INCOME TAXES |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES For interim financial statement purposes, U.S. GAAP income tax expense/benefit related to ordinary income is determined by applying an estimated annual effective income tax rate against a company’s ordinary income, subject to certain limitations on the benefit of losses. Income tax expense/benefit related to items not characterized as ordinary income is recognized as a discrete item when incurred. The estimation of Bausch + Lomb’s income tax provision requires the use of management forecasts and other estimates, application of statutory income tax rates and an evaluation of valuation allowances. The Company’s estimated annual effective income tax rate may be revised, if necessary, in each interim period. Provision for income taxes for the nine months ended September 30, 2026 was $28 million. The difference between the statutory tax rate and the effective tax rate is primarily attributable to jurisdictional mix of earnings and the discrete tax effects of: (a) the tax effects of acquired tax intangibles and net operating losses, (b) a benefit related to a favorable settlement in a foreign jurisdiction, (c) the filing of certain tax returns and (d) a one-time tax assessment of a foreign subsidiary. Benefit from income taxes for the nine months ended September 30, 2025 was $36 million. The difference between the statutory tax rate and the effective tax rate was primarily attributable to jurisdictional mix of earnings and the discrete tax effects of: (a) a benefit for previously accrued taxes that settled favorably with the Internal Revenue Service, (b) the impact of the voluntary recall of certain enVista® IOL products, (c) the filing of certain tax returns and (d) a change in the deduction for stock compensation. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made. The valuation allowance against deferred tax assets was $226 million and $212 million as of September 30, 2026 and December 31, 2025, respectively. The increase is related to losses incurred during the nine months ended September 30, 2026 in jurisdictions for which the Company has established a full valuation allowance. The Company’s U.S. affiliates remain under examination for various federal and state tax audits in the United States for years 2017 through 2024. Bausch + Lomb in Canada is under examination for the 2023 tax year. The Company's subsidiaries in Germany are under audit for tax years 2017 through 2019. The Company received a preliminary assessment from the German taxing authority that would disallow certain trade tax and transfer pricing adjustments. The Company is contesting this proposed tax deficiency through the appropriate appeals process, and if necessary, through appropriate litigation. Based on the current information available, the Company believes any exposure would not be material to its consolidated financial statements. Accordingly, no additional income tax provision has been recorded as of September 30, 2026. The Company's subsidiaries in France are under audit for tax years 2023 through 2025. As of September 30, 2026 and December 31, 2025, the Company had unrecognized tax benefits of $59 million and $71 million, respectively, which included interest and penalties of $10 million and $12 million, respectively. Of the total unrecognized tax benefits as of September 30, 2026, $50 million would reduce the Company’s effective tax rate, if recognized.
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