Company: BLCO
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0001860742-25-000018
Chunk: 22

Company: Bausch & Lomb Corp
Filing Date: 2025-07-30
Form: 10-Q
Item: Item 8
Chunk 22
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 ObligationsAcquisition-related contingent consideration, which primarily consists of potential milestone payments, is recorded in the Condensed Consolidated Balance Sheets at its acquisition date estimated fair value, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the Condensed Consolidated Statements of Operations. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in fair value measurement accounting.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, 2025, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 10% to 16%, and a weighted average risk-adjusted discount rate of 10%. The weighted average risk-adjusted discount rate was calculated by weighting each contract’s relative fair value at June 30, 2025.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, 2025 and 2024:(in millions)20252024Balance, as of January 1,$123 $44 Adjustments to Acquisition-related contingent consideration:Accretion for the time value of money$7 $2 Fair value adjustments due to changes in estimates of future payments(34)(1)Acquisition-related contingent consideration adjustments(27)1 Payments/Settlements— (1)Balance, as of June 30,96 44 Current portion included in Accrued and other current liabilities4 4 Non-current portion$92 $40 Fair Value of Long-term DebtThe fair value of long-term debt as of June 30, 2025 and December 31, 2024 was $5,093 million and $4,898 million, respectively, and was estimated using the quoted market prices for the same or similar debt