcare Industry and Marketing
term of office:
2021

Lynn D. Bleil
An experienced healthcare industry consultant with nearly three decades of experience as a
Senior Partner at McKinsey & Company combined with her valuable experience as a
director of publicly-held healthcare and life sciences companies, Lynn D. Bleil brings to the
Board extensive US and Swiss experience, strategy and leadership. Ms. Bleil has been a
Age: 57 member of the boards of directors of Stericycle, Inc. since 2015 (where she chairs the
Nominating & Governance Committee), Sonova Holding AG since 2016 and Amicus
Citizenship: Therapeutics, Inc. since 2018. She is a former member of the board of directors of DST
United States Systems Inc. and Auspex Pharmaceuticals, Inc. (until their sale to SS&C Technologies
Year of initial Holdings, Inc. and Teva Pharmaceutical Industries, Ltd., respectively). From 1985 through
appointment: 2013, Ms. Bleil was a Senior Partner at McKinsey & Company.
2019 Ms. Bleil holds a Bachelor of Science in Chemical Engineering from Princeton University and
Expiration of current a Master of Business Administration from the Stanford Graduate School of Business, both in
term of office: the United States.
2021 Key Competencies: Financial, Healthcare Industry and Regulatory/Public Policy

117
 Arthur Cummings, M.D.
As a native of South Africa with a large ophthalmology practice in Ireland whose opinion is
frequently sought by innovators in ophthalmology, Arthur Cummings, M.D. brings to the
Board an international perspective of a physician entrepreneur and practical first-hand
knowledge of the innovation that ophthalmologists seek. Dr. Cummings has been
Age: 58 Consultant Ophthalmologist at Beacon Hospital, since 2007, and Owner and Medical
Director at Wellington Eye Clinic, since 1998, both in Dublin, Ireland. Also, he has been
Citizenship: Owner of Arthur Cummings Eye Clinic Ltd. since 2014.
Ireland and South Africa
Dr. Cummings holds a Bachelor of Science in Medicine and Surgery (MB. ChB.) and a Master
Year of initial of Medicine in Ophthalmology (M. Med) from the University of Pretoria, South Africa. Dr.
appointment: Cummings is a Fellow of the College of Surgeons in South Africa (FCS SA) in Ophthalmology
2019 and a Fellow of the Royal College of Surgeons of Edinburgh (FRCSEd) in Ophthalmology.
Expiration of current Key Competencies: Healthcare Industry, Marketing and Technology
term of office:
2021

David J. Endicott
A lifelong healthcare executive with leadership experience at global pharmaceutical and
medical device companies, David J. Endicott is the Chief Executive Officer of Alcon and
brings to the Board an in-depth knowledge of Alcon as well as the healthcare industry. He
joined the Alcon Division, when still operating under the Novartis group, in July 2016 as
Age: 55 President, Commercial and Innovation, and Chief Operating Officer. Prior to joining the
Alcon Division in 2016, Mr. Endicott was President of Hospira Infusion Systems, a Pfizer
Citizenship: company. Before joining Hospira, Mr. Endicott served as an officer and executive committee
United States member of Allergan, Inc. where he spent more than 25 years of his career in leadership
Year of initial roles across Europe, Asia and Latin America, as well as the U.S. Mr. Endicott served on the
appointment: board of directors of Zeltiq, Inc. and Orexigen Therapeutics, Inc. He currently serves on the
2019 board of AdvaMed.

Expiration of current He holds an undergraduate degree in Chemistry from Whitman College and a Master’s
term of office: degree in Business Administration from the University of Southern California, both in the
2021 United States.
Key Competencies: Global Business Operations, Healthcare Industry and Marketing

118
 Thomas Glanzmann
Thomas Glanzmann, a venture capital investor with Medtech Ventures Partners where he
evaluates and invests in medical device companies, brings those strategic insights and
financial and risk management experience to the Board, as well as his decades long
experience in the healthcare industry. Thomas Glanzmann is the Founder and has been a
Partner at Medtech Ventures Partners since 2017. He has been a member of the board of
Age: 62 directors of Grifols S.A. since 2006, including serving as Vice Chairman since 2017 and the
Citizenship: President of its Sustainability Committee. He was President and Chief Executive Officer of
Switzerland Gambro AB from 2006 to 2011 and Chief Executive Officer and Managing Director of
HemoCue AB from 2005 to 2006. Mr. Glanzmann was Senior Advisor to the Executive
Year of initial Chairman and Acting Managing Director of the World Economic Forum from 2004 to 2005.
appointment: From 1988 to 2004, Mr. Glanzmann worked in various positions at Baxter International Inc.,
2019 including President of Baxter Bioscience, Chief Executive Officer of Immuno International
Expiration of current Co., Ltd. and President of Europe Biotech Group. In 2004, he was a Senior Vice President
term of office: and Corporate Officer of Baxter AG.
2021 He holds a Bachelor of Science in Political Science from Dartmouth College in the United
States, a Master of Business Administration from the IMD Business School in Switzerland
and a Board of Directors Certification from the UCLA Anderson School of Management in
the United States.
Key Competencies: Global Business Management, Healthcare Industry and Technology

D. Keith Grossman
D. Keith Grossman, with more than 30 years of experience with medical devices and
supplies, including as Chief Executive Officer of publicly held healthcare companies, brings
to the Board his executive and board leadership experience as well as operational and
strategic planning expertise in the healthcare industry. He has been the Chairman, Chief
Executive Officer and President of Nevro, Inc. since March 2019. He has also been Chairman
Age: 60 of the board of directors of Outset Medical, Inc. since 2014. He was President and Chief
Citizenship: Executive Officer of Thoratec Corporation from 1996 to 2006 and from 2014 to 2015 and
United States was a member of the board of directors from 1996 to 2015. Mr. Grossman was Chief
Executive Officer and a member of the board of directors at Conceptus, Inc. from 2011 to
Year of initial 2013. He was Managing Director and Senior Advisor at TPG Capital, L.P. from 2007 to 2011.
appointment: Mr. Grossman also served as a member of the board of directors of ViewRay, Inc. from 2018
2019 to 2021, Zeltiq, Inc., as Lead Director, from 2013 to 2017, Intuitive Surgical, Inc. from 2004 to
Expiration of current 2010 and Kyphon Inc. in 2007 and served on a number of private boards of directors.
term of office: Mr. Grossman holds a Bachelor of Science in Animal Sciences from The Ohio State
2021 University and Master of Business Administration in Finance from Pepperdine Graziadio
Business School at Pepperdine University, both in the United States.
Key Competencies: Healthcare Industry, International Supply Chain and Technology

119
 Scott Maw
An experienced financial executive with over two decades of experience at global
companies, including Chief Financial Officer of Starbucks Corporation, Scott Maw
contributes to the Board his extensive understanding of complex financial analysis and
reporting and internal controls over financial reporting of a global company. He has been a
member of the board of directors of Avista Corporation since 2016, Chipotle Mexican Grill
Age: 53
Inc. since 2019, where he is Chair of the Audit Committee, and Root, Inc. since 2020. Mr.
Citizenship: Maw is also member of the board of trustees of Gonzaga University. Previously, he was
United States Executive Vice President and Chief Financial Officer at Starbucks Corporation from 2014
until the end of 2018, Senior Vice President in Corporate Finance from 2012 to 2013 and
Year of initial
Senior Vice President and Global Controller from 2011 to 2012. From 2010 to 2011, he was
appointment:
Senior Vice President and Chief Financial Officer of SeaBright Holdings, Inc. From 2008 to
2019
2010, he was Senior Vice President and Chief Financial Officer of the Consumer Bank at JP
Expiration of current Morgan Chase and Company. Prior to this, Mr. Maw held leadership positions in finance at
term of office: Washington Mutual, Inc. from 2003 to 2008 and GE Capital from 1994 to 2003.
2021
Mr. Maw holds a Bachelor of Business Administration in Accounting from Gonzaga
University in the United States.
Key Competencies: Financial, Global Business Operations and Consumer Industry

Karen May
Karen May, who possesses a unique combination of having been both a financial executive
and a human resource executive of global companies, brings to the Board extensive
operational, financial and human capital strategy experience. Ms. May has been a member
of the board of directors of Ace Hardware Corporation, where she is Chair of the Audit
Age: 62 Committee, since 2017. Previously, Ms. May was on the board of directors of MB Financial,
Inc., where she served as Chair of the Compensation Committee until 2019. From 2012 to
Citizenship: 2018, she was Executive Vice President and Chief Human Resources Officer at Mondelez
United States International, Inc. (name changed from Kraft Foods, Inc. after the spin-off of select Kraft
Year of initial North American businesses in 2012). From 2005 to 2012, Ms. May was the Executive Vice
appointment: President and Chief Human Resources Officer of Kraft Foods, Inc. Between 1990 and 2005,
2019 she held various positions in Human Resources and Finance at Baxter International Inc.,
including Corporate Vice President and Chief Human Resources Officer, Vice President,
Expiration of current International Finance, and Vice President, Division Controller. Prior to Baxter International
term of office: Inc., Ms. May was a Certified Public Accountant in the audit practice of Price Waterhouse.
2021
Ms. May holds a Bachelor of Science in Accounting from the University of Illinois in the
United States.
Key Competencies: Financial, Consumer Industry and Human Capital Management

120
 Ines Pöschel
Ines Pöschel brings to the Board not only her deep experience as a Swiss lawyer,
particularly in corporate governance, capital markets and mergers and acquisitions, but her
extensive leadership roles in public policy with her appointments on government and public
commissions. Ms. Pöschel has been a Partner at Kellerhals Carrard Zurich KIG since 2007.
Age: 52 She has been a member of the board of directors of Implenia AG since 2016 and
Graubündner Kantonalbank since 2018 and serves on the board of directors of several non-
Citizenship: listed Swiss companies. Ms. Pöschel is also a member of the Swiss Federal expert
Switzerland commission for commercial register. From 2002 to 2007, Ms. Pöschel was a Senior Associate
Year of initial at Bär & Karrer AG. She was a Senior Manager at Andersen Legal LLC from 1999 to 2002.
appointment: Ms. Pöschel has a Master in Law from the University of Zurich in Switzerland, and passed
2019 the Swiss Bar Exam in 1996.
Expiration of current Key Competencies: Government Relations, Legal/Governance and Regulatory/Public Policy
term of office:
2021

Dieter Spälti, Ph.D.

As an executive of Spectrum Value Management Ltd., the family office of an iconic industrial
Swiss family, Dr. Spälti has overseen all of its investments for nearly two decades, which
allows Dr. Spälti to bring to the Board significant financial and operational experience in
addition to his previous consulting experience with numerous industrial, financial and
Age: 60 technology firms in Europe, the US and Southeast Asia. Dr. Spälti has been Chief Executive
Officer and a member of the board of directors at Spectrum Value Management Ltd.,
Citizenship: Switzerland since 2006 and Managing Partner from 2002 to 2006. He has been a member of
Switzerland the board of directors at LafargeHolcim Ltd. since 2003. Dr. Spälti served, or continues to
Year of initial serve, on the board of directors of various non-listed Swiss and international companies,
appointment: including several that are controlled by the same beneficial owner. Dr. Spälti was a Partner
2019 at McKinsey & Company from 1993 to 2001.

Expiration of current He holds a Ph.D. in Law from the University of Zurich, Switzerland.
term of office: Key Competencies: Financial, Legal/Governance and Technology
2021

121
Independence and Executive Function
The independence of Board members is a key element of Alcon’s corporate governance framework. Therefore, Alcon has
developed a strong set of independence criteria for its board members based on international best practice standards,
including the Swiss Code of Best Practices for Corporate Governance and the NYSE standards, which can be found in the
Alcon Board Regulations, available under the investor relations portion of the Alcon website (https://investor.alcon.com/
governance/governance/default.aspx).
The Board assesses the independence of its Board members on a regular basis, at least annually. As of December 31,
2020, all Board members qualified as independent, except for F. Michael Ball, David J. Endicott and Dr. Arthur Cummings.
Other than (i) F. Michael Ball, who previously served as Chief Executive Officer of the Alcon Division of Novartis and as a
member of the Novartis Executive Committee from February 1, 2016 until June 30, 2018 and (ii) David J. Endicott, who
currently serves as Alcon’s Chief Executive Officer, no Board member was a member of the management of the Company
or any other Alcon consolidated subsidiary in the last three financial years up to December 31, 2020.
Other than Dr. Arthur Cummings, who, in his capacity as an ophthalmologist, has provided certain consulting services,
including assistance with various clinical trials, to Alcon, no Board member has a significant business relationship with the
Company or with any other Alcon consolidated subsidiary.
David J. Endicott is an executive member of the Board by reason of his function as Chief Executive Officer of Alcon. All
other members of the Board are non-executive directors since none of them carries out operational management tasks
within Alcon.
As of December 31, 2020, none of the Board members held any official government functions or political posts.

Limitations of Number of Mandates

No member of the Board may hold more than 10 additional mandates in other companies, of which no more than four
shall be in other listed companies. Chairs of the board of directors of other listed companies count as two mandates.
Mandates in different legal entities which are under joint control are deemed one mandate. Further details can be found
in Article 34 of the Articles of Incorporation, available under https://investor.alcon.com/governance/governance/
default.aspx.

Elections and Terms of Office

The Board members, the Chair of the Board and the members of the Compensation Committee shall be elected
individually by the General Meeting of Shareholders for a term of office lasting until completion of the next Annual General
Meeting of Shareholders.
There is no mandatory term limit for Board members.
The rules in the Articles of Incorporation reflect the statutory legal provisions regarding the appointment of the Chairman,
the members of the Board, the members of the Compensation Committee and the independent proxy.

Internal Organizational Structure

General Principles and Areas of Responsibilities
The Board constitutes itself in compliance with legal requirements and taking into consideration the resolutions of the
General Meeting of Shareholders. It shall elect one or two Vice-Chairs. It shall appoint a secretary, who need not be a
member of the Board.
The Board is the ultimate governance body of the Company, under the leadership of the Chair. F. Michael Ball has been
the Chair of the Board since the Spin-off from Novartis. In this role, Mr. Ball leads the Board to represent the interests of
all stakeholders. The Vice Chair has been held by D. Keith Grossman, also acting in this role as the Senior Independent
Director. The duties of Mr. Ball and Mr. Grossman in their respective functions are laid out in Articles 20 and 21,
respectively, of the Alcon Board Regulations (https://investor.alcon.com/governance/governance/default.aspx).

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The Board is responsible for the duties assigned to it by the Articles of Incorporation and the Alcon Board Regulations,
which include the overall direction and supervision of management. It holds the ultimate decision-making authority for
Alcon, with the exception of any decisions reserved to the shareholders. In performing its tasks, the Board follows the
highest standards of ethics, integrity and governance. It undertakes annually a self-assessment process to evaluate its
performance, the performance of its committees and the individual performance of its members.
Within the limits of the law and the Articles of Incorporation, the Alcon Board has delegated certain of its duties to the
Executive Committee and the Board’s Committees.

Delegation to the Executive Committee

The Alcon Board has delegated to the Executive Committee the management of the business in accordance with the terms
set forth in the Alcon Board Regulations. Such delegation has been formalized in Article 12 of the Alcon Board Regulations
and further regulated in a set of internal regulations. Under the lead of the Chief Executive Officer, the Executive
Committee is responsible for the management of the business and functions as a coordination committee, independent of
any legal entity of the Alcon Group. A non-exhaustive list of the duties assigned to the Executive Committee can be found
in Article 23 of the Alcon Board Regulations (https://investor.alcon.com/governance/governance/default.aspx).

Delegation to the Board’s Committees

The Board’s Committees enable the Alcon Board to work in an efficient and effective manner, ensuring a thorough review
and discussion of matters, while giving the Alcon Board more time for deliberation and decision-making. For this purpose,
the Alcon Board has delegated certain of its duties to each of its four permanent committees, i.e. the Audit and Risk
Committee, the Compensation Committee, the Governance and Nomination Committee and the Innovation Committee.
Details of the duties, responsibilities and decision-making powers of each committee can be found in the respective
committee’s charter, contained in the Alcon Board Regulations, available under https://investor.alcon.com/governance/
governance/default.aspx.
1
In 2020, the composition of the respective Board’s Committees was as follows :

Audit and Risk Compensation Governance and

Name Committee Committee Nomination Committee Innovation Committee
F. Michael Ball Member
Lynn D. Bleil Member Member

Arthur Cummings Member

David J. Endicott

Thomas Glanzmann Member Member Chair

D. Keith Grossman Member Chair Member

Scott Maw Chair

Karen May Member Chair

Ines Pöschel Member Member

Dieter Spälti Member

1
Effective May 6, 2020, the Compensation, Governance and Nomination Committee (“CGNC”) split into two distinct committees, a Compensation Committee
(“CC”) and a Governance and Nomination Committee (“GNC”) to enable the two committees to better focus on their respective key responsibilities.

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Audit and Risk Committee

The Audit and Risk Committee consisted of four members in 2020, all of whom were determined by the Board to be
independent and in possession of the financial literacy and accounting or related financial management expertise, as
defined in the NYSE standards. The Audit and Risk Committee meets and consults regularly with the management, the
Alcon Internal Audit function, the independent external auditors and external consultants. The Audit and Risk Committee
regularly reports to the full Board on its decisions and deliberations.
The primary responsibilities of this committee include:
• supervising external auditors and selecting and nominating external auditors for election at the Annual General
Meeting of shareholders;
• overseeing internal auditors;
• overseeing accounting policies, financial controls and compliance with accounting and internal control standards;
• approving quarterly financial statements and financial results releases;
• overseeing internal control and compliance processes and procedures;
• overseeing compliance with laws and external and internal regulations;
• ensuring that Alcon has implemented and maintained an appropriate and effective risk management system and
process;
• ensuring that all necessary steps are taken to foster a culture of risk-adjusted decision-making without
constraining reasonable risk-taking and innovation;
• approving guidelines and reviewing policies and processes; and
• reviewing with management, internal auditors and external auditors the identification, prioritization and
management of risks; the accountabilities and roles of the functions involved in risk management; the risk
portfolio; and the related actions implemented by management.

Compensation Committee
The Compensation Committee consisted of four members in 2020, all of whom were determined by the Board to be
independent. The Compensation Committee meets and consults regularly with management and external consultants.
The Compensation Committee regularly reports to the full Board on its decisions and deliberations.
The primary responsibilities of this committee include:
• developing a compensation philosophy in line with the principles set forth in the Articles of Incorporation and
submit to the Alcon Board;
• providing oversight for Alcon's human capital strategy, including talent management, CEO and ECA succession
planning, diversity and inclusion initiatives and pay equity measures;
• designing, reviewing and recommending to the Alcon Board compensation policies and programs;
• reviewing and approving a peer group of companies for executive compensation comparisons;
• advising the Alcon Board on the compensation of Directors and the Chief Executive Officer of Alcon;
• determining the compensation of ECA members;
• supporting the Alcon Board in preparing the proposals to the General Meeting of Shareholders regarding the
compensation of the members of the Alcon Board and ECA;
• preparing the annual compensation report and submitting it to the Alcon Board for approval;
• establishing executive and director stock ownership guidelines and stock trading policies and monitoring
compliance with such policies; and
• overseeing communication and engagement on executive compensation matters with shareholders and their
advisors.

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Governance and Nomination Committee

The Governance and Nomination Committee consisted of four members in 2020. The Governance and Nomination
Committee meets and consults regularly with management and external consultants. The Governance and Nomination
Committee regularly reports to the full Board on its decisions and deliberations.

The primary responsibilities of this committee include:

• designing, reviewing and recommending corporate governance principles to the Alcon Board;

• overseeing Alcon's strategy and reputation regarding ESG matters and annually approve Alcon's Corporate
Responsibility Report;
• establishing criteria and identifying candidates for election as Directors;
• assessing existing Directors and recommending to the Alcon Board whether they should stand for re-election;
• developing and reviewing an onboarding program for new Directors and an ongoing education plan for existing
Directors;
• reviewing periodically the Articles of Incorporation with a view to reinforcing shareholder rights;
• reviewing periodically the composition and size of the Alcon Board and its committees;
• direct periodic assessments of the Board, directors and committees;
• reviewing annually the independence status of each Director; and
• reviewing directorships and agreements of Directors for conflicts of interest and dealing with conflicts of interest.
The ESG topic is considered of key importance within the Alcon governance framework. Under supervision and guidance
of the Governance and Nomination Committee, a dedicated Executive Steering Committee has been created to implement
Alcon's ESG strategy and conduct day-to-day activities. This Executive Steering Committee consists of senior
representatives of Alcon key functions, as listed in the following chart:

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Innovation Committee
The Innovation Committee consisted of four members in 2020. The Innovation Committee meets and consults regularly
with management. The Innovation Committee regularly reports to the full Board on its decisions and deliberations.
The primary responsibilities of this committee include:
• providing counsel to the Alcon Board and management in the area of technology, application of technology and
new business models;
• reviewing and making recommendations to the Board on internal pipeline and external investments (e.g.
potential acquisitions, equity investments, alliances and collaborations) relative to Alcon’s business portfolio,
forecasted capital and operating capacity during the strategic and operating reviews;
• reviewing, evaluating and advising the Board on the strategic direction and competitiveness of the innovation
pipeline through the evaluation of key innovation metrics;
• reviewing and recommending for approval any innovation goals/targets that may be incorporated into Alcon’s
incentive compensation plans;
• assisting the Board with oversight, risk management and evaluation of management’s criteria for selecting major
new R&D and BD&L projects, assessing progress against major milestones, budget execution and post-launch
revenue impact;
• reviewing, discussing and informing the Board of significant emerging science, technology, programs, issues or
trends relevant to Alcon; and
• reviewing such other matters in relation to Alcon research and development, technology and innovation
programs as the committee may, in its own discretion, deem desirable in connection with its responsibilities.

Frequency, Duration and Attendance of the Meetings of the Board of Directors and its
Committees
The Board and its Committees are convened as often as the conduct of the business may require.
In 2020, the Board and its Committees met as follows:

Governance and
Board of Audit and Risk Compensation Nomination Innovation
3
Directors Committee Committee Committee Committee
1
Number of meetings 8 11 8 4 3
2
Approximate average duration 5 hrs 10 min 1 hrs 40 min 1 h 50 min 1 h 15 min 2 hrs 10 min

Overall attendance 100% 100% 100% 100% 100%

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During 2020, each Board member attended all of the meetings of the Board and each Committee on which he or she
serves, as represented below:

Governance and
Audit and Risk Compensation Nomination Innovation
Meeting attendance Board of Directors Committee Committee Committee Committee
Number of Number of Number of Number of Number of
Meetings Meetings Meetings Meetings Meetings
8 11 8 4 3
F. Michael Ball 8 4
Lynn D. Bleil 8 11 3
Arthur Cummings 8 3
David J. Endicott 8
Thomas Glanzmann 8 8 4 3
D. Keith Grossman 8 8 4 3
Scott Maw 8 11
Karen May 8 11 8
Ines Pöschel 8 8 4
Dieter Spälti 8 11

1
The number of meetings includes physical meetings as well as meetings held through videoconference or conference call.
2
The approximate average duration does not include dinners, lunches and breaks.
3
Until May 6, 2020, the Governance and Nomination Committee was combined with the Compensation Committee as the
Compensation, Governance and Nomination Committee ("CGNC"). The three CGNC meetings occurring prior to May 6 are included in
the Compensation Committee totals. Prior to the split of the committees, governance and nomination matters were addressed in the
CGNC meetings.

Board Evaluation and Education

The Governance and Nomination Committee and the Chair of the Board coordinate an annual self-evaluation of the Board
and its Committees, which included individual interviews with the Board Chair and the completion of a confidential survey
by Board members. The Chair summarizes for the Board the results of the evaluation, and any findings are appropriately
addressed. For example, in 2020, the committee structure was reviewed and the Board decided to create the Governance
and Nomination Committee as a separate committee to better focus on ESG matters. In addition, each Committee
conducts its own self-evaluation annually.
The Alcon Board recognizes the value of independent development and learning by its members, and in 2020, it
established a Director Education Program for its members. This program provides for internal and external speakers on
trending topics, experiential learning of Alcon and its industry through site tours and product demonstrations and, at each
Board member’s option, externally provided coursework. The intent of the Director Education Program is to ensure Alcon
Board members are well-versed in matters related to Alcon, its business and the rapidly changing corporate governance
environment.

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Information and Control System of the Board vis-à-vis the Management
The Alcon Board ensures that it receives through several channels sufficient information from the Executive Committee to
perform its supervisory duties and to make the decisions that are reserved to it by law, i.e. its non-delegable decisions.

Information to the Board of Directors

The Alcon Board Regulations confer to the members of the Alcon Board the right to have full and unrestricted access to
management and employees of the Company and its subsidiaries in the execution of their duties. Also, the Chief Executive
Officer regularly informs the Alcon Board on business developments, including significant transactions and risk issues. The
Alcon Board and its Committees meet as often as required with the Chief Executive Officer and members of the Executive
Committee or other members of the senior management. Further, the Alcon Board may invite, in accordance with the
Alcon Board Regulations, external advisors to attend board or committee meetings in order to obtain a third party
independent perspective on certain topics. Information is further communicated to the Alcon Board through regular
reports (please refer to the section below “Alcon Management Information System”).

Alcon Management Information System

The Alcon Board receives monthly reports on the financial performance of the Company, including the performance of the
Surgical and Vision Care franchises. On a quarterly basis, prior to the release of each quarter’s results, the Board receives
the consolidated financial statement information and an outlook of the full-year results in accordance with IFRS and “core”
results together with related commentary.
On an annual basis, the Board receives and approves the financial targets for the following year. Mid-year, the Board met
for a strategic review of the business and approved the strategic plan for the next five years.
Additionally, throughout the year, the Board directly or through its Committees also received reports on, among other
things:
• the enterprise risk management program and risk assessment reports;
• the compliance program;
• the internal audit function;
• manufacturing and technical operations;
• research & development and product pipeline;
• commercial strategies and product launches;
• legal matters;
• competitive developments; and
• industry trends.

In matters of significance, the Board receives direct, immediate information.

Internal Audit
The purpose of the internal audit function is to review Alcon’s financial, operational, IT and compliance activities to review
compliance with laws, regulations and internal policies. It also supports Alcon’s efforts to maintain accurate and timely
financial reporting while seeking to add value by suggesting improvements to Alcon’s operations and to assist Alcon in
achieving its strategic and financial objectives. Internal audit is led by the Chief Audit Executive (“CAE”) who functionally
reports to the Audit and Risk Committee. The CAE is responsible for the development, review and modification of Alcon’s
internal audit policies and procedures. The CAE shall ensure effectiveness and efficiency of the internal control framework
with existing policies and regulations and proposes remediation actions where deficiencies were identified. The CAE
periodically submits to the Audit and Risk Committee reports on the activities of the internal audit function. In 2020,
internal audit was involved in a total of 37 audit engagements. The results and remediation status of these audit
engagements are reported to the Audit and Risk Committee on a periodic basis.

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Internal Control System
Alcon's internal control system is designed to provide reasonable assurance to the Board and management regarding the
reliability of financial reporting and accounting policies and the preparation and the presentation of the Company’s
financial statements. In 2020, Alcon fully implemented an internal control system that has been fully tested for
effectiveness. The Audit and Risk Committee has ultimate responsibility to oversee the adequacy and effectiveness of
internal control over financial reporting.

Risk Management
The Audit and Risk Committee has the responsibility to ensure the implementation of an appropriate and effective risk
management system and process and to foster a culture of risk-adjusted decision-making without constraining reasonable
risk taking and innovation. It approves guidelines and review policies and processes. In addition, the Audit and Risk
Committee reviews with management, internal auditors and external auditors, the identification, prioritization and
management of the risks, the accountabilities and roles of the functions involved with risk management, the risk portfolio
and the related actions implemented by management. The Audit and Risk Committee informs the Executive Committee
and the Board on a periodic basis on the risk management system and on the most significant risks and how these are
managed. The CAE supports the Audit and Risk Committee and perform appropriate reviews of Alcon's risk management
strategy.
Alcon’s key risk management tool is the Enterprise Risk Management ("ERM") program, the purpose of which is to help
execute on Alcon’s strategy within the boundaries of regulations and improve the probability for achieving Alcon’s strategic
and financial objectives. Alcon’s vision is to design a sustainable and appropriately scaled ERM program to proactively
manage existing and emerging threats and opportunities to the business. The ERM program aims in particular to provide
the business with the following: (i) operation discipline and rigor to enable business continuity, creation and preservation
of value, (ii) forums for frequent risk discussions and escalation of relevant items with leadership, and (iii) guidance,
techniques and support to identify, assess (e.g. likelihood and impact), manage, monitor and report on major risks,
including proper mitigation if necessary.

Compliance Function
As part of its global control system, Alcon has also established a comprehensive global integrity and compliance program,
under the supervision of the Audit and Risk Committee. The program is led by the Global Head, Integrity and Compliance
under the functional leadership of Alcon’s General Counsel and is intended to help prevent, detect and mitigate
compliance risk across the organization. The program is built on a culture and expectation of compliance at all levels. The
fundamental elements of the program include dedicated resources to address compliance globally, formal compliance
governance, a global intake process to receive questions and concerns (including through the Alcon's Ethics Helpline),
written standards, communications, training, multiple levels of risk-based auditing and monitoring, review of alleged
misconduct and corrective/disciplinary actions for violations. The Audit and Risk Committee of the Board receives periodic
updates on the performance of the Integrity and Compliance program and compliance related matters. The program also
includes compliance committees, which have been established at the corporate, regional and country-levels and include
participation by the Executive Committee and other senior leadership to provide strategic direction and oversight relating
to the management of compliance risks for Alcon. Policies are reviewed and updated on a regular basis to address
changes in laws and regulations and to strengthen compliance.

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Executive Committee
Composition of the Executive Committee
As of December 31, 2020, the Executive Committee of Alcon was composed of the following members:

David J. Endicott, Chief Executive Officer

Please refer to the biography set forth under "Board of Directors."

Age: 55
Citizenship:
United States

Tim C. Stonesifer, Chief Financial Officer

Tim Stonesifer has been the Chief Financial Officer since April 2019. Prior to joining Alcon,
he had served as Executive Vice President and Chief Financial Officer at Hewlett Packard
Enterprise from November 2015 through September 2018. Prior to that role, Mr.
Stonesifer acted as Senior Vice President and Chief Financial Officer, Enterprise Group at
Age: 53 HP Co. since 2014. Before joining HP Co., he served as Chief Financial Officer of General
Citizenship: Motors’ International Operations from 2011 to 2014. Previously, he served as Chief
United States Financial Officer of Alegco Scotsman, a storage company, from 2010 to May 2011; Chief
Financial Officer of Sabic Innovative Plastics (formerly GE Plastics) from 2007 to 2010; and
various other positions at General Electric since joining the company in 1989.
Mr. Stonesifer holds a Bachelor of Arts in Economics from the University of Michigan in
the United States.

Laurent Attias, Head Corporate Development, Strategy,

Business Development and Licensing (BD&L) and Mergers and
Acquisitions (M&A)

Laurent Attias is Head of Corporate Development, Strategy, BD&L and M&A where he
Age: 53 leads the development of long-term strategic plans for the Surgical and Vision Care
franchises of Alcon and is responsible for the Alcon’s BD&L, M&A, partnerships and
Citizenship: alliance activities, a role which he has held since 2012. Since 1994 when Mr. Attias joined
France and United States Alcon, he has had various roles with increasing responsibility beginning with positions in
Alcon’s Sales and Marketing functions and then holding the positions of Vice President,
Refractive Sales and Marketing from 2002 to 2007; Vice President/General Manager of
Alcon Canada from 2007 to 2009; Vice President, Central & Eastern Europe, Italy and
Greece from 2009 to 2010; and President, Europe, Middle East and Africa (“EMEA”) from
2010 to 2012.
Mr. Attias holds both a Bachelor of Business Administration in Marketing and a Master of
Business Administration from Texas Christian University in the United States.

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 Ian Bell, President International

Ian Bell has been the President-International, overseeing the Europe, Russia, Middle East
and Africa, Asia Pacific, Japan and Latin America and Caribbean markets, since January
2019. He joined Alcon in March 2016 as President of EMEA. Prior to joining Alcon, Mr. Bell
served as Corporate Vice President and President of the EMEA region for Hospira since
Age: 50 2014. Mr. Bell was Corporate Vice President and President of Allergan, Inc.’s Asia Pacific
Citizenship: region, based in Singapore, from 2008 to 2014. Mr. Bell joined Allergan in 2005 as Vice
United Kingdom President and Managing Director of its neurosciences division for the EMEA region. He
began his career at GlaxoSmithKline, where he held roles of increasing responsibility and
scope in sales, marketing and strategy for more than 10 years.
Mr. Bell was awarded the degree of Bachelor of Arts with honors in Economics from the
University of York in the United Kingdom.

Leon Sergio Duplan Fraustro, President North America

Sergio Duplan has served as President-North America, overseeing the United States and
Canada markets since 2015. Mr. Duplan joined Alcon in 2012 and served as Alcon’s
President of Latin America and Canada for Alcon for three years. Mr. Duplan began his
career with Novartis in 2004, as Vice President of Sales in General Medicines, in Mexico
Age: 53 then served as Head of Marketing and Sales for Latin America, General Medicines,
Citizenship: Pharma from 2006 to 2008 and then Country Pharma Organization Head and Country
Mexico and United States President of Novartis Mexico from 2008 to 2012. Prior to joining Novartis, Mr. Duplan held
several positions of increasing responsibility in Sales, Finance and Country Management
at Procter & Gamble and Eli Lilly & Co. He is also currently a board member of The Alcon
Foundation.
Mr. Duplan holds a Bachelor degree in Industrial Engineering from Universidad
Iberoamericana in Mexico and a Master of Business Administration from The Wharton
School at the University of Pennsylvania in the United States.

Michael Onuscheck, President Global Businesses and

Innovation

Michael Onuscheck has been the President-Global Businesses and Innovation since
November 2018 where he is responsible for driving the innovation pipeline for Alcon. Mr.
Onuscheck joined Alcon in 2015 as Alcon’s President and General Manager of the Global
Age: 54
Surgical franchise from Boston Scientific, where he had spent 10 years in leadership
Citizenship: positions of increasing responsibility, including overseeing the company’s business
United States operations in Europe and Russia from 2011 to 2015 and serving as President for its
Neuromodulation division from 2008 to 2011. Prior to joining Boston Scientific, Mr.
Onuscheck held a variety of management positions at Medtronic in spinal reconstructive
surgery and stereotactic image guided surgery and various sales and marketing positions
for Pfizer.
Mr. Onuscheck earned his degree in Business Administration and Psychology from
Washington and Jefferson College in the United States.

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 Rajkumar Narayanan, Operational Strategy and Chief
Transformation Officer

Mr. Narayanan has been the Senior Vice President Operational Strategy and Chief
Transformation Officer since April 2019 and is responsible for leading the development
and implementation of Alcon’s transformation program. He joined Alcon in June 2017 as
Age: 56 President Asia Pacific Region from Allergan, Inc., where he worked for 22 years in roles of
increasing responsibility, including Senior Vice President Asia Pacific Region from 2014 to
Citizenship:
2017; Vice President and Managing Director of the Medical Aesthetic Franchise for Europe
United States
Africa and Middle East from 2011 to 2014; and Vice-President, Greater China & Japan from
2008 to 2011. Prior to those roles, Mr. Narayanan was a part of Allergan’s Finance
function in a number of Country, Region and Corporate Finance roles. Mr. Narayanan
started his career in finance with Hindustan Unilever India in 1987.
Mr. Narayanan holds a Bachelor of Science degree in Accounting and Finance from
Mumbai University. He is also Chartered Accountant and Cost and Works Accountant in
India.

Role of the Executive Committee

The members of the Executive Committee are appointed by the Alcon Board. In accordance with the Articles of
Incorporation and the Alcon Board Regulations, the Alcon Board delegated the responsibility for the management of the
business to the Executive Committee, under the lead of the Chief Executive Officer.
The Executive Committee shall in particular (i) develop strategies and policies and implement those upon approval by the
Alcon Board, (ii) coordinate and monitor the group’s functions to achieve the business targets, (iii) ensure the efficient
operation of the group, (iv) manage the proper provision and use of capacity and financial and other resources within the
group and (v) ensure the development and succession of the senior management.
Alcon has not entered into any management agreements with any third parties pursuant to which Alcon would delegate
any business management responsibilities to any such third parties.
As of December 31, 2020, none of the members of the Executive Committee held any official functions or political posts.

Limitations of Number of Mandates

No member of the Executive Committee may hold more than 6 additional mandates in other companies, of which no
more than 2 additional mandates shall be in other listed companies. Each of these mandates shall be subject to approval
by the Board. Members of the Executive Committee are not allowed to hold chairs of the board of directors of other listed
companies. Further details can be found in Article 34 of the Articles of Incorporation, available under https://
investor.alcon.com/governance/governance/default.aspx.

Compensation, Shareholdings and Loans

Please refer to "Item 6.B - Compensation".

Shareholders’ Participations Rights

Voting-right Restrictions and Representation
Alcon has not imposed any restriction regarding share ownership or voting rights. Nominees shareholdings are not
subject to any limitations. The right to vote at Alcon general meetings may only be exercised by a shareholder,
usufructuary or nominee who is duly registered in Alcon share register on the record date for the applicable general
meeting. Shareholders can be represented at general meetings by the independent proxy or by a third person authorized
by written proxy who does not need to be a shareholder. As required by law, shareholders will also be given the
opportunity to issue their voting instructions to the independent proxy electronically through an online voting platform.

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Each Alcon share has the right to one vote. Shares held by the Company or any of its consolidated subsidiaries are not
entitled to vote. Votes are taken either by a show of hands or by electronic voting, unless the General Meeting of
Shareholders resolves to have a ballot or where a ballot is ordered by the chairman of the meeting.

Statutory Quorums
Unless otherwise required by law, the general meeting passes resolutions and elections with the absolute majority of the
votes duly represented.
According to Article 704 of the Swiss Code of Obligation, the following shareholders’ resolutions require the approval of at
least two thirds of the votes represented at a General Meeting of Shareholders: (1) an alteration of Alcon’s corporate
purpose; (2) the creation of shares with increased voting powers; (3) an implementation of restrictions on the transfer of
registered shares and the removal of such restrictions; (4) an authorized or conditional increase of the share capital; (5) an
increase of the share capital by conversion of equity, by contribution in kind, or for the purpose of an acquisition of
property or the grant of special rights; (6) a restriction or an exclusion of shareholders’ pre-emptive rights; (7) a change of
Alcon’s registered office; (8) Alcon’s dissolution; or (9) any amendment to the Articles of Incorporation which would create
or eliminate a supermajority requirement.
Swiss law further provides for a qualified majority for certain special resolutions, such as in case of merger or demerger.

Convocation of General Meetings

The Annual General Meeting shall be held within six months after the close of the financial year of the Company.
Extraordinary General Meetings may be convened upon request of the Alcon Board, the auditors or one or more
shareholders representing in aggregate not less than 10% of the Company’s share capital. At least 20 days before the
general meeting, the invitation including the agenda is published in the Swiss Gazette of Commerce and mailed to the
registered shareholders.

Agenda
One or more Alcon shareholders whose combined shareholdings represent an aggregate nominal value of at least CHF 1
million may demand that an item be included in the agenda of a General Meeting of Shareholders. Such a demand must
be made in writing at the latest 45 days before the meeting and shall specify the items and the proposals of such a
shareholder.

Registration in the Share Register

The share register of the Company is a non-public register, subject to confidentiality and privacy and data protections
imposed on Alcon to protect registered shareholders. Alcon shares can be voted only if their relevant holder is registered
in the Alcon share register by the record date determined by the Alcon Board. The Articles of Incorporation do not provide
for any specific rule regarding the closure of the share register.

Changes of Control and Defense Measures

Duty to Make an Offer
Under the Swiss Financial Market Infrastructure Act, shareholders and groups of shareholders acting in concert who
acquire more than 33.3% of Alcon shares would be under an obligation to make an offer to acquire all remaining Alcon
shares. Alcon has neither opted out from the mandatory takeover offer obligation nor opted to increase the threshold for
mandatory takeover offers in the Articles of Incorporation.

Clauses on Change of Control

In accordance with the rules of the Ordinance against Excessive Compensation in Listed Companies, Alcon does not
provide severance payments upon a change of control or “golden parachute” provisions in its agreements with its
Directors, Executive Committee members or other members of senior management. Alcon’s Long Term Incentive Plan and
Deferred Bonus Stock Plan, each applicable to all employee participants including Executive Committee members, provide
for double trigger accelerated vesting of outstanding stock awards in the event a participant leaves the company for “good

133
reason” or Alcon terminates the employee without “cause,” as such terms are defined in the plans, within two years
following a change of control. If such a double trigger event occurs, the participant’s outstanding unvested awards would
vest in full. In the case of Performance Share Units, awards less than 50% vested would vest at target and awards more
than 50% vested would vest in accordance with Alcon’s actual performance, as determined by the Compensation
Committee.

Auditors
Duration of the Mandate and Terms of Office of the Auditors
PricewaterhouseCoopers SA, Switzerland (“PwC Switzerland”), is the statutory auditor of the Company since 2019 and shall
conduct the audit activities required by Swiss law and the related SIX regulations. It was re-elected on May 6, 2020 for a
term of one year until the 2021 Company’s Annual General Meeting. Mike Foley has been the auditor in charge of the
statutory audit since 2019. Alcon has a policy to rotate the lead audit partner of the statutory auditor at least every five
years.
Separately, on May 5, 2020, the Company appointed PricewaterhouseCoopers LLP, United States (“PwC US”), for a term of
one year, as its independent registered accounting firm to conduct the audit activities required by US law and the related
NYSE regulations. The appointment of PwC US does not require approval of the Company’s shareholders.

Auditing Fees and Additional Fees

The following table sets forth the amount of audit fees, audit-related fees, tax fees and all other fees billed or expected to
be billed in aggregate by PwC Switzerland, PwC US and any other member firm of PricewaterhouseCoopers International
Limited that rendered audit and related services to any member of Alcon, for the fiscal years ended December 31, 2020
and December 31, 2019:

($ millions) 2020 2019

Audit fees 10.3 11.7

Audit related fees 0.2 0.2
Tax fees 0.1 —
All other fees — —
Total 10.6 11.9

Audit fees include fees billed for professional services rendered for audits of our annual consolidated and standalone
financial statements, reviews of consolidated quarterly financial information and statutory audits of the Company
(including in particular the Compensation Report) and our subsidiaries.
Audit-related fees include fees billed for assurance and related services such as due diligence, accounting consultations and
audits in connection with mergers and acquisitions, employee benefit plan audits, internal control reviews and
consultations concerning financial accounting and reporting standards.
Tax fees include fees billed for professional services for tax compliance, tax advice and tax planning.
All other fees include fees billed for products and services other than as reported above.

Control Measures over the Activities of the Auditors

The Alcon Board has delegated to the Audit and Risk Committee ("ARC") the oversight of the activities of the external
auditors. The ARC evaluates on an annual basis the qualifications and performance of our auditors and will determine
whether PwC Switzerland should be proposed to the general meeting to stand for re-election. The criteria applicable of the
performance assessment of our auditors include professional competence, sufficiency of resources to complete the audit
mandate, independence and objectivity, capability to provide effective and pragmatic recommendations and coordination
with the ARC and other functions of the Alcon group, including internal audit.
Upon recommendation of the ARC, the Alcon Board proposed that the shareholders accept the audited consolidated
financial statements of the Alcon group and the financial statements of the Company.

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The ARC is further responsible for the compensation of our auditors and pre-approve all auditing services, internal control-
related services and non-audit services permitted under applicable statutory law, regulations and listing requirements.
In 2020, our auditors participated in five meetings of the ARC in order to discuss auditing matters and present the 2020
audit strategy and audit results. Our auditors provide at least once a year to the ARC a report regarding (i) the external
auditor’s internal quality-control procedures, (ii) any material issues raised by quality-control reviews or any inquiry or
investigation by governmental or professional authorities, (iii) any step taken to deal with such issues and (iv) all
relationships between the external auditor and the Alcon group.

Information Policy
Alcon is committed to pursuing an open and transparent communication with shareholders, suppliers, customers and
other stakeholders. It publishes information in a professional manner in accordance with best practices and legal
requirements.

Investor Relations
Effective communication with shareholders is an important part of Alcon's governance framework. The Chairman and the
CEO, supported by the Investor Relations team, are responsible for actively engaging with shareholders and keeping them
informed about Alcon's business, governance, strategy and performance, in accordance with applicable laws and
regulations. The Company believes good engagement and dialogue with the financial community is critical in securing
support and confidence in management's leadership and Board's governance of Alcon. The Investor Relations team
regularly organizes opportunities to learn about the Company through in-person and virtual meetings and product
showcases throughout the year, subject to its quiet period policy.

Communications
Financial information is published in the form of annual and quarterly financial results, in accordance with internationally
recognized accounting standards. Related material, including annual reports, Form 20-Fs, quarterly results releases,
presentations and conference call webcasts are available on the Alcon website. From time to time, Alcon issues press
releases regarding business developments. Investors may subscribe to receive via email distributions providing news and
notification about Alcon. The dissemination of material information about business developments is made in accordance
with the rules of the SIX and the NYSE.
Information contained in reports and releases may only be deemed accurate in any material respect at the time of the
publication. Past releases are not updated to reflect subsequent events.
Alcon's website provides regular information and updates about the Company at www.alcon.com. Detailed information
regarding certain topics may be found as follows:

Topic Website
Investor relations https://investor.alcon.com
Media releases https://www.alcon.com/about-us#media-releases
Leadership https://www.alcon.com/about-us#leadership
Governance https://investor.alcon.com/governance/governance/default.aspx
Financials https://investor.alcon.com/financials/quarterly-results/default.aspx

Corporate Responsibility Report

Alcon publishes an annual Corporate Responsibility Report, which describes Alcon’s corporate responsibility strategy and
highlights Alcon's approach to ESG matters, available at https://www.alcon.com/about-us/corporate-social-responsibility.

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Differences in Corporate Governance Standards
According to the NYSE listing standards on corporate governance, listed foreign private issuers are required to disclose
any significant ways in which their corporate governance practices differ from those governance practices that must be
followed by NYSE-listed US domestic companies. We briefly summarize those differences in the following paragraphs.

Responsibility of the Audit Committee with regard to Independent Auditors

Our Audit and Risk Committee is responsible for the compensation, retention and oversight of our independent statutory
auditors. It assesses the performance and qualification of our statutory auditors and submits its proposal for
appointment, reappointment or removal of our statutory auditors to the full Board. As required by the Swiss Code of
Obligations, our Board then submits its proposal to the shareholders for their vote at the Annual General Meeting (AGM).
In contrast, under NYSE listing standards, the audit committee for US domestic companies is responsible for the
appointment of the independent auditors.

Supervision of the Internal Audit Function

The CFO and the Audit and Risk Committee share the supervisory responsibility with respect to the internal audit function.
In contrast, under NYSE standards, only the audit committee supervises the internal audit function.

Responsibility of the Compensation Committee for Performance

Evaluations of Senior Management
In line with Swiss law, our Compensation Committee, together with the Board, proposes for shareholder approval at the
AGM the maximum aggregate amount of compensation for the Board and the maximum aggregate amount of fixed and
variable compensation for the Executive Committee of Alcon. Our shareholders elect each of the members of the
Compensation Committee at the Annual General Meeting. In contrast, under NYSE standards, it is the responsibility of the
compensation committee to evaluate senior management performance and to determine and approve, as a committee or
together with the other independent directors, the compensation for senior officers and the board. US domestic
companies listed on NYSE are only required to provide shareholders a periodic advisory non-binding vote on a company’s
executive compensation practices.

Shareholders’ Votes on Equity Compensation Plans

Swiss law authorizes the Board to approve equity-based compensation plans. Shareholder approval is only mandatory if
equity-based compensation plans require an increase in capital. No shareholder approval is required if shares for issuance
under such plans are purchased by the issuer in the open market. In contrast, the NYSE standards require shareholder
approval for the establishment of and material revisions to all equity compensation plans.

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6.D. EMPLOYEES
The table below sets forth the breakdown of the total year-end number of our full-time equivalent employees by main
category of activity for the past three years.

  For the year ended December 31,

(1)
  2020 2019 2018
Production & Supply 12,237 11,026 10,655
Marketing & Sales 7,450 7,301 7,162
General & Administration 2,087 2,120 1,133
Research & Development 1,881 1,695 1,431
Total full-time equivalent employees 23,655 22,142 20,381
(1) Alcon historically received certain services from NBS, the shared service organization of Novartis. The corresponding full time
equivalents providing such services were part of NBS and therefore not included in the table above for 2018.

Unions or works councils represent a significant number of our associates. We have not experienced any material work
stoppages in recent years, and we consider our employee relations to be good.

6.E. SHARE OWNERSHIP

The information set forth under “Item 6.B. Compensation” is incorporated by reference. Also, refer to Note 24 to the
Consolidated Financial Statements for a discussion of our equity-based compensation programs.

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ITEM 7. MAJOR SHAREHOLDERS AND
RELATED PARTY TRANSACTIONS
7.A. MAJOR SHAREHOLDERS
The information set forth under “Item 6. Directors, Senior Management and Employees—6.C. Board Practices—Corporate
Governance” is incorporated by reference.

7.B. RELATED PARTY TRANSACTIONS

Dr. Arthur Cummings, an Alcon director, in his capacity as an ophthalmologist, provides certain consulting services
including assistance with various clinical trials to Alcon. In 2020 and 2019, Alcon paid to Dr. Cummings (or his related
entities) approximately $54,809 and $84,844, respectively.

7.C. INTERESTS OF EXPERTS AND COUNSEL

Not Applicable.

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ITEM 8. FINANCIAL INFORMATION
8.A. CONSOLIDATED STATEMENTS AND OTHER
FINANCIAL INFORMATION
Please refer to the financial statements beginning on page F-1 of this Annual Report.

Legal Proceedings
From time to time, we may become involved in litigation or may receive inquiries from regulatory authorities, including
antitrust and competition authorities in various jurisdictions relating to matters arising from the ordinary course of
business. In addition, we are from time to time and may in the future be subject to audit or investigation by tax authorities
in the ordinary course of business in the various jurisdictions in which we operate. Our management believes that, except
as described below, there are currently no claims or actions pending against us, the ultimate disposition of which could
have a material adverse effect on our results of operations, financial condition or cash flows. In addition, under the
Separation and Distribution Agreement we entered into with Novartis, we and Novartis have agreed, subject to certain
conditions and except to the extent otherwise described below with respect to any matter, to indemnify the other party
and its directors, officers, employees and other representatives against any pending or future liabilities or claims that
constitute either a Novartis liability, in the case of Novartis, or an Alcon liability, in the case of Alcon, under the terms of the
Separation and Distribution Agreement, based on whether such claim or liability relates to the Novartis business and
products or our business and products. For more information, see "Item  10. Additional Information—10.C.  Material
Contracts—Our Agreements with Novartis".

Contact lenses class actions

Since the first quarter of 2015, more than 50 class action complaints have been filed in several courts across the US
naming as defendants contact lens manufacturers, including Alcon, and alleging violations of federal antitrust law, as well
as the antitrust, consumer protection and unfair competition laws of various states, in connection with the
implementation of unilateral price policies by the defendants in the sale of contact lenses. The cases have been
consolidated in the Middle District of Florida by the Judicial Panel on Multidistrict Litigation and the claims are being
vigorously contested.

JJSVI patent dispute

On June 23, 2020, Johnson & Johnson Surgical Vision, Inc. ("JJSVI"), acting through its subsidiaries, filed a patent
infringement action in the US District Court in Delaware alleging that the manufacture, use, sale, offer for sale and/or
importation of Alcon’s LenSx Laser System willfully infringes, directly and/or indirectly, one or more claims of 12 US
patents. JJSVI subsequently amended its complaint to include copyright infringement claims relating to source code used in
the LenSx Laser System as well as additional claims of patent infringement. Also on June 23, 2020, JJSVI filed a claim in
Mannheim, Germany, alleging that Alcon directly infringes one European patent through its manufacture and sale of
LenSx. In these cases, JJSVI seeks monetary and injunctive relief. In addition, JJSVI filed a motion on February 4, 2021 asking
the district court in Delaware to issue a preliminary injunction prohibiting Alcon from offering, selling, distributing,
installing, or exporting LenSx systems that contain the allegedly infringing source code or offering to sell, selling,
distributing, or exporting such source code with the purpose or intent of it being loaded onto LenSx systems. Alcon intends
to defend the cases vigorously and has asserted various patent infringement claims against JJSVI in Europe and the United
States.

Hoya patent dispute

On December 11, 2020, Hoya Corporation and one of its affiliates filed suit against Alcon in the US District Court for the
Northern District of Texas alleging that Alcon's UltraSert Pre-Loaded Delivery System infringes six of Hoya's US patents.
Alcon intends to defend the case vigorously.

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Dividend Policy
Alcon expects that it will recommend to shareholders the payment of a regular annual cash dividend based on the prior
year’s core net income; however, the declaration, timing and amount, including potential increases, of any dividends will
be subject to the approval of our shareholders at a General Meeting. The determination of the Board as to whether to
recommend a dividend and the approval of any such proposed dividend by our shareholders will depend upon many
factors, including our financial condition, earnings, corporate strategy, capital requirements of our operating subsidiaries,
covenants, legal requirements and other factors deemed relevant by the Board and shareholders. In 2020, Alcon's Board
had initially proposed a dividend of CHF 0.19 per share for 2019; however, in April 2020, in light of the then current market
conditions and economic uncertainties linked to COVID-19 and as part of Alcon's overall efforts to maintain financial
flexibility and implement cash preservation measures, the Board determined that it was in the best interest of Alcon's
stakeholders to delay the initiation of a dividend proposal until 2021. For additional information, see "Item  3. Key
Information—3.D. Risk Factors—Risks related to the Ownership of our Shares—We may not pay or declare dividends".
For information about deduction of the withholding tax or other duties from dividend payments, see "Item 10. Additional
Information—10.E. Taxation—Swiss Taxation—Swiss Residents—Withholding Tax on Dividends" and "Item  10. Additional
Information—10.E. Taxation—US Federal Income Taxation—Distributions on the Shares".

Past Dividends
Since the formation of Alcon, which became effective as of the date of the registration of Alcon in the Swiss Register of
Commerce on September 21, 2018, Alcon has not paid any dividends.

8.B. SIGNIFICANT CHANGES

A discussion of significant changes in our business can be found under "Item 4. Information on the Company —4.A.
History and Development of the Company", "Item 4. Information on the Company — 4.B. Business Overview" and "Item 5.
Operating and Financial Review and Prospects — 5.A. Operating Results".

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ITEM 9. THE OFFER AND LISTING
9.A. OFFER AND LISTING DETAILS
Alcon Inc. shares are listed on the SIX and the NYSE as global registered shares under the trading ticker “ALC”. As such,
they can be traded and transferred across applicable borders, without the need for conversion, with identical shares
traded on different stock exchanges in different currencies. During 2020, the average daily trading volume of Alcon Inc.
shares was approximately 1.9 million shares on the SIX and approximately 1.2 million shares on the NYSE.
As of the date of this Annual Report, our shares are included in a number of indices, including the “Swiss Market Index”, or
SMI, the principal Swiss index published by the SIX. This index contains 20 of the largest and most liquid stocks based on
market capitalization and the most active stocks listed on the SIX. The SMI indicates trends in the Swiss stock market as a
whole and is one of the most widely followed stock price indices in Switzerland.

9.B. PLAN OF DISTRIBUTION

Not applicable.

9.C. MARKETS
See “Item 9.A. Offer and listing Details.”

9.D. SELLING SHAREHOLDERS

Not applicable.

9.E. DILUTION
Not applicable.

9.F. EXPENSES OF THE ISSUE

Not applicable.

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ITEM 10. ADDITIONAL INFORMATION
10.A. SHARE CAPITAL
Not Applicable.

10.B. MEMORANDUM AND ARTICLES OF ASSOCIATION

We incorporate by reference into this Annual Report the description of our Articles of Incorporation and our Regulations of
the Board contained in our Registration Statement on Form 20-F, as amended, initially filed with the SEC on November 13,
2018 (File No. 001-31269).

10.C. MATERIAL CONTRACTS

Our Agreements with Novartis

Following the separation and the Spin‑off, we and Novartis operate separately, each as an independent public company.
Prior to the completion of the Spin‑off, we entered into a Separation and Distribution Agreement and several other
agreements with Novartis to effect the separation and provide a framework for our relationship with Novartis after the
Spin‑off. These agreements govern the relationships between Novartis and and are attributable to periods prior to, at and
after the separation. In addition to the Separation and Distribution Agreement (which contains many of the key provisions
related to our separation from Novartis and the distribution of the Alcon shares to holders of Novartis shares and ADRs),
these agreements include:
▪ tax matters agreement;
▪ employee matters agreement;
▪ manufacturing and supply agreements;
▪ transitional services agreement; and
▪ certain IP arrangements.
The material agreements described below have been previously filed as exhibits to our filings with the SEC and the
summaries below set forth the terms of the agreements that we believe are material. These summaries are qualified in
their entireties by reference to the full text of the applicable agreements, which are incorporated by reference into this
Form 20‑F.
In addition, we entered into other agreements with Novartis prior to the completion of the Spin‑off that are not material to
our business. These agreements include agreements relating to information sharing and access rights, data transfer,
confidentiality and systems access, transfer of marketing authorizations, certain manufacturing quality control and
pharmacovigilance matters, certain leases to Novartis and certain transitional distribution and other services matters,
including shared premises services, as well as a third party claims and investigations management agreement.

Separation and Distribution Agreement

The Separation and Distribution Agreement sets forth our agreements with Novartis regarding the principal actions taken
in connection with the separation and the Spin‑off.

Transfer of Assets and Assumption of Liabilities

The Separation and Distribution Agreement identified the assets to be transferred, liabilities to be assumed and contracts
to be assigned to each of Novartis and Alcon as part of the internal transactions effected prior to the distribution, the
purpose of which was to ensure that, at the time of the distribution, each of Alcon and Novartis held the assets required to
operate their respective businesses and retained or assumed (as applicable) liabilities, including pending and future
claims, which relate to such business (whether arising prior to, at or after the date of execution of the Separation and
Distribution Agreement), subject to certain limited exceptions set out under the heading “Asia/Russia Investigation” below.

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The Distribution

The Separation and Distribution Agreement governed the rights and obligations of the parties with respect to the
distribution.

Intercompany Arrangements

All agreements, arrangements, commitments and understandings, including most intercompany accounts payable or
accounts receivable, between us, on the one hand, and Novartis, on the other hand, terminated effective as of completion
of the separation, except specified agreements and arrangements that survived completion of the separation that were
either transactional in nature or at arms’ length terms.

Representations and Warranties

We and Novartis each provided customary warranties as to our respective capacity to enter into the Separation and
Distribution Agreement. Except as expressly set forth in the Separation and Distribution Agreement or any ancillary
agreement, neither we nor Novartis made any representation or warranty as to the assets, business or liabilities
transferred or assumed as part of the separation, or as to the legal sufficiency of any assignment, document or instrument
delivered to convey title to any asset or thing of value transferred in connection with the separation. Except as expressly
set forth in the Separation and Distribution Agreement and certain other ancillary agreements, all assets were transferred
on an “as is”, “where is” basis.

Indemnification

We and Novartis each agreed to indemnify the other and each of the other’s directors, officers, managers, members,
agents and employees against certain liabilities incurred in connection with the Spin‑off and our and Novartis respective
businesses. The amount of either Novartis or our indemnification obligations will be reduced by any insurance proceeds
the party being indemnified receives.

Asia/Russia Investigation

Novartis indemnified Alcon in respect of defined direct monetary liabilities relating to the current scope of the ongoing
investigation by the DoJ and the SEC relating to certain business practices in Asia and Russia and related accounting
treatment. See the section entitled “Asia Investigation” in the Separation and Distribution Agreement attached as
Exhibit 4.1 to this Form 20‑F.

Release of Claims

We and Novartis each agreed to release the other and its affiliates, successors and assigns, and all persons that, prior to
completion of the Spin‑off, were the other’s shareholders, directors, officers, managers, members, agents or employees,
and their respective heirs, executors, administrators, successors and assigns, from any claims against any of them that
arise out of or relate to our respective businesses. These releases are subject to limited exceptions set forth in the
Separation and Distribution Agreement (including in respect of fraud and criminal conduct).

Term / Termination

Neither we nor Novartis may rescind the Separation and Distribution Agreement in any circumstances whatsoever
following the completion of the distribution.

Switch Rights

Novartis granted us the right, from the date of separation, to switch certain specified olopatadine products from
prescription products to over‑the‑counter products and to develop, manufacture and commercialize such products as
over‑the‑counter products going forward. This right is exercisable on notice and, for jurisdictions outside US, subject to
Novartis consent. We have provided notice to Novartis to exercise our right to develop, manufacture and commercialize
certain of those products in the US. The FDA approved PATADAY Twice Daily Relief (0.1%), PATADAY Once Daily Relief (0.2%)
and PATADAY Once Daily Extra Strength (0.7%) in 2020. The PATADAY brand contains olopatadine, the number one doctor
prescribed active ingredient for eye allergy relief.

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Brazil and Belgian Sites

Novartis and we each granted each other a right of last look in respect of any third party disposal of our portion of the
Puurs site and Novartis granted us a right of last look in respect of any third party disposal by Novartis of its portion of the
Brazilian manufacturing facility. In 2020, we agreed to waive our right of last look with respect to Novartis's Brazilian
manufacturing facility.

Other Matters Governed by the Separation and Distribution Agreement

Other matters governed by the Separation and Distribution Agreement include, without limitation, insurance
arrangements, confidentiality, mutual assistance and information sharing after completion of the distribution, treatment
and replacement of credit support and transfer of and post‑separation access to certain books and records.

Tax Matters Agreement

We entered into a Tax Matters Agreement with Novartis prior to completion of the Spin‑off. The Tax Matters Agreement
imposed certain restrictions on us (including restrictions on share issuances, business combinations, sales of assets and
similar transactions) designed to preserve the tax‑neutral nature of the Spin‑off for Swiss tax and US federal income tax
purposes. Nonetheless, we are able to engage in an otherwise restricted action if we obtain appropriate advice from
counsel or a ruling from a competent taxing authority. However, our indemnification obligation to Novartis, as discussed
below, is still applicable in circumstances in which we are permitted to engage in an otherwise restricted action.
The Tax Matters Agreement provides that we will indemnify Novartis if our breach of a representation or covenant that
serves as the basis for the Tax Opinion or the Tax Rulings or our taking, or failure to take, certain actions results in the
failure of the Spin‑off or certain internal restructuring steps to qualify for tax‑neutral treatment under Swiss tax or US
federal income tax laws, as applicable. The Tax Matters Agreement also provides that we will generally indemnify Novartis
for any taxes of Novartis and its subsidiaries to the extent such taxes are attributable to the Alcon Division, and Novartis
will generally indemnify us for any of our or our subsidiaries’ taxes to the extent such taxes are attributable to the Novartis
retained businesses, in each case whether accruing before, on or after the date of the Spin‑off.

Employee Matters Agreement

We entered into an Employee Matters Agreement with Novartis prior to completion of the Spin‑off. The Employee Matters
Agreement sets forth our agreements with Novartis regarding the identification of the employees transferred to and
retained by each of Novartis and Alcon as part of the operational separation prior to the Spin‑off, as well as the allocation
of liabilities and responsibilities with respect to certain employee matters.
Allocation of Employment Liabilities
Subject to certain exceptions, the general principle for the allocation of employment and service‑related liabilities is that
(i) Alcon assumes all such liabilities relating to Alcon employees and former employees of the Novartis Group who worked
wholly or substantially in the Alcon Division as of the date immediately prior to the termination of their employment
(“former Alcon employees”) and (ii) Novartis retains all such liabilities relating to all other current and former employees of
the Novartis Group (including employees who are identified as Alcon employees, but did not in fact transfer to Alcon), in
each case, regardless of when such liabilities arise.
Terms and Conditions of Alcon Employees
Until January  1, 2021, Alcon was to provide each current Alcon employee with the same basic salary and contractual
benefits that are substantially comparable, taken as a whole, to the contractual benefits received prior to the date of his or
her transfer to Alcon (excluding share‑based incentive schemes and long‑term incentive plans). If the employment of any
Alcon employee is terminated by reason of redundancy within 24 months following the date of his or her transfer, Alcon
will provide severance benefits that are no less favorable than those that would have been provided prior to the date of
his or her transfer.
Employee Benefit and Cash Bonus Plans
Alcon employees were generally, as of the date of the Spin‑off, eligible to participate in Alcon employee benefit plans and
cash bonus plans that are the same as, or comparable to, those that apply to them prior to the date of the Spin‑off.
Share‑Based Incentive Schemes
Awards granted under share‑based incentive schemes were treated as follows:
▪ Holders of unvested awards in the form of restricted Novartis shares received the dividend in‑kind resulting from
the Spin‑off.

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 ▪ Holders of unvested RSUs and PSUs did not receive the dividend in‑kind resulting from the Spin‑off, and such
awards were treated as described in the section entitled “Item 6. Directors, Senior Management and Employees—
6.B. Compensation—Section 3—ECA Compensation 2019—Section 3.6—Alcon Equity Restoration Plan”.
In addition, Alcon was required to establish, and employees were eligible to participate in, new Alcon equity plans in
relation to Alcon shares following the Spin‑off.
Restrictions on Post‑Spin‑off Employee Employment and Engagement
▪ Subject to certain exceptions, Novartis agreed that each member of the Novartis Group will not, for a period of
two years following the Spin‑off, directly or indirectly: (i)  solicit or induce certain senior Alcon employees to
become employed or engaged by any member of the Novartis Group; or (ii) knowingly induce or encourage such
employees to no longer be employed or engaged by Alcon.
▪ Subject to certain exceptions, Novartis agreed that it would not, and would undertake to procure that each
member of the Novartis Group would not, for a period of two years following the Spin‑off, employ or engage
certain senior Alcon employees.
Long‑Term Employee Benefits
As of the date of the Spin‑off, Alcon generally assumed sponsorship of and responsibility for any standalone long‑term
employee benefit arrangements relating to Alcon employees and former Alcon employees. Further, subject to certain
exceptions, the accrued (past service) liabilities relating to the Alcon employees and former Alcon employees under
Novartis Group‑wide plans providing retirement, disability or death, old‑age part‑time retirements or jubilee benefits,
transferred to Alcon. In the UK, Novartis paid to Alcon a sum equal to the liabilities and expenses incurred, sustained or
paid by Alcon, after the date of the Spin‑off, arising pursuant to section 75 of the UK Pensions Act 1995 in respect of Alcon
or of any Alcon subsidiary’s cessation of participation in the Novartis UK Pension Scheme.

Manufacturing and Supply Agreements

We entered into manufacturing and supply agreements with Novartis prior to the completion of the Spin‑off. The
manufacturing and supply agreements set forth our agreements with Novartis pursuant to which we and Novartis each
manufacture, label, package and supply products for the other and conduct relevant quality control, assurance and testing
activities for the other in relation to the manufacture and supply of applicable products (the “Forward and Reverse MSAs”).
The terms of the manufacturing and supply agreements, including terms relating to pricing, were determined at arm’s
length and are based on the prevailing cost of manufacturing with mutually agreed mark‑ups and adjustment
mechanisms.
The terms of the Forward and Reverse MSAs are equivalent, except where specific provision is required to address a
manufacturing site or product specific issue. The Forward and Reverse MSAs each include a transfer plan specifically
addressing the relocation and transfer of certain products between the parties and manufacturing sites, key milestones in
relation to product technical transfer and the anticipated date of expiration of the relevant Forward and Reverse MSA for
those products, as required to achieve separation of the relevant Novartis and Alcon Division following the distribution.
The Forward and Reverse MSAs additionally contain customary provisions for the transfer of manufacturing technology
and processes to the other party (or other manufacturers where applicable) for all products for the benefit of the relevant
purchasing party. For products not included in the transfer plan the Forward and Reverse MSAs have an initial term of
three years, with automatic renewal subject to rights of termination on three years’ notice from the relevant purchaser
party and five years’ notice from the relevant supplier party. The Forward and Reverse MSAs contain customary fault
based termination triggers (such as an insolvency related event or a material breach (which if curable is uncured)) and
customary liability provisions.
The Forward and Reverse MSAs also contain certain capacity reservation and minimum volume off‑take obligations on
each party that reflect the movement of products in the transfer plan and the agreed use of existing capacities at the
related sites. Failure to meet volume forecasts and minimum off‑take obligations will result in price adjustment and take
or pay obligations in respect of certain products.
The manufacturing and supply obligations will generally be performed under the Forward and Reverse MSAs on the basis
of total product cost plus a margin with certain adjustments where volume, inflation and materials cost criteria are met.
Certain products are to be supplied from Novartis to Alcon through toll manufacturing.

Transitional Services Agreement

We entered into a Transitional Services Agreement with Novartis prior to completion of the Spin‑off pursuant to which we
and Novartis, to the extent that shared business functions have not been separated prior to the Spin‑off, each provide to
the other various services and support on an interim transitional basis until such time as we (or Novartis in the case of

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services we will provide to Novartis) have developed the capability to provide the relevant services and support ourselves
or have appointed a third party provider to provide those services and support.
The Transitional Services Agreement sets forth the agreement with Novartis regarding the provision of these transitional
services and support. The Transitional Services Agreement is two‑way and reciprocal. Services and support are provided
on substantially the same basis as prior to the Spin‑off. The charges for the services are on a costs‑plus basis (with a
mark‑up to reflect the management and administrative cost of providing the services). The services generally commenced
on the date of the Spin‑off and are intended to terminate within 24 months of the date of the Spin‑off. The recipient of the
services will generally have the ability to: (i) extend the term that a service is provided for, subject to a maximum aggregate
service term of 24 months; and (ii) terminate a service early in whole or, with the service provider’s agreement, in part, in
each case subject to a specified notice period. Each party has standard termination rights for unremedied material breach
or insolvency.
Subject to standard limitations and exceptions, the liability of each of Alcon and Novartis as service provider under the
Transitional Services Agreement is capped, for all claims in each 12 month period of the agreement, at the level of service
charges payable to the service provider in that 12 month period.
The services and support provided by Novartis to us includes: information technology, human resources, real estate and
facilities, non‑strategic corporate services and financial reporting and accounting services. The services to be provided by
us to Novartis include information technology and real estate and facilities support.

IP Arrangements
Assignment of Alcon Intellectual Property Rights
We entered into assignment agreements with Novartis prior to, or with effect from, completion of the Spin‑off, under
which:
• Novartis transferred to us: (i)  all intellectual property rights owned by the Novartis Group and used exclusively
within the Alcon Division; and (ii)  certain intellectual property rights owned by the Novartis Group used within
both the Alcon Division and the other businesses of Novartis including, but not limited to, the Alcon brand; and
• We transferred to Novartis: (i)  all intellectual property rights owned by Alcon and used exclusively within the
Novartis businesses; and (ii)  certain intellectual property rights owned by the Alcon group used within both the
Alcon Division and the other businesses of Novartis.

Perpetual Shared Intellectual Property Rights License Agreements

In connection with any intellectual property rights owned by Alcon or Novartis and which are used by both Alcon and
Novartis in our respective businesses following the completion of the Spin‑off, we entered into reciprocal licenses with
Novartis under which we and Novartis were each granted the right to continue to use those shared intellectual property
rights in connection with our respective businesses. The intellectual property rights covered by these licenses will include
trademarks, patents, know‑how and other forms of intellectual property rights. The licenses are on a perpetual, worldwide
and royalty‑free basis. The licenses contain standard termination rights for material breach or insolvency.

Transitional Trademark License Agreements

We agreed with Novartis that we will each phase out our respective use of a limited number of corporate and product
marks which are owned by the other party following completion of the Spin‑off. We entered into reciprocal transitional
trademark license agreements with Novartis under which each party grants the other a royalty‑free, worldwide
non‑exclusive license to use certain corporate and product trademarks following the Spin‑off on substantially the same
basis as currently used. Each license permits the licensee to continue using the licensed trademarks for a transitional
period to provide the licensee with sufficient time to rebrand or phase out its use of the licensed trademarks, subject in
most cases to a longstop date of three years. The licenses contain standard termination rights for material breach or
insolvency.

Trademark Co‑Existence Agreement

In addition, we entered into a perpetual co‑existence agreement with Novartis regulating our respective use of the Alcon
CIBA VISION and Novartis CIBA brands with the objective of mitigating any potential customer confusion in connection
with our respective use of those brands and addressing certain related trademark formalities, including in connection with
the registration of new trade mark applications.

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2019 Bond Offering
On September 23, 2019, Alcon Finance Corporation (the “Issuer”), an indirect, wholly owned subsidiary of Alcon, completed
an offering of $500,000,000 aggregate principal amount of its 2026 Notes, $1,000,000,000 aggregate principal amount of
its 2029 Notes and $500,000,000 aggregate principal amount its 2049 Notes (collectively, the "Initial Notes"). The Initial
Notes were issued under an Indenture, dated September 23, 2019 (the “Indenture”), by and among the Issuer, Alcon Inc.
and Citibank, N.A., as trustee (the “Trustee”). The Initial Notes are senior unsecured obligations of the Issuer and are fully
and unconditionally guaranteed on a senior basis by Alcon.
Interest is payable on the Initial Notes on March 23 and September 23 of each year, beginning on March 23, 2020. The
2026 Notes will mature on September 23, 2026, the 2029 Notes will mature on September 23, 2029 and the 2049 Notes
will mature on September 23, 2049.
The Issuer may redeem the 2026 Notes prior to July 23, 2026 (the date that is two months prior to their maturity date), the
2029 Notes prior to June 23, 2029 (the date that is three months prior to their maturity date) or the 2049 Notes prior to
March 23, 2049 (the date that is six months prior to their maturity date) at a redemption price equal to 100% of the
principal amount of the applicable series of Initial Notes plus a “make-whole premium” and accrued and unpaid interest, if
any, up to, but excluding, the redemption date. The Issuer may also redeem the 2026 Notes on or after the date that is two
months prior to their maturity date, the 2029 Notes on or after the date that is three months prior to their maturity date
or the 2049 Notes on or after the date that is six months prior to their maturity date at a redemption price equal to 100%
of their principal amount plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
In addition, the Issuer may redeem any series of the Initial Notes at its option, in whole, but not in part, for cash, at any
time prior to their respective maturities at a price equal to 100% of the outstanding principal amount of such Initial Notes,
plus accrued and unpaid interest, to, but excluding, the redemption date, if certain tax events occur that would obligate
the Issuer to pay additional amounts as described in the Indenture.
Subject to certain limitations, in the event of a change of control triggering event, the Issuer will be required to make an
offer to purchase each series of the Initial Notes at a price equal to 101% of the principal amount of the Initial Notes, plus
accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
The Indenture also contains certain limitations on the Issuer’s ability to incur liens, as well as customary events of default.

2020 Bond Offering

On May 27, 2020, the Issuer completed an offering of an additional $750,000,000 aggregate principal amount of its 2030
Notes. The 2030 Notes were issued under the same Indenture as the Initial Notes. The 2030 Notes are senior unsecured
obligations of the Issuer and are fully and unconditionally guaranteed on a senior basis by Alcon.
Interest is payable on the 2030 Notes on May 27 and November 27 of each year, beginning on November 27, 2020. The
2030 Notes will mature on May 27, 2030.
The Issuer may redeem the 2030 Notes prior to February 27, 2030 (the date that is three months prior to their maturity
date) at a redemption price equal to 100% of the principal amount of the 2030 Notes plus a “make-whole premium” and
accrued and unpaid interest, if any, up to, but excluding, the redemption date. The Issuer may also redeem the 2030 Notes
on or after the date that is three months prior to their maturity date at a redemption price equal to 100% of their principal
amount plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
In addition, the Issuer may redeem the 2030 Notes at its option, in whole, but not in part, for cash, at any time prior to
their respective maturities at a price equal to 100% of the outstanding principal amount of such 2030 Notes, plus accrued
and unpaid interest, to, but excluding, the redemption date, if certain tax events occur that would obligate the Issuer to
pay additional amounts as described in the Indenture.
Subject to certain limitations, in the event of a change of control triggering event, the Issuer will be required to make an
offer to purchase the 2030 Notes at a price equal to 101% of the principal amount of the 2030 Notes, plus accrued and
unpaid interest, if any, to, but excluding, the date of repurchase.
The Indenture also contains certain limitations on the Issuer’s ability to incur liens, as well as customary events of default.

Bridge Loan, Term Loan and Revolving Credit Facilities

In connection with the Spin‑off, we entered into a $1.5 billion unsecured 364‑day bridge loan facility with two extension
options, each for a period of 180 days (the “Bridge Facility”), a $0.5 billion unsecured three‑year term loan facility (“Facility
A”), a $0.8  billion unsecured five‑year term loan facility (“Facility B”), a $0.4  billion (or the equivalent in EUR) unsecured

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five‑year term loan facility (“Facility C”) and a $1.0  billion unsecured five‑year committed multicurrency revolving credit
facility (the “Revolving Facility” and, together with the Bridge Facility, Facility A, Facility B and Facility C, the “Facilities” and
the related agreement, the “Group Facilities Agreement”). In February 2021, the Revolving Facility term was extended to
March 2026.
We and certain of our subsidiaries are borrowers under the Facilities. We guarantee the borrowings of such subsidiaries
under the Facilities. In addition, the Revolving Facility includes a mechanism through which certain of our subsidiaries, as
approved by the lenders, can accede as a borrower.
Prior to the Spin‑off, we borrowed an aggregate of approximately $3.2 billion under the Facilities and paid to Novartis
approximately $3.0  billion of the net proceeds of the Bridge Facility, Facility A, Facility B and Facility C, including in
satisfaction of certain intercompany indebtedness owed by Alcon and its subsidiaries to Novartis and its affiliates. We
retained the remaining net proceeds of such Facilities for general corporate and working capital purposes. In September
2019, we used the proceeds of our Initial Notes Offering to pay off in full the Bridge Facility and Facility A. The Bridge
Facility and Facility A are no longer available to us for borrowings.
We are permitted to voluntarily prepay loans under the Facilities, in whole or in part, without penalty or premium subject
to certain minimum prepayment amounts and the payment of accrued interest on the amount prepaid and customary
breakage costs.
The terms of the Facilities include certain events of default and covenants customary for investment grade credit facilities,
including restrictive covenants that limit, among other things, the grant or incurrence of security interests over any of our
assets, the incurrence of certain indebtedness and entry into certain fundamental change transactions. The Facilities do
not contain any financial covenants.
The Facilities bear interest at a rate equal to the interest rate benchmark (EURIBOR in the case of loans denominated in
EUR, USD LIBOR in the case of loans denominated in USD and CHF LIBOR in the case of loans denominated in CHF), plus
an applicable margin.
As of December 31, 2020, $1.2 billion of borrowings was outstanding under the Facilities. Such indebtedness requires us to
dedicate a portion of our future cash flows to payments on our debt, reducing our ability to use our cash flows to pay
dividends, fund capital expenditures, BD&L or other strategic transactions, working capital and other general operational
requirements.

10.D. EXCHANGE CONTROLS

There are no Swiss governmental laws, decrees or regulations that restrict, in a manner material to Alcon, the export or
import of capital, including any foreign exchange controls, or that generally affect the remittance of dividends or other
payments to non-residents or non-citizens of Switzerland who hold Alcon shares.

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10.E. TAXATION
The taxation discussion set forth below is intended only as a descriptive summary and does not purport to be a complete
analysis or listing of all potential tax effects relevant to the ownership or disposition of our shares. The statements of US
and Swiss tax laws set forth below are based on the laws and regulations in force as of the date of this Annual Report,
including the current Convention Between the United States and the Swiss Confederation for the Avoidance of Double
Taxation with Respect to Taxes on Income, entered into force on December  19, 1997 (the "Treaty"), and the US Internal
Revenue Code of 1986, as amended (the "Code"), Treasury Regulations, rulings, judicial decisions and administrative
pronouncements, and may be subject to any changes in US and Swiss law and in any double taxation convention or treaty
between the United States and Switzerland occurring after that date, which changes may have retroactive effect.

Swiss Taxation
The following is a general summary of certain tax consequences relating to owning and disposing of Alcon shares based on the
Swiss tax laws and regulations and regulatory practices in force on the date of this Annual Report. Tax consequences are subject
to changes in applicable law (or subject to changes in interpretation), including changes that could have a retroactive effect.
This is not a complete summary of the potential Swiss tax effects relevant to the Alcon shares nor does the summary take into
account or discuss the tax laws of any jurisdiction other than Switzerland. For example, this summary does not address estate,
gift, inheritance, capital or wealth taxes. It also does not take into account investors' individual circumstances. This summary does
not purport to be a legal opinion or to address all tax aspects that may be relevant to any particular investor.
YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO ACQUIRING, OWNING AND DISPOSING
OF ALCON SHARES.

Swiss Residents

Withholding Tax on Dividends

Dividends that we pay and any similar cash or in-kind distributions we may make to a holder of our shares (including
distributions of liquidation proceeds in excess of the nominal value, stock dividends and, under certain circumstances,
proceeds from repurchases of shares by us in excess of the nominal value) are generally subject to a Swiss federal
withholding tax (the "Withholding Tax") at a current rate of 35%. Under certain circumstances distributions out of capital
contribution reserves made by shareholders after December  31, 1996 are exempt from the Withholding Tax. We are
required to withhold this Withholding Tax from the gross distribution and to pay the Withholding Tax to the Swiss Federal
Tax Administration. The Withholding Tax is refundable in full to Swiss residents who are the beneficial owners of the
taxable distribution at the time it is resolved and duly report the gross distribution received on their personal tax return or
in their financial statements for tax purposes, as the case may be.
The Swiss corporate tax reform, which entered into force on January 1, 2020, requires that Swiss listed companies must
make distributions as dividends subject to Withholding Tax to the extent distributions are made out of capital contribution
reserves, which, as described above, are not subject to Withholding Tax.

Swiss Issuance Stamp Duty

Switzerland levies a one-time Issuance Stamp Duty (Emissionsabgabe) on the issuance of corporate equity capital by Swiss
companies. A 1% Swiss Issuance Stamp Duty applies to capital contributions received for the issuance of corporate shares,
non-voting shares, participation rights, as well as informal capital contributions in cash or in kind for no consideration.

Swiss Transfer Stamp Duty upon Transfer of Securities

The sale of our shares, whether by Swiss residents or Non-resident Holders, may be subject to federal securities Transfer
Stamp Duty (Umsatzabgabe) of 0.15%, calculated on the gross sale proceeds, if the sale occurs through or with a Swiss
bank or other Swiss securities dealer (Effektenhändler), as defined in the Swiss Federal Stamp Duty Act. The Transfer Stamp
Duty has to be paid by the securities dealer and may be charged to the parties in a taxable transaction who are not
securities dealers. In addition to this Transfer Stamp Duty, the sale of shares by or through a member of the SIX may be
subject to a minor stock exchange levy.

Income Tax on Dividends

A Swiss Holder who holds Alcon shares as private assets ("Swiss Resident Private Shareholder") is required to report the
receipt of dividends and similar distributions (including stock dividends and liquidation surplus) in its individual income tax

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returns and is subject to Swiss federal, cantonal and communal income tax on any net taxable income for the relevant tax
period.
A Swiss Holder who is Swiss resident for tax purposes, a non-Swiss individual who is subject to Swiss income tax for
reasons other than residency and a legal entity tax resident in Switzerland, in each case that holds Alcon shares as
business assets, and a non-Swiss tax resident legal entity that holds Alcon shares as part of a Swiss permanent
establishment or fixed place of business (each, a "Swiss Resident Commercial Shareholder") is required to recognize
dividends and similar distributions (including stock dividends and liquidation surplus) on Alcon shares in its income
statement for the relevant taxation period and is subject to Swiss federal, cantonal and communal individual or corporate
income tax, as the case may be, on any net taxable earnings for such taxation period. The same tax treatment also applies
to a Swiss Holder who, for income tax purposes, is classified as a "professional securities dealer" for reasons of, inter alia,
frequent dealing, or leveraged investments, in shares and other securities. Swiss Resident Commercial Shareholders who
are corporate taxpayers may be eligible for a participation deduction (Beteiligungsabzug) in respect of dividends if the Alcon
shares held by them as part of a Swiss business have an aggregate market value of at least CHF 1 million.

Taxes upon Disposition of Alcon Shares

Capital gains realized on the sale or other disposal of Alcon shares held by a Swiss Resident Private Shareholder are
generally not subject to any federal, cantonal or communal income taxation. However, gain realized upon a repurchase of
shares by us may be characterized as taxable dividend income if certain conditions are met. Capital gains realized on
shares held by a Swiss Resident Commercial Shareholder are, in general, included in the taxable income of such person.

Residents of Other Countries

Recipients of dividends and similar distributions on our shares who are neither residents of Switzerland for tax purposes
nor holding shares as part of a business conducted through a permanent establishment situated in Switzerland ("Non-
resident Holders") are not subject to Swiss income taxes in respect of such distributions. Moreover, gain realized by such
recipients upon the disposal of our shares is not subject to Swiss income tax.
Non-resident Holders of our shares are, however, subject to the Withholding Tax on dividends and similar distributions
mentioned above and under certain circumstances to the Transfer Stamp Duty described above. Such Non-resident
Holders may be entitled to a partial refund of the Withholding Tax if the country in which they reside has entered into a
bilateral treaty for the avoidance of double taxation with Switzerland. Non-resident Holders should be aware that the
procedures for claiming treaty refunds (and the time frame required for obtaining a refund) may differ from country to
country. Non-resident Holders should consult their own tax advisors regarding the receipt, ownership, purchase, sale or
other dispositions of our shares and the procedures for claiming a refund of the Withholding Tax.
A Non-resident Holder of our shares will not be liable for any Swiss taxes other than the Withholding Tax described above
and, if the transfer occurs through or with a Swiss bank or other Swiss securities dealer, the Transfer Stamp Duty
described above. If, however, the shares of Non-resident Holders can be attributed to a permanent establishment or a
fixed place of business maintained by such person within Switzerland during the relevant tax year, the shares may be
subject to Swiss income taxes in respect of income and gains realized on the shares and such person may qualify for a full
refund of the Withholding Tax based on Swiss tax law.

Residents of the United States

Non-resident Holders who are residents of the United States for purposes of the Treaty are eligible for a reduced rate of
tax on dividends equal to 15% of the dividend, provided that such holders qualify for benefits under the Treaty and do not
conduct business through a permanent establishment or fixed base in Switzerland to which our shares are attributable.
Such holders should consult their own tax advisors regarding their eligibility to claim the reduced rate and the procedures
for claiming a refund of the amount of the Withholding Tax in excess of the 15% Treaty rate.

International Automatic Exchange of Information in Tax Matters

On November 19, 2014, Switzerland signed the Multilateral Competent Authority Agreement, which is based on article 6 of
the OECD/Council of Europe administrative assistance convention and is intended to ensure the uniform implementation
of automatic exchange of information (the "AEOI"). The Federal Act on the International Automatic Exchange of
Information in Tax Matters (the "AEOI Act") entered into force on January 1, 2017. The AEOI Act is the legal basis for the
implementation of the AEOI standard in Switzerland.
The AEOI is being introduced in Switzerland through bilateral agreements or multilateral agreements. The agreements
have been, and will be, concluded on the basis of guaranteed reciprocity, compliance with the principle of specialty (i.e. the

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information exchanged may only be used to assess and levy taxes (and for criminal tax proceedings)) and adequate data
protection. The United States is not a treaty state.
Based on such multilateral agreements and bilateral agreements and the implementing laws of Switzerland, Switzerland
has begun to collect data in respect of financial assets (including shares) held in, and income derived thereon and credited
to, accounts or deposits with a paying agent in Switzerland for the benefit of individuals resident in a EU member state or
in a treaty state from, depending on the effective date of the respective agreement, 2017 or 2018, as the case may be, and
will begin to exchange such data in 2018 or 2019, as the case may be.

US Federal Income Taxation

The following discussion is a summary of the US federal income tax considerations generally applicable to the ownership and
disposition of our shares. This summary is based on the Code, its legislative history, US Treasury Regulations, administrative
guidance, published court decisions and the Treaty, all in effect as of the date hereof, and any of which may be repealed, revoked,
or modified (possibly with retroactive effect) so as to result in US federal income tax consequences different from those discussed
below. This summary is applicable to US Holders (as defined below) who are residents of the United States for purposes of the
Treaty and who qualify for the full benefits of the Treaty. It applies only to US Holders that hold our shares as capital assets
(generally, property held for investment purposes) and is of a general nature. This summary should not be construed to constitute
legal or tax advice to any particular US Holder.
This summary does not apply to or address US Holders subject to special rules, including, without limitation, brokers, dealers in
securities or currencies, traders in securities that elect to use a mark-to-market method of accounting for securities holdings, tax-
exempt entities (including private foundations), insurance companies, banks, thrifts and other financial institutions, persons liable
for alternative minimum tax, persons that hold an interest in an entity that holds our shares, persons that will own, or will have
owned, directly, indirectly or constructively 10% or more (by vote or value) of our stock, persons that hold our shares as part of a
straddle, hedge, conversion, constructive sale or other integrated transaction for US federal income tax purposes or persons
whose functional currency is not the US dollar.
This summary does not purport to be a complete analysis of all of the potential US federal income tax considerations that may be
relevant to US Holders in light of their particular circumstances. Further, it does not address any aspect of foreign, state, local or
estate or gift taxation or the 3.8% surtax imposed on certain net investment income. Each US Holder is urged to consult its tax
advisor regarding the application of US federal taxation to its particular circumstances and the, state, local, non-US and
other tax considerations of the ownership and disposition of our shares.

General
For purposes of this discussion, a “US Holder” is a beneficial owner of our shares that is, for US federal income tax
purposes:
• an individual who is a citizen or resident of the United States;
• a corporation (or other entity treated as a corporation for US federal income tax purposes) created in or
organized under the laws of the United States, any state thereof or the District of Columbia;
• an estate the income of which is includable in gross income for US federal income tax purposes regardless of its
source; or
• a trust (A) the administration of which is subject to the primary supervision of a US court and which has one or
more US persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise
validly elected to be treated as a US person under the Code.
If a partnership (or other entity treated as a partnership for US federal income tax purposes) is a beneficial owner of our
shares, the tax treatment of a partner in the partnership that will generally depend upon the status of the partner and the
activities of the partnership. Partnerships holding our shares and partners in such partnerships are urged to consult their
tax advisors as to the particular US federal income tax consequences of an investment in our shares.

Distributions on the Shares

Subject to the passive foreign investment company (“PFIC”) rules discussed below, the gross amount of any distribution
received by a US Holder with respect to our shares (including any amounts withheld to pay Swiss withholding taxes) will be
included in the gross income of the US Holder as a dividend to the extent  attributable to the Company’s current or
accumulated earnings and profits, as determined under US federal income tax principles. The Company may not calculate
its earnings and profits under US federal income tax rules. Accordingly, US Holders should expect that a distribution
generally will be treated as a dividend for US federal income tax purposes. Unless the Company is treated as a PFIC for the

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taxable year in which it pays a distribution or in the preceding taxable year (see “Passive foreign investment company
rules” below), the Company believes that it may qualify as a “qualified foreign corporation,” in which case distributions
treated as dividends and received by non-corporate US Holders may be eligible for a preferential tax rate. Distributions on
our shares generally will not be eligible for the dividends received deduction available to US Holders that are corporations.
The amount of any dividend paid in Swiss francs (including any amounts withheld to pay Swiss withholding taxes) will be
included in the gross income of a US Holder in an amount equal to the US dollar value of the Swiss francs calculated by
reference to the exchange rate in effect on the date the dividend is actually or constructively received by the US Holder,
regardless of whether the Swiss francs are converted into US dollars on such date. A US Holder will have a tax basis in the
Swiss francs equal to their US dollar value on the date of receipt. If the Swiss francs received are converted into US dollars
on the date of receipt, the US Holder generally should not be required to recognize foreign currency gain or loss in respect
of the distribution. If the Swiss francs received are not converted into US dollars on the date of receipt, a US Holder may
recognize foreign currency gain or loss on a subsequent conversion or other disposition of the Swiss francs. Such gain or
loss generally will be treated as US source ordinary income or loss.
A US Holder may be entitled to deduct or credit Swiss withholding tax imposed on dividends paid to a US Holder, subject
to applicable limitations in the Code. The rules governing the foreign tax credit are complex. US Holders are urged to
consult their own tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Sale, Exchange or Other Taxable Disposition of Our Shares

Subject to the PFIC rules discussed below, a US Holder generally will recognize a capital gain or loss on the sale, exchange
or other taxable disposition of our shares in an amount equal to the difference between the amount realized for the
shares and the US Holder’s adjusted tax basis in the shares. Any capital gain or loss will be long-term capital gain or loss if
the ordinary shares have been held for more than one year. Individuals and other non-corporate US Holders who have
long-term capital gains will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to
limitations. Any capital gain or loss recognized by a US Holder generally will be treated as US source gain or loss for US
foreign tax credit purposes.

Passive Foreign Investment Company Rules

A foreign corporation will be considered a PFIC for any taxable year in which (i) 75% or more of its gross income is “passive
income” or (ii) 50% or more of the average quarterly value of its assets produce (or are held for the production of) “passive
income.” For this purpose, “passive income” generally includes interest, dividends, rents, royalties and certain gains. We
currently do not believe that we were a PFIC in the taxable year ending December 31, 2020, nor do we anticipate that we
will be a PFIC in future taxable years. However, the determination of PFIC status is based on an annual determination that
cannot be made until the close of the taxable year, involves extensive factual investigation, including ascertaining the fair
market value of all of our assets on a quarterly basis and the character of each item of income that we earn, and is subject
to uncertainty in several respects. Accordingly, we cannot assure you that we will not be treated as a PFIC for the taxable
year ending December 31, 2020, or any future taxable year, or that the IRS will not take a contrary position.

10.F. DIVIDENDS AND PAYING AGENTS

Not applicable.

10.G. STATEMENTS BY EXPERTS

Not applicable.

10.H. DOCUMENTS ON DISPLAY

We maintain a website at the following address: www.alcon.com. The information on our website is not incorporated by
reference in this Annual Report. We make available on or through our website certain reports and amendments to those
reports that we file with or furnish to the SEC in accordance with the Exchange Act. We make this information available on
our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it
to, the SEC.
You may read and copy any reports or other information that we file through the Electronic Data Gathering, Analysis and
Retrieval (EDGAR) system through the SEC’s website on the Internet at www.sec.gov.

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We also make certain other documents available to the public (such as our Board committee charters, press releases and
investor presentations) on our website (www.alcon.com).
Any statement in this Annual Report about any of our contracts or other documents is not necessarily complete. If the
contract or document is filed as an exhibit to this Annual Report, the contract or document is deemed to modify the
description contained in this Annual Report. You must review the exhibits themselves for a complete description of the
contract or document.
Unless stated otherwise in this Annual Report, none of these documents form part of this Annual Report. 

10.I. SUBSIDIARY INFORMATION

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET
RISK
The major financing risks faced by Alcon are managed by the Alcon treasury function. For information about the effects of
currency and interest rate fluctuations and how we manage currency and interest risk, see "Item  5. Operating and
Financial Review and Prospects—5.A. Operating Results" and "—5.B. Liquidity and Capital Resources". Please also see the
information set forth under Note 18 to the Consolidated Financial Statements and related notes included elsewhere in this
Annual Report.

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ITEM 12. DESCRIPTION OF SECURITIES
OTHER THAN EQUITY SECURITIES
12.A. DEBT SECURITIES
Not applicable.

12.B. WARRANTS AND RIGHTS

Not applicable.

12.C. OTHER SECURITIES

Not applicable.

12.D. AMERICAN DEPOSITARY SHARES

Not applicable.

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PART II
ITEM 13. DEFAULTS, DIVIDEND
ARREARAGES AND
DELINQUENCIES
None.

155
ITEM 14. MATERIAL MODIFICATIONS TO
THE RIGHTS OF SECURITY
HOLDERS AND USE OF PROCEEDS
None.

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ITEM 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of December  31, 2020, the end of the period covered by this Annual Report, our management, including our Chief
Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rule  13a-15(e)  under the  Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that as of December  31, 2020, the end of the period covered by this Annual Report, we
maintained effective disclosure controls and procedures.

Management’s Annual Report on Internal Control Over Financial

Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act). Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. Internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles.
Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the
effectiveness of internal control over financial reporting using the criteria set forth in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the
results of this evaluation, our management concluded that our internal control over financial reporting was effective as of
December 31, 2020.
Our independent registered public accounting firm, PricewaterhouseCoopers LLP, audited the effectiveness of our internal
control over financial reporting. PricewaterhouseCoopers LLP's attestation report on our internal control over financial
reporting as of December 31, 2020 is included in Item 18 of this Annual Report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule  13a-15(f) under the  Exchange
Act) that occurred during the fiscal year ended December 31, 2020 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

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ITEM 16A. AUDIT COMMITTEE AND
FINANCIAL EXPERT
Our Board has determined that Lynn D. Bleil, Scott Maw, Karen May and Dieter Spälti, each of whom serves on our Audit
and Risk Committee ("ARC"), are independent for purposes of serving on the audit committee under Rule 10A-3 and the
listing standards promulgated by the New York Stock Exchange and are audit committee financial experts.

ITEM 16B. CODE OF ETHICS

Our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer are bound to adhere to our Code of
Business Conduct, which applies to all of our associates and members of our Board. Our Code of Business Conduct is
available on our website at www.alcon.com/about-us/responsible-business-practice.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES

AND SERVICES
The information set forth under “Item 6. Directors, Senior Management and Employees—6.C. Board Practices—Corporate
Governance—Auditors—Auditing Fees and Additional Fees" is incorporated by reference.

Policy on Audit and Risk Committee Pre-Approval of Services of

Principal Accountant
The Audit and Risk Committee has established a written policy to pre-approve, on an annual basis, all anticipated audit
and non-audit services provided by our independent auditors (“Pre-Approval Policy”). These services may include audit
services, audit-related services, tax services and other services. Pre-approval is generally provided for up to 12 months
from the date of pre-approval, and any pre-approval is detailed as to the particular service or category of services and is
generally subject to a specific budget.
The Pre-Approval Policy provides that the independent auditors may not perform any services for Alcon unless the
independent auditors are engaged pursuant to the Pre-Approval Policy. In addition, the Pre-Approval Policy prohibits the
Audit and Risk Committee from pre-approving certain non-audit services that are prohibited from being performed by the
independent auditors by applicable securities laws. Management is required to periodically report to the Audit and Risk
Committee regarding the extent of services provided by the independent auditors. In 2020, all audit-related, tax and other
services provided by PwC were pre-approved.
In connection with its review and evaluation of non-audit services, the Audit and Risk Committee is required to and does
consider and conclude that the provision of the non-audit services is compatible with maintaining the independence of the
independent auditor.

158
ITEM 16D. EXEMPTIONS FROM THE LISTING
STANDARDS FOR AUDIT
COMMITTEES
Not applicable.

159
ITEM 16E. PURCHASES OF EQUITY
SECURITIES BY THE ISSUER AND
AFFILIATED PURCHASERS
The following table sets forth purchases of our Ordinary Shares by us and our affiliated purchasers during the fiscal year
ended December 31, 2020:

Total Number
of Shares
Purchased Maximum Number (or
as part of Approximate
Publicly Dollar Value) of Shares
Average Price Announced that may yet be
Total Number of Paid per Share Plans or Purchased Under the
Period Shares Purchased (USD) Programs Plans or Programs
January 1-31 — — — —
February 1-28 — — — —
March 1-31 40,000 46.67 — —
April 1-30 — — — —
May 1-31 — — — —
June 1-30 — — — —
July 1-31 — — — —
August 1-31 — — — —
September 1-30 10,000 55.99 — —
October 1-31 — — — —
November 1-30 — — — —
December 1-31 — — — —
Total 50,000 48.53 — —

160
ITEM 16F. CHANGE IN REGISTRANT'S
CERTIFYING ACCOUNTANT
Not applicable.

161
ITEM 16G. CORPORATE GOVERNANCE
The information set forth under “Item 6. Directors, Senior Management and Employees—6.C. Board Practices—Corporate
Governance—Differences from Corporate Governance Standards Relevant to US-listed Companies" is incorporated by
reference.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

162
PART III
ITEM 17. FINANCIAL STATEMENTS
See response to "Item 18. Financial Statements."

ITEM 18. FINANCIAL STATEMENTS

Please refer to the financial statements beginning on page F-1 of this Annual Report.

163
ITEM 19. EXHIBITS
Exhibit
Number Description
1.1 Articles of Incorporation of Alcon Inc., as amended December 1, 2020 (English Translation)
1.2 Regulations of the Board of Directors of Alcon Inc., as amended May 6, 2020 (English Translation)
2.1 Description of rights of each class of securities registered under Section 12 of the Securities Exchange Act of
1934
2.2 The total amount of long-term debt securities authorized under any instrument does not exceed 10% of the
total assets of Alcon and its subsidiaries on a consolidated basis. We hereby agree to furnish to the SEC,
upon its request, a copy of any instrument defining the rights of holders of long-term debt of Alcon or of its
subsidiaries for which consolidated or unconsolidated financial statements are required to be filed.
4.1 Separation and Distribution Agreement by and between Novartis AG and Alcon Inc. - incorporated by
reference to Exhibit 99.1 to the Current Report on Form 6-K (File No. 001-31269) filed with the Securities and
Exchange Commission on April 9, 2019

4.2 Tax Matters Agreement by and between Novartis AG and Alcon Inc. - incorporated by reference to Exhibit
99.2 to the Current Report on Form 6-K (File No. 001-31269) filed with the Securities and Exchange
Commission on April 9, 2019

4.3 Employee Matters Agreement by and between Novartis AG and Alcon Inc. - incorporated by reference to
Exhibit 99.3 to the Current Report on Form 6-K (File No. 001-31269) filed with the Securities and Exchange
Commission on April 9, 2019

4.4 Forward Manufacturing and Supply Agreement by and between Novartis Pharma AG and Alcon Inc. -
incorporated by reference to Exhibit 99.4 to the Current Report on Form 6-K (File No. 001-31269) filed with
the Securities and Exchange Commission on April 9, 2019

4.5 Reverse Manufacturing and Supply Agreement by and between Novartis Pharma AG and Alcon Inc. -
incorporated by reference to Exhibit 99.5 to the Current Report on Form 6-K (File No. 001-31269) filed with
the Securities and Exchange Commission on April 9, 2019

4.6 Transitional Services Agreement by and between Novartis AG and Alcon Inc. - incorporated by reference to
Exhibit 99.6 to the Current Report on Form 6-K (File No. 001-31269) filed with the Securities and Exchange
Commission on April 9, 2019

4.7 Patent and Know-How License Agreement by Novartis AG for the benefit of Alcon Inc. - incorporated by
reference to Exhibit 99.7 to the Current Report on Form 6-K (File No. 001-31269) filed with the Securities and
Exchange Commission on April 9, 2019

4.8 Patent and Know-How License Agreement by Alcon Inc. for the benefit of Novartis AG - incorporated by
reference to Exhibit 99.8 to the Current Report on Form 6-K (File No. 001-31269) filed with the Securities and
Exchange Commission on April 9, 2019

4.9 Brand License Agreement by Novartis AG for the benefit of Alcon Inc. - incorporated by reference to Exhibit
99.9 to the Current Report on Form 6-K (File No. 001-31269) filed with the Securities and Exchange
Commission on April 9, 2019

4.10 Brand License Agreement by Alcon Inc. for the benefit of Novartis AG - incorporated by reference to Exhibit
99.10 to the Current Report on Form 6-K (File No. 001-31269) filed with the Securities and Exchange
Commission on April 9, 2019

4.11 Facilities Agreement by and among Alcon Inc., as borrower, Bank of America Merrill Lynch International
Designated Activity Company, BNP Paribas Fortis SA/NV, Citigroup Global Markets Limited, Morgan Stanley
Bank International Limited and UBS AG, London Branch, as joint lead arrangers and joint bookrunners, and
Citibank Europe PLC, UK Branch, as agent, dated as of March 6, 2019 - incorporated by reference to Exhibit
4.11 to the Registration Statement on Form 20-F (File No. 001-31269) filed with the Securities and Exchange
Commission on March 13, 2019

4.12 Alcon Inc. Long Term Incentive Plan, as amended - incorporated by reference to Exhibit 4.12 to the Annual
Report on Form 20-F (File No. 001-31269) filed with the Securities and Exchange Commission on February 25,
2020

164
 4.13 Alcon Inc. Deferred Bonus Stock Plan, as amended - incorporated by reference to Exhibit 4.13 to the Annual
Report on Form 20-F (File No. 001-31269) filed with the Securities and Exchange Commission on February 25,
2020
4.14 Alcon Swiss Employee Share Ownership Plan - incorporated by reference to Exhibit 99.3 to the Registration
Statement on Form S-8 (File No. 333-230794) filed with the Securities and Exchange Commission on April 10,
2019

4.15 Alcon Laboratories Ireland Share Participation Scheme - incorporated by reference to Exhibit 99.4 to the
Registration Statement on Form S-8 (File No. 333-230794) filed with the Securities and Exchange Commission
on April 10, 2019

4.16 Alcon Inc. UK Share Incentive Plan, as amended

8.1 For a list of all principal subsidiaries of Alcon Inc., see "Item 18. Financial Statements-Note 28. Alcon
subsidiaries".
12.1 Certification of David J. Endicott, Chief Executive Officer of Alcon Inc., Pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934
12.2 Certification of Timothy C. Stonesifer, Chief Financial Officer of Alcon Inc., Pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934
13.1 Certification of David J. Endicott, Chief Executive Officer of Alcon Inc., Pursuant to 18 U.S.C Section 1350
13.2 Certification of Timothy C. Stonesifer, Chief Financial Officer of Alcon Inc., Pursuant to 18 U.S.C Section 1350
15.1 Consent of PricewaterhouseCoopers LLP
15.2 Consent of PricewaterhouseCoopers SA
101.SCH Inline XBRL Taxonomy Extension Schema
101.CAL Inline XBRL Taxonomy Extension Calculation
101.DEF Inline XBRL Taxonomy Extension Definition
101.LAB Inline XBRL Taxonomy Extension Label
101.PRE Inline XBRL Taxonomy Extension Presentation
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

The SEC maintains an internet site at http://www.sec.gov that contains reports and other information regarding issuers
that file electronically with the SEC. These SEC filings are also available to the public from commercial document retrieval
services.

165
(This page has been left blank intentionally.)

166
CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC.

Audited Consolidated Financial Statements  

Consolidated Income Statement F-2
Consolidated Statement of Comprehensive Loss F-3
Consolidated Balance Sheet F-4
Consolidated Statement of Changes in Equity F-5
Consolidated Statement of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
Report of the Statutory Auditor on the Consolidated Financial Statements of Alcon Inc. F-72

F-1
CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC.

Consolidated income statement

(For the years ended December 31, 2020, 2019 and 2018)

($ millions except (loss) per share) Note 2020 2019 2018

Net sales to third parties 5 6,763 7,362 7,149
Sales to former parent 25 — — 4
Other revenues 5 70 146 —
Net sales and other revenues 6,833 7,508 7,153
Cost of net sales (3,830) (3,719) (3,961)
Cost of other revenues (63) (127) —
Gross profit 2,940 3,662 3,192
Selling, general & administration (2,694) (2,847) (2,801)
Research & development (673) (656) (587)
Other income 235 55 47
Other expense (290) (401) (99)
Operating (loss) (482) (187) (248)
Interest expense 6 (124) (113) (24)
Other financial income & expense 6 (29) (32) (28)
(Loss) before taxes (635) (332) (300)
Taxes 7 104 (324) 73
Net (loss) (531) (656) (227)

(Loss) per share ($)

Basic 8 (1.09) (1.34) (0.46)
Diluted 8 (1.09) (1.34) (0.46)

(1)
Weighted average number of shares outstanding (millions)
Basic 8 489.0 488.2 488.2
Diluted 8 489.0 488.2 488.2
(1) For periods prior to the Spin-off, the denominator for basic and diluted (loss) per share was calculated using 488.2 million shares of
common stock distributed in the Spin-off.

The accompanying Notes form an integral part of the Consolidated Financial Statements.

F-2
CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Consolidated statement of comprehensive loss

(For the years ended December 31, 2020, 2019 and 2018)

($ millions) 2020 2019 2018

Net (loss) (531) (656) (227)

Other comprehensive income to be eventually recycled into the consolidated income

statement:
Currency translation effects 19 (4) (58)
Total of items to eventually recycle 19 (4) (58)
Other comprehensive income never to be recycled into the consolidated income statement:
(1)
Actuarial (losses)/gains from defined benefit plans, net of taxes (14) (55) 8
(2)
Fair value adjustments on equity securities, net of taxes (7) (2) (23)
Total of items never to be recycled (21) (57) (15)
Total comprehensive (loss) (533) (717) (300)
(1) Amounts are net of tax benefits of $13 million and $11 million in 2020 and 2019, respectively, and net of tax expense of $2 million in
2018.

(2) Amounts are net of tax benefits of $3 million and $5 million in 2020 and 2019, respectively. No taxes were recorded in 2018.

The accompanying Notes form an integral part of the Consolidated Financial Statements.

F-3
CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Consolidated balance sheet

(At December 31, 2020 and 2019)
($ millions) Note 2020 2019
Assets    
Non-current assets    
Property, plant & equipment 9 3,425 3,113
Right-of-use assets 16 358 324
Goodwill 10 8,905 8,905
Intangible assets other than goodwill 10 9,097 10,231
Deferred tax assets 11 399 354
Financial assets 12 218 307
Other non-current assets 12 211 185
Total non-current assets 22,613 23,419
Current assets
Inventories 13 1,644 1,505
Trade receivables 14 1,361 1,390
Income tax receivables 21 17
Cash and cash equivalents 18 1,557 822
Other current assets 15 404 502
Total current assets 4,987 4,236
Total assets 27,600 27,655

Equity and liabilities

Equity
Share capital 8.1 20 20
Reserves 18,802 19,283
Total equity 18,822 19,303
Liabilities
Non-current liabilities
Financial debts 17 3,949 3,218
Lease liabilities 16 315 280
Deferred tax liabilities 11 1,196 1,386
Provisions & other non-current liabilities 19 1,060 1,168
Total non-current liabilities 6,520 6,052
Current liabilities
Trade payables 876 833
Financial debts 17 169 261
Lease liabilities 16 70 61
Current income tax liabilities 149 107
Provisions & other current liabilities 20 994 1,038
Total current liabilities 2,258 2,300
Total liabilities 8,778 8,352
Total equity and liabilities 27,600 27,655

The accompanying Notes form an integral part of the Consolidated Financial Statements.

F-4
CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Consolidated statement of changes in equity

(For the years ended December 31, 2020, 2019 and 2018)
Fair value
adjustments Fair value Actuarial Cumulative
Former on adjustments (losses)/gains currency
Share Other parent net
(1)
marketable on equity from defined translation Total value
(2) (1)
($ millions) capital reserves investment securities securities benefit plans effects adjustments Equity

Balance as of December 31, 2017, as

previously reported — — 22,942 25 — (25) 87 87 23,029
(3)
Impact of change in accounting policies 25 (25) — — — (25) —

Restated balance as of January 1, 2018 — — 22,967 — — (25) 87 62 23,029

Net (loss) (227) — (227)

Other comprehensive (loss) — (23) 8 (58) (73) (73)

Total comprehensive (loss) — — (227) — (23) 8 (58) (73) (300)

Movements of financing provided to former

parent, net (119) — (119)

Other transactions with former parent 27 — 27

(4)
Other movements 2 — 2

Total other movements — — (90) — — — — — (90)

Balance as of December 31, 2018 — — 22,650 — (23) (17) 29 (11) 22,639

Net (loss) (547) (109) — (656)

Other comprehensive (loss) — (2) (55) (4) (61) (61)

Total comprehensive (loss) — (547) (109) — (2) (55) (4) (61) (717)

Movements of financing provided to former

parent, net (2,658) — (2,658)

Other transactions with former parent (46) — (46)

Reclassification of deferred equity-
compensation (7) — (7)

Distribution by former parent of share capital 20 19,812 (19,832) — —

Equity-based compensation 87 — — 87
(4)
Other movements 3 2 — 5

Total other movements 20 19,902 (22,541) — — — — — (2,619)

Balance as of December 31, 2019 20 19,355 — — (25) (72) 25 (72) 19,303

Net (loss) (531) — — (531)

Other comprehensive (loss) — (7) (14) 19 (2) (2)

Total comprehensive (loss) — (531) — — (7) (14) 19 (2) (533)

Equity-based compensation 70 — — 70
(4)
Other movements 5 — (23) (23) (18)

Total other movements — 75 — — — (23) — (23) 52

Balance as of December 31, 2020 20 18,899 — — (32) (109) 44 (97) 18,822

(1) For periods prior to the Spin-off "Former parent net investment" and "Equity" were presented as "Retained earnings" and "Invested capital",
respectively, and were renamed upon the execution of the Spin-off.

(2) "Total value adjustments" are presented net of the corresponding tax effects.

(3) The impact of change in accounting policies includes $25 million relating to IFRS 9 implementation and nil relating to IFRS 15 implementation.

(4) Activity includes hyperinflationary accounting (see Note 3 to the Consolidated Financial Statements) and an adjustment to actuarial (losses) for
other post-employment benefit obligation assumption changes directly related to the Spin-off on April 9, 2019 but which was not recorded at
that time.

The accompanying Notes form an integral part of the Consolidated Financial Statements.

F-5
CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Consolidated statement of cash flows

(For the years ended December 31, 2020, 2019 and 2018)

($ millions) Note 2020 2019 2018

Net (loss) (531) (656) (227)

Adjustments to reconcile net (loss) to net cash flows from operating activities
Depreciation, amortization, impairments and fair value adjustments 21.1 1,626 1,456 1,622
Equity-based compensation expense 105 83 —
Non-cash change in provisions and other non-current liabilities (106) (4) (10)
Losses on disposal and other adjustments on property, plant & equipment and other non-
current assets, net 42 5 4
Interest expense 124 113 24
Other financial income & expense 29 32 28
Taxes (104) 324 (73)
Interest received 5 7 1
Interest paid (105) (67) (10)
Other financial payments (5) (18) (29)
Taxes paid (97) (224) (203)
Net cash flows before working capital changes and net payments out of provisions and
other non-current liabilities 983 1,051 1,127
Net payments out of provisions and other cash movements in non-current liabilities (115) (83) (67)
Change in net current assets and other operating cash flow items 21.2 (45) (48) 80
Net cash flows from operating activities 823 920 1,140
Purchase of property, plant & equipment (479) (553) (524)
Proceeds from sale of property, plant & equipment 6 — —
Purchase of intangible assets (88) (123) (188)
Purchase of financial assets (11) (59) (57)
Proceeds from sales of financial assets — 8 7
Purchase of other non-current assets — (1) —
Acquisitions of businesses, net 21.3 — (283) (239)
Net cash flows used in investing activities (572) (1,011) (1,001)
Movements of financing provided to former parent, net — (2,658) (119)
Proceeds from non-current financial debts, net of issuance costs 21.4 744 3,724 —
Proceeds from Bridge Facility, net of issuance costs 21.4 — 1,495 —
Repayment of non-current financial debts 21.4 — (509) —
Repayment of Bridge Facility 21.4 — (1,500) —
Change in current financial debts 21.4 (139) 202 (6)
Lease payments 21.4 (69) (52) —
Change in other financial receivables from former parent 21.4 — 39 26
Change in other financial liabilities to former parent 21.4 — (67) 21
Other financing cash flows (70) (15) —
Net cash flows from/(used in) financing activities 466 659 (78)
Effect of exchange rate changes on cash and cash equivalents 18 27 (6)
Net change in cash and cash equivalents 735 595 55
Cash and cash equivalents at January 1 822 227 172
Cash and cash equivalents at December 31 1,557 822 227

The accompanying Notes form an integral part of the Consolidated Financial Statements.

F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON
INC.
1. Description of business
Alcon Inc. (the "Company") and the subsidiaries it controls (collectively "Alcon") is a leading eye care company. Alcon is a
multinational company specializing in the research, development, manufacturing and marketing of a broad range of eye
care products within two businesses: Surgical and Vision Care. Alcon is a stock corporation organized under the laws of
Switzerland, domiciled in Fribourg, Switzerland, with global headquarters located in Geneva, Switzerland.

On February 28, 2019, Novartis AG (“Novartis” or “Former Parent”) shareholders at their Annual General Meeting approved
the proposed 100% spin-off of Alcon through the distribution of a dividend-in-kind of new Alcon shares to Novartis
shareholders and Novartis ADR holders (the “Spin-off”), subject to completion of certain conditions precedent to the
distribution. Amendment No. 6 to the Company's Registration Statement on Form 20-F filed with the Securities and
Exchange Commission ("SEC") on March 22, 2019, ("2018 Form 20-F"), was declared effective by the SEC on that same day.
On April 9, 2019, Novartis completed the Spin-off, which resulted in the Company becoming an independent, publicly-
traded company. Each Novartis shareholder of record as of April 8, 2019 and each holder of Novartis’ ADR of record as of
April 1, 2019 received one share of Alcon common stock for every five shares of Novartis common stock or Novartis ADR
held. The shares of the Company are listed on the SIX Swiss Stock Exchange ("SIX") and on the New York Stock Exchange
("NYSE") under the symbol “ALC”.

The Consolidated Financial Statements of Alcon are comprised of Consolidated Balance Sheet as of December  31, 2020
and 2019 and the Consolidated Income Statement, Consolidated Statement of Comprehensive Loss, Consolidated
Statement of Changes in Equity and Consolidated Statement of Cash Flows for each of the years ended December  31,
2020, 2019 and 2018.

The country of operation and percentage ownership of the legal entities with "Total assets" or "Net sales to third parties"
in excess of $5 million included in the Consolidated Financial Statements are disclosed in Note 28.

2. Basis of preparation
The accompanying Consolidated Financial Statements present our historical financial position, results of operations,
comprehensive loss, and cash flows in accordance with International Financial Reporting Standards (“IFRS”) as issued by
the International Accounting Standards Board (“IASB”), including the basis of preparation as described in this Note and
with the accounting policies as described in Note 3 to these Consolidated Financial Statements.

The preparation of Consolidated Financial Statements requires management to make certain estimates and assumptions,
either at the balance sheet date or during the year that affect the reported amounts of assets and liabilities as well as
revenues and expenses. Actual outcomes and results could differ from those estimates and assumptions.

Relationship with Former Parent and affiliates prior to Spin-off

The financial statements for periods prior to the Spin-off were prepared on a combined basis because the business of
Alcon did not form a separate legal group until the Spin-off occurred. The information in the financial statements for
periods prior to the Spin-off was derived from Novartis’ Consolidated Financial Statements and accounting records, which
were prepared in accordance with IFRS. Through the date of the Spin-off, all revenues and expenses as well as assets and
liabilities directly associated with Alcon have been included in the financial statements. For periods prior to the Spin-off,
the financial statements also include allocations of certain expenses for services provided by Novartis to Alcon and
allocations of related assets, liabilities, and the Former Parent’s invested capital, as applicable. The allocations were
determined on a reasonable basis; however, the amounts are not necessarily representative of the amounts that would
have been reflected in the financial statements had Alcon been an entity that operated independently of Novartis during
the applicable periods.

IFRS does not provide principles for the preparation of combined financial statements for carve-out financial statements,
and accordingly in preparing the financial statements for periods prior to the Spin-off certain accounting and allocation
conventions commonly used in practice for the preparation of carve-out financial statements were applied. The assets and
liabilities included in the balance sheet prior to Spin-off were measured at the carrying amounts recorded in Novartis
Group Consolidated Financial Statements.

The financial statements for periods prior to the Spin-off include all Alcon subsidiaries and all Alcon business operated
within Novartis Group subsidiaries over which Alcon has control, by applying the principles of IFRS  10, Consolidated

F-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Financial Statements. Alcon controls an entity when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
The financial statements for the periods prior to the Spin-off include the assets and liabilities within Novartis subsidiaries
that were attributable to the Alcon business and excluded the assets and liabilities within Alcon subsidiaries not
attributable to the Alcon business.
In addition, the financial statements include, for the periods prior to the Spin-off, the assets, liabilities and results of
operations of the ophthalmic over-the-counter products and a small portfolio of surgical diagnostics products that in
connection with a Novartis Group business reorganization, effective as of January 1, 2018, were transferred to Alcon from
the Innovative Medicines Division of Novartis.
Certain Novartis manufacturing sites performed production services for both the Alcon and Innovative Medicines Divisions
of Novartis Group ("multi-divisional manufacturing sites"). The financial statements, for periods prior to the Spin-off
include the carrying value of the manufacturing sites where the majority of the production is attributable to Alcon and
where such sites were transferred to Alcon in connection with the Spin-off. The inventory, sales and production costs of
these multi-divisional manufacturing sites that were attributable to the products of the Alcon and Innovative Medicines
Divisions of Novartis Group were accounted for and reported separately by the Alcon and Innovative Medicines Divisions
of Novartis Group within Novartis Group accounting systems. The supply chains of the Alcon and Innovative Medicines
Divisions of Novartis Group each managed separately the distribution of their respective products produced in these
multi-divisional manufacturing sites. As a result, there was no requirement for inter-divisional trading arrangements
between the Alcon and Innovative Medicines Divisions of Novartis Group for the products produced in these multi-
divisional manufacturing sites. Manufacturing costs attributable to the Alcon business' products produced in these multi-
divisional manufacturing sites were recognized in the financial statements for periods prior to the Spin-off at cost of
production.
For periods prior to the Spin-off, the financial statements include the attribution of certain assets and liabilities that were
historically held at the Novartis corporate level that were specifically identifiable or attributable to Alcon on a standalone
basis and were recognized on the pre-Spin-off balance sheet through retained earnings in invested capital. The most
significant of which were defined benefit plans, current and deferred income taxes, financial debts, financial investments
and the Alcon brand name. The Alcon brand name was used to market the products of Alcon and the products within
Novartis Innovative Medicines Divisions' ophthalmology pharmaceutical business. The Novartis Group transferred the full
rights to the Alcon brand name to Alcon in connection with the Spin-off. As a result, the carrying value of the Alcon brand
name was fully attributed to Alcon in the financial statements.
The income and expenses related to the hedging transactions prior to the Spin-off were allocated to Alcon based on the
estimated currency exposure of Alcon and are recorded to Other financial income & expense in the income statement and
recognized directly through retained earnings in Invested capital (renamed upon execution of the Spin-off).
The majority of Alcon's subsidiaries were party to Novartis cash pooling arrangements with several financial institutions to
maximize the availability of cash for general operating and investing purposes. Under these cash pooling arrangements,
cash balances were swept by Novartis regularly from Alcon's bank accounts. The net position with the Novartis cash
pooling accounts at the end of each reporting period prior to the Spin-off were reflected in the balance sheet in Other
financial receivables from former parent or Other financial liabilities to former parent.
Financing transactions between Novartis and Alcon, except for receivables and payables against the Novartis cash pool
described above, were excluded from the financial statements in the periods prior to the Spin-off, as none of the financing
transactions were specifically related to the operation of Alcon's business. The exclusion of these financing transactions
was recognized through retained earnings in Invested capital.
Dividend and other equity transactions between Alcon and Novartis were recognized directly to retained earnings in
Invested capital.
Novartis third-party debt and the related interest expense were not allocated to Alcon when Alcon's subsidiaries were not
the legal obligor of the debt and when Novartis borrowings were not directly attributable to Alcon's business. The financial
statements for periods prior to the Spin-off include third-party debt and the related interest expense when Alcon's
subsidiaries were the legal obligor of the debt and when the borrowings were directly attributable to Alcon's business.
Both before and after the Spin-off, Alcon's associates participate in defined benefit pension and other postretirement
plans sponsored by Novartis; in some countries these are single employer plans dedicated to the Alcon business
associates and in other countries these are plans where associates of Alcon and associates of the Novartis Group are
participants. The net defined benefit and other postretirement plan liabilities and pension costs attributable to Alcon are
included in the Consolidated Financial Statements for periods prior to and after the Spin-off, to the extent that the
corresponding pension obligations and plan assets under those plans transferred to Alcon at the time of Spin-off or will

F-8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

subsequently transfer pursuant to the Employee Matters Agreement entered into with Novartis. Refer to Note 23 to these
Consolidated Financial Statements for additional disclosure on post-employment benefits for associates.
Income taxes attributable to the Alcon business in the financial statements were determined using the separate return
approach, under which current and deferred income taxes are calculated as if a separate tax return had been prepared in
each tax jurisdiction. In various tax jurisdictions, Alcon and Novartis businesses operated within the same legal entity and
certain Alcon subsidiaries were part of a Novartis tax group. This required an assumption that the subsidiaries and
operations of Alcon in those tax jurisdictions operated on a standalone basis and constitute separate taxable entities.
Actual outcomes and results could differ from these separate tax return estimates, including those estimates and
assumptions related to realization of tax benefits within these Novartis tax groups. Refer to Note 7 and Note 11 to these
Consolidated Financial Statements for additional disclosures on income taxes.
Alcon's Invested capital in the financial statements for the periods prior to Spin-off represents the excess of total assets
over total liabilities and, in addition to the items described above, was impacted by the following:
• Currency translation adjustments of the Novartis Group multi-divisional subsidiaries were allocated between
Alcon and the Novartis retained businesses by applying allocation keys based on net assets of each respective
business.
• Other transactions with Novartis Group as shown on the Consolidated Statement of Changes in Equity represents
the movements in Invested capital resulting from the preparation of the financial statements in accordance with
the basis of preparation described in this Note.
• Movements of financing provided to Novartis Group as shown on the Consolidated Statement of Changes in
Equity and on the Consolidated Statement of Cash Flows primarily represent the net contributions from Alcon to
Novartis Group.
For the periods prior to the Spin-off, the financial statements include charges and allocation of expenses related to certain
Novartis business support functions and Novartis corporate general and administration functions. Alcon considers the
charges and allocation methodology and results to be reasonable. However, the charges and allocations may not be
indicative of the actual expense that would have been incurred had Alcon operated as an independent, publicly traded
company for the periods prior to the Spin-off. The following is a brief description of the nature of these charges and
allocations:
• Alcon received services from Novartis Business Services (“NBS”), the shared service organization of Novartis
Group, across the following service domains: human resources operations, real estate and facility services,
including site security and executive protection, procurement, information technology, commercial and medical
support services and financial reporting and accounting operations. The financial statements include the
appropriate costs related to the services rendered, without profit margin, in accordance with the historical
arrangements that existed between Novartis and the Alcon business prior to the Spin-off. Refer to Note 25 to
these Consolidated Financial Statements for additional disclosures.
• Certain Novartis corporate general and administrative functions costs, in the areas of corporate governance,
including board of directors, corporate responsibility and other corporate functions, such as tax, corporate
governance and listed company compliance, investor relations, internal audit, treasury, communications functions
and the net interest on the net defined benefit liability were not charged or allocated to the Alcon business in the
past. The financial statements include a reasonable allocation of these Novartis corporate general and
administrative functions costs and net interest on the net defined benefit liability, based on reasonable
assumptions and estimates. The corporate general and administrative function costs allocations were based on
the direct and indirect costs incurred to provide the respective services. When specific identification was not
practicable, a proportional cost allocation method was used, primarily based on sales, or headcount.
Management believes that the allocations reasonably approximate the corporate general and administrative
functions costs Alcon may have incurred had it operated as a standalone company. However, the allocations may
not be indicative of the actual expense that would have been incurred had Alcon operated on a standalone basis
prior to the Spin-off. Refer to Note 25 to these Consolidated Financial Statements for additional disclosures.
Management believes that all allocations were performed on a reasonable basis and reflect the services received by Alcon,
the costs incurred on behalf of Alcon and the assets and liabilities of Alcon. Although the financial statements for the
periods prior to the Spin-off reflect management's best estimate of all historical costs related to Alcon, this may not
necessarily reflect what the results of operations, financial position, or cash flows would have been had Alcon been a
separate entity prior to the Spin-off.
Agreements entered into between Alcon and Novartis in connection with the Spin-off govern the relationship between the
parties following the Spin-off and provide for the allocation of various assets, liabilities, rights and obligations. These
agreements also include arrangements for transition services to be provided on a temporary basis between the parties.

F-9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Following the Spin-off, the Consolidated Financial Statements include the accounts of Alcon and no longer include any
allocations from Novartis.

3. Selected accounting policies

Principles of consolidation
The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. In the
event that the Company has an interest in another entity that is not wholly owned, the assets, liabilities, results of
operations and cash flows of such entity are included in the Company's Consolidated Financial Statements, if the Company
is exposed or has rights to variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The Consolidated Financial Statements of the Company are prepared in accordance with
IFRS as issued by the IASB. They are prepared in accordance with the historical cost convention except for items that are
required to be accounted for at fair value. All intercompany transactions and accounts within Alcon were eliminated.
The Company's financial year-end is December 31, which is also the annual closing date of the individual entities' financial
statements incorporated into the Consolidated Financial Statements.

Impact of the coronavirus (“COVID-19”) pandemic

In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic.  The COVID-19 pandemic
has negatively impacted the global economy, disrupted global supply chains and created significant volatility and
disruption of financial markets, resulting in widespread shelter-in-place orders, business shut-downs and the deferral of
non-urgent surgeries. This has had, and may continue to have, an adverse effect on our net sales, operating results and
cash flow. The extent to which the COVID-19 pandemic and the related economic impact may continue to affect our
financial condition or results of operations is uncertain.
We have analyzed the impact of the COVID-19 pandemic on our financial statements for the twelve months ended
December 31, 2020. We have assessed various accounting estimates and other matters, including those that require
consideration of forecasted financial information, in the context of the unknown future impacts of COVID-19 using
information reasonably available to us at this time. The accounting estimates and other matters assessed include, but
were not limited to, provisions for expected credit losses, recoverability of goodwill and other intangible assets, financial
instruments, inventory provisions, associate benefits, income taxes and revenue recognition. Based on our assessment
performed, the resulting provisions recorded were not material to our Consolidated Financial Statements for the twelve
months ended December 31, 2020. However, the inherent uncertainties of COVID-19 including the duration, scope, and
severity of the pandemic may result in actual outcomes that differ materially from our current assumptions and estimates.

Foreign currencies
The Consolidated Financial Statements are presented in US dollars ("USD"). The functional currency of individual entities
incorporated into the Consolidated Financial Statements are generally the local currency of the respective entity. The
functional currency used for the reporting of certain Swiss entities is USD instead of their respective local currencies. This
reflects the fact that the cash flows and transactions of these entities are primarily denominated in these currencies.
For entities not operating in hyperinflationary economies, the entities results, financial position and cash flows that do not
have USD as their functional currency are translated into USD using the following exchange rates:
• Income, expense and cash flows using for each month the average exchange rate with the USD values for each
month being aggregated during the year.
• Balance sheet using year-end exchange rates.
• Resulting exchange rate differences are recognized in other comprehensive income.
The hyperinflationary economies in which Alcon operates are Argentina and Venezuela. Venezuela was hyperinflationary
for all years presented, and Argentina became hyperinflationary effective July  1, 2018, requiring retroactive
implementation of hyperinflation accounting as of January 1, 2018.

F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The impact of the restatement of the non-monetary assets and liabilities with the general price index at the beginning of
the period is recorded in "Other Reserves" in equity. The subsequent gains or losses resulting from the restatement of
non-monetary assets are recorded in "Other financial income & expense" in the consolidated income statement.

Acquisition of assets
Acquired assets are initially recognized on the balance sheet at cost if they meet the criteria for capitalization. The
capitalized cost of the asset includes the purchase price and any directly attributable costs for bringing the asset into the
condition to operate as intended. Expected costs for obligations to dismantle and remove property, plant and equipment
when it is no longer used are included in their cost.

Property, plant and equipment

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Freehold land is
not depreciated. The related depreciation expense is included in the costs of the functions using the asset or "Cost of net
sales" in the consolidated income statement.
Property, plant and equipment are assessed for impairment whenever there is an indication that the balance sheet
carrying amount may not be recoverable using cash flow projections for the useful life.
The following table shows the respective useful lives for property, plant and equipment:

  Useful life
Buildings and improvements 10 to 40 years
Machinery and other equipment  
Machinery and equipment 5 to 20 years
Furniture and vehicles 5 to 10 years
Computer hardware 3 to 7 years

Business combinations
From January 1, 2020, with the adoption of Amendments to IFRS 3, Business Combinations, Alcon's accounting policy for
business combinations is as follows:
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary may include:
• fair values of the assets transferred;
• liabilities incurred to the former owners of the acquired business;
• equity interests issued by the Company;
• fair value of an asset or liability resulting from a contingent consideration arrangement; and
• fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at
the acquisition date. The excess of the consideration transferred over the fair value of the net identifiable assets acquired
is recorded as goodwill, or directly in the income statement if it is a bargain purchase. Alcon primarily uses net present
value techniques, utilizing post-tax cash flows and discount rates in calculating the fair value of identifiable assets acquired
when allocating the purchase consideration paid for the acquisition. The estimates used in calculating fair values involve
significant judgment by management and include assumptions with measurement uncertainty such as, the amount and
timing of projected cash flows, long-term sales forecasts, the timing and probability of regulatory and commercial success,
and the discount rate.
Acquisition related costs are expensed as incurred.
Alcon may elect on a transaction-by-transaction basis to apply the optional concentration test to assess whether a
transaction qualifies as a business. Under the test, when substantially all of the fair value of the gross assets acquired is
concentrated in a single identifiable asset or a group of similar identifiable assets, Alcon will account for the transaction as
an asset purchase and not a business combination.
If the concentration test is not met, or Alcon elects not to apply this optional test, Alcon will perform an assessment
focusing on the existence of inputs and processes that have the ability to create outputs to determine whether the
transaction is an asset purchase or a business combination.

F-11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Prior to the adoption of Amendments to IFRS 3 on January 1, 2020, Alcon's accounting policy for business combinations
was as follows:
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary may include:
• fair values of the assets transferred;
• liabilities incurred to the former owners of the acquired business;
• equity interests issued by the Company;
• fair value of an asset or liability resulting from a contingent consideration arrangement; and
• fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at
the acquisition date. The excess of the consideration transferred over the fair value of the net identifiable assets acquired
is recorded as goodwill, or directly in the income statement if it is a bargain purchase. Alcon primarily uses net present
value techniques, utilizing post-tax cash flows and discount rates in calculating the fair value of net identifiable assets
acquired when allocating the purchase consideration paid for the acquisition. The estimates used in calculating fair values
involve significant judgment by management and include assumptions with measurement uncertainty such as, the
amount and timing of projected cash flows, long-term sales forecasts, the timing and probability of regulatory and
commercial success, and the discount rate.
Acquisition related costs are expensed as incurred.

Goodwill and intangible assets

The annual impairment testing date is Alcon's financial year-end, December 31.

Goodwill

Goodwill arises in a business combination and is the excess of the consideration transferred to acquire a business over
the underlying fair value of the net identified assets acquired. It is allocated to groups of cash generating units ("CGUs")
which are usually represented by the reportable segments, which are the same as Alcon's operating segments. Goodwill is
tested for impairment annually at the level of these groups of CGUs, and any impairment charges are recorded under
"Other expense" in the consolidated income statement.

Intangible assets available for use

Alcon has the following classes of available-for-use intangible assets: Currently marketed products, Marketing know-how,
Technologies, Other intangible assets (including computer software) and the Alcon brand name.
Currently marketed products represent the composite value of acquired intellectual property, patents, and distribution
rights and product trade names.
Marketing know-how represents the value attributable to the expertise acquired for marketing and distributing Alcon
surgical products.
Technologies represent identified and separable acquired know-how used in the research, development and production
processes.
Significant investments in internally developed and acquired software are capitalized and included in the "Other" category
and amortized once available for use.
The Alcon brand name is shown separately as it is the only Alcon intangible asset that is available for use with an indefinite
useful life. Alcon considers it appropriate that the brand name has an indefinite life since the branded products have a
history of strong revenue and cash flow performance, and Alcon has the intent and ability to support the brand with
spending to maintain its value for the foreseeable future.
Except for the Alcon brand name, intangible assets available for use are amortized over their estimated useful lives on a
straight-line basis and evaluated for potential impairment whenever facts and circumstances indicate that their carrying
value may not be recoverable. The Alcon brand name is not amortized, but evaluated for potential impairment annually.

F-12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The following table shows the respective useful lives for available-for-use intangible assets and the location in the
consolidated income statement in which the respective amortization and any potential impairment charge is recognized:

Income statement location for

  Useful life amortization and impairment charges
Currently marketed products 5 to 20 years "Cost of net sales"
Marketing know-how 25 years "Cost of net sales"
Technologies 10 to 20 years "Cost of net sales" or "Research and
Development"
Other (including software) 3 to 10 years In the respective functional expense
Alcon brand name Not amortized, indefinite useful life "Other expense"
From July 1, 2019, the useful life of Alcon's new SAP ERP software was extended from 7 years to 10 years on a prospective
basis based on Alcon's multi-year transformation program which centers on one ERP platform across the organization.
This change in estimate resulted in a $5 million reduction in amortization expense during the six months ended December
31, 2019 and a $10  million reduction in amortization expense for the twelve months ended December 31, 2020. This
change in estimate will reduce amortization expense up to $10 million per year during the remaining useful life of the SAP
ERP software assets placed in service at the time of the change.
The corresponding "Intangible assets available for use" portion of the accounting policy was updated in 2019 to reflect that
the useful life for Other intangible assets (including software) was extended from 3 to 7 years to 3 to 10 years.

Acquired In-Process Research & Development ("IPR&D")

Acquired research and development intangible assets, which are still under development and have accordingly not yet
obtained marketing approval, are recognized as IPR&D.
IPR&D is not amortized, but evaluated for potential impairment on an annual basis or when facts and circumstances
warrant. IPR&D is considered impaired when its balance sheet carrying amount exceeds its estimated recoverable
amount, which is defined as the higher of its fair value less costs of disposal ("FVLCOD") and its value in use ("VIU").
Usually, Alcon applies the FVLCOD method for its impairment assessments. Under this approach when evaluating IPR&D
for potential impairment, FVLCOD is estimated using net present value techniques utilizing post-tax cash flows and
discount rates as there are no direct or indirect observable prices in active markets for identical or similar assets. The
estimates used in calculating the net present values involve significant judgment by management and include
assumptions with measurement uncertainty such as, the amount and timing of projected cash flows, long-term sales
forecasts, discount rate, and the timing and probability of regulatory and commercial success. In the limited cases where
the VIU method would be applied, net present value techniques would be applied using pre-tax cash flows and discount
rates.
Any impairment charge is recorded in the consolidated income statement under "Research & development".
Once a project included in IPR&D has been successfully developed it is transferred to the "Currently marketed products"
category.

Impairment of goodwill, Alcon brand name and definite lived intangible assets

A CGU to which goodwill has been allocated (reportable segments) is considered impaired when its carrying amount,
including the goodwill, exceeds its recoverable amount, which is defined as the higher of its FVLCOD and its VIU. If the
recoverable amount of the reportable segment is less than its carrying amount, an impairment loss shall be recognized.
The impairment loss shall be allocated to reduce the carrying amount of any goodwill allocated to the reportable segment
first, with any remaining impairment loss allocated to other assets of the reportable segment on a pro-rata basis of their
carrying amount.
An intangible asset other than goodwill is considered impaired when its balance sheet carrying amount exceeds its
estimated recoverable amount, which is defined as the higher of its FVLCOD and its VIU. If the recoverable amount of an
asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount. That
reduction is an impairment loss. Usually, Alcon applies the FVLCOD method for its impairment assessment. In most cases
no direct or indirect observable market prices for identical or similar assets are available to measure the fair value less
costs of disposal. Therefore, an estimate of FVLCOD is based on net present value techniques utilizing post-tax cash flows
and discount rates. In the limited cases where the VIU method would be applied, net present value techniques would be
applied using pre-tax cash flows and discount rates.

F-13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

FVLCOD reflects estimates of assumptions that market participants would be expected to use when pricing the asset or
CGUs, and for this purpose management considers the range of economic conditions that are expected to exist over the
remaining useful life of the asset.
The estimates used in calculating the net present values involve significant judgment by management and include
assumptions with measurement uncertainty, such as the following:
• Amount and timing of projected cash flows;
• Long-term sales forecasts for periods of up to 25 years including sales growth rates;
• Royalty rate for the Alcon brand name;
• Terminal growth rate; and
• Discount rate.
Other assumptions used in the net present values calculation include:
• Future tax rate;
• Actions of competitors (launch of competing products, marketing initiatives, etc.); and
• Outcome of R&D activities and forecast of related costs (future product developments).
Generally, for intangible assets with a definite useful life Alcon uses cash flow projections for the whole useful life of these
assets. For goodwill and the Alcon brand name, Alcon generally utilizes cash flow projections for a five-year period based
on management forecasts, with a terminal value based on cash flow projections considering the long-term expected
inflation rates and impact of demographic trends of the population to which Alcon products are prescribed, for later
periods. Probability-weighted scenarios are typically used.
Discount rates used consider Alcon estimated weighted average cost of capital adjusted for specific country and currency
risks associated with cash flow projections to approximate the weighted average cost of capital of a comparable market
participant. Actual cash flows and values could vary significantly from forecasted future cash flows and related values
derived using discounting techniques.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, and other short-term and
highly liquid investments with original or weighted-average maturities of three months or less which are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts
are usually presented within current financial debts on the consolidated balance sheet except in cases where a right of
offset has been agreed with a bank which then allows for presentation on a net basis.

Financial assets
Non-current financial assets such as loans and long-term receivables from customers, primarily related to surgical
equipment sales arrangements, advances and other deposits, are carried at amortized cost, which reflects the time value
of money, less any allowances for uncollectable amounts.
Alcon assesses on a forward-looking basis the expected credit losses associated with its non-current financial assets
valued at amortized cost.
For loans, advances and other deposits valued at amortized cost, impairments, which are based on their expected credit
losses, and exchange rate losses are included in "Other expense" in the consolidated income statement and exchange rate
gains and interest income, using the effective interest rate method, are included in "Other income" in the consolidated
income statement.
For long-term receivables from customers, provisions for uncollectable amounts, which are based on their expected credit
losses, are recorded as marketing and selling costs recognized in the consolidated income statement within "Selling,
general & administration" expenses.
Fund investments are valued at fair value through profit and loss ("FVPL"). Unrealized gains and losses, including exchange
gains and losses, are recognized in the consolidated income statement in "Other income" for gains and "Other expense"
for losses.
Equity securities and convertible notes receivable held as strategic investments are generally designated at the date of
acquisition as financial assets valued at fair value through other comprehensive income with no subsequent recycling
through profit and loss. Unrealized gains and losses, including exchange gains and losses, are recorded as a fair value

F-14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

adjustment in the consolidated statement of comprehensive income. They are reclassified to "Other Reserves" when the
equity security is sold. If these equity securities and convertible notes receivable are not designated at the date of
acquisition as financial assets valued at fair value through other comprehensive income, they are valued at FVPL, as
described above for fund investments. Changes in fair value of options to acquire development stage companies are
charged to research and development expense.
Derivative financial instruments are initially recognized in the consolidated balance sheet at fair value and are remeasured
to their current fair value at the end of each subsequent reporting period. The valuation of forward exchange rate
contracts and foreign exchange swaps are based on the discounted cash flow model, using interest curves and spot rates
at the reporting date as observable inputs. Unsettled forward contracts and swaps are measured at fair value at quarter-
end with changes in fair value recorded to the consolidated income statement as unrealized gains or losses in "Other
financial income & expense". Settled forward contracts and swaps are measured at maturity date at fair value with
corresponding realized gains or losses recognized in the consolidated income statement in "Other financial income &
expense". No hedge accounting is applied for these arrangements.

Inventories
Inventory is valued at acquisition or production cost determined on a first-in, first-out basis. This value is used for the
"Cost of net sales" and "Cost of other revenues" in the consolidated income statement. Unsalable inventory is fully written
off in the consolidated income statement under "Cost of net sales" and "Cost of other revenues".

Trade receivables
Trade receivables are initially recognized at their invoiced amounts, including any related sales taxes less adjustments for
estimated revenue deductions such as chargebacks and cash discounts.
Provisions for expected credit losses are established using an expected credit loss model ("ECL"). The provisions are based
on a forward-looking ECL, which includes possible default events on the trade receivables over the entire holding period of
the trade receivable. These provisions represent the difference between the trade receivable's carrying amount and the
estimated net collectible amount. Charges for doubtful trade receivables are recorded as marketing and selling costs
recognized in the consolidated income statement within "Selling, general & administration" expenses.

Leases
Effective January 1, 2019, Alcon adopted IFRS 16, Leases. As lessee, Alcon assesses whether a contract contains a lease at
inception of a contract based on whether the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. Alcon recognizes a right-of-use asset and a corresponding lease liability for
all arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low
value leases for which Alcon has elected the recognition exemptions allowed under IFRS 16.

Right-of-use assets

Right-of-use assets are initially recognized at cost, which is comprised of the amount of the initial measurement of the
corresponding lease liabilities, adjusted for any lease payments made at or prior to the commencement date of the lease,
lease incentives received and initial direct costs incurred, as well as any expected costs for obligations to dismantle and
remove right-of-use assets when they are no longer used.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the useful life of the right-of-use asset or
the end of the lease term.
Right-of-use assets are assessed for impairment whenever there is an indication that the balance sheet carrying amount
may not be recoverable using cash flow projections for the useful life.

Lease liabilities

Lease liabilities are accounted for at amortized cost and are initially measured at the present value of future lease
payments and are classified as current or non-current based on the due dates of the underlying principal payments. In
determining the lease term, Alcon evaluates the renewal options and termination options reasonably certain to be
exercised. Lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, the
incremental borrowing rate Alcon would be expected to pay within the respective markets, on a borrowing with a similar
term and security. Interest in the period is recorded within "Interest expense" in Alcon's consolidated income statement.
Lease liabilities are remeasured for changes in estimated lease term, future lease payments arising from a change in an
index or rate, amounts expected to be payable under a residual value guarantee, or in assessment of whether Alcon will
exercise a purchase, extension or termination option. Changes to initial lease contract terms are assessed to determine

F-15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

their impact on the scope of lease, and any modifications increasing the scope of the lease are treated as new contracts
under the initial measurement principles, while modifications that do not increase or that decrease the scope of the lease
result in an adjustment to the right-of-use asset which is remeasured as of the date of the modification.
Principal payments made on lease liabilities and any initial direct costs paid are classified as financing cash outflows, while
interest payments are classified as operating cash outflows.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an
expense in the consolidated income statement and are classified as cash flows from operating activities. Short-term leases
are leases with a lease term of twelve months in duration or less.

Legal liabilities
Alcon is subject to contingencies arising in the ordinary course of business such as patent litigation and other product-
related litigation, commercial litigation, and governmental investigations and proceedings. Provisions are recorded where
a reliable estimate can be made of the probable outcome of legal or other disputes against the subsidiary.

Contingent consideration
In a business combination, it is necessary to recognize contingent future payments to previous owners representing
contractually defined potential amounts as a liability. Usually for Alcon, these are linked to development or commercial
milestones related to certain assets and are recognized as a financial liability at their fair value, which is then re-measured
at each subsequent reporting date.
For the determination of the fair value of a contingent consideration various unobservable inputs are used. A change in
these inputs might result in a significantly higher or lower fair value measurement. The inputs used are, among others, the
timing and probability of regulatory and commercial success, sales forecast and assumptions regarding the discount rate,
timing and different scenarios of triggering events. The significance and usage of these inputs to each contingent
consideration may vary due to differences in the timing and triggering events for payments or in the nature of the asset
related to the contingent consideration. These estimations typically depend on factors such as technical milestones or
market performance and are adjusted for the probability of their likelihood of payment, and if material, appropriately
discounted to reflect the impact of time.
Changes in the fair value of contingent consideration liabilities in subsequent periods are recognized in the consolidated
income statement in "Cost of net sales" for currently marketed products and in "Research & development" for IPR&D.
The effect of unwinding the discount over time is recognized in "Interest expense" in the consolidated income statement.

Defined benefit pension plans and other post-employment benefits

The liability or asset recognized in the balance sheet in respect of defined benefit pension plans and other post-
employment benefits is the present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected
unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using
interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and
that have terms approximating to the terms of the related obligation. In countries where there is no sufficient market for
such bonds, the market rates on government bonds are used.
The current service cost for such post-employment benefit plans is included in the personnel expenses of the various
functions where the associates are employed. The net interest on the net defined benefit liability is recognized as "Other
expense" or "Other income". The net interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligation and the fair value of plan assets. Past service cost is recognized as "Other expense" or "Other
income" in the consolidated income statement for the change in the present value of a defined benefit obligation for
employee service in prior periods resulting from a plan amendment or a curtailment.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognized in the period in which they occur, directly in other comprehensive income/(loss).

Defined contribution plans

For defined contribution plans, Alcon contributes to publicly or privately administered plans. Alcon has no further payment
obligations once the contributions have been paid. The contributions are included in the personnel expenses of the
various functions where the associates are employed.

F-16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Financial debts
Financial debts are initially recognized at fair value, net of transaction costs incurred. Financial debts are subsequently
measured at amortized cost. Any difference between the proceeds (net of transaction costs and discounts) and the
redemption amount is recognized in the consolidated income statement over the period of the financial debts using the
effective interest method. Fees paid on the establishment of credit facilities are recognized as transaction costs of the
financial debt to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw down occurs. To the extent that there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of
the facility to which it relates, and is recognized in "Other financial income & expense" in the consolidated income
statement.
Financial debts are derecognized from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial debt that has been extinguished and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in "Other financial
income & expense" in the consolidated income statement.
Interest paid on financial debts is classified as operating activities in the consolidated statement of cash flows. Financial
debts are classified as current liabilities unless Alcon has an unconditional right and intent to defer the settlement of the
liability for at least twelve months after the reporting period.

Revenue
Net sales to third parties

Revenue on the sale of Alcon products and services, which is recorded as "Net sales to third parties" in the consolidated
income statement, is recognized when a contractual promise to a customer (performance obligation) has been fulfilled by
transferring control over the promised goods and services to the customer, substantially all of which is at the point in time
of shipment to or receipt of the products by the customer or when the services are performed. If contracts contain
customer acceptance provisions, revenue would be recognized upon the satisfaction of acceptance criteria. The amount of
revenue to be recognized is based on the consideration Alcon expects to receive in exchange for its goods and services. If
a contract contains more than one performance obligation, the consideration is allocated based on the relative standalone
selling price of each performance obligation.
Surgical equipment may be sold together with other products and services under a single contract and may be structured
as an outright cash sale, an installment sale, or lease. Surgical equipment installment sales and leases have a fixed
payment amount which the customer may pay either in fixed intervals or as the customer purchases consumables and/or
implantables. Revenues are recognized upon satisfaction of each of the performance obligations in the contract and the
consideration is allocated based on the relative standalone selling price of each performance obligation.
• Surgical equipment revenue from outright cash sales and installment sales arrangements is recognized at the
point in time when control is transferred to the customer. Current portion of long-term receivables from
customers and long-term receivables from customers for installment sales arrangements are recorded in "Other
current assets" (see "Current portion of long-term receivables from customers" in Note 15 of these Consolidated
Financial Statements) and "Financial assets" (see "Long-term receivables from customers" in Note  12 of these
Consolidated Financial Statements), respectively. Financing income for installment sales arrangements longer
than twelve months is recognized over the term of the arrangement in "Other Income". Alcon applies the practical
expedient under IFRS 15 to installment sales arrangements that are twelve months or less in duration.
• In addition to cash and installment sales, revenue is recognized under finance and operating lease arrangements.
Leases in which Alcon transfers substantially all the risks and rewards incidental to ownership to the customer are
treated as finance lease arrangements. Revenue from finance lease arrangements is recognized at amounts equal
to the fair value of the equipment, which approximates the present value of the minimum lease payments under
the arrangements. As interest rates embedded in lease arrangements are approximately market rates, revenue
under finance lease arrangements is comparable to revenue for outright sales. Finance income for arrangements
longer than twelve months is deferred and subsequently recognized based on a pattern that approximates the
use of the effective interest method and recorded in "Other income". Operating lease revenue for equipment
rentals is recognized on a straight-line basis over the lease term in "Net sales to third parties".
The consideration Alcon receives in exchange for its goods or services may be fixed or variable. Variable consideration is
only recognized when it is highly probable that a significant reversal of cumulative sales will not occur. The most common
elements of variable consideration are listed below:

F-17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

• Rebates and discounts granted to government agencies, wholesalers, retail pharmacies and other customers are
provisioned and recorded as a deduction from revenue at the time the related revenues are recorded or when
the incentives are offered. They are calculated on the basis of historical experience and the specific terms in the
individual agreements.
• Cash discounts are offered to customers to encourage prompt payment and are provisioned and recorded as
revenue deductions at the time the related sales are recorded.
• Sales returns provisions are recognized and recorded as revenue deductions when there is historical experience
of Alcon agreeing to customer returns and Alcon can reasonably estimate expected future returns. In doing so,
the estimated rate of return is applied, determined based on historical experience of customer returns and
considering any other relevant factors. This is applied to the amounts invoiced, also considering the amount of
returned products to be destroyed versus products that can be placed back in inventory for resale. Where
shipments are made on a re-sale or return basis, without sufficient historical experience for estimating sales
returns, revenue is only recorded when there is evidence of consumption or when the right of return has expired.
Provisions for revenue deductions are adjusted to actual amounts as rebates, discounts and returns are processed. The
provision represents estimates of the related obligations, requiring the use of judgment when estimating the effect of
these sales deductions.

Other revenues

"Other revenues" include revenue from contract manufacturing services provided to the Former Parent which are
recognized over time as the service obligations are completed and third party royalty income. Associated costs for contract
manufacturing services are recognized in "Cost of other revenues".

Research & development
Internal research & development ("R&D") costs are fully charged to "Research & development" in the consolidated income
statement in the period in which they are incurred. Alcon considers that regulatory and other uncertainties inherent in the
development of new products preclude the capitalization of internal development expenses as an intangible asset until
marketing approval from a regulatory authority is obtained in a major market such as the United States, the European
Union, Switzerland, China or Japan.
Payments made to third parties to in-license or acquire intellectual property rights and products, including initial upfront
and subsequent milestone payments, are capitalized as intangible assets. If additional payments are made to the
originator company to continue to perform R&D activities, an evaluation is made as to the nature of the payments. Such
additional payments will be expensed if they are deemed to be compensation for subcontracted R&D services not
resulting in an additional transfer of intellectual property rights to Alcon. Such additional payments will be capitalized if
they are deemed to be compensation for the transfer to Alcon of additional intellectual property developed at the risk of
the originator company. Subsequent internal R&D costs in relation to IPR&D and other assets are expensed until such time
that technical feasibility can be proven, as demonstrated by the receipt of marketing approval for the related product from
a regulatory authority in a major market.

Equity-based compensation
Each of the periods presented include expense related to incentive compensation provided to eligible Alcon associates in
the form of equity-settled or equity-based awards including restricted stock units ("RSUs") and performance stock units
("PSUs").
Alcon expenses the fair values of RSUs and PSUs granted to associates as compensation over the related vesting periods
within the various functions where the associates are employed. The fair values of the awards are determined on their
grant dates and are adjusted to account for the specific provisions of each of the corresponding grant agreements.
Alcon RSUs do not entitle the recipients to dividends. As such, the fair value upon grant is therefore based on the Alcon
share price at the grant date adjusted for potential future dividends to be paid within the holding period. The fair value of
these grants, after making adjustments for assumptions related to their forfeiture during the vesting period, is expensed
on a straight-line basis over the respective vesting period.
PSUs are subject to certain performance criteria being achieved during the vesting period and require plan participants to
provide services during the vesting period. PSUs granted under Alcon's plans are subject to performance criteria based on
internal performance metrics. The expense is determined taking into account assumptions concerning performance
during the period relative to targets and expected forfeitures due to plan participants not meeting their service conditions.
These assumptions are periodically adjusted. Any change in estimates for past services is recorded immediately as an
expense or income in the consolidated income statement and amounts for future periods are expensed over the

F-18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

remaining vesting period. As a result, at the end of the vesting period, the total charge during the whole vesting period
represents the amount that will finally vest. The number of equity instruments that finally vest is determined at the vesting
date.
If a plan participant leaves Alcon for reasons other than retirement, disability or death, then unvested restricted shares,
RSUs and PSUs are forfeited, unless determined otherwise by the provision of the plan rules or by the Compensation
Committee of the Alcon Board of Directors, for example, in connection with a reorganization.

Restructuring charges
Restructuring provisions are recognized for the direct expenditures arising from the restructuring, where the plans are
sufficiently detailed and where appropriate communication to those affected has been made.
Charges to increase restructuring provisions are included in "Other expense" in the consolidated income statement.
Corresponding releases are recorded in "Other income" in the consolidated income statement.

Taxes
Taxes on income are expensed in the same periods as the revenues and expenses to which they relate and include any
interest and penalties incurred during the period. Deferred taxes are determined using the comprehensive liability
method and are calculated on the temporary differences that arise between the tax base of an asset or liability and its
carrying value in the balance sheet prepared for purposes of these Consolidated Financial Statements, except for those
temporary differences related to investments in subsidiaries where the timing of their reversal can be controlled and it is
probable that the difference will not reverse in the foreseeable future. Since the retained earnings are reinvested,
withholding or other taxes on eventual distribution of a subsidiary's retained earnings are only taken into account when a
dividend has been planned.
The estimated amounts for current and deferred tax assets or liabilities, including any amounts related to any uncertain
tax positions, are based on currently known facts and circumstances. Tax returns are based on an interpretation of tax
laws and regulations and reflect estimates based on these judgments and interpretations. The tax returns are subject to
examination by the competent taxing authorities which may result in an assessment being made requiring payments of
additional tax, interest or penalties. Inherent uncertainties exist in the estimates of the tax positions.

Earnings/(loss) per share

Basic earnings (loss) per share is based on the weighted average number of common shares outstanding. Diluted earnings
(loss) per share is based on the weighted average number of common shares outstanding and all dilutive potential
common shares outstanding.

Impact of adopting amended standards in 2020

Effective January 1, 2020, Alcon adopted Amendments to IFRS 3, Business Combinations, for transactions occurring on or
after January 1, 2020. The amendments clarify the definition of a business, with the objective of assisting entities to
determine whether a transaction should be accounted for as a business combination or an asset acquisition. The
amendments define a business as an integrated set of activities and assets that is capable of being conducted and
managed for the purpose of providing goods or services to customers, generating investment income (such as dividends
or interest) or generating other income from ordinary activities.
One of the key changes is the introduction of an optional concentration test that permits a simplified assessment of
whether an acquired set of activities and assets is not a business. The introduction of the optional concentration test is a
fundamental change in the determination of a business combination, applied on a transaction-by-transaction basis.
Specifically, when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset
or a group of similar assets, the set is not a business.
If the initial concentration test is not met, or Alcon elects not to apply the concentration test, an assessment focusing on
the existence of inputs and processes that have the ability to create outputs is required. The changes to the definition of a
business will likely result in Alcon accounting for more acquisitions as asset acquisitions.
The adoption of this amended standard on January 1, 2020 did not have a significant impact on our Consolidated Financial
Statements.

New standards and interpretations not yet adopted

There are no IFRS standards or interpretations not yet effective that would be expected to have a material impact on
Alcon.

F-19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

4. Significant transactions
Significant transactions in 2020
Series 2030 notes issuance
On May 27, 2020, Alcon, through its wholly owned subsidiary Alcon Finance Corporation (“AFC”), completed an offering of
$750 million of non-current financial debt consisting of 2.600% senior notes due 2030. The senior notes are described in
Note 17 of these Consolidated Financial Statements.

Significant transactions in 2019

Refinancing of Bridge Facility and Facility A financial debts
On September 23, 2019, Alcon, through its wholly owned subsidiary AFC, refinanced $2 billion of the bridge and term
loans, which had been issued in April 2019, with $500 million of 2.750% senior notes due 2026, $1 billion of 3.000% senior
notes due 2029, and $500 million of 3.800% senior notes due 2049. The bridge and term loans, notes, and refinancing are
described in Note 17 of these Consolidated Financial Statements.

Completion of Spin-off from Novartis through a dividend in kind distribution to Novartis shareholders
The Spin-off was executed on April 9, 2019 as described in Note 1 of these Consolidated Financial Statements. The below
transactions occurred in April 2019, immediately preceding the Spin-off.
On April 2, 2019, Alcon borrowed $3.2 billion against the bridge and other term loans which were executed on March 6,
2019 and are described in Note 17 of these Consolidated Financial Statements. These borrowings increased Alcon's third
party financial debts to $3.5 billion at the date of Spin-off. Through a series of intercompany transactions, Alcon then paid
approximately $3.1 billion in cash to Novartis and its affiliates prior to the Spin-off, decreasing Alcon's net assets to
approximately $20.0 billion at the date of Spin-off.

Surgical - Acquisition of PowerVision, Inc.

On March 13, 2019, Alcon acquired 100% of the outstanding shares and equity of PowerVision, Inc. ("PowerVision"), a
privately-held, US-based company focused on developing accommodative, implantable intraocular lenses. This technology
allows the intraocular lens to respond to natural muscular movements in the eye to alter shape and focus. The
PowerVision acquisition was executed as part of Alcon's commitment to innovation in advanced technology intraocular
lenses ("AT-IOLs").
The fair value of the total purchase consideration was $424 million. This amount consisted of an initial cash payment of
$289 million and the fair value of the probability weighted contingent consideration of $135 million due to PowerVision
shareholders, which they are eligible to receive upon the achievement of specified regulatory and commercialization
milestones. The purchase price allocation resulted in net identifiable assets of $418 million, which consisted of in-process
research & development intangible assets of $505 million, a net deferred tax liability of $93 million, and other net assets of
$6 million. Goodwill of $6 million was also recognized which is attributable to the assembled workforce. Cash paid for the
acquisition, net of cash acquired, was $283 million. The 2019 results of operations following the date of acquisition and
transaction costs for the acquisition were not material.

Significant transactions in 2018

Surgical - Acquisition of TrueVision Systems, Inc.

On December 19, 2018, Alcon acquired 100% of the outstanding shares and equity of TrueVision Systems, Inc.
("TrueVision"), a privately held US-based company. TrueVision developed the 3D scope technology currently used in the
commercially marketed Alcon product NGENUITY. This technology allows retina surgery specialists to have a 3D
visualization of the back of the eye with greater depth and detail than traditional microscopes.
The fair value of the total purchase consideration was $146 million. This amount consists of an initial cash payment of
$110 million and the fair value of the probability weighted contingent consideration of $36 million due to TrueVision
shareholders, which they are eligible to receive upon the achievement of specified development and commercialization
milestones. The purchase price allocation resulted in net identifiable assets of $144 million, which consisted of intangible
assets of $172 million, net deferred tax liability of $29 million and other net assets of $1 million. Goodwill of $2 million was

F-20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

also recognized which is attributable to the assembled workforce. The 2018 results of operations following the date of
acquisition were not material.

Vision Care - Acquisition of Tear Film Innovations, Inc.

On December 17, 2018, Alcon acquired 100% of the outstanding shares and equity of Tear Film Innovations, Inc. ("Tear
Film"), a privately held US-based company. Tear Film is the manufacturer of the iLux device, an innovative therapeutic
device used to treat Meibomian Gland Dysfunction, a leading cause of dry eye.
The fair value of the total purchase consideration was $145 million. This amount consists of an initial cash payment of $79
million and the fair value of the probability weighted contingent consideration of $66 million due to Tear Film previous
owners, which they are eligible to receive upon the achievement of specified development and commercialization
milestones. The purchase price allocation resulted in net identifiable assets of $143 million, which consisted of intangible
assets of $174 million, net deferred tax liability of $37 million, cash of $5 million and other net assets of $1 million.
Goodwill of $2 million was also recognized which is attributable to the assembled workforce. The 2018 results of
operations following the date of acquisition were not material.

5. Segment information
The segment information disclosed in these Consolidated Financial Statements reflects historical results consistent with
the identifiable reportable segments of Alcon and financial information that the Chief Operating Decision Maker ("CODM")
reviews to evaluate segmental performance and allocate resources among the segments. The CODM is the Executive
Committee of Alcon.
The businesses of Alcon are divided operationally on a worldwide basis into two identified reportable segments, Surgical
and Vision Care. Alcon's reportable segments are the same as its operating segments as Alcon does not aggregate any
operating segments in arriving at its reportable segments. As indicated below, certain income and expenses are not
allocated to segments.
Reportable segments are presented in a manner consistent with the internal reporting to the CODM. The reportable
segments are managed separately due to their distinct needs and activities for research, development, manufacturing,
distribution, and commercial execution.
The Executive Committee of Alcon is responsible for allocating resources and assessing the performance of the reportable
segments.
In Surgical, Alcon researches, develops, manufactures, distributes and sells ophthalmic products for cataract surgery,
vitreoretinal surgery, refractive laser surgery and glaucoma surgery. The surgical portfolio also includes implantables,
consumables and surgical equipment required for these procedures and supports the end-to-end procedure needs of the
ophthalmic surgeon.
In Vision Care, Alcon researches, develops, manufactures, distributes and sells daily disposable, reusable, and color-
enhancing contact lenses and a comprehensive portfolio of ocular health products, including products for dry eye, contact
lens care and ocular allergies, as well as ocular vitamins and redness relievers.
Alcon also provides services, training, education and technical support for both the Surgical and Vision Care businesses.
The basis of preparation described in Note  2, and the selected accounting policies mentioned in Note  3 of these
Consolidated Financial Statements are used in the reporting of segment results.
The Executive Committee of Alcon evaluates segmental performance and allocates resources among the segments
primarily based on net sales and segment contribution.
Net identifiable assets are not assigned to the segments in the internal reporting to the CODM, and are not considered in
evaluating the performance of the business segments by the Executive Committee of Alcon.
Segment contribution excludes amortization and impairment charges for acquired product rights or other intangibles,
general and administrative expenses for corporate activities, spin readiness and separation costs, transformation costs,
fair value adjustments of contingent consideration liabilities, past service costs primarily for post-employment benefit plan
amendments, and certain other income and expense items.

F-21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

General  & administration (corporate) includes the costs of the Alcon corporate headquarters, including all related
corporate function costs. For a portion of the historical comparative periods only, the related corporate function costs
were allocated to Alcon from its Former Parent.
Other income and expense items excluded from segment contribution include fair value adjustments of financial assets in
the form of options to acquire a company carried at FVPL, net gains and losses on fund investments and equity securities
valued at FVPL, restructuring costs, legal settlements, integration related expenses and other income and expense items
not attributed to a specific segment.
Certain income and expense items, primarily related to fair value adjustments of contingent consideration liabilities and
option rights and integration related expenses, previously included in segment contribution in the prior year periods have
been reclassified to conform with reporting of segment contribution to the CODM in the current period. The
reclassifications resulted in an increase in Surgical and Vision Care segment contribution of $34 million and $17 million,
respectively, in the year ended December  31, 2019 and an increase in Surgical and Vision Care segment contribution of
$33 million and $6 million, respectively, in the year ended December 31, 2018.

Segmentation - Consolidated income statement

  Surgical Vision Care Company

($ millions) 2020 2019 2020 2019 2020 2019
Net sales to third parties 3,710 4,174 3,053 3,188 6,763 7,362
Other revenues — — 70 146 70 146
Net sales and other revenue 3,710 4,174 3,123 3,334 6,833 7,508
Segment contribution 672 957 419 580 1,091 1,537
Amortization of intangible assets (1,078) (1,084)
Impairment charges on intangible assets (167) —
General & administration (corporate) (232) (216)
Separation costs (217) (237)
Spin readiness costs — (72)
Transformation costs (49) (52)
Fair value adjustments of contingent consideration
liabilities 63 75
Past service costs for post-employment benefit plan
amendments 154 (2)
Other (47) (136)
Operating (loss) (482) (187)
Interest expense (124) (113)
Other financial income & expense (29) (32)
(Loss) before taxes (635) (332)

Included in segment contribution are:

Surgical Vision Care Not allocated Total

($ millions) 2020 2019 2020 2019 2020 2019 2020 2019
Depreciation of property, plant & equipment (122) (112) (171) (155) — — (293) (267)
Depreciation of right-of-use assets (47) (42) (32) (24) — — (79) (66)
Impairment charges on property, plant &
equipment, net (6) (3) — (5) — — (6) (8)
Equity-based compensation (55) (55) (45) (44) (13) (15) (113) (114)

F-22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Surgical Vision Care Company

($ millions) 2019 2018 2019 2018 2019 2018
Net sales to third parties 4,174 3,999 3,188 3,150 7,362 7,149
Sales to former parent — 2 — 2 — 4
Other revenues — — 146 — 146 —
Net sales and other revenues 4,174 4,001 3,334 3,152 7,508 7,153
Segment contribution 957 846 580 600 1,537 1,446
Amortization of intangible assets (1,084) (1,019)
Impairment charges on intangible assets — (378)
General & administration (corporate) (216) (206)
Separation costs (237) —
Spin readiness costs (72) (32)
Transformation costs (52) —
Fair value adjustments of contingent consideration
liabilities 75 62
Past service costs for post-employment benefit plan
amendments (2) (1)
Other (136) (120)
Operating (loss) (187) (248)
Interest expense (113) (24)
Other financial income & expense (32) (28)
(Loss) before taxes (332) (300)

Included in segment contribution are:

Surgical Vision Care Not allocated Company

($ millions) 2019 2018 2019 2018 2019 2018 2019 2018
Depreciation of property, plant & equipment (112) (114) (155) (125) — — (267) (239)
Depreciation of right-of-use assets (42) — (24) — — — (66) —
Impairment charges on property, plant &
equipment, net (3) (1) (5) (1) — — (8) (2)
(1)
Equity-based compensation (55) (45) (44) (36) (15) (12) (114) (93)
(1) Equity-based compensation not allocated to segments in 2018 reflects an estimate of the allocation for corporate functions in the
historical period based on 2019 actual percentages.

F-23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Net sales by segment

($ millions) 2020 2019 2018

 
Surgical      
Implantables 1,126 1,210 1,136
Consumables 1,952 2,304 2,227
Equipment/other 632 660 636
Total Surgical 3,710 4,174 3,999
Vision Care
Contact lenses 1,838 1,969 1,928
Ocular health 1,215 1,219 1,222
Total Vision Care 3,053 3,188 3,150
Net sales to third parties 6,763 7,362 7,149

Geographical information
The following table shows the United States, International and countries that accounted for more than 5% of at least one
of the respective Alcon totals, for net sales for the years ended December 31, 2020, 2019 and 2018, and for selected non-
current assets at December 31, 2020 and 2019:

(2)
Total of selected (3)
  Net sales non-current assets
($ millions (1)
unless indicated
otherwise) 2020 2019 2018 2020 2019
 
Country                    
United States 2,975 44 % 3,055 41 % 2,942 41 % 10,309 47 % 10,559 47 %
International 3,788 56 % 4,307 59 % 4,207 59 % 11,476 53 % 12,014 53 %
thereof:
Switzerland (country of domicile) 55 1 % 56 1 % 57 1 % 9,737 45 % 10,486 46 %
Japan 650 10 % 656 9 % 593 8 % 63 — % 66 — %
China 383 6 % 377 5 % 341 5 % 16 — % 18 — %
Other 2,700 40 % 3,218 44 % 3,216 45 % 1,660 8 % 1,444 6 %
Company total 6,763 100 % 7,362 100 % 7,149 100 % 21,785 100 % 22,573 100 %
(1) International percentages may not sum due to rounding

(2) Net sales from operations by location of third-party customer.

(3) Includes property, plant & equipment, right-of-use assets, goodwill and other intangible assets.

No customer accounted for 10% or more of Alcon's net sales.

F-24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

6. Interest expense and other financial income & expense

Interest expense

($ millions) 2020 2019 2018

Interest expense on financial debts (94) (81) (10)
Interest expense from discounting long-term liabilities (17) (21) (9)
(1)
Interest expense on lease liabilities (13) (11) (5)
Total interest expense (124) (113) (24)
(1) For the year ended December 31, 2018, interest expense on finance leases was included in "Interest expense on lease liabilities".

Other financial income & expense

($ millions) 2020 2019 2018

Interest income 6 8 2
Loss on extinguishment of financial debt — (4) —
Other financial expense (9) (18) (3)
Monetary loss from hyperinflation accounting (4) (2) (1)
Currency result, net (22) (16) (26)
Total other financial income & expense (29) (32) (28)

7. Taxes
(Loss) before taxes

($ millions) 2020 2019 2018

Switzerland (585) (274) (227)
Foreign (50) (58) (73)
Total (loss) before taxes (635) (332) (300)

Current and deferred income tax (expense)/income

($ millions) 2020 2019 2018

Switzerland (14) (34) (77)
Foreign (105) (168) (157)
Current income tax expense (119) (202) (234)
Switzerland 96 (246) 78
Foreign 127 124 229
Deferred tax income/(expense) 223 (122) 307
Total income tax income/(expense) 104 (324) 73

F-25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Analysis of tax rate

Alcon's overall applicable tax rate can change each year since it is calculated as the weighted average tax rate based on
pre-tax (loss)/income of each subsidiary. The main elements contributing to the difference between Alcon's overall
applicable tax rate and the effective tax rate are summarized in the below table.

  2020 2019 2018

($ millions unless indicated otherwise) % % %
Applicable tax rate 98 15.4 % 39 11.7 % 82 27.3 %
Effect of disallowed expenditures (20) (3.1) % (23) (6.9) % (26) (8.7) %
Effect of equity-based compensation (5) (0.8) % (1) (0.3) % (2) (0.7) %
Effect of income taxed at reduced rates 4 0.6 % 2 0.6 % 2 0.7 %
Effect of tax credits and allowances 9 1.4 % 7 2.1 % 13 4.3 %
Effect of adjustments to contingent consideration and
other liabilities 17 2.7 % 11 3.3 % 11 3.7 %
Effect of option payments (6) (0.9) % (12) (3.6) % (17) (5.7) %
(1)
Effect of tax rate changes 10 1.6 % (342) (103.0) % (14) (4.7) %
Effect of changes in uncertain tax positions (8) (1.3) % 10 3.0 % (33) (11.0) %
Effect of other items (10) (1.6) % (2) (0.6) % (4) (1.2) %
(2)
Effect of prior year items 15 2.4 % (13) (3.9) % 61 20.3 %
Effective tax rate 104 16.4 % (324) (97.6)% 73 24.3 %
(1) Effect of tax rate changes in 2019 relates primarily to the adoption of the Swiss Tax Reform which resulted in a non-cash tax increase
in tax expense of $304 million for the re-measurement of the Swiss deferred tax balances and a $31 million re-measurement of US
deferred tax balances as a result of rate changes in the US following legal entity reorganizations executed related to the Spin-off.

(2) In 2020 and 2019, the prior year items relate to changes in certain estimates which resulted in a $15  million tax benefit and $13
million tax expense, respectively. In 2018, the prior year items relate to an out of period income tax benefit of $61 million which
Alcon concluded was not material to the current period or the prior periods to which they relate.

Alcon has a substantial business presence in many countries and is therefore subject to different income and expense
items that are non-taxable (permanent differences) or are taxed at different rates in those tax jurisdictions. This results in
a difference between Alcon's applicable tax rate and effective tax rate as shown in the table above.

The applicable tax rate in 2020, 2019 and 2018 was impacted by pre-tax losses in certain tax jurisdictions. The fluctuation
in taxes and effective tax rates, excluding Swiss tax reform, is primarily due to the geographical pre-tax income and loss
mix across certain tax jurisdictions relative to Alcon's consolidated (loss) before taxes, changes in uncertain tax positions
and certain non-recurring items.

8. Share capital and earnings/(loss) per share

8.1 Share capital
The share capital of the Company as of December 31, 2020 is CHF 20 million, which is comprised of 499.7 million common
shares, nominal value of CHF 0.04 per share.
On November 10, 2020 and November 19, 2019, the Company's Board of Directors approved increases of CHF 320,000
and CHF 120,000, respectively, out of the Company’s authorized share capital through the issuance of 8.0 million and 3.0
million additional registered shares, respectively, nominal value CHF 0.04 per share, to fulfill the future vesting of existing
and future equity-based awards. These additional shares were issued as treasury shares as part of the Company's
authorized share capital according to the authority granted by the shareholders at the Company’s Annual General Meeting
held on January 29, 2019 and reflected in the Company’s Articles of Incorporation as amended. While the transactions
increased the number of shares available for issuance under the Company’s equity-based compensation plans, there was
no immediate impact on the number of shares outstanding or earnings per share calculations at the time of the
transactions. The number of shares outstanding and earnings per share calculations will be impacted as shares are
delivered to plan participants over the course of the next several years.

F-26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

During the year ended December  31, 2020, 0.9 million shares were delivered for awards vesting under the Company's
equity incentive programs. At December 31, 2020, the Company had 489.2 million outstanding common shares and 10.5
million shares held in the Company's treasury share accounts. All of the Company's 10.5 million shares held in treasury
may only be used to fulfill the future vesting of existing and future equity-based awards.

On April 9, 2019, the date of the Spin-off,  488.2 million  shares of the Company's common stock were distributed to
Novartis shareholders and Novartis ADR holders. The shares were distributed from the Company's existing share capital of
488.7 million shares. Subsequent to the Spin-off, 0.1 million shares were delivered for awards vesting under the
Company's equity incentive programs during the year ended December 31, 2019. At December 31, 2019, the Company had
488.3 million outstanding common shares and 3.4 million shares held in the Company's treasury share accounts.
No dividends were declared or paid from April 9, 2019 through December 31, 2020.

8.2 Earnings/(loss) per share

Basic earnings/(loss) per share is computed by dividing net (loss)/income for the period by the weighted average number
of common shares outstanding during the period. For the years ended December  31, 2020 and 2019, the weighted
average number of shares outstanding was 489.0 million and 488.2 million shares, respectively. For periods prior to the
Spin-off, the denominator for basic loss per share uses the number of shares distributed on the date of the Spin-off.
The only potentially dilutive securities are the outstanding unvested equity-based awards under the Company's equity-
based incentive plans, as described in Note 24 to these Consolidated Financial Statements. Except when the effect would
be anti-dilutive, the calculation of diluted earnings per common share includes the weighted average net impact of
unvested equity-based awards. For the years ended December  31, 2020 and 2019, 2.8 million and 1.9 million unvested
equity-based awards, respectively, have been excluded from the calculation of diluted loss per share as their effect would
be anti-dilutive. For periods prior to the Spin-off, the denominator for diluted loss per share uses the number of shares
distributed on the date of the Spin-off.
The average market value of the Company's shares for the purposes of calculating the potentially dilutive effects of
unvested equity-based awards was based on quoted market prices for the period that the unvested awards were
outstanding.

F-27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

9. Property, plant & equipment

The following table summarizes the movements of property, plant & equipment in 2020:

Machinery &
Buildings & Construction other
($ millions) Land improvements in progress equipment Total

Cost
January 1, 2020 33 1,628 755 2,906 5,322
(1)
Additions 2 7 479 74 562
(2)
Disposals and derecognitions — (7) (10) (105) (122)
Reclassifications for assets placed in service — 215 (705) 490 —
Other reclassifications — 11 — (11) —
Currency translation effects — 30 54 71 155
December 31, 2020 35 1,884 573 3,425 5,917

Accumulated depreciation
January 1, 2020 — (618) (8) (1,583) (2,209)
Depreciation charge — (80) — (213) (293)
Impairment charge — — — (6) (6)
(2)
Disposals and derecognitions — 4 — 70 74
Other reclassifications — (7) — 7 —
Currency translation effects — (15) — (43) (58)
December 31, 2020 — (716) (8) (1,768) (2,492)
Net book value at December 31, 2020 35 1,168 565 1,657 3,425
(1) Includes $83 million in non-cash additions.

(2) Derecognition of assets that are no longer used and are not considered to have a significant disposal value or other alternative use.

As of December 31, 2020, commitments for purchases of property, plant & equipment were $136 million. There were no
capitalized borrowing costs.

F-28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The following table summarizes the movements of property, plant and equipment in 2019:

Machinery &
Buildings & Construction other
($ millions) Land improvements in progress equipment Total

Cost
January 1, 2019 60 1,527 657 2,646 4,890
(1)
Additions — 11 514 82 607
Impact of business combinations — — — 1 1
(2)
Disposals and derecognitions — (17) (1) (161) (179)
Transfers with former parent — 4 2 29 35
Reclassifications for assets placed in service — 104 (417) 313 —
Other reclassifications (27) — — — (27)
Currency translation effects — (1) — (4) (5)
December 31, 2019 33 1,628 755 2,906 5,322

Accumulated depreciation
January 1, 2019 (7) (558) (7) (1,518) (2,090)
Depreciation charge — (73) — (194) (267)
Impairment charge — — (1) (7) (8)
(2)
Disposals and derecognitions — 14 — 151 165
Transfers with former parent — (2) — (15) (17)
Other reclassifications 7 — — — 7
Currency translation effects — 1 — — 1
December 31, 2019 — (618) (8) (1,583) (2,209)
Net book value at December 31, 2019 33 1,010 747 1,323 3,113
(1) Includes $56 million in non-cash additions.

(2) Derecognition of assets that are no longer used and are not considered to have a significant disposal value or other alternative use.

As of December 31, 2019, commitments for purchases of property, plant & equipment were $212 million. There were no
capitalized borrowing costs.

F-29
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

10. Goodwill and other intangible assets

The following table summarizes the movements of goodwill and other intangible assets in 2020:

  Intangible assets other than goodwill

Other
intangible
Alcon Acquired Currently assets
brand research & marketed Marketing (including
($ millions) Goodwill name development Technologies products know-how software) Total

Cost
January 1, 2020 8,905 2,980 728 5,369 4,440 5,960 611 20,088
Additions — — 2 — — — 118 120
Disposals and (1)
derecognitions — — (3) — — — (173) (176)
December 31, 2020 8,905 2,980 727 5,369 4,440 5,960 556 20,032

Accumulated amortization
January 1, 2020 — — (3) (4,692) (2,842) (2,146) (174) (9,857)
Amortization charge — — — (507) (249) (238) (84) (1,078)
Disposals and (1)
derecognitions — — 3 — — — 164 167
Impairment charges — — — — (106) — (61) (167)
December 31, 2020 — — — (5,199) (3,197) (2,384) (155) (10,935)
Net book value at
December 31, 2020 8,905 2,980 727 170 1,243 3,576 401 9,097
(1) Derecognitions of assets that are no longer used or being developed and are not considered to have a significant disposal value or
other alternative use.

The following table summarizes the allocation of the net book values of goodwill and other intangible assets by reportable
segment at December 31, 2020:

Intangible assets other than goodwill

Other
intangible
Alcon Acquired Currently assets
brand research & marketed Marketing (including
($ millions) Goodwill name development Technologies products know-how software) Total
Surgical 4,544 — 723 170 247 3,576 237 4,953
Vision Care 4,361 — 4 — 996 — 164 1,164
Not allocated to
segments — 2,980 — — — — — 2,980
Net book value at
December 31, 2020 8,905 2,980 727 170 1,243 3,576 401 9,097

The Surgical and Vision Care reportable segments' cash generating units, to which goodwill is allocated are comprised of a
group of smaller cash generating units. The valuation method of the recoverable amount of the cash generating units, to
which goodwill is allocated, is based on the fair value less costs of disposal.

The Alcon brand name is an intangible asset with an indefinite life. The intangible asset is not allocated to the reportable
segments as it is used to market the Alcon-branded products of both the Surgical and Vision Care businesses. Net sales of
these products together are the grouping of cash generating units, which is used to determine the recoverable amount. The
valuation method is based on the fair value less costs of disposal.

F-30
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The following assumptions were used in the calculations for the recoverable amounts of goodwill and the Alcon brand
name at December 31, 2020 and 2019:

(As a percentage) Surgical Vision Care

Terminal growth rate 3.0 3.0
Discount rate (post-tax) 7.5 7.0
The Surgical and Vision Care reportable segments' terminal growth rate assumption of 3.0% takes into consideration how
the industry is expected to grow, analysis of industry expert reports, and expected relevant changes in demographics for
various markets. The discount rates for both Surgical and Vision Care reportable segments consider Alcon's weighted
average cost of capital, adjusted to approximate the weighted average cost of capital of comparable market participants.
Both the terminal growth rate and the discount rate are consistent with external sources of information.
The fair value less costs of disposal, for all groupings of cash generating units containing goodwill or indefinite life
intangible assets, is reviewed for the impact of reasonably possible changes in key assumptions. In particular Alcon
considered an increase in the discount rate, a decrease in the terminal growth rate and certain negative impacts on the
forecasted cash flows. These reasonably possible changes in key assumptions did not indicate an impairment.
Refer to "Impairment of goodwill, Alcon brand name and definite lived intangible assets" in Note 3 in these Consolidated
Financial Statements for additional disclosures on how Alcon performs goodwill and intangible asset impairment testing.
The following table summarizes the movements of goodwill and other intangible assets in 2019:

Intangible assets other than goodwill

Other
intangible
Alcon Acquired Currently assets
brand research & marketed Marketing (including
($ millions) Goodwill name development Technologies products know-how software) Total

Cost
January 1, 2019 8,899 2,980 249 5,369 4,440 5,960 494 19,492
Impact of business
combinations 6 — 505 — — — — 505
Additions — — 7 — — — 125 132
Reclassifications — — (33) — — — 33 —
Disposals and (1)
derecognitions — — — — — — (41) (41)
December 31, 2019 8,905 2,980 728 5,369 4,440 5,960 611 20,088

Accumulated amortization
January 1, 2019 — — (3) (4,184) (2,592) (1,906) (128) (8,813)
Amortization charge — — — (508) (250) (240) (86) (1,084)
Disposals and (1)
derecognitions — — — — — — 40 40
December 31, 2019 — — (3) (4,692) (2,842) (2,146) (174) (9,857)
Net book value at
December 31, 2019 8,905 2,980 725 677 1,598 3,814 437 10,231
(1) Derecognitions of assets that are no longer used or being developed and are not considered to have a significant disposal value or
other alternative use.

F-31
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The following table summarizes the allocation of the net book values of goodwill and other intangible assets by reportable
segment at December 31, 2019:

Intangible assets other than goodwill

Other
intangible
Alcon Acquired Currently assets
brand research & marketed Marketing (including
($ millions) Goodwill name development Technologies products know-how software) Total
Surgical 4,544 — 721 677 374 3,814 184 5,770
Vision Care 4,361 — 4 — 1,224 — 253 1,481
Not allocated to
segments — 2,980 — — — — — 2,980
Net book value at
December 31, 2019 8,905 2,980 725 677 1,598 3,814 437 10,231

Intangible asset impairment charges

The following table shows the intangible asset impairment charges in 2020, 2019 and 2018:

($ millions) 2020 2019 2018

Surgical (66) — (378)
Vision Care (101) — —
Total (167) — (378)

For the year ended December 31, 2020, impairments amounted to $167 million. An impairment of $61  million was
recognized in the third quarter of 2020, primarily to fully impair a CGU within the Vision Care reportable segment upon
termination of the associated licensing agreement. The impairment was recognized in Research & development in the
consolidated income statement. The remaining amount relates to additional impairments of $106  million, which was
recognized in Cost of net sales in the consolidated income statement in 2020. Of that amount, an impairment of $41 million
was recorded for a currently marketed product CGU within the Vision Care reportable segment due to lower expected
sales. The CGU was reduced to its recoverable amount of $88 million at the time of impairment in the second quarter of
2020. An additional $65  million relates to impairments of a currently marketed product CGU in the Surgical reportable
segment recognized in the first and fourth quarters of 2020 due to lower expected sales. This CGU was also reduced to its
recoverable amount of $65 million at the time of impairment at December 31, 2020.
The recoverable amount of each CGU was determined based on the FVLCOD method. FVLCOD was estimated using net
present value techniques utilizing post-tax cash flows and discount rates as there are no direct or indirect observable prices
in active markets for identical or similar assets. The estimates used in calculating the net present value involve significant
judgment by management and include assumptions with measurement uncertainty. The estimates used are considered to
be consistent with market participant assumptions and include cash flow projections for a five-year period based on
management forecasts, sales forecasts beyond the five-year period extrapolated using long-term expected inflation rates,
discount rate, and future tax rate. Since the cash flow projections are a significant unobservable input, the fair value of the
CGUs were classified as Level 3 in the fair value hierarchy. Actual cash flows and values could vary significantly from
forecasted future cash flows and related values derived using net present value techniques.
There were no intangible asset impairment charges during the year ended December  31, 2019. For the year ended
December 31, 2018, there was a full impairment of $337  million related to the write-down of CyPass within the Surgical
reportable segment due to a voluntary market withdrawal, and an impairment of $39 million related to the write-down of
the Optonol technologies also within the Surgical reportable segment.

F-32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

11. Deferred tax assets and liabilities

Other
Pensions and assets,
Property, other benefit Tax loss provision
plant & Intangible obligations of carry- and
($ millions) equipment assets associates Inventories forwards accruals Total
Gross deferred tax assets at
December 31, 2019 13 6 151 371 110 281 932
Gross deferred tax liabilities at
December 31, 2019 (172) (1,713) (10) (23) — (46) (1,964)
Net deferred tax balance at
December 31, 2019 (159) (1,707) 141 348 110 235 (1,032)
At December 31, 2019 (159) (1,707) 141 348 110 235 (1,032)
(Charged)/credited to income (32) 193 (33) 10 59 26 223
Credited/(charged) to equity — — 7 — 5 (16) (4)

Credited to other comprehensive

income — — 13 — — 3 16
Net deferred tax balance at
December 31, 2020 (191) (1,514) 128 358 174 248 (797)
Gross deferred tax assets at
December 31, 2020 24 5 128 381 174 314 1,026
Gross deferred tax liabilities at
December 31, 2020 (215) (1,519) — (23) — (66) (1,823)
Net deferred tax balance at
December 31, 2020 (191) (1,514) 128 358 174 248 (797)

The below table presents the Net deferred tax balance as of December 31, 2020 after offsetting $627 million of deferred
tax assets and liabilities within the same tax jurisdiction.

($ millions) At December 31, 2020

Deferred tax assets 399
Deferred tax liabilities (1,196)
Net deferred tax balance (797)

F-33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Other
Pensions and assets,
Property, other benefit Tax loss provision
plant & Intangible obligations of carry- and
($ millions) equipment assets associates Inventories forwards accruals Total

Gross deferred tax assets at

December 31, 2018 12 — 125 262 39 235 673
Gross deferred tax liabilities at
December 31, 2018 (94) (1,403) (2) (14) — (18) (1,531)
Net deferred tax balance at
December 31, 2018 (82) (1,403) 123 248 39 217 (858)
At December 31, 2018 (82) (1,403) 123 248 39 217 (858)
(Charged)/credited to income (71) (194) 18 111 50 (36) (122)
Credited to equity — — — — — 25 25

Credited to other comprehensive

income — — 11 — — 5 16
Impact of business combinations — (121) — — 28 — (93)
Other movements (6) 11 (11) (11) (7) 24 —
Net deferred tax balance at
December 31, 2019 (159) (1,707) 141 348 110 235 (1,032)
Gross deferred tax assets at
December 31, 2019 13 6 151 371 110 281 932
Gross deferred tax liabilities at
December 31, 2019 (172) (1,713) (10) (23) — (46) (1,964)
Net deferred tax balance at
December 31, 2019 (159) (1,707) 141 348 110 235 (1,032)

The below table presents the Net deferred tax balance as of December 31, 2019 after offsetting $578 million of deferred
tax assets and liabilities within the same tax jurisdiction.

($ millions) At December 31, 2019

Deferred tax assets 354
Deferred tax liabilities (1,386)
Net deferred tax balance (1,032)

The below table presents deferred tax assets and deferred tax liabilities expected to have an impact on current taxes
payable after more than twelve months.

($ billions) At December 31, 2020 At December 31, 2019

Deferred tax assets 0.6 0.6
Deferred tax liabilities 1.8 1.8

For foreign unremitted earnings retained by consolidated entities for reinvestment, which amounted to $7 billion as of
December 31, 2020, no provision is made for income taxes that would be payable upon the distribution of these earnings.
If these earnings were remitted, an income tax charge could result based on the tax statutes currently in effect.
IFRS exceptions to recognizing taxable temporary differences include an exception to recognizing a deferred tax liability
arising on the initial recognition of goodwill from acquisitions. As such, we have not provided a deferred tax for goodwill
from acquisitions which amounted to $9 billion as of December 31, 2020 and 2019.
The gross value of tax loss carryforwards capitalized as deferred tax assets amount to $921 million (2019: $521 million), of
which $5  million will expire in five years. Of the remaining $916  million, approximately $559  million have an indefinite
carryforward period, and approximately $357 million have a carryforward period that ranges from six to 20 years. All tax
loss carryforwards have been capitalized as deferred tax assets in 2020 as it is probable that sufficient taxable income will
be available for the foreseeable future.

F-34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

No tax losses carried forward have expired in 2020, 2019 or 2018.

Swiss tax reform

On June 30, 2019, Swiss voters approved the Swiss Tax Reform and Old Age Insurance financing bill ("Swiss tax reform"). As
a result, the corporate income tax rate applicable to Alcon’s Swiss profits as of January 1, 2020 increased from
approximately 9.4% in 2019 to approximately 14.2% beginning in 2020. This change resulted in a non-cash increase in tax
expense of $304 million related to the re-measurement of Swiss deferred tax assets and liabilities in 2019.

12. Financial and other non-current assets

The below tables provide details related to Financial assets and Other non-current assets as of December  31, 2020 and
2019.

Financial assets

($ millions) 2020 2019

Long-term financial investments measured at FVOCI 28 31
Long-term financial investments measured at FVPL 12 28
Long-term receivables from customers 117 136
Minimum lease payments from finance lease agreements 39 78
Long-term loans, advances, and security deposits 22 34
Total financial assets 218 307

Minimum lease payments from finance lease agreements

The following table shows the receivables of the gross investments in finance leases and the net present value of the
minimum lease payments, as well as unearned finance income, related to surgical equipment lease arrangements. The
finance income is recorded in "Other income".

2020 2019
Total Unearned Net Total Unearned Net
future interest Present book future interest Present book
($ millions) payments income value Provision value payments income value Provision value
Not later(1)than
one year 33 (3) 30 (1) 29 51 (4) 47 (1) 46
Between one
and five years 55 (3) 52 (18) 34 94 (5) 89 (23) 66
Later than
five years 32 — 32 (27) 5 46 (1) 45 (33) 12
Total 120 (6) 114 (46) 68 191 (10) 181 (57) 124
(1) The current portion of the minimum lease payments is recorded in trade receivables or other current assets (to the extent not yet invoiced).

Other non-current assets

($ millions) 2020 2019

Deferred compensation plans 137 122
Prepaid post-employment benefit plans 24 13
Other non-current assets 50 50
Total other non-current assets 211 185

F-35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

13. Inventories
The amount of inventory recognized as an expense in "Cost of net sales" in the consolidated income statement during
2020 amounted to $2.1 billion (2019: $2.2 billion, 2018: $2.2 billion). The amount of inventory recognized as an expense in
"Cost of other revenues" in the consolidated income statement during 2020 amounted to $63 million (2019: $127 million,
2018: $0 million).

($ millions) 2020 2019

Raw material, consumables 278 286
Work in progress 136 101
Finished products 1,230 1,118
Total inventories 1,644 1,505
Alcon recognized inventory provisions and write-downs amounting to $304  million in 2020 (2019: $181  million, 2018:
$170 million) and reversed inventory provisions amounting to $91 million (2019: $65 million, 2018: $56 million). Inventory
provisions mainly relate to the adjustment of inventory balances to their net realizable value based on the forecasted
sales. Reversals are made when the products become saleable.

14. Trade receivables

Trade receivable balances include sales to wholesalers, retailers, doctor groups, private health systems, government
agencies, pharmacy benefit managers and government-supported healthcare systems. The following tables provide details
related to Trade receivables as of December  31, 2020 and 2019, including trade receivables that are not overdue as
specified in the payment terms and conditions established with Alcon's customers, as well as an analysis of overdue
amounts, expected credit loss rates and related provisions for doubtful trade receivables:

2020
Trade Expected
Gross trade receivables, credit loss
($ millions) receivables Provision net rates
Not overdue 1,137 (2) 1,135 0.2 %
Past due for not more than one month 109 (1) 108 0.9 %
Past due for more than one month but less than three months 67 (2) 65 3.0 %
Past due for more than three months but less than six months 36 (2) 34 5.6 %
Past due for more than six months but less than one year 31 (18) 13 58.1 %
Past due for more than one year 49 (43) 6 87.8 %
Total 1,429 (68) 1,361

2019
Trade Expected
Gross trade receivables, credit loss
($ millions) receivables Provision net rates
Not overdue 1,135 (1) 1,134 0.1 %
Past due for not more than one month 118 (1) 117 0.8 %
Past due for more than one month but less than three months 81 (1) 80 1.2 %
Past due for more than three months but less than six months 47 (2) 45 4.3 %
Past due for more than six months but less than one year 21 (12) 9 57.1 %
Past due for more than one year 36 (31) 5 86.1 %
Total 1,438 (48) 1,390

F-36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The following table summarizes the movement in the provision for doubtful trade receivables:

($ millions) 2020 2019 2018

January 1 (48) (54) (77)
Transfers with former parent — — 4
Provisions for doubtful trade receivables charged to the
consolidated income statement (48) (17) (17)
Utilization of provisions for doubtful trade receivables 15 7 16
Reversal of provisions for doubtful trade receivables 14 15 16
Currency translation effects (1) 1 4
December 31 (68) (48) (54)

The majority of the outstanding trade receivables from Greece, Italy, Portugal, Spain, Brazil, Russia, Turkey, Saudi Arabia,
and Argentina (the closely monitored countries) are due directly from local governments or from government-funded
entities except for Russia, Brazil, and Turkey. We evaluate trade receivables in these countries for potential collection risk.
Should there be a substantial deterioration in our economic exposure with respect to those countries, we may increase
our level of provisions by updating our expected loss provision or may change the terms of trade on which we operate.
The following table shows the gross trade receivables balance from these closely monitored countries as of December 31,
2020 and 2019, the amounts that are past due for more than one year and the related amount of the provisions for
doubtful trade receivables that have been recorded:

($ millions) 2020 2019

Total balance of gross trade receivables from closely monitored countries 211 209
Past due for more than one year 14 10
Provisions for doubtful trade receivables (15) (13)
Trade receivables include amounts denominated in the following major currencies:

($ millions) 2020 2019

US dollar (USD) 477 463
Euro (EUR) 214 243
Japanese yen (JPY) 168 168
Chinese yuan (CNY) 121 102
Indian rupee (INR) 30 33
Canadian dollar (CAD) 32 30
Australian dollar (AUD) 29 29
British pound (GBP) 21 24
Russian ruble (RUB) 28 34
South Korean won (KRW) 31 29
Other currencies 210 235
Total trade receivables, net 1,361 1,390

F-37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

15. Other current assets

The following table provides details related to Other current assets as of December 31, 2020 and 2019:

($ millions) 2020 2019

Current portion of long-term financial investments measured at FVPL 12 33
Current portion of long-term receivables from customers 107 122
Current portion of minimum lease payments from finance lease agreements 29 46
Prepaid expenses 93 89
Other receivables, security deposits and current assets 88 147
Derivative financial instruments 3 1
VAT receivable 72 64
Total other current assets 404 502

16. Right-of-use assets and Lease liabilities

Right-of-use assets
Right-of-use assets as of December 31, 2020 and 2019 were comprised of the following:

($ millions) 2020 2019

Land 20 20
Buildings 310 277
Machinery & equipment and other assets 28 27
Total right-of-use assets 358 324

Depreciation charges of $79 million and $66 million for the years ended December 31, 2020 and 2019, respectively, are
shown in the table below by underlying class of asset:

($ millions) 2020 2019

Land 1 1
Buildings 59 47
Machinery & equipment and other assets 19 18
Total 79 66
Additions to right-of-use assets amounted to $107 million and $116 million for the years ended December 31, 2020 and
2019, respectively.

Lease liabilities
Lease liabilities totaled $385 million as of December  31, 2020, including $70 million in current lease liabilities and $315
million in non-current lease liabilities. The contractual maturities of the undiscounted lease liabilities as of December 31,
2020 and December 31, 2019, are as follows:

Lease liabilities undiscounted

($ millions) 2020 2019
Not later than one year 82 73
Between one and five years 203 176
Later than five years 203 200
Total lease liabilities undiscounted 488 449

F-38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Lease liabilities
($ millions) 2020 2019
Not later than one year 70 61
Between one and five years 168 140
Later than five years 147 140
Total lease liabilities 385 341

Additional disclosures
The following table provides additional disclosures related to right-of-use assets and lease liabilities:

($ millions) 2020 2019

Interest expense on lease liabilities 13 11
Expense on short-term, low value and variable leases 4 3
Total cash outflows for leases 85 59
Thereof:
(1)
Lease liability payments 69 52
(2)
Interest payments 12 5
(2)
Short-term and low value lease payments 4 2
(1) Reported as cash outflows from financing activities net of lease incentives received

(2) Included within total net cash flows from operating activities

F-39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

17. Non-current and current financial debts

The below table summarizes non-current and current Financial debts outstanding as of December 31, 2020 and 2019.

($ millions) 2020 2019

Non-current financial debts
Facility B 794 793
Facility C 429 391
Local facilities (Japan) — 55
Series 2026 notes 496 495
Series 2029 notes 992 991
Series 2030 notes 744 —
Series 2049 notes 494 493
Revolving facility — —
Total non-current financial debts 3,949 3,218

Current financial debts

Local facilities:
Japan 101 115
All others 49 101
Other short-term financial debts 12 29
Derivatives 7 16
Total current financial debts 169 261
Total financial debts 4,118 3,479
Interest expense recognized for Financial debts, excluding lease liabilities, was $94 million, $81 million and $10 million for
the years ended December 31, 2020, 2019 and 2018, respectively. The weighted average interest rate on Financial debts
was 2.3% in 2020 and 2.9% in 2019.

Bridge Loan, Term Loan, and Revolving Credit Facilities

On March 6, 2019, Alcon entered into a $1.5 billion unsecured 364-day bridge loan facility with two extension options, each
for a period of 180 days (the "Bridge Facility"), a $0.5 billion unsecured three-year term loan facility ("Facility A"), a $0.8
billion unsecured five-year term loan facility ("Facility B"), a $0.4 billion (or the equivalent in EUR) unsecured five-year term
loan facility ("Facility C") and a $1.0 billion unsecured five-year committed multicurrency revolving credit facility (the
"Revolving Facility" and, together with the Bridge Facility, Facility A, Facility B and Facility C, the "Facilities"). On April 2, 2019,
Alcon borrowed $3.2 billion against the bridge and other term loans. In January 2020, the $1.0 billion Revolving Facility was
extended to March 2025. The Revolving Facility remained undrawn as of December 31, 2020.
The Facilities bear interest rates equal to the interest rate benchmark (prevailing Euro Interbank Offered Rate (“EURIBOR”)
in the case of loans denominated in EUR, USD prevailing London Interbank Offered Rate (“LIBOR”) in the case of loans
denominated in USD and CHF LIBOR in the case of loans denominated in CHF), plus an applicable margin.
Alcon and certain of its subsidiaries are the borrowers under the Facilities and Alcon guarantees the borrowings of such
subsidiaries under the Facilities. In addition, the Revolving Facility includes a mechanism through which certain
subsidiaries, as approved by the lenders, can accede as a borrower.
Alcon is permitted to voluntarily prepay loans under the Facilities, in whole or in part, without penalty or premium subject
to certain minimum prepayment amounts and the payment of accrued interest on the amount prepaid and customary
breakage costs. The Bridge Facility had a mandatory prepayment provision, pursuant to which Alcon would have to apply
proceeds from relevant debt capital markets transactions in prepayment under the Bridge Facility.

F-40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The terms of the Facilities include certain events of default and covenants customary for investment grade credit facilities,
including restrictive covenants that will limit, among other things, the grant or incurrence of security interests over any of
Alcon's assets, the incurrence of certain indebtedness and entry into certain fundamental change transactions. The
Facilities do not contain any financial covenants.

Refinancing of Bridge Facility and Facility A

On September  23, 2019, AFC issued Senior Notes ("Notes") with maturity dates in 2026, 2029, and 2049, which are
guaranteed by the Company. The Notes are unsecured senior obligations of AFC issued in a private placement. The total
principal amount of the Notes is $2.0 billion. The Notes were issued at a discount totaling $7 million, which was recorded
as a reduction to the carrying value of the Notes and will be amortized to Interest expense over the term of the Notes. AFC
incurred $15 million of debt issuance costs, which were recorded as a reduction to the carrying value of the Notes and will
be amortized to Other financial income & expense over the term of the Notes.
The Notes consist of the following:
• Series 2026 Notes - $0.5 billion due in 2026 issued at 99.5%, 2.750% interest is payable twice per year in March
and September, beginning in March 2020.
• Series 2029 Notes - $1.0 billion due in 2029 issued at 99.6%, 3.000% interest is payable twice per year in March
and September, beginning March 2020.
• Series 2049 Notes - $0.5 billion due in 2049 issued at 99.8%, 3.800% interest is payable twice per year in March
and September, beginning March 2020.
The funds borrowed through the issuance of the Notes were used to repay the $1.5 billion Bridge Facility and $0.5 billion
Facility A. The transaction was accounted for as an extinguishment of a liability. Alcon recognized a loss of $4 million
associated with the write-off of unamortized deferred financing costs due to extinguishment of the original financing. This
loss on extinguishment was recognized in Other financial income & expense.

Series 2030 notes issuance

On May 27, 2020, AFC issued senior notes due in 2030 (“Series 2030 Notes”), which are guaranteed by the Company. The
Series 2030 Notes are unsecured senior obligations of AFC issued in a private placement and rank equally in right of
payment with the Series 2026, Series 2029, and Series 2049 notes. The total principal amount of the Senior 2030 Notes is
$750 million. The Senior 2030 Notes were issued at 99.843% with 2.600% interest payable twice per year in May and
November, beginning in November 2020. The Series 2030 Notes were issued at a discount totaling $1 million, which was
recorded as a reduction to the carrying value of the Series 2030 notes and will be amortized to Interest expense over the
term of the Series 2030 Notes. AFC incurred $5 million of debt issuance costs, which were recorded as a reduction to the
carrying value of the Series 2030 Notes and will be amortized to Other financial income & expense over the term of the
Series 2030 Notes.

Local Bilateral Facilities

In February 2019, Alcon entered into a number of local bilateral facilities in different countries, with the largest share of
borrowings in Japan. As of December 31, 2020, a total of $150 million was drawn, including $101 million on two lines in
Japan and are classified as current with a maturity date of one year or less. There was $115 million undrawn on the
facilities in Japan as of December 31, 2020.

F-41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Maturity of contractual undiscounted cash flows and interest payment commitments

The following table provides details on the maturity of the contractual undiscounted cash flows for Alcon's borrowings as
of December 31, 2020 and 2019:

2020 2019
Nominal amount - Nominal amount -
Current and Current and
non-current non-current
($ millions) financial debt Derivatives Total financial debt Derivatives Total
Not later than one year 162 7 169 245 16 261
Between one and five years 1,231 — 1,231 1,247 — 1,247
Later than five years 2,750 — 2,750 2,000 — 2,000
Total cash flows 4,143 7 4,150 3,492 16 3,508
Unamortized debt discount and
issuance costs (32) — (32) (29) — (29)
Total carrying value 4,111 7 4,118 3,463 16 3,479

The following table provides details on the maturity of the future contractual interest payments commitments as of
December 31, 2020 and 2019:

($ millions) 2020 2019

Not later than one year 96 94
Between one and five years 357 336
Later than five years 687 653
Total cash flows 1,140 1,083

F-42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

18. Financial instruments - additional disclosures

The below table provides detail related to financial instruments as of December 31, 2020 and 2019.

($ millions) Note 2020 2019

Cash and cash equivalents
Cash in current accounts 262 392
Cash held in time deposits and money market funds 1,295 430
Total Cash and cash equivalents 1,557 822
Financial assets - measured at fair value through other comprehensive income ("FVOCI")
Long-term financial investments 12 28 31
Total financial assets - measured at FVOCI 28 31
(1)
Financial assets - measured at amortized costs
Trade receivables 14 1,361 1,390
Income tax receivables 21 17
Other current assets (excluding prepaid expenses and other current assets measured at FVPL) 15 296 379
Long-term receivables from customers 12 117 136
Non-current minimum lease payments from finance lease agreements 12 39 78
Long-term loans, advances, and security deposits 12 22 34
Total financial assets - measured at amortized costs 1,856 2,034
Financial assets - measured at fair value through profit and loss ("FVPL")
Deferred compensation assets 12 137 122
Current portion of long-term financial investments 15 12 33
Derivative financial instruments 15 3 1
Long-term financial investments 12 12 28
Total financial assets - measured at FVPL 164 184
Total financial assets 3,605 3,071
(1)
Financial liabilities - measured at amortized cost or cost
Current financial liabilities
Financial debts 17 162 245
Lease liabilities 16 70 61
Trade payables 876 833
Total current financial liabilities - measured at amortized cost or cost 1,108 1,139
Non-current financial liabilities
Financial debts 17 3,949 3,218
Lease liabilities 16 315 280
Total non-current financial liabilities - measured at amortized cost or cost 4,264 3,498
Total financial liabilities - measured at amortized cost or cost 5,372 4,637
Financial liabilities - measured at FVPL
Contingent consideration liabilities 19/20 157 243
Derivative financial instruments 17 7 16
Total financial liabilities - measured at FVPL 164 259
Total financial liabilities 5,536 4,896
Net financial assets and financial liabilities (1,931) (1,825)
(1) The carrying amount is a reasonable approximation of fair value, with the exception of the Series 2026, 2029, 2030 and 2049 notes recorded in Non-
current financial debts with a fair value of $3,036 million and carrying value of $2,726 million as of December 31, 2020 and a fair value of $2,049 million
and carrying value of $1,979 million as of December 31, 2019. The fair value of notes was determined using level 2 inputs. The notes were valued using
a quoted market price for such notes, which have low trading volumes.

F-43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Fair value by hierarchy

As required by IFRS, financial assets and liabilities recorded at fair value in the Consolidated Financial Statements are
categorized based upon the level of judgment associated with the inputs used to measure their fair value. There are three
hierarchical levels, based on an increasing amount of judgment associated with the inputs to derive fair value for these
financial assets and liabilities, which are as follows:
Financial assets and liabilities carried at Level 1 fair value hierarchy are listed in active markets.
Financial assets and liabilities carried at Level 2 fair value hierarchy are valued using corroborated market data.
Level 1 financial assets include money market funds and deferred compensation assets. There were no financial liabilities
carried at Level 1 fair value, and Level 2 financial assets and liabilities include derivative financial instruments.
Investments in money market funds are classified within Level 1 of the fair value hierarchy because they are valued using
quoted market prices. The investments are classified as Cash & cash equivalents within our Consolidated Balance Sheet.
Deferred compensation investments for certain employee benefit plans are held in a rabbi trust and dedicated to pay the
benefits under the associated plans but are not considered plan assets as the assets remain available to creditors of Alcon
in certain events, including bankruptcy. Rabbi trust assets primarily consist of investments in mutual funds. These assets
are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.
Level 3 inputs are unobservable for the financial asset or liability. The financial assets and liabilities generally included in
Level 3 fair value hierarchy are equity securities and convertible notes receivable of private companies measured at FVOCI,
and fund investments, options to acquire private companies, and contingent consideration liabilities measured at FVPL.

F-44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The following tables summarize financial assets and liabilities measured at fair value on a recurring basis or at amortized
cost or cost as of December 31, 2020 and 2019.

  December 31, 2020

Valued at
amortized
cost or
($ millions) Level 1 Level 2 Level 3 cost Total
Non-current financial assets
Long-term financial investments measured at FVOCI — — 28 — 28
Long-term financial investments measured at FVPL — — 12 — 12
Long-term receivables from customers — — — 117 117
(1)
Deferred compensation assets 137 — — — 137
Non-current minimum lease payments from finance lease agreements — — — 39 39
Long-term loans, advances, and security deposits — — — 22 22
Total non-current financial assets 137 — 40 178 355
Current financial assets
Money market funds 625 — — — 625
(2)
Current portion of long-term financial investments measured at FVPL — — 12 — 12
(2)
Current portion of long-term receivables from customers — — — 107 107
Current portion
(2)
of minimum lease payments from finance lease
agreements — — — 29 29
(2)
Other receivables, security deposits and current assets — — — 88 88
(2)
VAT receivables — — — 72 72
(2)
Derivative financial instruments — 3 — — 3
Total current financial assets 625 3 12 296 936
Total financial assets at fair value and amortized cost or cost 762 3 52 474 1,291
Financial liabilities
Contingent consideration liabilities — — (157) — (157)
Non-current financial debt — — — (3,949) (3,949)
Current financial debt — — — (162) (162)
Derivative financial instruments — (7) — — (7)
Total financial liabilities at fair value and amortized cost — (7) (157) (4,111) (4,275)

(1) Recorded in Other non-current assets.

(2) Recorded in Other current assets.

F-45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

December 31, 2019

Valued at
amortized
cost or
($ millions) Level 1 Level 2 Level 3 cost Total
Non-current financial assets
Long-term financial investments measured at FVOCI — — 31 — 31
Long-term financial investments measured at FVPL — — 28 — 28
Long-term receivables from customers — — — 136 136
(1)
Deferred compensation assets 122 — — — 122
Non-current minimum lease payments from finance lease agreements — — — 78 78
Long-term loans, advances, and security deposits — — — 34 34
Total non-current financial assets 122 — 59 248 429
Current financial assets
Money market funds 120 — — — 120
(2)
Current portion of long-term financial investments measured at FVPL — — 33 — 33
(2)
Current portion of long-term receivables from customers — — — 122 122
Current portion
(2)
of minimum lease payments from finance lease
agreements — — — 46 46
(2)
Other receivables, security deposits and current assets — — — 147 147
(2)
VAT receivables — — — 64 64
(2)
Derivative financial instruments — 1 — — 1
Total current financial assets 120 1 33 379 533
Total financial assets at fair value and amortized cost or cost 242 1 92 627 962
Financial liabilities
Contingent consideration liabilities — — (243) — (243)
Non-current financial debt — — — (3,218) (3,218)
Current financial debt — — — (245) (245)
Derivative financial instruments — (16) — — (16)
Total financial liabilities at fair value and amortized cost — (16) (243) (3,463) (3,722)
(1) Recorded in Other non-current assets.

(2) Recorded in Other current assets

There were no transfers of financial instruments between levels in the fair value hierarchy during the years ended
December 31, 2020 and 2019.

F-46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Level 3 financial instruments measured at fair value on a recurring basis

Financial assets

Long-term financial
investments measured Financial investments
at FVOCI measured at FVPL
($ millions) 2020 2019 2020 2019
Balance as of January 1 31 19 61 98
Additions 7 17 2 34
Sales — — — (7)
(Losses) recognized in consolidated statement of
comprehensive loss (10) (7) — —
Unrealized gains/(losses) in consolidated income statement — — (5) (3)
Amortization — — (34) (61)
Reclassification — 2 — —
Balance as of December 31 28 31 24 61
If the pricing parameters for the Level 3 input were to change for Long-term financial investments measured at FVOCI and
Financial investments measured at FVPL by 10% positively or negatively, this would change the amount recorded in the
2020 Consolidated Statement of Comprehensive Loss by $4 million.

Financial liabilities

Contingent consideration liabilities

($ millions) 2020 2019
Balance as of January 1 (243) (162)
Additions — (135)
Accretion for passage of time (17) (21)
Adjustments for changes in assumptions 63 75
Payments 40 —
Balance as of December 31 (157) (243)

Changes in contingent consideration liabilities in the current year include adjustments for changes in assumptions of $63
million primarily related to revised expectations for achievement of development and commercial milestones and timing
of settlement for milestones, and payments of $40 million related to achievement of development milestones. As of
December 31, 2020, the probability of success for various development and commercial milestones ranges from 55% to
100% and the maximum remaining potential payments related to contingent consideration from business combinations is
$470 million, plus other amounts calculated as a percentage of commercial sales in cases where there is not a specified
maximum contractual payment amount. The estimation of probability typically depends on factors such as technical
milestones or market performance and is adjusted for the probability of payment. If material, probable payments are
appropriately discounted to reflect the impact of time.
Changes in contingent consideration liabilities in the prior year included additions of $135 million related to the acquisition
of PowerVision in March 2019 as described in Note 4 of these Consolidated Financial Statements. The prior year also
included changes in assumptions of $75 million primarily related to revised expectations for achievement of commercial
milestones and changes in assumptions related to the expected timing of settlement for development milestones. As of
December 31, 2019, the probability of success for various development and commercial milestones ranged from 70% to
100% and the maximum remaining potential payments related to contingent consideration from business combinations
was $510  million, plus other amounts calculated as a percentage of commercial sales in cases where there is not a
specified maximum contractual payment amount.

Contingent consideration liabilities are reported in “Provisions & other non-current liabilities" and "Provisions & other
current liabilities” based on the projected timing of settlement which is estimated to range from 2021 through 2032 for
contingent consideration obligations as of December 31, 2020.

F-47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

For the determination of the fair value of a contingent consideration various unobservable inputs are used. A change in
these inputs might result in a significantly higher or lower fair value measurement. The inputs used are, among others, the
probability of success, sales forecast and assumptions regarding the discount rate, timing and different scenarios of
triggering events. The significance and usage of these inputs to each contingent consideration may vary due to differences
in the timing and triggering events for payments or in the nature of the asset related to the contingent consideration.
As the most significant Level  3 input, if the probability of success were to change by 10% positively or negatively, this
would change the amounts recorded for contingent consideration payables in the 2020 Consolidated Income Statement
by $23 million and $24 million respectively.

Derivatives
As of December 31, 2020, the net value of unsettled positions for derivative forward contracts and swaps was $4 million,
including $3 million of unrealized gains in Other current assets and $7 million of unrealized losses in Current financial
debts. As of December 31, 2019, the net value of unsettled positions for derivative forward contracts and swaps was $15
million, including $1 million of unrealized gains in Other current assets and $16 million of unrealized losses in Current
financial debts. There are master agreements with several banking counterparties for derivatives financial instruments,
however, there were no derivative financial instruments meeting the offsetting criteria under IFRS as of December  31,
2020 or December 31, 2019.

Nature and extent of risks arising from financial instruments

COVID-19 has resulted in updates to our assessment of the nature and extent of certain risks arising from financial
instruments, as outlined below.

Market risk
Alcon is exposed to market risk, primarily related to foreign currency exchange rates, interest rates and the market value
of the investments of liquid funds. Alcon actively monitors and seeks to reduce, where it deems it appropriate to do so,
fluctuations in these exposures. It is Alcon policy and practice to enter into a variety of derivative financial instruments to
manage the volatility of these exposures and to enhance the yield on the investment of liquid funds. Alcon does not enter
into any financial transactions containing a risk that cannot be quantified at the time the transaction is concluded. In
addition, Alcon does not sell short assets it does not have, or does not know it will have, in the future. Alcon only sells
existing assets or enters into transactions and future transactions (in the case of anticipatory hedges) that it confidently
expects it will have in the future, based on past experience. In the case of liquid funds, Alcon writes call options on assets it
has, or writes put options on positions it wants to acquire and has the liquidity to acquire. Alcon expects that any loss in
value for these instruments generally would be offset by increases in the value of the underlying transactions.

Foreign currency exchange rate risk

Alcon uses the US Dollar as its reporting currency and is therefore exposed to foreign currency exchange movements,
primarily in Euros, Japanese Yen, Chinese Renminbi, Swiss Francs, and emerging market currencies. Fluctuations in the
exchange rate between the US Dollar and other currencies can have a significant effect on both the Alcon’s results of
operations, including reported sales and earnings, as well as on the reported value of our assets, liabilities and cash flows.
This, in turn, may significantly affect the comparability of period-to-period results of operations.
Alcon manages its global currency exposure by engaging in hedging transactions where management deems appropriate
(forward contracts and swaps). Specifically, Alcon enters into various contracts that reflect the changes in the value of
foreign currency exchange rates to preserve the value of assets.

Interest rate risk

Alcon's exposure to cash flow interest rate risks arises mainly from non-current financial debts at variable rates. Alcon may
enter into interest rate swap agreements, in which it exchanges periodic payments based on a notional amount and
agreed-upon fixed and variable rate interests. If the interest rates had been higher / lower by 1%, the loss before taxes
would have been higher / lower by $14 million from the impacts of interest expense based on the change in the interest
rate.

F-48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Commodity price risk

Alcon has only a very limited exposure to price risk related to anticipated purchases of certain commodities used as raw
materials by Alcon's businesses. A change in those prices may alter the gross margin of a specific business, but generally
by not more than 10% of the margin and thus below Alcon's risk management tolerance levels. Accordingly, Alcon does
not enter into significant forward and option contracts to manage fluctuations in prices of anticipated purchases.

Credit risk
Credit risks arise from the possibility that customers may not be able to settle their obligations as agreed. To manage this
risk, Alcon periodically assesses credit risk, assigns individual credit limits, and takes actions to mitigate credit risk where
appropriate.
With the continued adverse economic conditions in relation to the COVID-19 pandemic, there is an increased credit risk
due to an increase in expected credit losses. Provisions for expected credit losses have been reflected in the Consolidated
Financial Statements as of December  31, 2020. Alcon will continue to assess forward-looking estimates of potential
increased default rates and potential increase in lifetime expected credit losses. For further information, refer to Note 14
of these Consolidated Financial Statements.
No customer accounted for 10% or more of Alcon's net sales in 2020, 2019, or 2018.

Liquidity risk
Liquidity risk is defined as the risk that Alcon may not be able to settle or meet its obligations on time or at a reasonable
price. Alcon Treasury is responsible for liquidity, funding and settlement management. In addition, liquidity and funding
risks, and related processes and policies, are overseen by management. Alcon manages its liquidity risk on a consolidated
basis according to business needs, tax, capital or regulatory considerations, if applicable, through numerous sources of
financing in order to maintain flexibility. Management monitors Alcon's net debt or liquidity position through rolling
forecasts on the basis of expected cash flows.
Since March 2020, Alcon has experienced delayed collections from customers. While collections improved in the second
half of the year, with the continued adverse economic conditions in relation to the COVID-19 pandemic, there is an
increased liquidity risk due to further potential delays or reductions in collections from our customers or increased
difficulties in accessing the capital or debt markets. In response to the increased liquidity risk, on May 27, 2020, AFC
completed an offering of $750 million of 2.600% senior notes due in 2030, increasing Alcon's overall liquidity. In addition,
Alcon’s revolving credit facility with total availability of $1.0 billion remained undrawn as of December  31, 2020 with no
current limitations on borrowing, and management has not identified any changes in Alcon's ability to access the capital or
debt markets.
For further information on maturity of the contractual undiscounted cash flows for Alcon's borrowings and interest on
borrowing, refer to Note 17 of these Consolidated Financial Statements.

19. Provisions and other non-current liabilities

The below table provides details related to Provisions and other non-current liabilities as of December 31, 2020, and 2019.

($ millions) Note 2020 2019

Accrued liability for employee benefits:
Defined benefit pension plans 23 339 291
Other long-term employee benefits and deferred compensation 152 140
Other post-employment benefits 23 332 423
Provisions for litigation and other legal matters — —
Contingent consideration 18 142 208
Other non-current liabilities 95 106
Total provisions and other non-current liabilities 1,060 1,168
Alcon believes that its total provisions are adequate based upon currently available information; however, given the
inherent difficulties in estimating liabilities in this area, Alcon may incur additional costs beyond the amounts provided.
Management believes that such additional amounts, if any, would not be material to Alcon's financial condition but could
be material to the results of operations or cash flows in a given period.

F-49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Provisions for litigation and other legal matters

Alcon has established provisions for certain litigation and other legal matters, where a potential cash outflow is probable
and a reliable estimate can be made of the amount of the outflow. These provisions represent the current best estimate of
the total financial effect for these matters. Potential cash outflows reflected in a provision may be fully or partially off-set
by insurance in certain circumstances.
Alcon has not established provisions for potential damage awards for certain additional legal claims if Alcon currently
believes that a payment is either not probable or cannot be reliably estimated. A number of other legal matters are in such
early stages or the issues presented are such that Alcon has not made any provisions since it cannot currently estimate
either a potential outcome or the amount of any potential losses. For these reasons, among others, Alcon generally is
unable to make a reliable estimate of possible loss with respect to such cases. It is therefore not practicable to provide
information about the potential financial impact of those cases.
There might also be cases for which Alcon was able to make a reliable estimate of the possible loss or the range of
possible loss, but Alcon believes that publication of such information on a case-by-case basis would prejudice Alcon's
position in ongoing legal proceedings or in any related settlement discussions. Accordingly, in such cases, information
would be disclosed with respect to the nature of the contingency, but no disclosure is provided as to an estimate of the
possible loss or range of possible loss.
Note 26 contains additional information on contingencies.

Summary of significant legal proceedings

Under the Separation and Distribution Agreement Alcon entered into with Novartis in connection with the separation and
the Spin-off, Alcon and Novartis agreed, subject to certain conditions and except to the extent otherwise described below
with respect to any matter, to indemnify the other party and its directors, officers, associates and other representatives
against any pending or future liabilities or claims that constitute either a Novartis Group liability, in the case of Novartis, or
an Alcon liability, in the case of Alcon, under the terms of the Separation and Distribution Agreement, based on whether
such claim or liability relates to the Novartis business and products or Alcon's respective business and products.
A number of Alcon companies are, and will likely continue to be, subject to various legal proceedings and investigations
that arise from time to time, including proceedings regarding product liability, sales and marketing practices, commercial
disputes, employment, and wrongful discharge, antitrust, securities, health and safety, environmental, tax, international
trade, privacy, and intellectual property matters. As a result, Alcon may become subject to substantial liabilities that may
not be covered by insurance and could affect our business, financial position and reputation. While Alcon does not believe
that any of these legal proceedings will have a material adverse effect on its financial position, litigation is inherently
unpredictable and large judgments sometimes occur. As a consequence, Alcon may in the future incur judgments or enter
into settlements of claims that could have a material adverse effect on its results of operations or cash flow. The following
is a summary as of February 23, 2021 of significant legal proceedings of the Alcon business to which Alcon or any of its
subsidiaries are a party.

Asia / Russia investigation

In 2017 and 2018, Alcon and Novartis Group companies, as well as certain present and former executives and associates
of Alcon and Novartis, received document requests and subpoenas from the US Department of Justice (“DoJ”) and the SEC
requesting information concerning Alcon accounting, internal controls and business practices in Asia and Russia, including
revenue recognition for surgical equipment and related products and services and relationships with third party
distributors, both before and after Alcon became part of the Novartis Group.  The Investigations by the DoJ and the SEC
have concluded. On June 25, 2020, Alcon entered into a three-year Deferred Prosecution Agreement with the DoJ
regarding a charge that Alcon Pte Ltd. conspired to falsify financial books and records in violation of the US Foreign
Corrupt Practices Act. The charge relates to payments made by a former distributor to health care providers in Vietnam
between 2007 and 2014. Alcon agreed to pay the DoJ a penalty of $8.925 million, for which Novartis has indemnified Alcon
under the Separation and Distribution Agreement.

F-50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Contact lenses class actions

Since the first quarter of 2015, more than 50 class action complaints have been filed in several courts across the US
naming as defendants contact lens manufacturers, including Alcon, and alleging violations of federal antitrust law, as well
as the antitrust, consumer protection and unfair competition laws of various states, in connection with the
implementation of unilateral price policies by the defendants in the sale of contact lenses. The cases have been
consolidated in the Middle District of Florida by the Judicial Panel on Multidistrict Litigation and the claims are being
vigorously contested.

TCPA matter
In April 2016, a putative class action lawsuit was filed in Illinois federal court alleging that the defendants, Alcon and
Novartis Pharmaceuticals Corporation, sent unsolicited facsimiles in violation of the Telephone Consumer Protection Act,
and seeking to certify a representative putative nationwide class of affected consumers. The parties have settled the
matter on terms that will dispose of all claims and will require no payments by Alcon.

JJSVI patent dispute

On June 23, 2020, Johnson & Johnson Surgical Vision, Inc. ("JJSVI"), acting through its subsidiaries, filed a patent
infringement action in the US District Court in Delaware alleging that the manufacture, use, sale, offer for sale, and/or
importation of Alcon’s LenSx Laser System willfully infringes, directly and/or indirectly, one or more claims of 12 US
patents. JJSVI subsequently amended its complaint to include copyright infringement claims relating to source code used in
the LenSx Laser System as well as additional claims of patent infringement. Also on June 23, 2020, JJSVI filed a claim in
Mannheim, Germany, alleging that Alcon directly infringes one European patent through its manufacture and sale of
LenSx. In these cases, JJSVI seeks monetary and injunctive relief. In addition, JJSVI filed a motion on February 4, 2021 asking
the district court in Delaware to issue a preliminary injunction prohibiting Alcon from offering, selling, distributing,
installing, or exporting LenSx systems that contain the allegedly infringing source code or offering to sell, selling,
distributing, or exporting such source code with the purpose or intent of it being loaded onto LenSx systems. Alcon intends
to defend the cases vigorously and has asserted various patent infringement claims against JJSVI in Europe and the United
States.

Hoya patent dispute

On December 11, 2020, Hoya Corporation and one of its affiliates filed suit against Alcon in the US District Court for the
Northern District of Texas alleging that Alcon's UltraSert Pre-Loaded Delivery System infringes six of Hoya's US patents.
Alcon intends to defend the case vigorously.

Litigation and other legal matters provision movements

($ millions) 2020 2019 2018

January 1 — 42 49
Additions to provisions 9 — 1
Cash payments (9) (40) (1)
Releases of provisions — (2) (7)
December 31 — — 42
Less current portion — — (42)
Non-current provisions for litigation and other legal matters at
December 31 — — —

Alcon believes that its total provisions for litigation and other legal matters are adequate based upon currently available
information. However, given the inherent difficulties in estimating liabilities, there can be no assurance that additional
liabilities and costs will not be incurred beyond the amounts provided.

F-51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

20. Provisions and other current liabilities

The following table provides details related to Provisions and other current liabilities as of December 31, 2020 and 2019:

($ millions) Note 2020 2019

Taxes other than income taxes 110 81
Restructuring provisions 10 28
Accrued expenses for goods and services received but not invoiced 61 79
Accruals for royalties 11 10
Accruals for deductions from revenue 217 212
Accruals for compensation and benefits including social security 352 382
Deferred income 110 97
Provisions for litigation and other legal matters 19 — —
Accrued share-based payments 9 10
Accrued interest on financial debts 19 19
Contingent consideration 18 15 35
Other payables 80 85
Total provisions and other current liabilities 994 1,038
Provisions and accruals are based upon management's best estimate and adjusted for actual experience. Such
adjustments to the historic estimates have not been material.

Accruals for deductions from revenue

The following table shows the movement of accruals for deductions from revenue:

($ millions) 2020 2019 2018

January 1 212 194 213
Additions 540 662 603
Payments/utilizations (537) (646) (613)
Changes in offset against gross trade receivables (2) 1 2
Currency translation effects 4 1 (11)
December 31 217 212 194

F-52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Restructuring provisions
The following table shows the movement of restructuring provisions:

($ millions) 2020 2019 2018

January 1 28 8 3
Additions 22 32 13
Cash payments (40) (10) (7)
Releases — (2) (2)
Currency translation effects — — 1
December 31 10 28 8

In 2020 and 2019, additions to restructuring provisions of $22 million and $32 million, respectively, were related to the
multi-year transformation program announced by Alcon on November 19, 2019. The additions to restructuring provisions
in 2020 and 2019 were primarily related to accrued severance for the associates whose positions will be eliminated.
In 2018, additions to restructuring provisions of $13 million were related to initiatives aimed at improving the efficiency
and agility of Alcon's operating model.

21. Consolidated statements of cash flows - additional details

The Consolidated Statement of Cash Flows was prepared in accordance with IAS 7, Statement of Cash Flows. The below
tables provide additional detail supporting select line items in the Consolidated Statement of Cash Flows.

21.1 Depreciation, amortization, impairments and fair value adjustments

($ millions) 2020 2019 2018

Property, plant & equipment 299 275 241
Right-of-use assets 79 66 —
Intangible assets 1,245 1,084 1,397
Financial assets 5 31 (16)
Other non-current assets (2) — —
Total 1,626 1,456 1,622

21.2 Change in net current assets and other operating cash flow items

($ millions) 2020 2019 2018

(Increase) in inventories (159) (108) (150)
Decrease/(increase) in trade receivables 43 (115) 53
(Decrease)/increase in trade payables (21) 84 44
Net change in other current assets 127 (26) 83
Net change in other current liabilities (35) 117 50
Total (45) (48) 80

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

21.3 Acquisitions of businesses, net

($ millions) 2020 2019 2018

Net assets recognized as a result of business combinations — (418) (286)
Payables contingent consideration — 135 102
Other payments — — (55)
Cash flows — (283) (239)
Notes  4 and 22 to these Consolidated Financial Statements provide further information regarding acquisitions of
businesses. All acquisitions were for cash.

21.4 Reconciliation of assets and liabilities arising from financing activities

Financial Liabilities
Non-current Current Non-current Current
financial financial lease lease
($ millions) debts debts liabilities liabilities
January 1, 2020 3,218 261 280 61
Proceeds from non-current financial debts, net of issuance costs 744 —
New leases 96 11
Change in current financial debts — (139)
Amortization of discounts on financial debts 1 —
Payments of lease liabilities, net — (69)
Interest payments for amounts included in lease liabilities classified as
cash flows from operating activities — (12)
Changes in fair values and other non-cash changes, net 4 (9) (2) 8
Currency translation effects 37 1 10 2
Reclassification from non-current to current (55) 55 (69) 69
December 31, 2020 3,949 169 315 70

F-54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Financial
Assets Financial Liabilities
Other Other
financial financial
receivables Non-current Current liabilities to Non-current Current
from former financial financial former lease lease
($ millions) parent debts debts parent liabilities liabilities
January 1, 2019 (39) — 47 67 89 —
Proceeds from non-current financial
debts, net of issuance costs 3,724
Repayment of non-current financial
debts (509)
Proceeds from Bridge Facility, net of
issuance costs 1,495
Repayment of Bridge Facility (1,500)
Change in current financial debts 202
Impact of adoption of IFRS 16 Leases
and new leases 248 54
Payments of lease liabilities, net — (52)
Interest payments for amounts
included in lease liabilities classified as
cash flows from operating activities — (5)
Changes in fair values and other non-
cash changes, net 2 20 (2) 8
Change in other financial receivables
from former parent 39

Change in other financial liabilities to

former parent (67)
Currency translation effects 1 (3) 1 —
Reclassifications from non-current to
current (56) 56
December 31, 2019 — 3,218 261 — 280 61

F-55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

22. Acquisitions of businesses

Fair value of assets and liabilities arising from acquisitions

($ millions) 2020 2019 2018

Property, plant & equipment — 1 1
Currently marketed products — — 346
Acquired research & development — 505 —
Deferred tax assets — 28 12
Inventories — — 3
Trade receivables and other current assets — — 2
Cash and cash equivalents — 6 5
Deferred tax liabilities — (121) (78)
Trade payables and other liabilities — (1) (4)
Net identifiable assets acquired — 418 287
Acquired liquidity — (6) (5)
Goodwill — 6 4
Net assets recognized as a result of business combinations — 418 286
Note 4 of these Consolidated Financial Statements details significant acquisitions of businesses, which were PowerVision
in 2019 and TrueVision and Tear Film in 2018. No goodwill from 2019 or 2018 acquisitions is tax-deductible.

23. Post-employment benefits for associates

Defined benefit plans
In addition to the legally required social security schemes, Alcon has sponsored numerous independent pension and other
post-employment benefit plans and participates in certain plans of Novartis pending completion of their separation. In
most cases, these plans are externally funded in entities that are legally separate from Alcon. For certain subsidiaries,
however, no independent plan assets exist for the pension and other post-employment benefit obligations of associates.
In these cases the related unfunded liability is included in the Consolidated Balance Sheet. The value of the post-
employment benefits promised under the pension and other post-employment benefit plans is represented by the
defined benefit obligation ("DBO"), which is measured based on the projected unit credit method ("PUC"). Independent
actuaries reappraise the DBOs of all major pension and other post-employment benefit plans annually. Plan assets are
recognized at fair value.
The major plans are based in Switzerland, the United States, Germany, and the United Kingdom. As of December 31, 2020,
these plans represent 86% of Alcon's total DBO and, other than described below for the finalization of the Swiss plan
separation, are independently sponsored by Alcon. Details of the plans in those significant countries are provided below.
The pension plans in Switzerland represent the most significant portion of Alcon's total pension DBO and the largest
component of Alcon's total plan assets. The principal plan in Switzerland is funded. Following the Spin-off, all Alcon Swiss
associates continued to participate in Novartis pension funds for a temporary period. For the Swiss pension plan, active
insured members' benefits are partially linked to the contributions paid into the plan. Certain features of Swiss pension
plans required by law preclude the plans from being categorized as defined contribution plans. These factors include a
minimum interest guarantee on retirement savings accounts, a pre-determined factor for converting the accumulated
savings account balance into a pension and embedded death and disability benefits. All benefits granted under a Swiss-
based principal pension plan are vested, and Swiss legislation prescribes that the employer has to contribute a fixed
percentage of an associate's pay to an external pension fund. Additional employer contributions may be required
whenever the plan's statutory funding ratio falls below a certain level. The associate also contributes to the plan.

F-56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

As of December 31, 2020 the Swiss pension plan was managed by a separate legal entity governed by a board of trustees,
that, for the pension plan, consisted of representatives nominated by Alcon's Former Parent and the active insured
associates. The board of trustees was responsible for the plan design and asset investment strategy. Effective February 1,
2021, Alcon's Swiss pension obligation was set-up under an Alcon-sponsored arrangement with Copré La Collective de
Prévoyance ("Copre"). Also effective February 1, 2021, Alcon has its own pension committee, consisting of representatives
nominated by Alcon and the active insured associates. Associates' vested account balances are expected to transfer to
Copré before March 31, 2021. As a collective foundation, Copré is governed by its own board of trustees which is
responsible for the foundation regulations and asset investment strategy for multiple entities participating in the collective
foundation. The pension committee is responsible for the plan design of Alcon’s plan. During the third quarter of 2020, the
selection of Copré resulted in a plan amendment with past service costs of $12 million recognized in Other expense and a
corresponding increase in the DBO.

The United States pension plans represent the second largest component of Alcon's total pension DBO and the third
largest component of Alcon's total plan assets. The principal plan (Qualified Plan) is funded, whereas the plans providing
additional benefits for executives (Defined Benefit Restoration Plan and Grandfathered Supplemental Executive Plan) are
unfunded. Benefits in the Qualified Plan and Restoration Plan are frozen for all participants. Employer contributions are
required for the Qualified Plan whenever the statutory funding ratio falls below a certain level. Furthermore, associates in
the United States are covered under other post-employment benefit plans (US OPEB plans) which represent 99% of the
total DBO for other post-employment benefit plans. These benefits in the US primarily consist of post-employment
healthcare which has been closed to new members since 2015. Effective January 1, 2021, the Alcon sponsored group
health plan for current and future eligible retired participants age 65 and over was changed to a private Medicare
marketplace while providing an annual notional contribution to a Health Reimbursement Account for each covered
member and spouse. The impact of the plan amendment in the fourth quarter of 2020 was a benefit of $164 million
recognized in Other income and a corresponding decrease in the DBO in Provisions and other non-current liabilities. There
is no statutory funding requirement for the US OPEB plans. The Qualified Pension plan and US OPEB plans were separated
from Novartis plans subsequent to the Spin-off and were independently sponsored by Alcon as of December 31, 2020. The
Defined Benefit Restoration Plan and Grandfathered Supplemental Executive Plan were already independently sponsored
by Alcon.
The major pension arrangements in Germany are governed by the Occupational Pensions Act ("BetrAVG") and represent
the third largest component of Alcon's total pension DBO and the fifth largest component of Alcon's total plan assets. The
plans are partly funded by a Contractual Trust arrangement or direct insurances. The employer is responsible for
contributing the premiums to the insurances and paying certain benefits when they fall due. All plans are closed for new
entrants and the benefits are fully vested for all participants. For some participants the benefits are based on final salary
and length of employment, and for others the benefit is earned each year based on the current salary in the year of
service. Associates do not contribute towards the cost of the benefits.
The pension plans in the United Kingdom represent the fourth largest component of Alcon's total pension DBO and the
second largest component of Alcon's total plan assets. The Alcon United Kingdom Pension Scheme is governed and
administered by a board of trustees in accordance with its Trust Deed. United Kingdom legislation requires that pension
schemes are funded prudently (i.e., to a level in excess of the "best estimate" expected cost of providing benefits). Funding
is assessed on a triennial basis using (prudent) assumptions agreed by the board of trustees and Alcon. The board of
trustees is responsible for jointly agreeing with Alcon the level of contributions needed to eliminate any shortfall over a
reasonable period of time, typically not exceeding 10 years. Under the governing documentation, if a surplus remains once
liabilities have been settled it would be refunded to Alcon.
One of Alcon's pension plans has a surplus that is not recognized, on the basis that future economic benefits are not
available to the entity in the form of a reduction in future contributions or a cash refund.

F-57
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The following tables summarize the funded and unfunded DBO for pension and other post-employment benefit plans of
Alcon associates at December 31, 2020 and 2019:

Other post-employment
  Pension plans benefit plans
($ millions) 2020 2019 2020 2019
Benefit obligation at January 1 723 662 423 385
Current service cost 31 22 14 8
Interest cost 12 13 15 15
Past service costs and settlements 9 2 (165) —
Administrative expenses 1 1 — —
Remeasurement losses arising from changes in
financial assumptions 38 71 92 52
Remeasurement losses/(gains) arising from changes in
demographic assumptions 2 6 (4) (1)
Remeasurement (gains) arising from experience-related
changes (13) (5) (27) (20)
Currency translation effects 44 1 — —
Benefit payments (36) (15) (25) (16)
Contributions of associates 6 5 9 —
Effect of acquisitions, divestments or transfers — (40) — —
Benefit obligation at December 31 817 723 332 423
Fair value of plan assets at January 1 451 424 — 40
Interest income 7 8 — 1
Return on plan assets excluding interest income 32 36 — 3
Currency translation effects 24 7 — —
Employer contributions 25 21 16 (28)
Contributions of associates 6 5 9 —
Settlements (2) — — —
Benefit payments (36) (15) (25) (16)
Effect of acquisitions, divestments or transfers 12 (35) — —
Fair value of plan assets at December 31 519 451 — —
Funded status (298) (272) (332) (423)
Limitation on recognition of fund surplus at
January 1 (6) (4)
Change in limitation on recognition of fund surplus
(including exchange rate differences) (11) (2)
Limitation on recognition of fund surplus at
December 31 (17) (6)
Net liability in the balance sheet at December 31 (315) (278) (332) (423)

F-58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The reconciliation of the net liability from January 1 to December 31 is as follows:

Other post-
employment
  Pension plans benefit plans
($ millions) 2020 2019 2020 2019
Net liability at January 1 (278) (242) (423) (345)
Current service cost (31) (22) (14) (8)
Net interest expense (5) (5) (15) (14)
Administrative expenses (1) (1) — —
Past service costs and settlements (11) (2) 165 —
Remeasurements 5 (36) (61) (28)
Currency translation effects (20) 6 — —
Employer contributions 25 21 16 (28)
Effect of acquisitions, divestments or transfers 12 5 — —
Change in limitation on recognition of fund surplus (11) (2) — —
Net liability at December 31 (315) (278) (332) (423)

Amounts recognized in the balance sheet

Prepaid benefit cost 24 13 — —
Accrued benefit liability (339) (291) (332) (423)

The following tables provide detail of the DBO for pension plans by geography and type of member and of plan assets
based on the geographical locations in which they are held:

2020
United United Rest of
($ millions) Switzerland States Germany Kingdom the world Total
By type of member
Active (251) (53) (76) — (125) (505)
Deferred pensioners (12) (50) (32) (62) (17) (173)
Pensioners (26) (35) (26) (42) (10) (139)
Benefit obligation at December 31 (289) (138) (134) (104) (152) (817)
Thereof: unfunded plans 51 30 — — 31 112
Thereof: unfunded portion of funded
plans 84 14 115 — 14 227
Prepaid benefit costs and limitation on
recognition of fund surplus — — — (23) (18) (41)

Fair value of plan assets at

December 31 154 94 19 127 125 519
Funded status (135) (44) (115) 23 (27) (298)

F-59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

  2019
United United Rest of
($ millions) Switzerland States Germany Kingdom the world Total
By type of member
Active (216) (40) (61) — (123) (440)
Deferred pensioners (12) (46) (27) (54) (12) (151)
Pensioners (16) (41) (21) (44) (10) (132)
Benefit obligation at December 31 (244) (127) (109) (98) (145) (723)
Thereof: unfunded plans 47 29 — — 23 99
Thereof: unfunded portion of funded
plans 65 18 92 — 17 192
Prepaid benefit costs and limitation on
recognition of fund surplus — — — (11) (8) (19)

Fair value of plan assets at

December 31 132 80 17 109 113 451
Funded status (112) (47) (92) 11 (32) (272)

The following table shows the principal weighted average actuarial assumptions used for calculating defined benefit plans
and other post-employment benefits of Alcon associates:

Other post-employment
  Pension plans benefit plans
  2020 2019 2020 2019
Discount rate 1.2 % 1.7 % 2.3 % 3.3 %
Expected rate of pension increase 1.1 % 1.2 %
Expected rate of salary increase 2.4 % 3.3 %
Interest on savings account 1.0 % 1.0 %
Current average life expectancy for a 65-year-old male
(in years) 20 21 20 21
Current average life expectancy for a 65-year-old
female (in years) 23 24 22 23

The following table shows additional details related to the weighted average discount rates for the principal plan for each
significant country:

Other post-employment
  Pension plans benefit plans
  2020 2019 2020 2019
Switzerland 0.1 % 0.3 %
United States 2.4 % 3.1 % 2.3 % 3.3 %
Germany 0.8 % 1.1 %
United Kingdom 1.3 % 2.0 %

Changes in the aforementioned actuarial assumptions can result in significant volatility in the accounting for pension plans
in the Consolidated Financial Statements. This can result in substantial changes in Alcon's other comprehensive income,
non-current liabilities and prepaid pension assets.
The DBO is significantly impacted by assumptions related to the rate used to discount the actuarially determined post-
employment benefit liability. This rate is based on yields of high-quality corporate bonds in the country of the plan.
Decreasing corporate bond yields decrease the discount rate, resulting in an increase in the DBO and decrease in the
funded status.
The impact of decreasing interest rates on a plan's assets is more difficult to predict. A significant part of the plan assets is
invested in bonds. Bond values usually rise when interest rates decrease and may therefore partially compensate for the
decrease in the funded status. Furthermore, pension assets also include significant holdings of equity instruments. Share

F-60
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

prices tend to rise when interest rates decrease and therefore often counteract the negative impact of the rising DBO on
the funded status (although the correlation of interest rates with equities is not as strong as with bonds, especially in the
short term).
The assumption for the expected rate for pension increases significantly affects the DBO of most plans in Switzerland,
Germany and the United Kingdom. Such pension increases also decrease the funded status, although there is no strong
correlation between the value of the plan assets and pension/inflation increases.
Assumptions regarding life expectancy significantly impact the DBO. An increase in longevity increases the DBO. There is
no offsetting impact from the plan assets, as no longevity bonds or swaps are held by the pension funds. Generational
mortality tables are used where this data is available.
The following table shows the sensitivity of the defined benefit pension and other post-employment benefit obligations to
the principal actuarial assumptions as of December 31, 2020:

Change in 2020
($ millions) year-end
25 basis point increase in discount rate (42)
25 basis point decrease in discount rate 46
1 year increase in life expectancy 31
25 basis point increase in rate of pension increase 15
(1)
25 basis point decrease in rate of pension increase (7)
25 basis point increase of interest on savings account 4
25 basis point decrease of interest on savings account (3)
25 basis point increase in rate of salary increase 6
25 basis point decrease in rate of salary increase (4)
(1) Decrease in rate of pension increase is limited to zero.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur, and changes of the assumptions may be correlated. When calculating the sensitivity of
the DBO to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated
with the PUC method at the end of the reporting period) has been applied as when calculating the net liability recognized
in the Consolidated Balance Sheet.
The healthcare cost trend rate assumptions used for other post-employment benefits are as follows:

2020 2019 2018

Healthcare cost trend rate assumed for next year 6.2 % 6.5 % 7.0 %
Rate to which the cost trend rate is assumed to decline 4.5 % 4.5 % 4.5 %
Year that the rate reaches the ultimate trend rate 2028 2028 2028

F-61
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

The following table shows the weighted average plan asset allocation of funded defined benefit pension plans at
December 31, 2020, and 2019:

Pension plans
Long-term Long-term
target target
(as a percentage) minimum maximum 2020 2019
Equity securities 15 40 31 32
Debt securities 20 60 46 42
Real estate 5 20 7 7
Alternative investments 0 20 10 15
Cash and other investments 0 15 6 4
Total 100 100
Cash and most of the equity and debt securities have a quoted market price in an active market. Real estate and
alternative investments, which include hedge fund and private equity investments, usually do not have a quoted market
price.
The strategic allocation of assets of the different pension plans is determined with the objective of achieving an
investment return that, together with employer contributions and contributions of associates, is sufficient to maintain
reasonable control over the various funding risks of the plans. Based upon the market and economic environments, actual
asset allocations may temporarily be permitted to deviate from policy targets.
The weighted average duration of the DBO is 15.5 and 15.6 years as of December 31, 2020 and 2019, respectively.
Alcon's ordinary contribution to the various pension plans is based on the rules of each plan. Additional contributions are
made whenever required by statute or law (i.e.,  usually when statutory funding levels fall below predetermined
thresholds).
The following table summarizes expected future cash flows for pension and other post-employment benefit plans as of
December 31, 2020:

Other
post-employment
($ millions) Pension plans benefit plans
Expected employer contributions to funded plans
2021 (estimated) 11 —
Expected future benefit payments
2021 44 19
2022 26 21
2023 28 22
2024 32 23
2025 32 23
2026-2030 185 110

Defined contribution plans

In many subsidiaries, associates are covered by defined contribution plans. Contributions charged to the 2020
Consolidated Income Statement for the defined contribution plans were $136 million (2019: $128 million; 2018: $105
million).

24. Equity-based compensation

For the year ended December 31, 2020, Alcon recorded equity-based compensation expense of $113 million (2019: $114
million, 2018: $93 million).
Liabilities from cash-settled equity-based compensation plans were $9 million as of December 31, 2020 (2019: $10 million).

F-62
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

On April 9, 2019, Alcon adopted various equity-based incentive plans, under which Alcon may grant awards in the form of
restricted stock units ("RSUs"), performance-based restricted stock units ("PSUs"), restricted stock awards ("RSAs"), or any
other form of award at the discretion of the Board. Certain associates in select countries may also participate in share
ownership savings plans.
Prior to the Spin-off, Alcon associates participated in Novartis equity-based participation plans, which included stock
options, RSUs, PSUs, RSAs and certain share ownership savings plans. Such awards were settled in shares or options of the
Former Parent. For periods prior to the Spin-off, the Consolidated Income Statement reflects the compensation expense
for the Novartis’s equity-based incentive plans in which Alcon associates participated.

Replacement awards
Concurrent with the Spin-off, certain outstanding Novartis awards granted to Alcon associates under Novartis’ equity-
based incentive plans vested in Novartis equity on a pro rata basis, in proportion to the amount of the vesting period
completed. The remaining unvested Novartis awards were replaced and restored with Alcon awards as governed by the
Alcon equity restoration plan with terms and vesting schedules substantially similar to the replaced Novartis awards.
The pro rata vesting of Novartis awards and replacement of forfeited unvested Novartis awards with Alcon awards
represents a modification under IFRS 2, Share-based Payment. Alcon measured the fair value of the awards immediately
prior to and subsequent to the modification and concluded that no incremental fair value was provided to associates.
Accordingly, Alcon continues to recognize as an expense the amount of unrecognized compensation cost of the original
awards over the remaining vesting periods. Alcon issued 4.2 million unvested equity-based awards in connection with the
modification at the time of the the Spin-off.
The replacement awards consist primarily of RSUs and PSUs, and vest over a period consistent with the original vesting
schedule of the awards which they replaced. In addition to the replacement awards, Alcon has granted additional equity-
based awards under the newly-established Alcon incentive plans which were also granted in the form of RSUs and PSUs
that will settle in Alcon Inc. shares upon vesting.

Summary of unvested share movements

The below table summarizes unvested share movements for all Alcon equity-based incentive plans through December 31,
2020 and 2019:

  2020 2019
Number of Weighted average Fair value at Number of Weighted average Fair value at
shares in fair value at grant grant date in shares in fair value at grant grant date in
thousands date in $ $ millions thousands date in $ $ millions
Unvested shares at January 1/
(1)
Replacement awards issued at Spin-off 4,742 51.20 243 4,222 n/a 212
Granted
Restricted awards 1,668 60.19 100 625 56.10 35
Performance awards 457 62.03 28 117 58.00 7
(1)
Vested (1,149) n/a (58) (108) n/a (5)
(1)
Forfeited (301) n/a (16) (114) n/a (6)
Unvested shares at December 31 5,417 54.90 297 4,742 51.20 243

(1) Fair value of replacement awards granted at Spin-off and associated subsequent vesting and forfeitures based on estimated fair value per share at the time of Spin-
off.

The remaining weighted-average vesting period of unvested equity-based awards as of December 31, 2020 was 1.3 years.

F-63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Alcon equity-based incentive plans

The below table summarizes the number of shares authorized under the plans as of December 31, 2020:

(thousands) Authorized shares

Long-term Incentive Plan 20,000
Deferred Bonus Stock Plan 1,500
Swiss Employee Share Ownership Plan 475
Other share savings plans 275
Total 22,250

Long-Term Incentive Plan ("LTIP") - Restricted Stock Units and Restricted Stock Awards

Under Alcon's LTIP, certain eligible executives and management personnel may receive grants of RSUs and RSAs (together
"Restricted awards"). The awards generally vest on the third anniversary of the award and are generally forfeited if the
employment relationship with Alcon terminates prior to vesting. Recipients of RSU awards do not have any shareholder
rights, such as voting or dividend rights, until the shares are delivered. Alcon associates receiving grants of RSAs are
entitled to the dividends that may be declared and paid over the vesting period only if the associates vest in such award.
For the periods prior to the Spin-off, Alcon associates participated in the Former Parent's "Select" plan. The Company's
LTIP plan is substantially similar to and replaced the Former Parent plan.

LTIP - Performance Stock Units

The Alcon CEO and Alcon Top Leaders ("ATLs") participate in Alcon's long-term performance program. PSUs granted under
the LTIP each convert to one unrestricted Alcon Inc. share at vesting, subject to the achievement of performance
measures.
PSUs awarded to plan participants are granted at target incentive ranges from 30% to 430% of base compensation and
vest over a three-year period. The payout between 0% and 200% of target is dependent upon four equally weighted
performance metrics which are determined at the onset of the performance period by the Alcon Inc. Board of Directors.
The metrics include cumulative annual growth rate of Net sales, Core EPS, market share, and innovation. The Alcon Inc.
Board of Directors and the Compensation Committee assess the performance against the defined measures and approve
the final payout. PSUs granted under the performance plan do not carry voting rights, but do carry dividend equivalents
that are paid in Alcon Inc. shares at vesting, provided participants remain associates of Alcon.
For the periods prior to the Spin-off, Alcon associates participated in the Former Parent's Long-Term Performance Plan
("LTPP") and Long-Term Relative Performance Plan ("LTRPP"), which were substantially similar to Alcon's LTIP performance
program.

Deferred Bonus Stock Plan ("DBSP")

Beginning in 2020, the annual incentives for the Alcon CEO and ATLs no longer include deferrals of compensation in the
form of equity-based awards subject to the provisions of the DBSP. Prior to 2020, the Alcon CEO's annual incentive was
paid 50% in cash in the year following the performance period, and 50% in Alcon Inc. RSUs or RSAs. In prior years ATLs
received 70% of their annual incentive in cash and 30% in Alcon Inc. RSUs or RSAs. The RSUs and RSAs are granted in first
quarter of the year following the performance period, which are deferred and restricted for three years. Each RSU is
converted into one Alcon Inc. share at the vesting date. RSUs granted under the DBSP do not carry any dividend, dividend
equivalent or voting rights. Executives in certain countries may elect to also receive some or all of their cash incentive in
shares or share units that are not subject to vesting conditions.
The Alcon DBSP is substantially similar to and replaces the Annual Incentive plan, which existed in the periods prior to the
Spin-off.

F-64
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Swiss Employee Share Ownership Plan and other share savings plans

Alcon associates in certain countries are encouraged to invest in share savings plans. Under the share savings plans,
participants may elect to receive some or all of their wages or annual incentives in Alcon Inc. shares in lieu of cash. Subject
to plan rules and limitations, as a reward for their participation in the share savings plans, at no additional cost to the
participant, Alcon may fully or partially match their investments in shares after a holding period of three or five years.
Prior to the Spin-off, Alcon associates participated in the Former Parent's share savings plans, which were substantially
similar to and replaced by Alcon's share savings plans.

25. Related parties transactions

Executive officers
The following table summarizes compensation information for key management personnel (7 members for all years
presented):

($ millions) 2020 2019 2018

Cash and other compensation 12.8 12.5 10.3
Post-employment benefits 1.1 0.9 0.8
Equity-based compensation 9.2 10.7 11.3
Total 23.1 24.1 22.4

Transactions with members of the Board of Directors

Dr. Arthur Cummings, an Alcon Board Director, in his capacity as an ophthalmologist, provides certain consulting services,
including assistance with various clinical trials to Alcon. In 2020 and 2019, Alcon paid to Dr. Cummings (or his related
entities) approximately $54,809 and $84,844, respectively.

Transactions with Novartis (up to April 9, 2019)

Prior to the Spin-off, the Alcon business was a segment of Novartis such that transactions with Novartis were considered
related party transactions. In connection with the Spin-off, Alcon entered into a separation and distribution agreement as
well as various other agreements governing relationships with Novartis going forward, including manufacturing and
supply, transitional services, tax matters, employee matters, and patent and know-how license and brand license
agreements. Information included in this Note with respect to Novartis is strictly limited to related party transactions with
Novartis prior to the Spin-off on April 9, 2019.

Transactions from trading activities related to products and services invoiced between other Novartis Group companies
and Alcon's business, have been retained in the historical Consolidated Financial Statements. The ultimate controlling
parent of both, the other Novartis Group companies and Alcon's business, was Novartis AG until the Spin-off.
The following table summarizes amounts for the years ended December 31, 2019 and 2018:
(1)
($ millions) 2019 2018
Sales to former parent — 4
Contract manufacturing revenues from former parent 47 —
Purchases from former parent 19 4
(1) Activity presented strictly relates to the period during which Novartis was a related party (up to April 9, 2019).

Sales to and purchases from Former Parent

Beginning in 2019, product sales to Novartis are recorded in Other revenues in line with Alcon's contract manufacturing
arrangement executed with Novartis. Other revenues in 2019 prior to the Spin-off were $47 million. Purchases of products
from Novartis under the contract manufacturing arrangement totaled $19 million in 2019 prior to the Spin-off.

F-65
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Other financial receivables and payables related to Former Parent

Prior to the Spin-off, the majority of Alcon's subsidiaries were party to Novartis cash pooling arrangements with several
financial institutions to maximize the availability of cash for general operating and investing purposes. Under these cash
pooling arrangements, cash balances were swept by Novartis regularly from Alcon's bank accounts, and the net position
with the Novartis cash pooling accounts at the end of each reporting period was reflected in the Consolidated Balance
Sheet in Other financial receivables from former parent or Other financial liabilities to former parent. These cash pooling
arrangements were eliminated during the three months ended March 31, 2019 in anticipation of the Spin-off and replaced
with third party financing arrangements as needed.

Novartis Business Services ("NBS") charges, corporate overhead and other allocations from Former Parent

Prior to January 1, 2019, Novartis Group provided Alcon certain services from NBS, the shared service organization of
Novartis Group, across the following service domains: human resources operations, real estate and facility services,
including site security and executive protection, procurement, information technology, commercial and medical support
services and financial reporting and accounting operations. The Consolidated Financial Statements include the appropriate
costs related to the services rendered, without profit margin, in accordance with the historical arrangements that existed
between the Alcon business and NBS.
Further, certain general and administrative costs of Novartis Group were not charged or allocated to the Alcon business in
the past. For the purpose of the 2018 financial statements, such costs were allocated based on reasonable assumptions
and estimates, based on the direct and indirect costs incurred to provide the respective service. When specific
identification was not practicable, a proportional cost method was used, primarily based on sales or headcount.
These NBS charges, corporate overhead and other allocations amounted to $553 million in 2018.
During 2018, Alcon formed its own business and corporate support functions, including its own service organization, such
that certain activities and associates were transferred from Novartis to Alcon, operationally effective January 1, 2019.
Services provided by Novartis Group to Alcon in 2019 prior to the Spin-off totaled $40 million and primarily related to
human resources operations, real estate and facility services, and information technology.
Management believes that the net charges and methods used for allocations to Alcon were performed on a reasonable
basis and reflect the services received by Alcon and the cost incurred on behalf of Alcon. Although the Consolidated
Financial Statements reflect management's best estimate of all historical costs related to Alcon, this may however not
necessarily reflect what the results of operations, financial position, or cash flows would have been had Alcon been a
separate entity, nor the future results of Alcon as it exists following completion of the separation on April 9, 2019.

F-66
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

26. Commitments and contingencies

Commitments
Research & development
Alcon has entered into long-term research agreements with various institutions which provide for potential milestone
payments and other payments by Alcon that may be capitalized. As of December  31, 2020, the commitments to make
payments under those agreements, and their estimated timing, were as follows:

($ millions) 2020
2021 26
2022 5
2023 1
2024 1
2025 —
Thereafter 47
Total 80

Other
Alcon entered into various purchase commitments for services and materials as well as for equipment in the ordinary
course of business. These commitments are generally entered into at current market prices and reflect normal business
operations. For disclosure of Property, plant and equipment purchase commitments, see Note 9.

Contingencies
The Alcon companies have to observe the laws, government orders and regulations of the country in which they operate.
A number of Alcon companies are, and will likely continue to be, subject to various legal proceedings and investigations
that arise from time to time, including proceedings regarding product liability, sales and marketing practices, commercial
disputes, employment, and wrongful discharge, antitrust, securities, health and safety, environmental, tax, international
trade, privacy, and intellectual property matters. As a result, Alcon may become subject to substantial liabilities that may
not be covered by insurance and could affect our business, financial position and reputation. While Alcon does not believe
that any of these legal proceedings will have a material adverse effect on its financial position, litigation is inherently
unpredictable and large judgments sometimes occur. As a consequence, Alcon may in the future incur judgments or enter
into settlements of claims that could have a material adverse effect on its results of operations or cash flow.
Governments and regulatory authorities around the world have been stepping up their compliance and law enforcement
activities in recent years in key areas, including marketing practices, pricing, corruption, trade restrictions, embargo
legislation, insider trading, antitrust, cyber security and data privacy. Further, when one government or regulatory
authority undertakes an investigation, it is not uncommon for other governments or regulators to undertake
investigations regarding the same or similar matters. Responding to such investigations is costly and requires an
increasing amount of management's time and attention. In addition, such investigations may affect Alcon's reputation,
create a risk of potential exclusion from government reimbursement programs in the United States and other countries,
and may lead to (or arise from) litigation. These factors have contributed to decisions by Alcon and other companies in the
medical device and healthcare industry, when deemed in their interest, to enter into settlement agreements with
governmental authorities around the world prior to any formal decision by the authorities or a court. Those government
settlements have involved and may continue to involve, in current government investigations and proceedings, large cash
payments, sometimes in the hundreds of millions of dollars or more, including the potential repayment of amounts
allegedly obtained improperly and other penalties, including treble damages. In addition, settlements of government
healthcare fraud cases often require companies to enter into corporate integrity agreements, which are intended to
regulate company behavior for a period of years. Also, matters underlying governmental investigations and settlements
may be the subject of separate private litigation.
While provisions have been made for probable losses, which management deems to be reasonable or appropriate, there
are uncertainties connected with these estimates. Note 19 contains additional information on these matters.
Alcon is involved in legal proceedings concerning intellectual property rights. The inherent unpredictability of such
proceedings means that there can be no assurances as to their ultimate outcome. A negative result in any such

F-67
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

proceeding could potentially adversely affect the ability of certain Alcon companies to sell their products, or require the
payment of substantial damages or royalties.
Alcon's potential for environmental remediation liability is assessed based on a risk assessment and investigation of the
various sites identified by Alcon as at risk for environmental remediation exposure. Alcon's future remediation expenses
are affected by a number of uncertainties. These uncertainties include, but are not limited to, the method and extent of
remediation, the percentage of material attributable to Alcon at the remediation sites relative to that attributable to other
parties, and the financial capabilities of the other potentially responsible parties.
Alcon has no significant environmental liabilities as at December  31, 2020 and 2019 and has incurred no significant
remediation costs for the years ended December 31, 2020, 2019 and 2018.

27. Subsequent events

Subsequent to December 31, 2020, the Revolving Facility was extended to March 2026. The Revolving Facility remained
undrawn as of February 23, 2021.
On February  23, 2021, the Alcon Board of Directors approved the proposal to submit the 2020 financial statements of
Alcon Inc. and these Consolidated Financial Statements for approval at the Annual General Meeting on April 28,
2021. Additionally on February 23, 2021, the Board proposed a dividend of CHF 0.10 per share to be approved at the same
Annual General Meeting. If approved by the shareholders, the total dividend payments would amount to a maximum of
approximately $56 million using the CHF/USD exchange rate as of February 19, 2021.
The Board of Directors has evaluated subsequent events as they relate to Alcon for potential recognition or disclosures
from January 1, 2021 to the date of the approval of these Consolidated Financial Statements and has determined there are
no additional subsequent events to be reported in these Consolidated Financial Statements.

F-68
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

28. Alcon subsidiaries

The following table lists the subsidiaries of Alcon Inc. with Total assets or Net sales to third parties in excess of $5 million
included in the Consolidated Financial Statements at and for the year ended December 31, 2020, respectively. The equity
interest percentage shown in the table represents Alcon's share in voting rights in those entities. Unless otherwise stated,
each entity has share capital consisting of equity held directly by the Company or another of its consolidated subsidiaries.

Equity
Country of organization/Entity name Place of business interest
Argentina
Alcon Laboratorios Argentina S.A. Buenos Aires 100 %
Australia
Alcon Laboratories (Australia) Pty Ltd Frenchs Forest, NSW 100 %
Austria
Alcon Ophthalmika GmbH Wein 100 %
Belgium
Alcon Laboratories Belgium BVBA Puurs 100 %
N.V. Alcon S.A. Vilvoorde 100 %
Brazil
Alcon Brasil Cuidados com a Saúde Ltda. São Paulo 100 %
Canada
Alcon Canada Inc. Mississauga, Ontario 100 %
Chile
Alcon Laboratorios Chile Ltd. Santiago de Chile 100 %
China
Alcon (China) Ophthalmic Product Co., Ltd. Beijing 100 %
Alcon Hong Kong Limited Hong Kong 100 %
Colombia
Laboratorios Alcon de Colombia S.A. Santafé de Bogotá 100 %
Czech Republic
Alcon Pharmaceuticals (Czech Republic) s.r.o. Prague 100 %
Denmark
Alcon Nordic A/S Copenhagen 100 %
Ecuador
AlconLab Ecuador S.A. Quito 100 %
France
Laboratoires Alcon S.A.S. Rueil-Malmaison 100 %
Germany
Alcon Deutschland GmbH Freiburg im Breisgau 100 %
CIBA Vision GmbH Grosswallstadt 100 %
WaveLight GmbH Erlangen 100 %
Greece
Alcon Laboratories Hellas- Single Member Commercial and Industrial S.A.C.I. Maroussi, Athens 100 %
Hungary
Alcon Hungary Pharmaceuticals Trading Limited Liability Company Budapest 100 %
India
Alcon Laboratories (India) Private Limited Bangalore 100 %
Indonesia
PT. CIBA Vision Batam Batam 100 %
Ireland
Alcon Laboratories Ireland Limited Cork City 100 %
Israel
Optonol Ltd. Neve-Ilan 100 %
Italy
Alcon Italia S.p.A. Milano 100 %
Japan
Alcon Japan Ltd. Tokyo 100 %

F-69
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Equity
Country of organization/Entity name Place of business interest
Malaysia
Alcon Laboratories (Malaysia) Sdn. Bhd. Petaling Jaya 100 %
CIBA Vision Johor Sdn. Bhd. Kuala Lumpur 100 %
Mexico
Alcon Laboratorios, S.A. de C.V. Ciudad de Mexico 100 %
Netherlands
Alcon Nederland B.V. Arnhem 100 %
New Zealand
Alcon Laboratories (New Zealand) Ltd. Auckland 100 %
Panama
Alcon Centroamerica S.A. Panama City 100 %
Peru
Alcon Pharmaceutical del Peru S.A. Lima 100 %
Philippines
Alcon Laboratories (Philippines), Inc. Manila 100 %
Poland
Alcon Polska Sp. z o.o. Warszawa 100 %
Portugal
Alcon Portugal-Produtos e Equipamentos Oftalmológicos Lda. Porto Salvo 100 %
Puerto Rico
Alcon (Puerto Rico), Inc. Cataño, PR 100 %
Romania
Alcon Romania S.R.L. Bucharest 100 %
Russian Federation
Alcon Farmacevtika LLC Moscow 100 %
Singapore
Alcon Pte Ltd Singapore 100 %
Alcon Singapore Manufacturing Pte Ltd Singapore 100 %
CIBA Vision Asian Manufacturing and Logistics Pte Ltd. Singapore 100 %
South Africa
Alcon Laboratories (South Africa) (Pty) Ltd. Midrand 100 %
South Korea
Alcon Korea Ltd. Seoul 100 %
Spain
Alcon Healthcare S.A. Barcelona 100 %
Switzerland
Alcon Grieshaber AG Schaffhausen 100 %
Alcon Management SA Vernier 100 %
Alcon Pharmaceuticals Ltd. Fribourg 100 %
Alcon Services AG Fribourg 100 %
Alcon Switzerland SA Zug 100 %
Thailand
Alcon Laboratories (Thailand) Limited Bangkok 100 %
Turkey
Alcon Laboratuvarlari Ticaret A.S. Istanbul 100 %
Ukraine
Alcon Ukraine LLC Kiev 100 %
United Kingdom
Alcon Eye Care UK Limited Frimley/Camberley 100 %
United States of America
Alcon Finance Corporation Fort Worth, TX 100 %
Alcon Laboratories, Inc. Fort Worth, TX 100 %
Alcon RefractiveHorizons, LLC Fort Worth, TX 100 %
Alcon Research, LLC Fort Worth, TX 100 %

F-70
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Equity
Country of organization/Entity name Place of business interest
Alcon Vision, LLC Fort Worth, TX 100 %
CIBA Vision, LLC Fort Worth, TX 100 %
WaveLight, Inc. Fort Worth, TX 100 %
ClarVista Medical, Inc. Fort Worth, TX 100 %
PowerVision, Inc. Fort Worth, TX 100 %
Tear Film Innovations, Inc. Fort Worth, TX 100 %
TrueVision Systems, Inc. Fort Worth, TX 100 %
Alcon LenSx, Inc. Fort Worth, TX 100 %

During the year ended December 31, 2020, the below principal Novartis legal entity contained assets, liabilities and results
of operations attributable to the Alcon business with Total assets or Net sales to third parties in excess of $5 million
included in the Consolidated Financial Statements.

Mexico
Novartis Farmacéutica, S.A. de C.V.

F-71
REPORT OF THE STATUTORY AUDITOR
to the General Meeting of Alcon Inc.
Fribourg, Switzerland

Report on the audit of the consolidated financial statements

Opinion
We have audited the consolidated financial statements of Alcon Inc. and its subsidiaries (the “Group”), which comprise the
consolidated balance sheet as at December 31, 2020 and the consolidated income statement, consolidated statement of
comprehensive loss, consolidated statement of changes in equity, and consolidated statement of cash flows, and notes to
the consolidated financial statements, including a summary of significant accounting policies, for the year ended
December 31, 2020.

In our opinion, the consolidated financial statements (pages F-1 to F-71) give a true and fair view of the consolidated
financial position of the Group as at December 31, 2020 and its consolidated financial performance and its consolidated
cash flows for the year then ended in accordance with the International Financial Reporting Standards (IFRS) and comply
with Swiss law.

Basis for opinion

We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss Auditing
Standards. Our responsibilities under those provisions and standards are further described in the “Auditor’s
responsibilities for the audit of the consolidated financial statements” section of our report.

We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit
profession, as well as the International Code of Ethics for Professional Accountants (including International Independence
Standards) of the International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Our audit approach

Overview Overall Group materiality: USD 35 million

We conducted full scope audit work at 10 reporting entities in two countries. In

addition, specified procedures or full scope audit work on account balances was
performed at 12 reporting entities in 10 countries. Our audit scope addressed
79% of the Group’s net sales to third parties.

As key audit matters, the following areas of focus have been identified:

– Goodwill and Alcon Brand Name Impairment Assessments

– In-Process Research and Development and Definite Lived Intangible
Asset Impairment Assessments

F-72
Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable
assurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due
to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgment, we determined certain quantitative thresholds for materiality, including the overall
Group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated financial
statements as a whole.

Overall Group materiality USD 35 million

How we determined it Overall Group materiality was determined based on an assessment of relevant
benchmarks including unadjusted EBITDA and “Core” EBITDA, net sales to third
parties, pre-tax net loss and “Core” pre-tax net income.

Rationale for the materiality We chose these benchmarks because, in our view, they are the measures against
benchmark applied which the performance of the Group is most commonly assessed. The benchmark
metrics noted provided a range, from which we determined the overall Group
materiality.

We agreed with the Audit and Risk Committee that we would report to them misstatements above USD 3.5 million
identified during our audit as well as any misstatements below that amount which, in our view, warranted reporting for
qualitative reasons.

Audit scope
The Group financial statements are a consolidation of over 80 reporting entities operating worldwide. The accounting
function is primarily disaggregated across the Group with each entity reporting local financial information to the Group.
The Group uses shared service centres for certain accounting functions in most countries across the organization, with
four located in the United States, Switzerland, Malaysia, and Mexico. The Group’s corporate functions (including
accounting for associated companies, consolidation, taxation, treasury, litigation and certain employee benefits) are
managed centrally between the United States and Switzerland.

We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated
financial statements. In particular, we considered where subjective judgments were made; for example, in respect of
significant accounting estimates that involved making assumptions and considering future events that are inherently
uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among
other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due
to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the
consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes
and controls, and the industry in which the Group operates. To exercise the appropriate direction and supervision over the
work of the reporting entity audit teams, the Group audit team reviewed audit working papers, held virtual meetings with
the reporting entity audit teams, and virtually attended selected meetings between local management and the reporting
entity audit teams.

F-73
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.

Goodwill and Alcon Brand Name Impairment Assessments

Key audit matter How our audit addressed the key audit matter
As described in Notes 3 and 10 to the consolidated financial Addressing the matter involved performing procedures
statements, as of December 31, 2020 the Group had USD 8.9 and evaluating audit evidence in connection with
billion of goodwill, as well as a USD 3.0 billion indefinite life forming our overall opinion on the consolidated
intangible asset related to the Alcon brand name. An financial statements. These procedures included
impairment assessment on goodwill and indefinite life testing the effectiveness of controls relating to
intangible assets, which is performed over the groupings of management’s goodwill and the Alcon brand name
cash generating units containing goodwill or the Alcon brand impairment assessments, including controls over the
name, is performed at least annually. A cash generating unit determination of the fair value less costs of disposal.
to which goodwill has been allocated is considered impaired These procedures also included, among others, testing
when its carrying amount, including the goodwill, exceeds its management’s process for developing the fair value
recoverable amount, which is defined as the higher of its fair less costs of disposal estimates; evaluating the
value less costs of disposal and its value in use. An intangible appropriateness of the fair value estimates; testing the
asset other than goodwill is considered impaired when its completeness, accuracy, and relevance of underlying
balance sheet carrying amount exceeds its estimated data used; and evaluating the significant assumptions
recoverable amount, which is defined as the higher of its fair used by management related to long-term sales
value less costs of disposal and its value in use. Usually, forecasts, discount rates and royalty rate. Evaluating
management applies the fair value less costs of disposal management’s assumptions related to long-term sales
method for its impairment assessment. In most cases, no forecasts involved evaluating whether the assumptions
direct or indirect observable market prices for identical or used by management were reasonable considering (i)
similar assets are available to measure the fair value less the current and past performance of the business, (ii)
costs of disposal. Therefore, an estimate of fair value less the consistency with external market and industry
costs of disposal is based on net present value techniques data, and (iii) whether these assumptions were
utilizing post-tax cash flows and discount rates. The estimates consistent with evidence obtained in other areas of the
used by management in calculating the net present values audit. Professionals with specialized skill and
involve significant judgment by management and include knowledge were used to assist in the evaluation of
assumptions with measurement uncertainty, such as the management’s estimate of fair value less costs of
amount and timing of projected cash flows, long-term sales disposal method and the discount rate and royalty rate
forecasts, terminal growth rate, discount rate, and additionally significant assumptions.
for the Alcon brand name, royalty rate.
The principal considerations for our determination that
performing procedures relating to the goodwill and Alcon
brand name impairment assessments is a key audit matter
are the significant judgment by management when
determining the fair value less costs of disposal, which in turn
led to a high degree of auditor judgment, subjectivity and
effort in performing procedures and evaluating for (i)
goodwill, management’s significant assumptions related to
long-term sales forecasts and discount rate, and (ii) the Alcon
brand name, management’s significant assumptions related
to long-term sales forecasts, discount rate and royalty rate.

F-74
In-Process Research and Development and Definite Lived Intangible Asset Impairment Assessments

Key audit matter How our audit addressed the key audit matter
As described in Notes 3 and 10 to the consolidated financial Addressing the matter involved performing procedures
statements, as of December 31, 2020 the Group had USD 727 and evaluating audit evidence in connection with
million of in-process research and development (IPR&D) forming our overall opinion on the consolidated
intangible assets and USD 5,390 million of definite lived financial statements. These procedures included
intangible assets. An impairment assessment on individual testing the effectiveness of controls relating to
IPR&D assets is performed at least annually or when facts and management’s IPR&D and definite lived intangible
circumstances warrant. Individual definite lived intangible asset impairment assessments, including controls over
assets are evaluated for potential impairment whenever facts the determination of the fair value less costs of
and circumstances indicate that their carrying value may not disposal. These procedures also included, among
be recoverable. An intangible asset is considered impaired others, testing management’s process for developing
when its carrying amount exceeds its estimated recoverable the fair value less costs of disposal estimates;
amount, which is defined as the higher of its fair value less evaluating the appropriateness of the fair value
costs of disposal and its value in use. Usually, management estimates; testing the completeness, accuracy, and
applies the fair value less costs of disposal method for its relevance of underlying data used; and evaluating the
impairment assessment. In most cases, no direct or indirect significant assumptions used by management related
observable market prices for identical or similar assets are to long-term sales forecasts, discount rates and
available to measure the fair value less costs of disposal. probability of success. Evaluating management’s
Therefore, an estimate of fair value less costs of disposal is assumptions related to long-term sales forecasts and
based on net present value techniques utilizing post-tax cash probability of success involved evaluating whether the
flows and discount rates. The estimates used by management assumptions used by management were reasonable
in calculating the net present values involve significant considering (i) the current and past performance of the
judgment by management and include assumptions with business, and (ii) whether these assumptions were
measurement uncertainty, such as the amount and timing of consistent with evidence obtained in other areas of the
projected cash flows, long-term sales forecasts, and discount audit. Evaluating management’s assumption related to
rates, and additionally for IPR&D intangible assets, the timing long-term sales forecasts also involved ensuring
and probability of success. consistency with external market and industry data.
Professionals with specialized skill and knowledge were
The principal considerations for our determination that
used to assist in the evaluation of management’s
performing procedures relating to the IPR&D and definite
estimate of fair value less costs of disposal method and
lived intangible asset impairment assessments is a key audit
the discount rate significant assumptions.
matter are the significant judgment by management when
determining the fair value less costs of disposal, which in turn
led to a high degree of auditor judgment, subjectivity and
effort in performing procedures and evaluating for (i) IPR&D
intangible assets, management’s significant assumptions
related to long-term sales forecasts, discount rate, and
probability of success, and (ii) definite lived intangible assets,
management’s significant assumptions related to long-term
sales forecasts and discount rate.

Other information in the annual report

The Board of Directors is responsible for the other information in the annual report. The other information comprises all
information included in the annual report, but does not include the consolidated financial statements, the stand-alone
financial statements and the compensation report of Alcon Inc. and our auditor’s reports thereon.

Our opinion on the consolidated financial statements does not cover the other information in the annual report and we do
not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information in
the annual report and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.

F-75
Responsibilities of the Board of Directors for the consolidated financial statements
The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair
view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Board of Directors
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss
law, ISAs and Swiss Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Swiss law, ISAs and Swiss Auditing Standards, we exercise professional judgment
and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.

We communicate with the Board of Directors, mostly through the Audit and Risk Committee, regarding, among other
matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or

F-76
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.

Report on other legal and regulatory requirements

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal
control system exists which has been designed for the preparation of consolidated financial statements according to the
instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

PricewaterhouseCoopers SA

Michael Foley Colin Johnson

Audit expert
Auditor in charge

Geneva, February 23, 2021

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FINANCIAL STATEMENTS OF ALCON INC.
Audited Financial Statements  
Income Statement A-2
Balance Sheet A-3
Notes to Financial Statements A-4
Appropriation of available earnings and reserves A-10
Report of the statutory auditor on the financial statements of Alcon Inc. A-11

A-1
FINANCIAL STATEMENTS OF ALCON INC.

INCOME STATEMENT
(For the years ended December 31, 2020 and 2019)

(CHF thousands) Note 2020 2019

Income from investments in Group subsidiaries 136,298 9,874
Other income 3 52,632 5,420
Total income 188,930 15,294
Impairment of investment in Group subsidiaries 4 (73) (1,419)
Other expenses (9,856) (6,345)
Total expenses (9,929) (7,764)
Operating income 179,001 7,530
Financial income 5 98,211 64,132
Financial expenses 5 (93,719) (58,979)
Income before taxes 183,493 12,683
Direct taxes (7,702) (1,398)
Net income for the year 175,791 11,285

The accompanying Notes are an integral part of these financial statements.

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FINANCIAL STATEMENTS OF ALCON INC. (Continued)

BALANCE SHEET
(At December 31, 2020 and 2019)

(CHF thousands) Note 2020 2019

Assets
Current assets
Cash and cash equivalents — —
Other current receivables
Group subsidiaries 40,127 28,678
Prepaid expenses and accrued income 6,241 9,137
Total current assets 46,368 37,815
Non-current assets
Financial assets
Group subsidiaries 6 1,213,727 1,155,305
Investments
Group subsidiaries 4 17,323,314 17,267,766
Total non-current assets 18,537,041 18,423,071
Total assets 18,583,409 18,460,886

Liabilities and equity

Current liabilities
Other current liabilities
Group subsidiaries 12,322 1,970
Related parties 738 532
Third parties 10,622 2,908
Total current liabilities 23,682 5,410
Non-current liabilities
Long-term interest-bearing liabilities 7 1,083,727 1,155,305
Total non-current liabilities 1,083,727 1,155,305

Equity
Share capital 8 19,988 19,668
Legal capital reserves — —
General reserve 9,834 50
Total legal reserves 9,834 50
Free reserves 9 17,270,806 17,269,305
Net income for the year 175,791 11,285
Retained earnings available for distribution at year end 175,791 11,285
Total unappropriated earnings and free reserves 17,446,597 17,280,590
Treasury shares held by Alcon Inc. 10 (419) (137)
Total equity 17,476,000 17,300,171
Total liabilities and equity 18,583,409 18,460,886

The accompanying Notes are an integral part of these financial statements.

A-3
NOTES TO FINANCIAL STATEMENTS OF
ALCON INC.
1. Introduction
Alcon Inc. (the "Company") is a stock corporation (Aktiengesellschaft) organized under the laws of Switzerland in
accordance with article 620 et seq. of the Swiss Code of Obligations ("SCO") and registered as of September 21, 2018.
These financial statements of Alcon Inc., with registered office in Fribourg, were prepared according to the principles of the
Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Where not prescribed by
law, the significant accounting and valuation principles applied are described below.
Alcon Inc. is presenting its consolidated financial statements according to IFRS. As a result, Alcon Inc. has applied the
exemption included in art. 961d SCO and has not included additional disclosures, a cash flow statement or a management
report in its financial statements.
Alcon Group is defined as Alcon Inc. and all its direct and indirect subsidiaries.

2. Accounting policies
Cash and cash equivalents
Cash and cash equivalents are valued at nominal value.

Investments
Investments are initially recognized at cost, assessed annually for impairment, and adjusted to their recoverable amount
as needed.

Loans granted to subsidiaries

Long term loans to Alcon Group subsidiaries are valued at nominal value under consideration of any impairment if
needed.

Prepaid expenses and accrued income

Interest-bearing liabilities are recognized in the balance sheet at nominal value. Fees related to arrange such financing are
recognized as prepaid expenses and amortized on a straight-line basis over the loan period. Agency fees are expensed to
the income statement.

Treasury shares
Treasury shares are initially recognized at cost at the time of acquisition and recorded as a reduction of equity. Any
subsequent sale of treasury shares resulting in a gain or loss is recorded in the income statement under other income or
expense.

A-4
NOTES TO FINANCIAL STATEMENTS OF ALCON INC. (Continued)

Positions denominated in foreign currencies

The positions in the balance sheet denominated in foreign currencies are translated to CHF with the following foreign
exchange rates as of December 31, 2020 and 2019:

Currency 2020 2019

USD 0.88085 0.96905
EUR 1.08299 1.08590

3. Other income
Other income, in 2020, includes solely income from subsequent sales of treasury shares as defined in Note 2.

4. Investments
On November 14, 2018, the Company entered into a Contribution Agreement with Novartis AG (Note 9). Based on this
agreement, investments related to the Alcon business were contributed from Novartis AG to the Company for a
corresponding value of CHF 7,113,528,983 in 2019. The related goodwill of the underlying business (CHF 10,080,930,324)
was contributed to Alcon Pharmaceuticals Ltd. ("APL") within the same year.
The principal direct and indirect subsidiaries and other holdings of Alcon Inc. are shown in Note 28 to the Group’s
Consolidated Financial Statements.

(CHF thousands) 2020 2019

January 1 17,267,766 74,896
Additions 55,621 17,194,459
Impairments/Disposals (73) (1,589)
Total 17,323,314 17,267,766

5. Financial income and expenses

2020 2019
(CHF thousands) Income Expenses Income Expenses
Guarantee income and Interest 24,216 (12,806) 26,276 (18,709)
Foreign exchange 73,995 (77,592) 37,856 (37,668)
Syndications/Bank fees — (3,321) — (2,602)
Total 98,211 (93,719) 64,132 (58,979)

6. Long-term interest-bearing loans to group subsidiaries

Financial assets include long-term interest-bearing loans.

Tranche 1 Tranche 2 Total

Original Borrower Start date Repayment date (USD thousands) (EUR thousands) (CHF thousands)
Alcon Pharmaceuticals Ltd. March, 2019 March, 2024 800,000 350,000 1,083,727
Alcon Pharmaceuticals Ltd. September, 2020 September, 2022 — — 130,000
Total 1,213,727

A-5
NOTES TO FINANCIAL STATEMENTS OF ALCON INC. (Continued)

7. Long-term interest-bearing liabilities

In 2019, the Company entered into a syndicated facilities agreement with 11 international banks to obtain two loans of
USD 800 million (Facility B) and EUR 350 million (Facility C) nominal value with a maturity of 5 years. The below schedule
summarizes the external debt, on which annual interest is set as a total of US denominated LIBOR and bank margin for
Facility B and EURIBOR and bank margin for Facility C.

Facility B Facility C Total

Original Borrower Repayment date (USD thousands) (EUR thousands) (CHF thousands)
Syndicated facilities March, 2024 800,000 350,000 1,083,727

8. Share capital
The share capital consists of 499,700,000 registered shares with a nominal value of CHF 0.04 (CHF 19,988,000).

Authorized share capital

The Board of Directors is authorized, at any time until January 29, 2021, to increase the Company's share capital by a
maximum of CHF 977,400 through the issue of up to 24,435,000 fully paid up new shares of CHF 0.04 nominal value each
for the purpose of any share-based incentive or other participation plans, schemes or arrangements for directors,
associates or advisors of the Alcon Group ("Employee Participation Plans"). Share capital increases representing one or
several portions of this maximum are permitted. The remaining available authorized share capital for increase as at
December 31, 2020 is 13,435,000 share for a value of CHF 537,400 (2019: 21,435,000 shares for a value of CHF 857,400).
The Board of Directors shall determine the amount of share capital to be issued, the form of payment required for
subscription, the date of issue, and the commencement of dividend entitlement.
Existing shareholders' subscription rights shall be excluded and the Board of Directors is authorized to allocate the shares
as it deems appropriate (including to any group company or third party involved in the administration of any Employee
Participation Plan) to fulfill or cover existing or future obligations to deliver shares under any Employee Participation Plan.

Capital movements

2020 2019
Number of Share capital Number of Share capital
shares (CHF thousands) shares (CHF thousands)
January 1 491,700,000 19,668 2,500,000 100
Capital increase — — 486,200,000 19,448
Capital increase – Treasury shares 8,000,000 320 3,000,000 120
Total 499,700,000 19,988 491,700,000 19,668

On January 25, 2019, there was an ordinary share capital increase of CHF 19,448,000 in accordance with article 650 SCO.
On December 4, 2019, there was a second capital increase for an additional 3,000,000 shares at CHF 0.04 nominal value
each, kept as treasury shares, in accordance with the authorized share capital (Note 10).
On December 1, 2020, a capital increase occurred for 8,000,000 shares at CHF 0.04 nominal value each, kept as treasury
shares, in accordance with the authorized share capital (Note 10).

A-6
NOTES TO FINANCIAL STATEMENTS OF ALCON INC. (Continued)

9. Free reserves
In preparation of the Spin-off of Alcon from the Novartis Group, several contributions in kind were performed to transfer
the underlying business and its related goodwill. Novartis AG contributed investments for a value of CHF 7,113,528,983
and the related goodwill for a value of CHF 10,080,930,324. In addition, Novartis AG contributed 529,052 treasury shares to
the Company at nominal value (Note 10).
The Spin-off occurred on April 9, 2019.

(CHF thousands) 2020 2019

January 1 17,269,305 —
2018 Allocation — 74,846
2019 Contribution — 17,194,459
2019 Allocation 1,501 —
Total 17,270,806 17,269,305

The Annual General Meeting held on May 6, 2020 approved that, after allocation to the general reserve, the remaining
available earnings be carried forward.
None of the above-mentioned contributions can be considered as capital contribution as per art. 5 para 1bis Withholding
Tax Act and therefore are not eligible to be treated as a repayment of share capital.

10. Treasury shares

Alcon Inc. has met legal requirements for legal reserves under articles 659 et seq. SCO for treasury shares.
At December 31, 2020 share-based compensation transactions amounted to 935,929 shares (2019: 112,478 shares).

2020 2019
Deduction from Deduction from
equity for treasury equity for treasury
Number of shares held by Number of shares held by
shares held by Alcon Inc. shares held by Alcon Inc.
Alcon Inc. (CHF thousands) Alcon Inc. (CHF thousands)
January 1 3,416,574 (137) — —
Contributed by Novartis AG (Note 9) — — 529,052 (21)
Capital Increase 8,000,000 (320) 3,000,000 (120)
Transferred (935,929) 38 (112,478) 4
Total 10,480,645 (419) 3,416,574 (137)

11. Declaration of full time equivalent (FTE) employees

The Company employs less than 10 associates.

A-7
NOTES TO FINANCIAL STATEMENTS OF ALCON INC. (Continued)

12. Shares held by management and administrative bodies

Number of shares
2020 2019
Board of Directors 82,566 32,653
Alcon Executive Committee 689,413 530,230

Further information regarding the individual holding of the members of the Board of Directors and the Alcon Executive
Committee is available in “Board of Directors Compensation 2020—Share Ownership of the Board Members” and “ECA
Compensation 2020—Share Ownership of the ECA Members as of December 31, 2020”, respectively, of “Item 6.B
Compensation” in the Annual Report.

13. Major shareholders

According to the Alcon share register, the following nominee shareholders held more than 5% of the share capital of Alcon
Inc. as of December 31, 2020 and 2019:

% Holding of share capital

2020 2019
Chase Nominees Ltd. 9.06% 17.24%
Cede & Co (DTC nominee) 22.46% 16.76%

In addition, according to disclosure notifications filed with Alcon and the SIX Swiss Exchange pursuant to the obligations
set forth in the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives
Trading (FMIA), the below companies held between 5% and 10% of the Company’s total share capital as of December 31,
2020 and/or 2019, respectively, but were not registered with Alcon share register:

% Holding of share capital

2020 2019
T-Rowe Price Associates Inc. Below 5% Between 5% and 10%
BlackRock Inc. Between 5% and 10% Between 5% and 10%
The Capital Group Companies Inc. Below 5% Between 5% and 10%

14. Contingent liabilities

The Company is liable for the below:
• Alcon Inc. is an unconditional guarantor to the USD 2.75 billion (CHF 2.42 billion) senior notes issued by Alcon Finance
Corporation.
• A JPY 11 billion (CHF 0.1 billion) to Mizuho Bank Ltd. and a JPY 11.4 billion (CHF 0.1 billion) loan to MUFG Bank Ltd.,
both due to mature in 2021 and borrowed by Alcon Japan Ltd.
As part of the facilities agreement mentioned in Note 7, Alcon Inc. is guaranteeing up to USD 1 billion (CHF 0.9 billion), the
committed Revolving Credit Facility available to Alcon Vision LLC, Alcon Finance Corp, APL and Alcon Inc. In 2020, the
maturity date of the facility was extended by one year to March 2025. As at December 31, 2020 the credit facility was not
drawn down.
The Company is part of the Swiss Alcon value added tax ("VAT") group and is therefore jointly liable for existing and future
VAT claims from Swiss Federal Tax Administration.

A-8
NOTES TO FINANCIAL STATEMENTS OF ALCON INC. (Continued)

15. Significant events after the balance sheet date

The ability to further issue any shares under the authorized share capital (Note 8) has lapsed on January 29, 2021.
Subsequent to December 31, 2020, the Revolving Facility (Note 14) was extended to March 2026. The Revolving Facility
remained undrawn as of February 23, 2021
The Board of Directors has evaluated subsequent events as they relate to the Company for potential recognition or
disclosures from January 1, 2021 to the date of the approval of these financial statements and has determined there are
no additional subsequent events to be reported in these financial statements.

A-9
APPROPRIATION OF AVAILABLE EARNINGS
FOR ALCON INC. AS PER BALANCE SHEET
AND DECLARATION OF DIVIDEND
(CHF thousands) 2020 2019
Available unappropriated earnings
Balance brought forward 17,270,806 74,846
Contribution to free reserves for the year 17,194,459
Net income for the year 175,791 11,285
Total available earnings at the disposal of the Annual General Meeting 17,446,597 17,280,590
Appropriation proposed by the Board of Directors (cash dividend) (49,970) —
Total available earnings after appropriation of cash dividend 17,396,627 17,280,590
Allocation to general reserve (160) (9,784)
Balance to be carried forward after cash dividend and general reserve 17,396,467 17,270,806
allocation

For the year 2020, the Board of Directors proposes that out of the earnings available to the Annual General Meeting, a
dividend of CHF 0.1 gross per registered share be distributed. Calculated on the total number of issued shares of
499,700,000, this corresponds to a maximum total amount of CHF 50 million.
In deciding on the appropriation of dividends, the Annual General Meeting shall take into account that Alcon Inc. will not
pay dividends on own shares held by the Company.

A-10
REPORT OF THE STATUTORY AUDITOR
to the General Meeting of Alcon Inc.
Fribourg, Switzerland

Report on the audit of the financial statements

Opinion
We have audited the financial statements of Alcon Inc., which comprise the balance sheet as at December 31, 2020,
income statement and notes for the year then ended, including a summary of significant accounting policies, for the year
ended December 31, 2020.

In our opinion, the financial statements (pages A-1 to A-9) as at December 31, 2020 comply with Swiss law and the
Company’s Articles of Incorporation.

Basis for opinion

We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities under those
provisions and standards are further described in the “Auditor’s responsibilities for the audit of the financial statements”
section of our report.

We are independent of the entity in accordance with the provisions of Swiss law and the requirements of the Swiss audit
profession and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our audit approach

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable
assurance that the financial statements are free from material misstatement. Misstatements may arise due to fraud or
error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.

Based on our professional judgment, we determined certain quantitative thresholds for materiality, including the overall
materiality for the financial statements as a whole as set out in the table below. These, together with qualitative
considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole.

Overall materiality CHF 185 million

How we determined it 1% of total assets

Rationale for the materiality We chose total assets as the benchmark because, in our view, it is the benchmark
benchmark applied which reflects the actual substance of the entity. This is a generally accepted
benchmark for ultimate holding entities.

We agreed with the Audit and Risk Committee that we would report to them misstatements above CHF 9.25 million
identified during our audit as well as any misstatements below that amount which, in our view, warranted reporting for
qualitative reasons.

Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial
statements. In particular, we considered where subjective judgments were made; for example, in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in

A-11
all of our audits, we also addressed the risk of management override of internal controls, including among other matters
consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial
statements as a whole, taking into account the structure of the entity, the accounting processes and controls, and the
industry in which the entity operates.

Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight Authority
We have determined that there are no key audit matters to communicate in our report.

Responsibilities of the Board of Directors for the financial statements

The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of
Swiss law and the Company’s Articles of Incorporation, and for such internal control as the Board of Directors determines
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate the entity or to cease operations, or has no realistic alternative
but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss
law and Swiss Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Swiss law and Swiss Auditing Standards, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the entity’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the entity to cease to continue as a going concern.

We communicate with the Board of Directors, mostly through the Audit and Risk Committee, regarding, among other
matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

A-12
From the matters communicated with the Board of Directors, we determine those matters that were of most significance
in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal
control system exists which has been designed for the preparation of financial statements according to the instructions of
the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s
articles of incorporation. We recommend that the financial statements submitted to you be approved.

PricewaterhouseCoopers SA

Michael Foley Colin Johnson

Audit expert
Auditor in charge

Geneva, February 23, 2021

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https://www.alcon.com/