Company: BLCO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001860742-25-000004
Chunk: 372

Company: Bausch & Lomb Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1A
Chunk 372
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 the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows for 2024 and 2023:(in millions)20242023Gain (loss) related to changes in fair value$7 $(6)(Loss) gain related to settlements$(2)$2 Acquisition-related Contingent Consideration ObligationsAcquisition-related contingent consideration, which primarily consists of potential milestone payments, is recorded in the 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 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.

F-31

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 December 31, 2024, the fair value measurements of acquisition-related contingent consideration were determined using risk-adjusted discount rates ranging from 8% to 28%, and a weighted average risk-adjusted discount rate of 9%. The weighted average risk-adjusted discount rate was calculated by weighting each contract’s relative fair value at December 31, 2024.The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the years 2024 and 2023:(in millions)20242023Balance, beginning of period$44 $4 Adjustments to Acquisition-related contingent consideration:Accretion for the time value of money$4 $3 Fair value adjustments due to changes in estimates of future payments(13)(1)Acquisition-related contingent consideration adjustments(9)2 Additions (Note 4)89 38 Payments/Settlements(1)— Balance, end of period123 44 Current portion included in Accrued and other current liabilities15 5 Non-current portion$108