v3.26.1
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Fair value measurements are estimated based on valuation techniques and inputs categorized as follows:
•Level 1 — Quoted prices in active markets for identical assets or liabilities;
•Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following fair value hierarchy table presents the components and classification of the Company’s financial assets and liabilities measured at fair value on a recurring basis:
 June 30, 2026December 31, 2025
(in millions)TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Assets:        
Cash equivalents$934 $924 $10 $— $587 $574 $13 $— 
Restricted cash$13 $13 $— $— $16 $16 $— $— 
Cross-currency swaps$3 $— $3 $— $5 $— $5 $— 
Foreign currency exchange contracts$1 $— $1 $— $1 $— $1 $— 
Liabilities:     
Acquisition-related contingent consideration$293 $— $— $293 $292 $— $— $292 
Cross-currency swaps$136 $— $136 $— $158 $— $158 $— 
Foreign currency exchange contracts$2 $— $2 $— $5 $— $5 $— 
Cash equivalents consist of highly liquid investments, primarily money market funds, with maturities of three months or less when purchased, and are reflected in the Condensed Consolidated Balance Sheets at carrying value, which approximates fair value due to their short-term nature. Cash, cash equivalents and restricted cash as presented in the Condensed Consolidated Balance Sheet as of June 30, 2026 includes $378 million of cash, cash equivalents and restricted cash held by legal entities of Bausch + Lomb. Cash held by Bausch + Lomb legal entities and any future cash from the operating, investing and financing activities of Bausch + Lomb is expected to be retained by Bausch + Lomb entities and is generally not available to support the operations, investing and financing activities of other legal entities, including Bausch Health unless paid as a dividend which would be determined by the Board of Directors of Bausch + Lomb and paid pro rata to Bausch + Lomb’s shareholders.
There were no transfers into or out of Level 3 assets or liabilities during the six months ended June 30, 2026.
Cross-currency Swaps
Bausch + Lomb enters into cross-currency swaps to mitigate fluctuation in the value of a portion of its euro-denominated net investment in its consolidated financial statements from fluctuation in exchange rates. The euro-denominated net investment being hedged is Bausch + Lomb’s investment in certain Bausch + Lomb euro-denominated subsidiaries. As of June 30, 2026, these swaps had an aggregate notional value of $1,000 million.
The assets and liabilities associated with Bausch + Lomb’s cross-currency swaps as included in the Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 are as follows:
(in millions)June 30,
2026		December 31,
2025
Other non-current liabilities$(136)$(158)
Prepaid expenses and other current assets$3 $5 
Net fair value$(133)$(153)
The following table presents the effect of hedging instruments on the Condensed Consolidated Statements of Comprehensive income (loss) and the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025:
Three Months Ended
June 30,		Six Months Ended June 30,
(in millions)2026202520262025
Gain (loss) recognized in Other comprehensive income (loss)$2 $(92)$22 $(128)
Gain excluded from assessment of hedge effectiveness$1 $3 $4 $6 
Location of gain of excluded componentInterest ExpenseInterest Expense
No portion of the cross-currency swaps were ineffective for the six months ended June 30, 2026 and 2025. During the six months ended June 30, 2026 and 2025, the Company received $5 million and $6 million, respectively, in interest settlements, which are reported as investing activities in the Condensed Consolidated Statements of Cash Flows.
Foreign Currency Exchange Contracts
The Company’s foreign currency exchange contracts are remeasured at each reporting date to reflect changes in their fair values determined using forward rates, which are observable market inputs, multiplied by the notional amount. The Company’s foreign currency exchange contracts are economically hedging the foreign exchange exposure on certain of the Company’s intercompany balances. As of June 30, 2026, the Company’s outstanding foreign currency exchange contracts had an aggregate notional amount of $601 million.
The assets and liabilities associated with the Company’s foreign exchange contracts as included in the Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 are as follows:
(in millions)June 30,
2026		December 31,
2025
Accrued and other current liabilities$(2)$(5)
Prepaid expenses and other current assets$1 $1 
Net fair value$(1)$(4)
The following table presents the effect of the Company’s foreign exchange contracts on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2026 and 2025:
Three Months Ended
June 30,		Six Months Ended
June 30,
(in millions)2026202520262025
Gain (loss) related to changes in fair value$1 $(4)$2 $(9)
Loss related to settlements$(6)$(11)$(11)$(13)
Acquisition-related Contingent Consideration Obligations
The fair value measurement of contingent consideration obligations arising from business combinations is determined via a probability-weighted discounted cash flow analysis, using unobservable (Level 3) inputs. These inputs may include: (i) the estimated amount and timing of projected cash flows, (ii) the probability of the achievement of the factor(s) on which the contingency is based and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases or decreases in any of those inputs in isolation could result in a significantly higher or lower fair value measurement. At June 30, 2026, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 6% to 27%, and a weighted average risk-adjusted discount rate of 8%. The weighted average risk-adjusted discount rate was calculated by weighting each contract’s relative fair value at June 30, 2026.
The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2026 and 2025:
June 30,
(in millions)20262025
Balance, beginning of period$292 $359 
Adjustments to Acquisition-related contingent consideration:
Accretion for the time value of money$12 $14 
Fair value adjustments due to changes in estimates of future payments6 (54)
Acquisition-related contingent consideration (Note 4)18 (40)
Additions2 — 
Payments/Settlements(19)(16)
Balance, end of period293 303 
Current portion included in Accrued and other current liabilities83 39 
Non-current portion included in Other non-current liabilities$210 $264 
Fair Value of Long-term Debt
The fair value of long-term debt as of June 30, 2026 and December 31, 2025 was $19,275 million and $19,626 million, respectively, and was estimated using the quoted market prices for the same or similar debt issuances (Level 2).