INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2025

The components of Loss before provision for income taxes for 2025, 2024 and 2023 consist of:

The components of Provision for income taxes for 2025, 2024 and 2023 consist of:


(in millions)	2025
	Amount		Percent
Loss before provision for income taxes	$	(317)
Provision for income taxes
Expected provision for income taxes at Canadian statutory rate	$	79	25	%
Domestic provincial and local income taxes, net of federal (national) income tax effect	—		—	%
Foreign Tax Effects
United States
State and local taxes	5		2	%
Effects of cross-border taxes	(4)		(1)	%
Research & Development Tax Credits	8		3	%
Contingent Consideration Fair Value Adjustments	6		2	%
Intercompany Profit in Ending Inventory	(2)		(1)	%
All Other	(4)		(1)	%
Ireland
Statutory Rate Differential	(49)		(15)	%
Changes in Valuation Allowance	(11)		(3)	%
Non-Deductible Interest	(17)		(5)	%
Capital Loss on Sale of Assets	7		2	%
Foreign exchange impact on EUR denominated assets in Ireland	(5)		(2)	%
Intercompany Profit in Ending Inventory	18		6	%
All Other	—		—	%
Netherlands
Changes in Valuation Allowance	(4)		(1)	%
All Other	(1)		—	%
Germany
Statutory Rate Differential	8		3	%
Other	(2)		(1)	%
Other Foreign Jurisdictions	(7)		(2)	%
Effect of Changes in Tax Laws or Rates enacted in the current period	—		—	%
Effect of Cross Border Taxes (FAPI)	(2)		(1)	%
Tax Credits	—		—	%
Changes in Valuation Allowances	(15)		(5)	%
Nontaxable and Nondeductible Items
Share-based Compensation	(14)		(4)	%
Non-Deductible Interest	(5)		(2)	%
Worldwide Changes to Uncertain Tax Positions	—		—	%
All Other
Foreign exchange impact on USD denominated debt in Canada	(24)		(8)	%
All Other	—		—	%
	$	(35)	(11)	%


(in millions)	2024		2023
Loss before provision for income taxes	$	(234)	$	(166)
Provision for income taxes
Expected provision for income taxes at Canadian statutory rate	$	62	$	44
Adjustments to tax attributes	2		1
Non-deductible amount of share-based compensation	(10)		(7)
Change in valuation allowance	(44)		(42)
Change in uncertain tax positions	1		2
Withholding tax	(7)		(5)
Return to provision	5		(1)
Foreign tax rate differences	(74)		(57)
Foreign exchange impact on USD denominated debt in Canada	25		—
Disallowed interest	(28)		(14)
Other	(3)		(3)
	$	(71)	$	(82)

Deferred tax assets and liabilities consist of:


(in millions)	December 31, 2025		December 31, 2024
Deferred tax assets:
Tax loss and credit carryforwards	$	1,032	$	923
Intangible assets	—		25
Provisions	173		145
Share-based compensation	22		15
Leases	15		14
Other	28		45
Total deferred tax assets	1,270		1,167
Less valuation allowance	(212)		(179)
Net deferred tax assets	1,058		988
Deferred tax liabilities:
Plant, equipment and technology	71		64
Intangible assets	17		—
Leases and Right of Use Assets	14		14
Outside basis differences	41		38
Total deferred tax liabilities	143		116
Net deferred tax asset	$	915	$	872

The following table presents a reconciliation of the deferred tax asset valuation allowance for 2025, 2024 and 2023:


(in millions)	2025		2024		2023
Balance, beginning of year	$	179	$	150	$	54
Charged to Benefit from income taxes	29		30		42
Other	4		(1)		54
Balance, end of year	$	212	$	179	$	150

The following table presents a reconciliation of the unrecognized tax benefits, not including interest and penalties, for 2025, 2024 and 2023:


(in millions)	2025		2024		2023
Balance, beginning of year	$	55	$	59	$	60
Additions for tax positions of prior years	6		—		2
Reductions for tax positions of prior years	(1)		(3)		(1)
Lapse of statute of limitations	(1)		(1)		(2)
Balance, end of year	$	59	$	55	$	59

Bausch & Lomb Corp 10-K