Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

			Year Ended December 31,
(in millions, except per share data)			2025						2024						2023
Net sales			$	20,074					$	16,747					$	14,240
Cost of products sold (excluding amortization expense)			6,221						5,257						4,345
Gross profit			13,854						11,490						9,896
Operating expenses:
Selling, general and administrative expenses			6,887						5,984						5,190
Research and development expenses			2,052						1,615						1,414
Royalty expense			46						33						46
Amortization expense			897						856						828
Intangible asset impairment charges			46						386						58
Contingent consideration net expense (benefit)			18						(5)						58
Restructuring net charges (credits)			101						16						69
Litigation-related net charges (credits)			194						—						(111)
			10,241						8,887						7,553
Operating income (loss)			3,613						2,603						2,343
Other income (expense):
Interest expense			(349)						(305)						(265)
Other, net			121						(16)						(93)
Income (loss) before income taxes			3,385						2,282						1,985
Income tax expense (benefit)			493						436						393
Net income (loss)			2,892						1,846						1,592
Preferred stock dividends			—						—						(23)
Net income (loss) attributable to noncontrolling interests			(6)						(8)						(1)
Net income (loss) attributable to Boston Scientific common stockholders			$	2,898					$	1,853					$	1,570
Net income (loss) per common share — basic			$	1.96					$	1.26					$	1.08
Net income (loss) per common share — diluted			$	1.94					$	1.25					$	1.07
Weighted-average shares outstanding
Basic			1,480.4						1,471.5						1,453.0
Diluted			1,494.5						1,485.9						1,463.5

See notes to the consolidated financial statements. Amounts may not add due to rounding.

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

			Year Ended December 31,
(in millions)			2025						2024						2023
Net income (loss)			$	2,892					$	1,846					$	1,592
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment			(685)						225						(105)
Net change in derivative financial instruments			(202)						1						(115)
Net change in defined benefit pensions and other items			15						(8)						(9)
Other comprehensive income (loss)			(872)						218						(230)
Comprehensive income (loss)			2,020						2,064						1,362
Net income (loss) attributable to noncontrolling interests			(6)						(8)						(1)
Other comprehensive income (loss) attributable to noncontrolling interests			12						(7)						(10)
Comprehensive income (loss) attributable to noncontrolling interests			6						(15)						(11)
Comprehensive income attributable to Boston Scientific common stockholders			$	2,013					$	2,079					$	1,373

See notes to the consolidated financial statements. Amounts may not add due to rounding.

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

			As of December 31,
(in millions, except share and per share data)			2025						2024
ASSETS
Current assets:
Cash and cash equivalents			$	1,965					$	414
Trade accounts receivable, net			2,926						2,558
Inventories			2,943						2,810
Prepaid income taxes			299						307
Other current assets			660						831
Total current assets			8,794						6,920
Property, plant and equipment, net			4,036						3,294
Goodwill			18,282						17,089
Other intangible assets, net			7,019						6,684
Deferred tax assets			3,675						3,655
Other long-term assets			1,866						1,754
TOTAL ASSETS			$	43,673					$	39,395
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current debt obligations			$	299					$	1,778
Accounts payable			1,144						960
Accrued expenses			3,201						2,773
Other current liabilities			795						887
Total current liabilities			5,439						6,399
Long-term debt			11,137						8,968
Deferred tax liabilities			220						155
Other long-term liabilities			2,405						1,870
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value - authorized 50,000,000 shares; 0 shares issued as of December 31, 2025 and 2024			—						—
Common stock, $0.01 par value - authorized 2,000,000,000 shares; 1,746,290,165 shares issued as of December 31, 2025 and 1,737,846,196 shares issued as of December 31, 2024			17						17
Treasury stock, at cost - 263,289,848 shares as of December 31, 2025 and 2024			(2,251)						(2,251)
Additional paid-in capital			21,505						21,056
Retained earnings			5,571						2,673
Accumulated other comprehensive income (loss), net of tax			(610)						275
Total stockholders’ equity			24,233						21,770
Noncontrolling interests			239						233
Total equity			24,472						22,003
TOTAL LIABILITIES AND EQUITY			$	43,673					$	39,395

See notes to the consolidated financial statements. Amounts may not add due to rounding.

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

			Year Ended December 31,
(in millions, except share data)			2025						2024						2023
Preferred stock shares issued
Beginning			—						—						10,062,500
Conversion of mandatory convertible preferred stock to common stock			—						—						(10,062,500)
Ending			—						—						—
Common stock shares issued
Beginning			1,737,846,196						1,729,000,224						1,696,633,993
Impact of stock-based compensation plans			8,443,969						8,845,972						8,383,329
Conversion of mandatory convertible preferred stock to common stock			—						—						23,982,902
Ending			1,746,290,165						1,737,846,196						1,729,000,224
Preferred stock
Beginning			$	—					$	—					$	0
Conversion of mandatory convertible preferred stock to common stock			—						—						(0)
Ending			$	—					$	—					$	—
Common stock
Beginning			$	17					$	17					$	17
Impact of stock-based compensation plans			—						0						0
Conversion of mandatory convertible preferred stock to common stock			—						—						0
Ending			$	17					$	17					$	17
Treasury Stock
Beginning			$	(2,251)					$	(2,251)					$	(2,251)
Repurchase of common stock			—						—						—
Ending			$	(2,251)					$	(2,251)					$	(2,251)
Additional paid-in capital
Beginning			$	21,056					$	20,647					$	20,289
Conversion of mandatory convertible preferred stock to common stock			—						—						(0)
Impact of stock-based compensation plans			449						409						359
Ending			$	21,505					$	21,056					$	20,647
Retained earnings (Accumulated deficit)
Beginning			$	2,673					$	819					$	(750)
Net income (loss)			2,892						1,846						1,592
Net (income) loss attributable to noncontrolling interests			6						8						1
Preferred stock dividends			—						—						(23)
Ending			$	5,571					$	2,673					$	819
Accumulated other comprehensive income (loss), net of tax
Beginning			$	275					$	49					$	269
Changes in other comprehensive income (loss), net of tax:
Foreign currency translation adjustment			(697)						232						(95)
Derivative financial instruments			(202)						1						(115)
Defined benefit pensions and other items			15						(8)						(9)
Ending			$	(610)					$	275					$	49
Total stockholders' equity			$	24,233					$	21,770					$	19,282
Noncontrolling interests
Beginning			$	233					$	248					$	—
Net income (loss) attributable to noncontrolling interests			(6)						(8)						(1)
Changes in other comprehensive income (loss)			12						(7)						(10)
Changes to noncontrolling ownership interest			—						—						259
Ending			$	239					$	233					$	248
Total equity			$	24,472					$	22,003					$	19,530

See notes to the consolidated financial statements. Amounts may not add due to rounding.

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Year Ended December 31,
(in millions)			2025						2024						2023
Net income (loss)			$	2,892					$	1,846					$	1,592
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities
Depreciation and amortization			1,368						1,269						1,196
Deferred and prepaid income taxes			(2)						(70)						(1)
Stock-based compensation expense			299						266						233
Goodwill and other intangible asset impairment charges			46						386						58
Net loss (gain) on investments and notes receivable			(139)						79						59
Contingent consideration net expense (benefit)			18						(5)						58
Inventory step-up amortization			132						51						6
Fixed asset and right-of-use asset impairment			124						72						27
Other, net			42						2						47
Increase (decrease) in operating assets and liabilities, excluding purchase accounting:
Trade accounts receivable			(269)						(351)						(238)
Inventories			(188)						(228)						(660)
Other assets			(85)						(126)						10
Accounts payable, accrued expenses and other liabilities			296						243						118
Cash provided by (used for) operating activities			4,534						3,435						2,503
Investing Activities
Purchases of property, plant and equipment and internal use software			(876)						(790)						(711)
Payments for acquisitions of businesses, net of cash acquired			(1,593)						(4,640)						(1,811)
Payments for investments and acquisitions of certain technologies			(254)						(280)						(89)
Other, net			84						23						37
Cash provided by (used for) investing activities			(2,640)						(5,687)						(2,574)
Financing Activities
Payment of contingent consideration previously established in purchase accounting			(62)						(131)						(39)
Payments for finance leases			(258)						(25)						—
Payments on short-term borrowings			(1,595)						(504)						—
Net increase (decrease) in commercial paper			(196)						187						(4)
Proceeds from long-term borrowings, net of debt issuance costs			1,558						2,145						—
Cash used to net share settle employee equity awards			(131)						(87)						(56)
Proceeds from issuances of shares of common stock pursuant to employee stock compensation and purchase plans			282						230						182
Other, net			7						(1)						(77)
Cash provided by (used for) financing activities			(395)						1,814						5
Effect of foreign exchange rates on cash			42						(11)						(4)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents			1,541						(450)						(70)
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period			606						1,055						1,126
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period			$	2,147					$	606					$	1,055

See notes to the consolidated financial statements. Amounts may not add due to rounding.

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (SUPPLEMENTAL INFORMATION)

			Year Ended December 31,
(in millions)			2025						2024						2023
Supplemental Information
Cash paid for income taxes, net			$	561					$	656					$	512
Cash paid for interest			319						250						259
Fair value of contingent consideration recorded in purchase accounting			258						29						273
Noncash transactions related to finance lease obligations			205						122						—
			As of December 31,
(in millions)			2025						2024						2023
Reconciliation to amounts within the consolidated balance sheets
Cash and cash equivalents			$	1,965					$	414					$	865
Restricted cash and restricted cash equivalents included in Other current assets			80						111						130
Restricted cash equivalents included in Other long-term assets			103						80						60
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period			$	2,147					$	606					$	1,055

See notes to the consolidated financial statements. Amounts may not add due to rounding.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Our consolidated financial statements include the accounts of Boston Scientific Corporation's wholly owned subsidiaries and entities for which we have a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. In the first quarter of 2023, we acquired a majority stake investment in Acotec Scientific Holdings Limited (Acotec) and have elected to consolidate their financial statements on a one quarter lag.

When used in this report, the terms "we," "us," "our" and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries. We assess the terms of our investment interests to determine if any of our investees meet the definition of a variable interest entity (VIE). Based on our assessments under the applicable guidance, we did not have controlling financial interests in any VIEs and, therefore, did not consolidate any VIEs during 2025, 2024 or 2023.

Basis of Presentation

The accompanying consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and with the instructions to Form 10-K and Regulation S-X.

Amounts reported in millions within this Annual Report on Form 10-K are computed based on the amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded numbers.

Subsequent Events

We evaluate events occurring after the date of our accompanying consolidated balance sheets for potential recognition or disclosure in our consolidated financial statements. Those items requiring recognition in the financial statements have been recorded and disclosed accordingly.

Those items requiring disclosure (non-recognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note B – Acquisitions and Strategic Investments and Note H – Income Taxes for further details.

Accounting Estimates

To prepare our consolidated financial statements in accordance with GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, the disclosure of contingent liabilities as of the date of our consolidated financial statements and the reported amounts of our revenues and expenses during the reporting period. Our actual results may differ from these estimates.

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

Cash and Cash Equivalents

We record Cash and cash equivalents in our consolidated balance sheets at cost, which approximates fair value. Our policy is to invest excess cash in short-term marketable securities earning a market rate of interest without assuming undue risk of loss of principal amounts invested and we limit our direct exposure to securities in any one industry or issuer. We consider cash equivalents to be all short-term marketable securities with remaining days to maturity of 90 days or less from the purchase date that can be readily converted to cash.

Restricted Cash and Restricted Cash Equivalents

Amounts included in restricted cash represent cash on hand required to be set aside by a contractual agreement related to receivable factoring arrangements and deferred compensation plans. Restricted cash equivalents primarily represent amounts paid into various qualified settlement funds and current amounts related to our non-qualified pension plan. These are included in Other current assets within our consolidated balance sheets. Generally, the restrictions related to the factoring arrangements lapse at the time we remit the customer payments collected by us for servicing previously sold customer receivables to the

purchaser. Restrictions for deferred compensation lapse when amounts are paid to the employee. The restrictions related to the various qualified settlement funds will lapse as we approve amounts payable to claimants, at which time we no longer have rights to a return of the amounts paid into the various qualified settlement funds. Restricted cash equivalents included in Other long-term assets within our consolidated balance sheets are related to deferred compensation plans.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, derivative financial instruments and accounts and notes receivable. Our investment policy limits exposure to concentrations of credit risk and changes in market conditions. Counterparties to financial instruments expose us to credit-related losses in the event of nonperformance. We transact our financial instruments with a diversified group of major financial institutions with investment grade credit ratings and actively monitor their credit ratings and our outstanding positions to limit our credit exposure. In the normal course, our payment terms with customers, including distributors, hospitals, health care agencies, clinics, doctors' offices and other private and governmental institutions, are typically 30 days in the U.S. but may be longer in international markets and generally do not require collateral.

For our derivative financial instruments, we also employ master netting arrangements that limit the risk of counterparty non-payment on a particular settlement date to the net gain that would have otherwise been received from the counterparty. Although not completely eliminated, we do not consider the risk of counterparty default to be significant as a result of these protections. Further, none of our derivative instruments are subject to collateral or other security arrangements, nor do they contain provisions that are dependent on our credit ratings from any credit rating agency.

We record credit loss reserves to Allowance for credit losses when we establish Trade accounts receivable if credit losses are expected over the asset's contractual life. We base our estimates of credit loss reserves on historical experience and adjust, as necessary, to reflect current conditions using reasonable and supportable forecasts not already reflected in the historical loss information. We utilize an accounts receivable aging approach to determine the reserve to record at accounts receivable commencement for certain customers, applying country or region-specific factors. In performing the assessment of outstanding accounts receivable, regardless of country or region, we may consider significant factors relevant to collectability, including those specific to a customer such as bankruptcy, lengthy average payment cycles and type of account.

We write-off amounts determined to be uncollectible against this reserve. We are not dependent on any single institution, and no single customer accounted for more than ten percent of our net sales in 2025, 2024 and 2023; however, large group purchasing organizations, hospital networks, international distributors and dealers and other buying groups are important to our business and represent a substantial portion of our net sales.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the U.S. and international economies. Our sales to government-owned or supported customers, particularly in southern Europe, are subject to an increased number of days outstanding prior to payment relative to other countries. Further, the ongoing site-of-service trend of shifting procedure volumes in the U.S. toward non-hospital settings, particularly ambulatory surgery centers and office-based labs, continues. Many of these customers are smaller than those we have historically done business with and may have more limited liquidity. We have adjusted our estimates of credit loss reserves for these customers, regions and conditions, as appropriate. We believe our Allowance for credit losses is adequate as of December 31, 2025; however, if significant changes were to occur in the payment practices of government customers, or if there is an increase in bankruptcies among our ambulatory surgery center or office-based customers, we may not be able to collect on receivables due to us from these customers, and our write-offs of uncollectible accounts may increase.

Revenue Recognition

We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors or dealers. We consider revenue to be earned when all of the applicable criteria are met in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers.

Transfer of control is evidenced upon passage of title and risk of loss to the customer unless we are required to provide additional services. We treat shipping and handling costs performed after a customer obtains control of the good as a fulfillment cost and record these costs as a component of Selling, general and administrative expenses when incurred. We recognize revenue from consignment arrangements based on product usage, or implant, which indicates that the sale is complete. We recognize a receivable at the point in time we have an unconditional right to payment. Payment terms are typically 30 days in the U.S. but may be longer in international markets.

Many of our Cardiac Rhythm Management (CRM) product offerings combine the sale of a device with our LATITUDE™ Patient Management System, which represents a future service obligation. Similarly, arrangements that include the sale of capital equipment may include multiple performance obligations. For contracts with multiple performance obligations, the total transaction price is allocated to each performance obligation in an amount based on the estimated relative standalone selling price of each distinct good or service in the contract. For goods or services for which observable standalone selling prices are not available, or if sales volume is not sufficient, we estimate the standalone selling price considering entity-specific factors including, but not limited to, the expected cost and margin of the product or service. The use of alternative estimates could result in a different amount of revenue deferral.

Deferred Revenue

We record a contract liability, or deferred revenue, when we have an obligation to provide a product or service to the customer and payment is received or due in advance of our performance. When we sell a device with a future service obligation, we defer revenue on the unfulfilled performance obligation and recognize this revenue over the related service period.

Contract liabilities are classified within Other current liabilities and Other long-term liabilities on our accompanying consolidated balance sheets. Our contract liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System. Revenue is recognized over the average service period which is based on device and patient longevity. Our contract liabilities also include deferred revenue related to the LUX-Dx II+™ Insertable Cardiac Monitor system, also within our CRM business, for which revenue is recognized over the average service period based on device longevity and usage. We have elected not to disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less. In addition, we have not identified material unfulfilled performance obligations for which revenue is not currently deferred.

Variable Consideration

We generally allow our customers to return defective, damaged and, in certain cases, expired products for credit. We base our estimate for sales returns upon historical trends and record the amount as a reduction to revenue when we sell the initial product. In addition, we may allow customers to return previously purchased products for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to sales returns and could cause actual returns to differ from these estimates.

We also offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the corresponding liability as current. We estimate rebates for products where there is sufficient historical information available to predict the volume of expected future rebates. If we are unable to reasonably estimate the expected rebates, we record a liability for the maximum rebate percentage offered. We have entered certain agreements with group purchasing organizations to sell our products to participating hospitals at negotiated prices. We recognize revenue from these agreements following the same revenue recognition criteria discussed above.

Post-Implant Services

We provide non-contractual services to customers, where necessary, to ensure the safe and effective use of certain implanted devices. Because the revenue related to the immaterial non-contractual services is recognized before they are delivered, we forward accrue the costs to provide these services at the time the devices are sold. We record these costs to Selling, general and administrative expenses within our consolidated statements of operations. We estimate the amount of time spent by our representatives performing these services and their compensation throughout the device life to determine the service cost. Changes to our business practice or the use of alternative estimates could result in a different amount of accrued cost.

Warranty Obligations

We offer warranties on certain of our product offerings. These products come with a standard limited warranty covering the repair or replacement of these devices. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim and record a liability equal to these estimated costs as Cost of products sold at the time the product sale occurs. We assess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary.

Inventories

We state inventories at the lower of first-in, first-out cost or net realizable value. We utilize a standard costing system, capitalizing variances between estimated and actual production costs during periods of normal production, and amortize to Cost of products sold over inventory turns. We expense manufacturing variances during periods of abnormal production, or less than 75 percent of manufacturing capacity. We did not record any abnormal or material production variances during the years ended December 31, 2025, 2024 or 2023. We base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales.

Property, Plant and Equipment

We state property, plant, equipment and leasehold improvements at historical cost. We charge expenditures for maintenance and repairs to expense and capitalize additions and improvements that extend the life of the underlying asset. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. We depreciate buildings over a maximum life of 40 years; building improvements over the remaining useful life of the building structure; equipment over a five to 15 year life; furniture and fixtures over a seven year life; and leasehold improvements over the shorter of the useful life of the improvement or the term of the related lease.

Valuation of Business Combinations

We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the date of acquisition, including identifiable intangible assets and in-process research and development (IPR&D), which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including IPR&D, on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate to goodwill any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired. Transaction costs associated with these acquisitions are expensed as incurred through Selling, general and administrative expenses.

In cases where we acquire a company in which we previously held an equity stake, we attribute a portion of the purchase price to the previously-held equity interest, which is implied based on the total purchase consideration allocable to each of the shareholders, including Boston Scientific, according to priority of equity interests. We record a gain or loss in Other, net equal to the difference between the implied fair value of our prior ownership and the book value immediately prior to the acquisition.

Where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through Contingent consideration net expense (benefit) on our consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount rates, periods, timing and amount of projected revenue or timing or likelihood of achieving regulatory, revenue or commercialization-based milestones. Payment of additional consideration is generally contingent on the acquired company reaching certain performance milestones after the acquisition date, including attaining specified revenue levels, achieving product development targets and/or obtaining regulatory approvals for products in development at the date of the acquisition.

Indefinite-lived Intangibles

Our indefinite-lived intangible assets, which are not subject to amortization, consist of IPR&D intangible assets acquired in a business combination. Our IPR&D represents intangible assets that are used in research and development activities but have not yet reached technological feasibility, regardless of whether they have alternative future use. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. We classify IPR&D as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development efforts. Upon completion of the associated research and development efforts, we will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, we write-off the remaining carrying amount of the associated IPR&D intangible asset.

We test our indefinite-lived intangible assets at least annually during the third quarter for impairment and reassess their classification as indefinite-lived assets. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the

quantitative impairment test by comparing the fair value with the carrying value in accordance with FASB ASC Topic 350, Intangibles - Goodwill and Other (FASB ASC Topic 350). If the carrying value exceeds the fair value of the indefinite-lived intangible asset, we write the carrying value down to the fair value.

We use the income approach to determine the fair values of our IPR&D. We base our revenue assumptions on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected levels of market share. In arriving at the value of the in-process projects, we consider, among other factors, the in-process projects’ stage of completion, the complexity of the work completed as of the acquisition date, the costs already incurred, the projected costs to complete, the contribution of other acquired assets, the expected regulatory path and introduction dates by region and the estimated useful life of the technology. See Note C – Goodwill and Other Intangible Assets for more information related to indefinite-lived intangibles.

For asset purchases outside of business combinations, we expense any purchased research and development assets as of the acquisition date.

Amortization and Impairment of Intangible Assets

We record definite-lived intangible assets at historical cost and amortize them over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: patents and licenses, two to 20 years; amortizable technology-related and customer relationships, five to 25 years; other intangible assets, various. In addition, we classify internal use software as an intangible asset within our accompanying consolidated balance sheets and amortize over a one to 15 year useful life. Due to the operational nature of these assets, we record the amortization of our internal use software within Cost of products sold; Selling, general and administrative expenses and Research and development expenses, as appropriate within our accompanying consolidated statements of operations, and include in Amortization expense only that associated with intangible assets acquired in a business combination or asset acquisition, as well as internally-developed patents.

We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. If we determine it is more likely than not that the asset is impaired based on our qualitative assessment of impairment indicators, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset or asset group, we will write the carrying value down to fair value in the period impairment is identified.

We calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset or asset group. See Note C – Goodwill and Other Intangible Assets for more information related to impairments of intangible assets.

Goodwill Valuation

We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We test our goodwill balances, utilizing both the qualitative and quantitative approach described in FASB ASC Topic 350, in the second quarter of each year as of April 1 for impairment, or more frequently if impairment indicators are present or changes in circumstances suggest an impairment may exist.

We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. For our 2025 annual impairment assessment, we identified the following reporting units for purposes of our annual goodwill impairment test: Interventional Cardiology, Rhythm Management, Peripheral Interventions, Endoscopy, Urology and Neuromodulation. Based on the criteria prescribed in FASB ASC Topic 350, we aggregated the Interventional Cardiology Therapies and Watchman components of our Cardiology operating segment into a single Interventional Cardiology reporting unit and aggregated the Cardiac Rhythm Management and Electrophysiology components into a single Rhythm Management reporting unit. In the fourth quarter of 2025, an organizational change combined

our legacy Cardiology and Peripheral Interventions operating segments into a single Cardiovascular operating segment. This change had no impact on our reporting units or reportable segments.

In performing annual impairment assessments, the qualitative approach is used for testing reporting units where it is not more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then we perform a quantitative impairment test. When a quantitative test is performed, we typically use the income approach, specifically the Discounted Cash Flow method, to derive the fair value of each of our reporting units in preparing our goodwill impairment assessments. We make assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within our Discounted Cash Flow analysis is based on our most recent operational budgets, long range strategic plans and other estimates.

Investments in Publicly Traded and Privately-Held Entities

For publicly-held equity securities for which we do not have the ability to exercise significant influence, we account for these investments at fair value with changes in fair value recognized currently in Other, net within our accompanying consolidated statements of operations. For privately-held equity securities for which we do not have the ability to exercise significant influence, we apply the measurement alternative approach and measure these investments at cost minus impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We account for investments in entities for which we have the ability to exercise significant influence under the equity method if we hold 50 percent or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary in accordance with FASB ASC Topic 323, Investments - Equity Method and Joint Ventures. We record these investments initially at cost and adjust the carrying amount to reflect our share of the earnings or losses of the investee, including all adjustments similar to those made in preparing consolidated financial statements. Refer to Note B – Acquisitions and Strategic Investments for additional details on our investment balances.

Each reporting period, we evaluate our investments to determine if there are any events or circumstances that are likely to have a significant adverse effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to, a significant deterioration in earnings performance, recent financing rounds at reduced valuations, a significant adverse change in the regulatory, economic or technological environment of an investee or a significant doubt about an investee’s ability to continue as a going concern. If we identify an impairment indicator, we will estimate the fair value of the investment and compare it to its carrying value. Our estimation of fair value considers financial information related to the investee available to us, including valuations based on recent third-party equity investments in the investee. For our investments for which we apply the measurement alternative, if the fair value of the investment is less than its carrying value, the investment is impaired and we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. For our equity method investments, if we determine an impairment is other-than-temporary, we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. We deem an impairment to be other-than-temporary unless available evidence indicates that the valuation is more likely than not to recover up to the carrying value of the investment in a reasonable period of time, and we have both the ability and intent to hold the investment for at least the period of time needed to recover the value.

Net gains and losses and impairments associated with our investment portfolio are included within Other, net in our consolidated statements of operations.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, we determine deferred tax assets and liabilities based on differences between the financial reporting and tax bases of our assets and liabilities. We measure deferred tax assets and liabilities using the enacted tax rates and laws that will be in effect when we expect the differences to reverse. Future changes in tax laws and rates may affect recorded deferred tax assets and liabilities. We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that we will not realize some portion of or all the deferred tax assets.

With respect to uncertain tax positions, in accordance with FASB ASC Topic 740, Income Taxes, any tax position that meets the more-likely-than-not recognition threshold is measured and recognized in the consolidated financial statements at the largest amount of benefit greater than 50 percent likely to be realized upon ultimate settlement. The amount relating to uncertain tax positions is classified as a current liability in the consolidated balance sheets to the extent that we anticipate making a payment within one year.

Interest and penalties associated with income taxes are classified within Income tax expense (benefit) in our consolidated statements of operations.

We have elected to treat the impact of Net Controlled Foreign Corporation Tested Income (NCTI), formerly known as Global Intangible Low Taxed Income (GILTI), as a period cost reported as part of continuing operations.

See Note H – Income Taxes for further information and discussion of our income tax provision and balances.

Legal Costs

We are involved in various legal and regulatory proceedings, including intellectual property, breach of contract, securities and product liability litigation. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures or impact our ability to sell our products. We are also the subject of certain governmental investigations, which could result in substantial fines, penalties and administrative remedies. We maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. We accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We analyze litigation settlements to identify each element of the arrangement. We allocate arrangement consideration to patent licenses received based on estimates of fair value and capitalize these amounts as assets if the license will provide an ongoing future benefit. We record certain legal charges, credits and costs of defense, which we consider to be unusual or infrequent and significant as Litigation-related charges (credits) in our consolidated statements of operations; all other legal charges, credits and costs are recorded within Selling, general and administrative expenses within our consolidated statements of operations. See Note I – Commitments and Contingencies for discussion of our individual material legal proceedings.

Costs Associated with Exit Activities

We record employee termination costs in accordance with FASB ASC Topic 712*,* Compensation - Nonretirement and Postemployment Benefits, if we pay the benefits as part of an ongoing benefit arrangement, which includes benefits provided as part of our established severance policies or that we provide in accordance with international statutory requirements. We accrue employee termination costs associated with an ongoing benefit arrangement if the obligation is attributable to prior services rendered, the rights to the benefits have vested, the payment is probable and we can reasonably estimate the liability. We account for involuntary employee termination benefits that represent a one-time benefit in accordance with FASB ASC Topic 420*, Exit or Disposal Cost Obligations* (FASB ASC Topic 420). We record such costs into expense over the employee’s future service period, if any.

Other costs associated with exit activities may include contract termination costs and consulting fees, which are expensed in accordance with FASB ASC Topic 420 and are included within Restructuring net charges (credits) in our consolidated statements of operations. We recorded Restructuring net charges (credits) of $101 million in 2025, $16 million in 2024 and $69 million in 2023. The restructuring reserve balance as of December 31, 2025 and 2024 was $59 million and $26 million, respectively. Additionally, costs directly related to our active restructuring initiatives, including program management costs, accelerated depreciation, fixed asset write-offs and costs to transfer product lines among facilities are included within Costs of products sold, Selling, general and administrative expenses and Research and development expenses within our consolidated statements of operations. Impairment of right of use lease assets and lease termination costs directly related to our active restructuring initiatives are expensed in accordance with FASB ASC Topic 842, Leases (FASB ASC Topic 842) and included within Costs of products sold or Selling, general and administrative expenses in our consolidated statements of operations.

Translation of Foreign Currency

We translate all assets and liabilities of foreign subsidiaries from the functional currency, which is generally the local currency, into U.S. dollars using the year-end exchange rate. We show the net effect of these translation adjustments within our consolidated financial statements as a component of Accumulated other comprehensive income (loss), net of tax. We translate revenues and expenses at the average exchange rates in effect during the year. For any significant foreign subsidiaries located in highly inflationary economies, we re-measure their financial statements as if the functional currency were the U.S. dollar.

Foreign currency transaction gains and losses are included within Other, net in our consolidated statements of operations, net of gains and losses from any related derivative financial instruments.

Financial Instruments and Hedging Activities

We address market risk from changes in foreign currency exchange rates and interest rates through risk management programs which are operated pursuant to documented corporate risk management policies and include the use of derivative and nonderivative financial instruments. We recognize all derivative and nonderivative financial instruments in our consolidated financial statements at fair value in accordance with FASB ASC Topic 815*, Derivatives and Hedging* (FASB ASC Topic 815), and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our consolidated financial statements. In accordance with FASB ASC Topic 815, for those derivative instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies for, and has been designated as part of a hedging relationship, as well as on the type of hedging relationship. Our derivative instruments do not subject our earnings to material risk, as gains and losses on these derivatives generally offset gains and losses on the item being hedged, and we do not enter into derivative transactions for speculative purposes.

Currency Hedging Instruments

Our risk from changes in currency exchange rates consists primarily of monetary assets and liabilities; forecasted intercompany and third-party transactions; and net investments in certain subsidiaries. We manage currency exchange rate risk at a consolidated level to reduce the cost of hedging by taking advantage of offsetting transactions. We employ derivative and nonderivative instruments, primarily forward currency contracts, to reduce the risk to our earnings and cash flows associated with changes in currency exchange rates. We may experience unanticipated currency exchange gains or losses to the extent the actual activity is different than forecasted. In addition, changes in currency exchange rates related to any unhedged transactions may impact our earnings and cash flows.

Certain of our currency derivative instruments are designated as cash flow hedges under FASB ASC Topic 815, and are intended to protect the U.S. dollar value of forecasted transactions. The gain or loss on a derivative instrument designated as a cash flow hedge is recorded in the Net change in derivative financial instruments component of Other comprehensive income (loss), net of tax (OCI) within our consolidated statements of comprehensive income (loss) until the underlying third-party transaction occurs. When the underlying third-party transaction occurs, we recognize the gain or loss in earnings within Cost of products sold in our consolidated statements of operations. In the event the hedging relationship is no longer effective, or if the occurrence of the hedged forecast transaction becomes no longer probable, we reclassify the gains or losses within Accumulated other comprehensive income (loss), net of tax (AOCI) to earnings at that time. The cash flows related to the derivative instruments designated as cash flow hedges are reported as operating activities in our consolidated statements of cash flows.

We also designate certain forward currency contracts as net investment hedges to hedge a portion of our net investments in certain of our entities. For these derivative instruments, we elected to use the spot method to assess hedge effectiveness. We also elected to exclude the spot-forward difference, referred to as the excluded component, from the assessment of hedge effectiveness and are amortizing this amount separately, as calculated at the date of designation, on a straight-line basis over the term of the currency forward contracts. As such, we defer recognition of foreign currency gains and losses within the Foreign currency translation adjustment (CTA) component of OCI, and we reclassify amortization of the excluded component from AOCI to current period earnings within Interest expense within our consolidated statements of operations.

We designate certain euro-denominated debt as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in euro. For these nonderivative instruments, we defer recognition of the foreign currency remeasurement gains and losses within the CTA component of OCI. We reclassify these gains and losses to current period earnings within Other, net within our consolidated statements of operations only when the hedged item affects earnings, which would occur upon disposal or substantial liquidation of the underlying foreign subsidiary.

We also use forward currency contracts that are not part of designated hedging relationships as a part of our strategy to manage our exposure to currency exchange rate risk related to monetary assets and liabilities and related forecast transactions. These non-designated currency forward contracts have an original time to maturity consistent with the hedged currency transaction exposures, generally less than one year, and are marked-to-market with changes in fair value recorded to earnings within Other, net in our consolidated statements of operations.

Interest Rate Hedging Instruments

Our interest rate risk relates primarily to U.S. dollar and euro-denominated borrowings partially offset by U.S. dollar cash investments. We use interest rate derivative instruments to mitigate the risk to our earnings and cash flows associated with exposure to changes in interest rates. Under these agreements, we and the counterparty, at specified intervals, exchange the

difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. We designate these derivative instruments either as fair value or cash flow hedges in accordance with FASB ASC Topic 815. In the event that we designate outstanding interest rate derivative instruments as cash flow hedges, we record the changes in the fair value of the derivatives within OCI until the underlying hedged transaction occurs. In the event that we designate outstanding interest rate derivative instruments as fair value hedges, we record the changes in the fair values of interest rate derivatives designated as fair value hedges and of the underlying hedged debt instruments in Interest expense, which generally offset.

Research and Development

We expense research and development (R&D) costs, including new product development programs, regulatory compliance and clinical research as incurred. Refer to Indefinite-lived Intangibles above for our policy regarding R&D projects acquired in connection with our business combinations and asset purchases.

NOTE B – ACQUISITIONS AND STRATEGIC INVESTMENTS

Our consolidated financial statements include the operating results for acquired entities from the respective dates of acquisition. We have not presented supplemental pro forma financial information for completed acquisitions or divestitures given their results are not material to our consolidated financial statements. Further, transaction costs were immaterial to our consolidated financial statements and were expensed as incurred.

On January 27, 2026, we completed our acquisition of 100 percent of Nalu Medical, Inc. (Nalu Medical), a privately held medical technology company focused on developing and commercializing innovative and minimally invasive solutions for patients with chronic pain. We had been an investor in Nalu Medical since 2017 and previously held an equity stake of approximately nine percent. The transaction to acquire the remaining stake consisted of an upfront cash payment of approximately $517 million, net of cash acquired. The Nalu Medical business will be integrated into our Neuromodulation division.

On January 15, 2026, we announced our entry into a definitive agreement to acquire 100 percent of Penumbra, Inc. (Penumbra), a publicly traded medical technology company primarily focused on thrombectomy products for use in peripheral vascular procedures in the removal of blood clots and blockages. The purchase price is valued at $374 per share, or approximately $14.500 billion. The transaction is expected to be completed in 2026, subject to customary closing conditions. The Penumbra business will be integrated into our Cardiovascular division.

2025 Acquisitions

On July 11, 2025, we completed our acquisition of 100 percent of Anrei Medical (HZ) Co., Ltd. (Anrei Medical), a privately held company that specializes in the design and production of medical devices for minimally invasive procedures primarily serving the field of gastroenterology. The transaction price consisted of an upfront cash payment, net of cash acquired, of approximately $182 million. The Anrei Medical portfolio complements our existing Endoscopy portfolio which will provide physicians with more treatment options to meet specific patient needs.

On May 7, 2025, we completed our acquisition of the remaining shares of SoniVie Ltd. (SoniVie), a privately held medical device company that has developed the TIVUS™ Intravascular Ultrasound System. An investigational technology, the TIVUS system is designed to denervate nerves surrounding blood vessels to treat a variety of hypertensive disorders, including renal artery denervation for hypertension. We had been an investor in SoniVie since 2022 and held an equity stake of approximately 10 percent immediately prior to the acquisition date. The transaction price to acquire the remaining stake consisted of an upfront cash payment of $362 million, net of cash acquired after adjustments for our prior equity stake and other closing adjustments, and an additional future payment of up to $200 million, or $180 million for the portion not previously owned, upon achievement of a regulatory milestone. We remeasured the fair value of our previously-held investment based on the allocation of the purchase price according to priority of equity interests which resulted in a $45 million gain recognized within Other, net during the second quarter of 2025. The SoniVie business will be integrated into our Cardiovascular division.

On May 6, 2025, we completed our acquisition of 100 percent of Intera Oncology®, Inc. (Intera), a privately held medical device company that provides the Intera 3000 Hepatic Artery Infusion Pump and floxuridine – a chemotherapy drug – both of which are approved by the U.S. Food and Drug Administration. The Intera 3000 pump is used to administer hepatic artery infusion therapy to treat tumors in the liver primarily caused by metastatic colorectal cancer. The transaction price consisted of an upfront cash payment, net of cash acquired, of approximately $172 million. The Intera business will be integrated into our Cardiovascular division.

On April 1, 2025, we completed our acquisition of the remaining shares of Bolt Medical, Inc. (Bolt Medical), the developer of an intravascular lithotripsy advanced laser-based platform for the treatment of coronary and peripheral artery disease. We had been an investor in Bolt Medical since 2019 and held an equity stake of approximately 26 percent immediately prior to the acquisition date. The transaction price to acquire the remaining stake consisted of an upfront cash payment of $475 million, net of cash acquired after adjustments for our prior equity stake, debt and other closing adjustments, including Bolt Medical's achievement of a regulatory milestone. In addition, the transaction price consists of a future payment of up to $200 million, or approximately $148 million for the portion not previously owned, upon achievement of a second regulatory milestone. We remeasured the fair value of our previously-held investment based on the allocation of the purchase price according to priority of equity interests which resulted in a $185 million gain recognized within Other, net during the second quarter of 2025. The Bolt Medical business will be integrated into our Cardiovascular division.

On January 24, 2025, we completed our acquisition of 100 percent of Cortex, Inc. (Cortex), a privately held medical technology company focused on the development of a diagnostic mapping solution which may identify triggers and drivers outside of the pulmonary veins that are foundational to atrial fibrillation (AF). The transaction price consisted of an upfront cash payment of $239 million, net of cash acquired, and up to an additional $50 million in future payments upon achievement of clinical and other milestones. The Cortex business will be integrated into our Cardiovascular division.

In addition, during 2025, we completed the acquisition of other businesses for which the aggregate transaction price consisted of upfront cash payments of $162 million, net of cash acquired.

Purchase Price Allocation

We accounted for these transactions as business combinations in accordance with FASB ASC Topic 805*, Business Combinations* (FASB ASC Topic 805). The preliminary purchase prices were comprised of the amounts presented below:

(in millions)			Bolt Medical			SoniVie			Other
Payment for acquisition, net of cash acquired			$	475		$	362		$	756
Fair value of contingent consideration			100			98			38
Fair value of prior interest			207			55			—
			$	782		$	516		$	794

We recorded the assets acquired and liabilities assumed at their respective fair values as of the closing date of the transaction. The preliminary purchase price allocations were comprised of the components presented below, which represent the preliminary determination of the fair value of assets acquired and liabilities assumed, with the excess of the purchase price over the fair value of net identifiable assets acquired recorded to goodwill. The final determination of the fair value of certain assets and liabilities will be completed within the measurement period in accordance with FASB ASC Topic 805.

(in millions)			Bolt Medical			SoniVie			Other
Goodwill			$	304		$	248		$	507
Amortizable intangible assets			142			—			298
Indefinite-lived intangible assets			376			344			—
Other assets acquired			28			12			98
Liabilities assumed			(22)			(23)			(72)
Net deferred tax liabilities			(46)			(65)			(38)
			$	782		$	516		$	794

Goodwill was primarily established due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, none of which is deductible for tax purposes.

We allocated a portion of the purchase price to the specific intangible asset categories as follows:

			Amount Assigned (in millions)			Weighted Average Amortization Period (in years)
Bolt Medical:
Amortizable intangible assets:
Technology-related			$	142		12
Indefinite-lived intangible assets:
IPR&D			376			N/A
			$	518
SoniVie:
Indefinite-lived intangible assets:
IPR&D			$	344		N/A
			$	344
Other:
Amortizable intangible assets:
Technology-related			$	284		11
Customer relationships and other intangibles			15			12
			$	298

Our intangible assets, including technology-related intangible assets and IPR&D, consist of technical processes, intellectual property and institutional understanding with respect to products and processes that we intend to leverage in future products or processes. We used the multi-period excess earnings method, a form of the income approach, to derive the fair value of the technology-related and IPR&D intangible assets. Our amortizable intangibles are amortized on a straight-line basis over their assigned estimated useful lives.

2024 Acquisitions

On September 17, 2024, we completed our acquisition of 100 percent of the outstanding equity of Silk Road Medical, Inc. (Silk Road Medical), a publicly traded medical device company that has developed an innovative platform of products to prevent stroke in patients with carotid artery disease through a minimally-invasive procedure called transcarotid artery revascularization. The transaction consisted of an upfront cash payment of $27.50 per share, or approximately $1.126 billion, net of cash acquired. The Silk Road Medical business is being integrated into our Cardiovascular division.

On November 15, 2024, we completed our acquisition of 100 percent of the outstanding equity of Axonics, Inc. (Axonics), a public medical technology company focused on the development and commercialization of differentiated devices to treat urinary and bowel dysfunction. The transaction consisted of an upfront cash payment of $71.00 per share, or approximately $3.411 billion, net of cash acquired. The Axonics business is being integrated into our Urology division.

Purchase Price Allocation

We accounted for these transactions as business combinations in accordance with FASB ASC Topic 805. The final purchase prices were comprised of the amounts presented below:

(in millions)			Silk Road Medical			Axonics
Payment for acquisition, net of cash acquired			$	1,126		$	3,411
			$	1,126		$	3,411

We recorded the assets acquired and liabilities assumed at their respective fair values as of the closing date of the transaction. The final purchase price allocations were comprised of the components presented below, with the excess of the purchase price over the fair value of net identifiable assets acquired recorded to goodwill:

(in millions)			Silk Road Medical			Axonics
Goodwill			$	569		$	2,162
Amortizable intangible assets			507			1,242
Other assets acquired			117			423
Liabilities assumed			(45)			(183)
Net deferred tax liabilities			(23)			(233)
			$	1,126		$	3,411

Goodwill was primarily established due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, none of which is deductible for tax purposes.

We allocated a portion of the purchase price to the specific intangible asset categories as follows:

			Amount Assigned (in millions)			Weighted Average Amortization Period (in years)
Silk Road Medical:
Amortizable intangible assets:
Technology-related			$	447		12
Customer relationships			61			12
			$	507
Axonics
Amortizable intangible assets:
Technology-related			$	1,157		12
Customer relationships			85			12
			$	1,242

Our technology-related intangible assets consist of technical processes, intellectual property and institutional understanding with respect to products and processes that we intend to leverage in future products or processes. We used the multi-period excess earnings method, a form of the income approach, to derive the fair value of the technology-related intangible assets and are amortizing them on a straight-line basis over their assigned estimated useful lives.

Contingent Consideration

Changes in the fair value of our contingent consideration liability during 2025 and 2024 associated with current and prior period acquisitions were as follows:

(in millions)
Balance as of December 31, 2023			$	404
Amount recorded related to current year acquisitions			29
Contingent consideration net expense (benefit)			(5)
Contingent consideration payments and other adjustments			(257)
Balance as of December 31, 2024			$	171
Amount recorded related to current year acquisitions			258
Contingent consideration net expense (benefit)			18
Contingent consideration payments			(62)
Balance as of December 31, 2025			$	385

In 2025, payments were primarily related to our acquisition of Relievant Medsystems, Inc. following the achievement of sales milestones. In 2024, payments were primarily related to our acquisition of Farapulse, Inc. and Relievant Medsystems, Inc. following the achievement of revenue-based earnouts and sales milestones, respectively.

The maximum amount for certain contingent consideration is not determinable as it is uncapped and based on a percent of certain sales. As of December 31, 2025, the fair value of such uncapped contingent consideration is estimated at $123 million. As of December 31, 2025, the maximum amount that we could be required to pay under our other capped contingent consideration arrangements (undiscounted) is approximately $671 million.

The recurring Level 3 fair value measurements of our contingent consideration liability that we expect to be required to settle include the following significant unobservable inputs:

Contingent Consideration Liability			Fair Value as of December 31, 2025			Valuation Technique			Unobservable Input			Range									Weighted Average**(1)**
Revenue-based Payments and Commercialization Milestones			$143 million			Discounted Cash Flow			Discount Rate			6		%	-			15%			8%
Probability of Payment			15%			-			100%			99%
Projected Year of Payment			2026			-			2032			2028
Clinical-based, Regulatory and Other Milestones			$242 million			Discounted Cash Flow			Discount Rate			4		%	-			5%			5%
Probability of Payment			74%			-			86%			79%
Projected Year of Payment			2026			-			2029			2028

(1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected year of payment, the amount represents the median of the inputs and is not a weighted average.

Projected contingent payment amounts related to our clinical, regulatory and revenue-based payments and commercialization milestones are discounted back to the current period, primarily using a discounted cash flow model. Significant increases or decreases in projected revenues, probabilities of payment, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement as of December 31, 2025.

Strategic Investments

The aggregate carrying amount of our strategic investments was comprised of the following:

			As of December 31,
(in millions)			2025						2024
Equity method investments			$	396					$	278
Measurement alternative investments(1, 2)			286						277
			$	681					$	555

(1) Measurement alternative investments are privately-held equity securities without readily determinable fair values that are measured at cost less impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer, recognized in Other, net within our accompanying consolidated statements of operations.

(2) Includes publicly-held equity securities measured at fair value with changes in fair value recognized in Other, net within our consolidated statements of operations.

These investments are classified as Other long-term assets within our consolidated balance sheets, in accordance with GAAP and our accounting policies.

In 2025, the cost of our aggregated equity method investments exceeded our share of the underlying equity in net assets by $376 million, which represents amortizable intangible assets, IPR&D, goodwill and deferred tax liabilities.

NOTE C – GOODWILL AND OTHER INTANGIBLE ASSETS

The gross carrying amount of goodwill and other intangible assets and the related accumulated amortization for intangible assets subject to amortization and accumulated goodwill impairment charges are as follows:

			As of December 31, 2025												As of December 31, 2024
(in millions)			Gross Carrying Amount						Accumulated Amortization/ Write-offs						Gross Carrying Amount						Accumulated Amortization/ Write-offs
Technology-related			$	14,692					$	(9,346)					$	14,327					$	(8,605)
Patents			493						(382)						481						(381)
Other intangible assets			2,482						(1,732)						2,380						(1,612)
Amortizable intangible assets			$	17,667					$	(11,461)					$	17,188					$	(10,598)
Goodwill			$	28,182					$	(9,900)					$	26,989					$	(9,900)
IPR&D			813												94
Indefinite-lived intangible assets			$	813											$	94

The increase in our balance of goodwill and intangible assets is related primarily to our recent acquisitions. Refer to Note B – Acquisitions and Strategic Investments for further detail.

Intangible asset impairment charges were $46 million in 2025, $386 million in 2024 and $58 million in 2023. The impairment charges recorded in 2024 were primarily associated with amortizable intangible assets established in connection with our acquisitions of Cryterion Medical, Inc. (Cryterion) and Devoro Medical, Inc. (Devoro), which were integrated into our Cardiovascular business. Intangible assets acquired from Cryterion were impaired due to strong commercial adoption of our Farapulse™ Pulsed Field Ablation System and the resulting lower revenue projections and cannibalization of our cryoablation business in major markets like the U.S. Intangible assets acquired from Devoro were impaired following management's decision to cancel the related program in the second quarter of 2024.

During the third quarter of 2025, we performed our annual IPR&D impairment test and evaluated our indefinite-lived intangible assets for impairment and concluded the assets were not impaired. We also verified that the classification of IPR&D projects recognized within our consolidated balance sheets continues to be appropriate.

The following represents a roll forward of our goodwill balance by reportable segment:

(in millions)			MedSurg						Cardiovascular						Total
Balance as of December 31, 2023			$	5,347					$	9,041					$	14,387
Goodwill acquired			2,172						615						2,787
Impact of foreign currency fluctuations and purchase price and other adjustments			(35)						(51)						(86)
Balance as of December 31, 2024			$	7,483					$	9,606					$	17,089
Goodwill acquired			173						887						1,060
Impact of foreign currency fluctuations and purchase price adjustments			53						81						134
Balance as of December 31, 2025			$	7,709					$	10,574					$	18,282

In the second quarter of 2025, we performed our annual goodwill impairment test utilizing the qualitative approach described in FASB ASC Topic 350 for all reporting units. After assessing the totality of events, it was determined that it was not more likely than not that the fair value of the reporting units was less than their carrying value, and it was not deemed necessary to proceed to the quantitative test.

Refer to Note A – Significant Accounting Policies for further discussion of our goodwill and intangible asset impairment testing.

Estimated Amortization expense for each of the five succeeding fiscal years based upon our amortizable intangible asset portfolio, consisting of intangible assets acquired in a business combination or asset acquisition, as well as internally developed patents, as of December 31, 2025 is as follows:

Fiscal Year			(in millions)
2026			$	881
2027			869
2028			831
2029			786
2030			625

These estimates do not include amortization expense associated with future acquisitions that have been announced but not yet completed as of December 31, 2025.

NOTE D – HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS

Derivative Instruments and Hedging Activities

Our risk from changes in currency exchange rates consists primarily of monetary assets and liabilities; forecasted intercompany and third-party transactions; and net investments in certain subsidiaries. We employ derivative and nonderivative instruments, primarily forward currency contracts, to reduce the risk to our earnings and cash flows associated with changes in currency exchange rates. The success of our currency risk management program depends, in part, on forecasted transactions denominated primarily in euro, Chinese renminbi, Japanese yen, British pound sterling, Korean won, Australian dollar and Swiss franc.

Certain of our currency derivative instruments are designated as cash flow hedges under FASB ASC Topic 815, and are intended to protect the U.S. dollar value of forecasted transactions. We also designate certain forward currency contracts as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in euro, Chinese renminbi and Japanese yen. We designate certain euro-denominated debt as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in euro. As of December 31, 2025 and 2024, we designated as a net investment hedge our €900 million in aggregate principal amount of 0.625% senior notes issued in November 2019 and due in 2027 (December 2027 Notes).

We also use forward currency contracts that are not part of designated hedging relationships as a part of our strategy to manage our exposure to currency exchange rate risk related to monetary assets and liabilities and related forecast transactions.

Refer to Note A – Significant Accounting Policies for additional information on our accounting policies relating to derivative instruments and hedging activities.

The following table presents the contractual amounts of our hedging instruments outstanding:

(in millions)						FASB ASC Topic 815 Designation						As of December 31,
			2025						2024
Forward currency contracts						Cash flow hedge						$	7,270					$	2,464
Forward currency contracts						Net investment hedge						1,292						741
Foreign currency-denominated debt(1)						Net investment hedge						997						997
Forward currency contracts						Non-designated						4,163						4,440
Total Notional Outstanding												$	13,723					$	8,642

(1) Foreign currency-denominated debt is the €900 million debt principal associated with our December 2027 Notes designated as a net investment hedge.

The remaining time to maturity as of December 31, 2025 is within 60 months for all forward currency contracts designated as cash flow hedges and generally less than one year for all non-designated forward currency contracts. The forward currency contracts designated as net investment hedges generally mature between one and two years. The euro-denominated debt principal designated as a net investment hedge has a contractual maturity of December 1, 2027.

The following presents the effect of our derivative and nonderivative instruments designated as cash flow and net investment hedges under FASB ASC Topic 815 in our accompanying consolidated statements of operations. Refer to Note O – Changes in Other Comprehensive Income for the total amounts relating to derivative and nonderivative instruments presented within our consolidated statements of comprehensive income (loss).

			Effect of Hedging Relationships on Accumulated Other Comprehensive Income
			Amount Recognized in OCI on Hedges												Consolidated Statements of Operations**(1)**						Amount Reclassified from AOCI into Earnings
(in millions)			Pre-Tax Gain (Loss)			Tax Benefit (Expense)			Gain (Loss) Net of Tax						Location of Amount Reclassified						Pre-Tax (Gain) Loss			Tax (Benefit) Expense			(Gain) Loss Net of Tax
Year Ended December 31, 2025
Forward currency contracts
Cash flow hedges			$	(187)		$	42		$	(145)					Cost of products sold						$	(81)		$	21		$	(60)
Net investment hedges(2)			(23)			5			(18)						Interest expense						(31)			7			(24)
Foreign currency-denominated debt
Net investment hedges(3)			(123)			28			(95)						Other, net						—			—			—
Interest rate derivative contracts
Cash flow hedges			—			—			—						Interest expense						4			(1)			3
Year Ended December 31, 2024
Forward currency contracts
Cash flow hedges			$	184		$	(41)		$	142					Cost of products sold						$	(183)		$	41		$	(141)
Net investment hedges(2)			65			(15)			51						Interest expense						(18)			4			(14)
Foreign currency-denominated debt
Net investment hedges(3)			60			(13)			46						Other, net						—			—			—
Interest rate derivative contracts
Cash flow hedges			—			—			—						Interest expense						1			(0)			1
Year Ended December 31, 2023
Forward currency contracts
Cash flow hedges			$	81		$	(18)		$	63					Cost of products sold						$	(235)		$	53		$	(182)
Net investment hedges(2)			32			(7)			25						Interest expense						(10)			2			(8)
Foreign currency-denominated debt
Net investment hedges(3)			(34)			8			(27)						Other, net						—			—			—
Interest rate derivative contracts
Cash flow hedges			—			—			—						Interest expense						3			(1)			2

(1) In all periods presented in the table above, the pre-tax (gain) loss amounts reclassified from AOCI to earnings represent the effect of the hedging relationships on earnings.

(2) For our outstanding forward currency contracts designated as net investment hedges, the net gain or loss reclassified from AOCI to earnings as a reduction of Interest expense represents the straight-line amortization of the excluded component as calculated at the date of designation. This initial value of the excluded component has been excluded from the assessment of effectiveness in accordance with FASB ASC Topic 815. In the current and prior periods, we did not recognize any gains or losses on the components included in the assessment of hedge effectiveness in earnings.

(3) For our outstanding euro-denominated debt principal designated as a net investment hedge, the change in fair value attributable to changes in the spot rate is recorded in the CTA component of OCI. No amounts were reclassified from AOCI to current period earnings.

As of December 31, 2025, pre-tax net gains or losses for our derivative instruments designated, or previously designated, as cash flow and net investment hedges under FASB ASC Topic 815 that may be reclassified from AOCI to earnings within the next twelve months are presented below (in millions):

Designated Hedging Instrument						FASB ASC Topic 815 Designation						Location on Consolidated Statements of Operations						Amount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings
Forward currency contracts						Cash flow hedge						Cost of products sold						$	(19)
Forward currency contracts						Net investment hedge						Interest expense						3

Net gains and losses on currency hedge contracts not designated as hedging instruments offset by net gains and losses from currency transaction exposures are presented below:

(in millions)						Location on Consolidated Statements of Operations						Year Ended December 31,
						2025						2024						2023
Net gain (loss) on currency hedge contracts						Other, net						$	(174)					$	56					$	3
Net gain (loss) on currency transaction exposures						Other, net						162						(71)						(44)
Net currency exchange gain (loss)												$	(12)					$	(16)					$	(41)

Fair Value Measurements

FASB ASC Topic 815 requires all derivative and nonderivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. We determine the fair value of our derivative and nonderivative instruments using the framework prescribed by FASB ASC Topic 820, Fair Value Measurements and Disclosures (FASB ASC Topic 820), and considering the estimated amount we would receive or pay to transfer these instruments at the reporting date with respect to current currency exchange rates, interest rates, the creditworthiness of the counterparty for unrealized gain positions and our own creditworthiness for unrealized loss positions. In certain instances, we may utilize financial models to measure fair value of our derivative and nonderivative instruments. In doing so, we use inputs that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other observable inputs for the asset or liability and inputs derived principally from, or corroborated by, observable market data by correlation or other means. The following are the balances of our derivative and nonderivative assets and liabilities:

(in millions)						Location on Consolidated Balance Sheets**(1)**						As of December 31,
			2025						2024
Derivative and Nonderivative Assets:
Designated Hedging Instruments
Forward currency contracts						Other current assets						$	99					$	149
Forward currency contracts						Other long-term assets						57						79
												156						228
Non-Designated Hedging Instruments
Forward currency contracts						Other current assets						25						156
Total Derivative and Nonderivative Assets												$	181					$	384
Derivative and Nonderivative Liabilities:
Designated Hedging Instruments
Forward currency contracts						Other current liabilities						$	109					$	1
Forward currency contracts						Other long-term liabilities						102						—
Foreign currency-denominated debt(2)						Long-term debt						1,055						930
												1,266						931
Non-Designated Hedging Instruments
Forward currency contracts						Other current liabilities						42						59
Total Derivative and Nonderivative Liabilities												$	1,308					$	990

(1) We classify derivative and nonderivative assets and liabilities as current when the settlement date of the contract is one year or less.

(2) Foreign currency-denominated debt is the €900 million debt principal associated with our December 2027 Notes designated as a net investment hedge. A portion of this notional is subject to de-designation and re-designation based on changes in the underlying hedged item.

Recurring Fair Value Measurements

On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices. Where quoted market prices or other observable inputs are not available, we apply valuation techniques to estimate fair value. FASB ASC Topic 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The category of a financial asset or a financial liability within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:

• Level 1 – Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.

• Level 2 – Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.

• Level 3 – Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.

Assets and liabilities measured at fair value on a recurring basis consist of the following:

			As of
			December 31, 2025																								December 31, 2024
(in millions)			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Money market funds and time deposits			$	1,075					$	—					$	—					$	1,075					$	120					$	—					$	—					$	120
Publicly-held securities			17						—						—						17						19						—						—						19
Hedging instruments			—						181						—						181						—						384						—						384
Licensing arrangements			—						—						—						—						—						—						24						24
			$	1,092					$	181					$	—					$	1,273					$	139					$	384					$	24					$	547
Liabilities
Hedging instruments			$	—					$	1,308					$	—					$	1,308					$	—					$	990					$	—					$	990
Contingent consideration liability			—						—						385						385						—						—						171						171
Licensing arrangements			—						—						7						7						—						—						33						33
			$	—					$	1,308					$	392					$	1,700					$	—					$	990					$	203					$	1,194

Our investments in money market funds and time deposits are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. These investments are classified as Cash and cash equivalents or Other current assets within our accompanying consolidated balance sheets, in accordance with GAAP and our accounting policies. In addition to $1.075 billion invested in money market funds and time deposits as of December 31, 2025 and $120 million as of December 31, 2024, we held $965 million in interest-bearing and non-interest-bearing bank accounts as of December 31, 2025 and $364 million as of December 31, 2024.

Our recurring fair value measurements using Level 3 inputs include those related to our contingent consideration liability. Refer to Note B – Acquisitions and Strategic Investments for a discussion of the changes in the fair value of our contingent consideration liability.

Non-Recurring Fair Value Measurements

We hold certain assets and liabilities that are measured at fair value on a non-recurring basis in periods after initial recognition. The fair value of a measurement alternative investment is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. Refer to Note B – Acquisitions and Strategic Investments for a discussion of our strategic investments and Note C – Goodwill and Other Intangible Assets for a discussion of the fair values of our intangible assets including goodwill.

The fair value of our outstanding debt obligations, excluding finance leases, was $11.154 billion as of December 31, 2025 and $10.330 billion as of December 31, 2024. We determined fair value by using quoted market prices for our publicly registered senior notes, classified as Level 1 within the fair value hierarchy, and face value for commercial paper, term loans and credit facility borrowings outstanding. Refer to Note E – Contractual Obligations and Commitments for a discussion of our debt obligations.

NOTE E – CONTRACTUAL OBLIGATIONS AND COMMITMENTS

Borrowings and Credit Arrangements

The debt maturity schedule for our long-term debt obligations is presented below:

						Issuance Date						Maturity Date						As of December 31,												Coupon Rate**(1)**
(in millions, except interest rates)												2025						2024
March 2026 Senior Notes						February 2019						March 2026						—						255						3.750%
December 2027 Senior Notes(3)						November 2019						December 2027						1,058						935						0.625%
March 2028 Senior Notes(3)						March 2022						March 2028						881						779						1.375%
March 2028 Senior Notes						February 2018						March 2028						344						344						4.000%
March 2029 Senior Notes						February 2019						March 2029						272						272						4.000%
March 2029 Senior Notes(3)						February 2024						March 2029						881						779						3.375%
June 2030 Senior Notes						May 2020						June 2030						1,200						1,200						2.650%
March 2031 Senior Notes(3)						March 2022						March 2031						881						779						1.625%
March 2031 Senior Notes(3)						February 2025						March 2031						999						—						3.000%
March 2032 Senior Notes(3)						February 2024						March 2032						1,469						1,299						3.500%
March 2034 Senior Notes(3)						March 2022						March 2034						588						519						1.875%
March 2034 Senior Notes(3)						February 2025						March 2034						764						—						3.250%
November 2035 Senior Notes(2)						November 2005						November 2035						350						350						6.250%
March 2039 Senior Notes						February 2019						March 2039						450						450						4.550%
January 2040 Senior Notes						December 2009						January 2040						300						300						7.375%
March 2049 Senior Notes						February 2019						March 2049						650						650						4.700%
Unamortized Debt Issuance Discount and Deferred Financing Costs												2026 - 2049						(76)						(70)
Finance Lease Obligation												Various						125						126
Long-term debt																		$	11,137					$	8,968

(1) Coupon rates are semi-annual, except for the euro-denominated notes, which bear an annual coupon.

(2) In accordance with the agreements, the adjusted interest rate on our November 2035 Notes is permanently reinstated to the issuance rate of 6.25% when the lowest credit ratings assigned to these senior notes is either A- or A3 or higher. This required credit rating was attained in the second quarter of 2025 and the interest rate was reset to the issuance rate in November 2025.

(3) These notes are euro-denominated and presented in U.S. dollars based on the exchange rate in effect as of December 31, 2025 and 2024, respectively.

Contractual maturities of our Senior Notes classified as long-term debt as of December 31, 2025 are as follows (in millions):

Fiscal Year
2027			1,058
2028			1,226
2029			1,154
2030			1,200
Thereafter			6,451

Revolving Credit Facility

On May 10, 2021, we entered into a $2.750 billion revolving credit facility (as amended, supplemented or otherwise modified from time to time, the 2021 Revolving Credit Facility) with a global syndicate of commercial banks. On May 10, 2024, we entered into a third amendment to the 2021 Revolving Credit Facility credit agreement, which provided for, among other things, an extension of the scheduled maturity date to May 10, 2029, an amendment of the Ratings based pricing grid of the Applicable Margin, each as defined in the credit agreement, and reset the applicable date for purposes of determining the amounts of restructuring charges and restructuring-related expenses that may be excluded from consolidated Earnings Before Interest,

Taxes, Depreciation and Amortization (EBITDA), as defined by the credit agreement, for purposes of our maximum leverage ratio covenant, from December 31, 2022 to March 31, 2024, as further discussed under Financial Covenant below. This facility provides backing for our commercial paper program, and outstanding commercial paper directly reduces borrowing capacity under the 2021 Revolving Credit Facility. We had no amounts outstanding under the 2021 Revolving Credit Facility as of December 31, 2025 or December 31, 2024.

Financial Covenant

As of December 31, 2025, we were in compliance with the financial covenant required by the 2021 Revolving Credit Facility.

			Covenant Requirement as of December 31, 2025						Actual as of December 31, 2025
Maximum permitted leverage ratio(1)			4.50 times						1.92 times

(1) Ratio of total debt to deemed consolidated EBITDA, as defined by the 2021 Revolving Credit Facility credit agreement.

The 2021 Revolving Credit Facility includes the financial covenant requirement for all of our credit arrangements that we maintain the maximum permitted leverage ratio of 3.75 times for the remaining term. The credit agreement provides for higher leverage ratios, at our election, for the period following a Qualified Acquisition, as defined by the agreement, for which consideration exceeds $1.000 billion. In the event of such an acquisition, for the four succeeding quarters immediately following, including the quarter in which the acquisition occurs, the maximum permitted leverage ratio is 4.75 times. It steps down for the fifth, sixth and seventh succeeding quarters to 4.50 times, 4.25 times and 4.00 times, respectively. Thereafter, a maximum leverage ratio of 3.75 times is required through the remaining term of the 2021 Revolving Credit Facility. On November 15, 2024, we announced the closing of our acquisition of Axonics, which we had previously designated as a Qualified Acquisition under the credit agreement, increasing the maximum permitted leverage ratio to 4.75 times at that time. As of December 31, 2025, the maximum permitted leverage ratio is 4.50 times. We believe that we have the ability to comply with the financial covenant for the next 12 months.

The financial covenant requirement, as amended on May 10, 2024, provides for an exclusion from the calculation of consolidated EBITDA through maturity, of certain charges and expenses. The credit agreement amendment reset the starting date for purposes of calculating such permitted exclusions related to restructuring charges and restructuring-related expenses from December 31, 2022 to March 31, 2024. Permitted exclusions include up to $500 million in cash and non-cash restructuring charges and restructuring-related expenses. As of December 31, 2025, we had none of the restructuring charge exclusion remaining; no further restructuring charges will be excluded. In addition, any cash litigation payments (net of any cash litigation receipts), as defined by the agreement, are excluded from the calculation of consolidated EBITDA, provided that the sum of any excluded net cash litigation payments do not exceed $1.000 billion plus all accrued legal liabilities as of December 31, 2022. As of December 31, 2025, we had $1.160 billion of the litigation exclusion remaining.

Any inability to maintain compliance with this covenant could require us to seek to renegotiate the terms of our credit arrangements or seek waivers from compliance with this covenant, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers on terms acceptable to us. In this case, all 2021 Revolving Credit Facility commitments would terminate, and any amounts borrowed under the facility would become immediately due and payable. Furthermore, any termination of our 2021 Revolving Credit Facility may negatively impact the credit ratings assigned to our commercial paper program, which may impact our ability to refinance any then outstanding commercial paper as it becomes due and payable.

Commercial Paper

Our commercial paper program is backed by the 2021 Revolving Credit Facility. Outstanding commercial paper directly reduces borrowing capacity under the 2021 Revolving Credit Facility. We had no outstanding commercial paper under our program as of December 31, 2025 and $191 million outstanding as of December 31, 2024.

			As of December 31,
(in millions, except maturity and yield)			2025						2024
Commercial paper outstanding (at par)			$	—					$	191
Maximum borrowing capacity			2,750						2,750
Borrowing capacity available			2,750						2,559
Weighted average maturity			0 days						20 days
Weighted average yield			—		%				4.71		%

Senior Notes

We had senior notes outstanding of $11.343 billion as of December 31, 2025 and $10.451 billion as of December 31, 2024. Our senior notes were issued in public offerings, are redeemable prior to maturity and are not subject to sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to liabilities of our subsidiaries (see Other Arrangements below).

In February 2025, American Medical Systems Europe B.V. (AMS Europe), an indirect, wholly owned subsidiary of Boston Scientific, completed a registered public offering of €1.500 billion in aggregate principal amount of euro-denominated senior notes comprised of €850 million of 3.000% Senior Notes due 2031 and €650 million of 3.250% Senior Notes due 2034 (collectively, the 2025 Eurobonds). Boston Scientific has fully and unconditionally guaranteed all of AMS Europe's obligations under the 2025 Eurobonds, and no other subsidiary of Boston Scientific will guarantee these obligations. AMS Europe is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of Regulation S-X. The financial condition, results of operations and cash flows of AMS Europe are consolidated in the financial statements of Boston Scientific. The 2025 Eurobonds offering resulted in cash proceeds of $1.558 billion, net of investor discounts and issuance costs.

We used the net proceeds from the 2025 Eurobonds offering to fund the repayment at maturity of AMS Europe’s €1.000 billion 0.750% Senior Notes due March 2025 and to pay accrued and unpaid interest with respect to such notes. Additionally, we used the remaining net proceeds for general corporate purposes, including, among other things, short term investments, reduction of short term debt, funding of working capital and acquisitions. During the second quarter of 2025, we also repaid at maturity our $500 million 1.900% Senior Notes due June 2025 and accrued and unpaid interest with respect to such notes.

In February 2024, AMS Europe completed a registered public offering of €2.000 billion in aggregate principal amount of euro-denominated senior notes comprised of €750 million of 3.375% Senior Notes due 2029 and €1.250 billion of 3.500% Senior Notes due 2032 (collectively, the 2024 Eurobonds). Boston Scientific has fully and unconditionally guaranteed all of AMS Europe's obligations under the 2024 Eurobonds, in addition to all of AMS Europe's obligations under the euro-denominated senior notes that were previously issued by AMS Europe in 2022, and no other subsidiary of Boston Scientific will guarantee these obligations. The 2024 Eurobonds offering resulted in cash proceeds of $2.145 billion, net of investor discounts and issuance costs.

We primarily used the net proceeds from the 2024 Eurobonds offering to fund a portion of the purchase price of our acquisition of Axonics and to pay related fees and expenses, and for general corporate purposes. We also used the net proceeds to fund the repayment at maturity of $504 million of our 3.450% Senior Notes due March 2024 and to pay accrued and unpaid interest with respect to such notes.

Other Arrangements

We have accounts receivable factoring programs in certain European countries and with commercial banks in China and Japan which include promissory notes discounting programs. We account for our factoring programs as sales under FASB ASC Topic 860, Transfers and Servicing. We have no retained interest in the transferred receivables, other than collection and administration, and once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. Amounts de-recognized for accounts and notes receivable, which are excluded from Trade accounts receivable, net in our accompanying consolidated balance sheets, are aggregated by contract denominated currency below (in millions):

			As of December 31, 2025												As of December 31, 2024
Factoring Arrangements			Amount De-recognized						Weighted Average Interest Rate						Amount De-recognized						Weighted Average Interest Rate
Euro denominated			$	193					3.6		%				$	176					5.3		%
Yen denominated			230						1.4		%				193						0.9		%
Renminbi denominated			26						2.6		%				26						2.0		%

Other Contractual Obligations and Commitments

We had outstanding letters of credit of $203 million as of December 31, 2025 and $206 million as of December 31, 2024, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of December 31, 2025 and December 31, 2024, we had not recognized a related liability for our outstanding letters of credit in our consolidated balance sheets.

As of December 31, 2025, future minimum purchase obligations, relating primarily to non-cancellable inventory commitments and capital expenditures entered in the normal course of business, were (in millions):

Fiscal Year			Unrecorded Purchase Obligations
2026			$	1,051
2027			268
2028			186
2029			90
2030			57
Thereafter			176
			$	1,830

We have a supplier financing program offered primarily in the U.S. that enables our suppliers to opt to receive early payment at a nominal discount, while allowing us to lengthen our payment terms and optimize working capital. Our standard payment term in the U.S. is 90 days. All outstanding payables related to the supplier finance program are classified within Accounts Payable within our consolidated balance sheets and were $144 million as of December 31, 2025 and $140 million as of December 31, 2024.

The following is a roll forward of outstanding payables related to our supplier finance program:

(in millions)
Balance as of December 31, 2024			$	140
Additions			698
Settlements			(694)
Balance as of December 31, 2025			$	144

NOTE F – LEASES

We have operating and finance leases for real estate including corporate offices, land, warehouse space, vehicles and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). We recognize lease expense on a straight-line basis over the lease term for short-term leases that we do not record on our balance sheet. If there is a change in our assessment of the lease term and, as a result, the remaining lease term extends more than 12 months from the end of the previously determined lease term, or we subsequently become reasonably certain that we will exercise an option to purchase the underlying asset, the lease no longer meets the definition of a short-term lease and is accounted for as either an operating or finance lease and recognized on the balance sheet. In accordance with FASB ASC Topic 842, we account for the lease components and the non-lease components as a single lease component, with the exception of our warehouse leases. Our leases have remaining lease terms of less than 1 year to approximately 51 years, some of which may include options to extend the leases for up to 10 years. If we are reasonably certain we will exercise an option to extend the lease, the time period covered by the extension option is included in the lease term.

We determine whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of the arrangement. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, we utilize the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

Our operating lease right-of-use assets are presented within Other long-term assets and corresponding liabilities are presented within Other current liabilities and Other long-term liabilities on our consolidated balance sheets. In December 2024, a previously executed lease for additional office and warehouse space with a noncancellable lease term of 25 years commenced and was accounted for as a finance lease. As of December 31, 2025, the finance lease right-of-use asset had a carrying value of $119 million, recorded in Property, plant and equipment, net, in our consolidated balance sheets, as well as a corresponding current finance lease liability of less than $1 million, and noncurrent finance lease liability of $122 million, recorded in Current debt obligations and Long-term debt, respectively, in our consolidated balance sheets. The discount rate used to calculate the initial right-of-use asset and corresponding liability was 4.8%. In the fourth quarter of 2025, we executed buyout options for $205 million related to previously executed lease agreements for land and additional office and lab space in Maple Grove, Minnesota. The leases were classified as finance leases. The purchase has resulted in the recognition of buildings and land included within Property, plant and equipment, net.

The following table presents supplemental balance sheet information related to our operating leases:

			As of December 31,
(in millions)			2025						2024
Assets
Operating lease right-of-use assets in Other long-term assets			$	465					$	449
Liabilities
Operating lease liabilities in Other current liabilities			90						81
Operating lease liabilities in Other long-term liabilities			446						401

The following table presents the weighted average remaining lease term and discount rate information related to our operating leases:

			As of December 31,
			2025						2024
Weighted average remaining lease term			8 years						9 years
Weighted average discount rate			4.1%						3.9%

Our operating lease cost under FASB ASC Topic 842 was $117 million in 2025, $98 million in 2024 and $96 million in 2023.

The following table presents supplemental cash flow information related to our operating leases:

			Year Ended December 31,
(in millions)			2025						2024						2023
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows from operating leases			$	111					$	97					$	93

Right-of-use assets obtained in exchange for operating lease obligations were $119 million and $117 million for the years ended December 31, 2025 and 2024, respectively.

The following table presents the maturities of our operating lease liabilities as of December 31, 2025 (in millions):

Fiscal year			Operating Leases (1)
2026			$	107
2027			96
2028			82
2029			69
2030			56
Thereafter			248
Total future minimum operating lease payments			656
Less: imputed interest			(121)
Present value of operating lease liabilities			$	536

(1) Excludes expected lease payments for lease terms that have not yet commenced.

NOTE G – SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of selected captions in our accompanying consolidated balance sheets are as follows:

Trade accounts receivable, net

			As of December 31,
(in millions)			2025						2024
Trade accounts receivable			$	3,058					$	2,667
Allowance for credit losses			(132)						(109)
			$	2,926					$	2,558

The following is a roll forward of our Allowance for credit losses:

			Year Ended December 31,
(in millions)			2025						2024						2023
Beginning balance			$	109					$	110					$	109
Credit loss expense			56						41						50
Write-offs			(33)						(43)						(48)
Ending balance			$	132					$	109					$	110

Inventories

			As of December 31,
(in millions)			2025						2024
Finished goods			$	1,849					$	1,798
Work-in-process			246						193
Raw materials			849						819
			$	2,943					$	2,810

Approximately 22 percent of our finished goods inventory as of December 31, 2025 and 2024 was at customer locations pursuant to consignment arrangements or held by sales representatives.

Property, plant and equipment, net

			As of December 31,
(in millions)			2025						2024
Land			$	173					$	144
Buildings and improvements			2,484						2,019
Equipment, furniture and fixtures			3,827						3,630
Capital in progress			1,161						1,035
			7,645						6,827
Less: accumulated depreciation			3,610						3,533
			$	4,036					$	3,294

Depreciation expense was $471 million in 2025, $412 million in 2024 and $367 million in 2023.

Accrued expenses

			As of December 31,
(in millions)			2025						2024
Payroll and related liabilities			$	1,426					$	1,288
Rebates			626						494
Other			1,149						991
			$	3,201					$	2,773

Other current liabilities

			As of December 31,
(in millions)			2025						2024
Deferred revenue			$	313					$	306
Other			482						581
			$	795					$	887

NOTE H – INCOME TAXES

Our Income (loss) before income taxes consisted of the following:

			Year Ended December 31,
(in millions)			2025						2024						2023
Domestic			$	(311)					$	(261)					$	(394)
Foreign			3,696						2,542						2,379
Total			$	3,385					$	2,282					$	1,985

The related expense (benefit) for income taxes consisted of the following:

			Year Ended December 31,
(in millions)			2025						2024						2023
Current
Federal			$	242					$	310					$	189
State			22						31						15
Foreign			241						184						116
Total Current			505						526						320
Deferred
Federal			(66)						(131)						(82)
State			(53)						(52)						(22)
Foreign			107						92						176
Total Deferred			(12)						(90)						73
Total expense (benefit) for income taxes			$	493					$	436					$	393

We adopted ASC Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09) on a prospective basis beginning with the year ended December 31, 2025.

The reconciliation of income taxes at the federal statutory rate to the reported rate for income taxes pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:

			Year Ended December 31, 2025
(in millions)			Amount						Percent
U.S. Federal Statutory Tax Rate			$	711					21.0		%
State and Local Income Taxes, Net of Federal Income Tax Effects**(1)**			(39)						(1.2)		%
Foreign Tax Effects
Costa Rica
Statutory Tax Rate Differential			(349)						(10.3)		%
Ireland
Statutory Tax Rate Differential			(136)						(4.0)		%
Other			27						0.8		%
Other Foreign Jurisdictions			4						0.1		%
Effect of Cross-Border Tax Laws
Global Intangible Low-Taxed Income			328						9.7		%
Other			(29)						(0.9)		%
Tax Credits
Research and Development Tax Credits			(61)						(1.8)		%
Nontaxable or Nondeductible Items
Compensation-Related			(37)						(1.1)		%
Other			33						1.0		%
Other Adjustments			42						1.2		%
Reported Tax Rate			$	493					14.6		%

(1) State taxes in California, New Jersey, Massachusetts, Minnesota, Illinois and Michigan made up the majority (greater than 50%) of the tax effect in this category.

The reconciliation of income taxes at the federal statutory rate to the reported rate for income taxes for years prior to our adoption of ASU 2023-09 is as follows:

									Year Ended December 31,
									2024						2023
U.S. federal statutory income tax rate									21.0		%				21.0		%
State income taxes, net of federal benefit									0.1		%				0.7		%
Domestic taxes on foreign earnings									9.2		%				6.9		%
Effect of foreign taxes									(12.2)		%				(15.3)		%
Acquisition-related									1.5		%				2.2		%
Research credit									(3.1)		%				(2.9)		%
Valuation allowance									0.4		%				7.5		%
Compensation-related									(0.1)		%				0.5		%
Non-deductible expenses									0.6		%				0.4		%
Uncertain tax positions									1.3		%				(0.5)		%
Return to provision									0.5		%				(0.1)		%
Change in tax rates									0.1		%				(0.6)		%
Other, net									(0.2)		%				—		%
Reported tax rate									19.1		%				19.8		%

Significant components of our deferred tax assets and liabilities are as follows:

			As of December 31,
(in millions)			2025						2024
Deferred Tax Assets:
Inventory costs and related reserves			$	52					$	15
Tax benefit of net operating losses and credits			626						774
Reserves and accruals			383						320
Restructuring-related			27						12
Litigation and product liability reserves			56						79
Investment write-down			93						73
Compensation-related			207						186
Federal benefit of uncertain tax positions			27						25
Intangible assets			2,898						3,059
Capitalized R&D			336						329
Operating lease liabilities			132						117
Other			23						—
			4,857						4,990
Less: valuation allowance			(1,202)						(1,268)
			3,655						3,722
Deferred Tax Liabilities:
Property, plant and equipment			78						29
Unrealized gains and losses on derivative financial instruments			—						81
Operating right-of-use asset			120						111
Other			2						1
			200						222
Net Deferred Tax Assets			3,456						3,500
Prepaid tax on intercompany profit			299						307
Net Deferred Tax Assets and Prepaid Tax on Intercompany Profit			$	3,755					$	3,807

Our deferred tax assets, deferred tax liabilities and prepaid tax on intercompany profit are included in the following locations within our accompanying consolidated balance sheets (in millions):

			Location on Consolidated Balance Sheets			As of December 31,
Component			2025						2024
Prepaid tax on intercompany profit			Prepaid income taxes			$	299					$	307
Non-current deferred tax asset			Deferred tax assets			3,675						3,655
Deferred Tax Assets and Prepaid Tax on Intercompany Profit						3,975						3,962
Non-current deferred tax liability			Deferred tax liabilities			220						155
Deferred Tax Liabilities						220						155
Net Deferred Tax Assets and Prepaid Tax on Intercompany Profit						$	3,755					$	3,807

As of December 31, 2025 and 2024, we had U.S. federal and state tax net operating loss carryforwards and tax credits, the tax effect of which was $529 million and $558 million, respectively. In addition, we had foreign tax net operating loss carryforwards and tax credits, the tax effect of which was $97 million as of December 31, 2025, and $216 million as of December 31, 2024. These tax attributes expire periodically beginning in 2026.

After consideration of all positive and negative evidence, we believe that it is more likely than not that a portion of our deferred tax assets will not be realized. As a result, we recorded a valuation allowance of $1.202 billion as of December 31, 2025, and $1.268 billion as of December 31, 2024. The decrease in the valuation allowance as of December 31, 2025, compared to December 31, 2024, primarily reflects the release of valuation allowances associated with ongoing restructuring activities. This decrease was partially offset by increases in valuation allowances related to certain foreign deferred tax assets, deferred tax assets acquired during the year, and certain state attributes. The income tax impact of the unrealized gain or loss component of other comprehensive income and stockholders' equity was a benefit of $106 million in 2025, a charge of $30 million in 2024 and a benefit of $39 million in 2023.

Our manufacturing facilities in Costa Rica operate under the Free Trade Zone regime, and we also benefit from tax holidays and tax incentive grants in various other countries. These tax benefits are conditional upon meeting certain thresholds required under statutory law and will expire between fiscal years 2028 and 2034, unless extended. Subsequent to December 31, 2025, we received confirmation from the Costa Rican government that our eligibility for the Free Trade Zone regime has been extended through 2033. This subsequent event did not impact our financial statements for the year ended December 31, 2025, but may impact the effective tax rate in future periods. The tax reductions as compared to the taxes otherwise chargeable favorably impacted Net income (loss) attributable to Boston Scientific common stockholders by $540 million, $353 million and $254 million in fiscal years 2025, 2024 and 2023, respectively, and Net income (loss) per common share - diluted by $0.36, $0.24 and $0.17 in fiscal years 2025, 2024 and 2023, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

			Year Ended December 31,
(in millions)			2025						2024						2023
Beginning Balance			$	506					$	467					$	492
Additions based on positions related to the current year			74						58						65
Additions based on positions related to prior years			54						20						67
Reductions for tax positions of prior years			(10)						(20)						(114)
Settlements with taxing authorities			(14)						—						(14)
Statute of limitation expirations			(15)						(18)						(29)
Ending Balance			$	596					$	506					$	467

At December 31, 2025, 2024 and 2023, there are unrecognized tax benefits of $501 million, $423 million, and $395 million, respectively, that would affect our effective tax rate if recognized.

We are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. We have concluded all U.S. federal income tax matters and substantially all material state and local income tax matters through 2018. We have concluded substantially all foreign income tax matters through 2015.

We recognize interest and penalties related to income taxes as a component of income tax expense. We had $100 million accrued for gross interest and penalties as of December 31, 2025, $78 million as of December 31, 2024, and $70 million as of December 31, 2023. Net tax expense related to interest and penalties was immaterial in 2025, 2024 and 2023.

Unremitted earnings of our international subsidiaries are indefinitely reinvested overseas. We regularly review our plans for reinvestment or repatriation of unremitted foreign earnings, and any future change in our plans would require us to provide for the related net tax impacts. Determining the amount of unrecognized deferred income tax related to our undistributed accumulated foreign earnings and additional outside basis differences is not practicable.

A reconciliation of income taxes paid, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:

						Year Ended December 31,
(in millions)						2025
U.S. Federal						$	317
U.S. State and Local						29
Foreign
Ireland						56
Other Foreign Jurisdictions						159
						215
Total						$	561

NOTE I – COMMITMENTS AND CONTINGENCIES

We are involved in various legal proceedings, including intellectual property, product liability, securities and commercial claims and disputes, employment matters, environmental matters, governmental inquiries, investigations and proceedings, and other legal matters that arise from time to time in the ordinary course of our business, including those described below.

In recent years, we have successfully negotiated closure of several long-standing legal matters and have received favorable rulings in several other matters, however, there continues to be outstanding litigation and disputes. Adverse outcomes in one or more of these matters could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity.

Intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. From time to time, we face litigation initiated against us by others, including our competitors, claiming that our current or former product offerings infringe patents owned or licensed by them. Intellectual property litigation is inherently complex and unpredictable. In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties. In some cases, several competitors are parties in the same proceeding, or in a series of related proceedings, or litigate multiple features of a single class of devices. These dynamics frequently drive settlement not only for individual cases, but also for a series of pending and potentially related and unrelated cases. Although monetary and injunctive relief is typically sought, remedies and restitution are generally not determined until the conclusion of the trial court proceedings and can be modified on appeal. Accordingly, the outcomes of individual cases are difficult to time, predict or quantify and are often dependent upon the outcomes of other cases in other geographies.

Product liability, securities, environmental and commercial claims have been asserted against us and similar or other claims may be asserted against us in the future related to events not known to management at the present time. We maintain an insurance policy providing limited coverage against securities claims and we are substantially self-insured with respect to product liability and environmental claims and fully self-insured with respect to intellectual property infringement claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. Product liability claims, securities, environmental and commercial litigation and other legal proceedings in the future, regardless of their outcome, could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity.

In addition, like other companies in the medical device industry, we are subject to extensive regulation by national, state and local governmental agencies in the U.S. and other countries in which we operate. From time to time, we receive inquiries and have ongoing discussions with governmental agencies with respect to our operations, such as the Securities and Exchange Commission (SEC), the Department of Justice (DOJ) and other U.S. and foreign regulators. These include ongoing and any future investigations with respect to alleged Foreign Corrupt Practices Act (FCPA) violations, U.S.-based subpoenas and DOJ Civil Investigative Demands (CID), and qui tam actions or other governmental investigations often involving regulatory, marketing and other business practices. From time to time, we also self-disclose potential concerns to regulators. It is our standard practice to cooperate with governmental agencies when responding to such inquiries and investigating such matters. These governmental investigations and inquiries could result in the commencement of civil and criminal proceedings,

substantial fines, penalties and administrative remedies and have a material adverse effect on our financial position, results of operations and/or liquidity.

In accordance with FASB ASC Topic 450, Contingencies, we accrue anticipated costs of settlement, damages, losses for claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range.

Our accrual for legal matters that are probable and estimable was $242 million as of December 31, 2025, and $326 million as of December 31, 2024 and includes certain estimated costs of settlement, damages and defense primarily related to product liability cases or claims and matters assumed from acquired companies. We record certain legal charges, credits and costs of defense, which we consider to be unusual or infrequent and significant as Litigation-related net charges (credits) within our accompanying consolidated financial statements. We recorded litigation-related net charges of $194 million in 2025 related to the resolution of a legacy IP-related matter related to an acquired company. We did not record any litigation-related net charges (credits) in 2024. We recorded litigation-related net credits of $111 million in 2023 primarily related to the settlement of offensive patent litigation. All other legal charges, credits and costs are recorded within Selling, general and administrative expenses within our accompanying consolidated statements of operations.

We continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact our operating results, cash flows and/or our ability to comply with our financial covenant required by our credit arrangements.

In management's opinion, we are not currently involved in any legal proceedings other than those specifically identified below, which, individually or in the aggregate, could have a material adverse effect on our financial condition, operations and/or cash flows. Unless included in our legal accrual or otherwise indicated below, a range of loss associated with any individual material legal proceeding cannot be reasonably estimated.

Patent Litigation

On November 20, 2017, The Board of Regents, University of Texas System and TissueGen. Inc. (collectively, UT), served a lawsuit against us in the Western District of Texas. The complaint against the Company alleges patent infringement of two U.S. patents owned by UT, relating to “Drug Releasing Biodegradable Fiber Implant” and “Drug Releasing Biodegradable Fiber for Delivery of Therapeutics,” and affects the manufacture, use and sale of our Synergy™ Stent System. UT primarily seeks a reasonable royalty. On March 12, 2018, the District Court for the Western District of Texas dismissed the action and transferred it to the United States District Court for the District of Delaware. On September 5, 2019, the Court of Appeals for the Federal Circuit affirmed the dismissal of the District Court for the Western District of Texas. In April 2020, the United States Supreme Court denied the UT’s Petition for Certiorari. UT proceeded with its case against the Company in Delaware. In January 2023, a jury trial was held on the issue of whether the one UT patent still asserted in the case was valid and whether it was infringed by the Company. On January 31, 2023, a jury concluded that UT’s patent was valid and willfully infringed by the Company, and awarded UT $42 million in damages. Following the trial, UT filed a motion seeking prejudgment interest and enhanced damages. The Company filed a motion seeking judgment as a matter of law in its favor or alternatively a new trial. On June 5, 2024, the Court granted the Company’s motion for judgment as a matter of law of no willful infringement, but otherwise denied the Company’s motions. The Court also denied UT’s motion for enhanced damages, awarded approximately $7 million in pre-judgment interest, and awarded post-judgment interest. On July 3, 2024, UT and the Company each filed a notice of appeal.

Upon the Company’s acquisition of Axonics on November 15, 2024, the Company assumed responsibility for all litigation pending against Axonics. On September 18, 2023, Axonics commenced an arbitration dispute against the Al Mann Foundation (AMF), in response to which AMF asserted multiple claims against Axonics. This arbitration was to resolve, among other things, whether AMF terminated its licensing agreement with Axonics and whether Axonics owes royalties to AMF for its non-rechargeable sacral neuromodulation products. The parties reached a confidential settlement resolving all claims in the arbitration in December 2025.

Product Liability Litigation

Multiple product liability cases or claims related to transvaginal surgical mesh products designed to treat stress urinary incontinence and pelvic organ prolapse have been asserted against us, predominantly in the United States, Canada, the United Kingdom, Scotland, Ireland, and Australia. Plaintiffs generally seek monetary damages based on allegations of personal injury associated with the use of our transvaginal surgical mesh products, including design and manufacturing claims, failure to warn,

breach of warranty, fraud, violations of state consumer protection laws and loss of consortium claims. We have entered into individual and master settlement agreements or are in the final stages of entering agreements with certain plaintiffs' counsel, to resolve the majority of these cases and claims. All settlement agreements were entered into solely by way of compromise and without any admission or concession by us of any liability or wrongdoing.

We have established a product liability accrual for remaining claims asserted against us associated with our transvaginal surgical mesh products and the costs of defense thereof. We continue to engage in discussions with plaintiffs’ counsel regarding potential resolution of pending cases and claims, which we continue to vigorously contest. The final resolution of the cases and claims is uncertain and could have a material impact on our results of operations, financial condition and/or liquidity. Trials involving our transvaginal surgical mesh products have resulted in both favorable and unfavorable judgments for us. We do not believe that the judgment in any one trial is representative of potential outcomes of all cases or claims related to our transvaginal surgical mesh products.

NOTE J – STOCKHOLDERS' EQUITY

Preferred Stock

We are authorized to issue 50 million shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by our stockholders.

On May 27, 2020, we completed an offering of 10,062,500 shares of 5.50% Mandatory Convertible Preferred Stock, Series A (MCPS) at a price to the public and liquidation preference of $100 per share. The net proceeds from the MCPS offering were approximately $975 million after deducting underwriting discounts and commissions and offering expenses. On June 1, 2023 (the Mandatory Conversion Date), all outstanding shares of MCPS automatically converted into shares of common stock, with a conversion rate of 2.3834. An aggregate of approximately 24 million shares of common stock were issued upon conversion of the MCPS. Prior to the Mandatory Conversion Date in 2023, the Audit Committee of our Board of Directors, pursuant to authority delegated to such committee by our Board of Directors, declared, and we paid, cash dividends of $28 million, or $1.3750 per MCPS share to holders representing dividend periods through May 2023. Following the mandatory conversion of the MCPS, there were no outstanding shares of MCPS.

Common Stock

We are authorized to issue two billion shares of common stock, $0.01 par value per share. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by our Board of Directors, and to share ratably in our assets legally available for distribution to our stockholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption, or conversion rights. The holders of common stock do not have cumulative voting rights. The holders of a majority of the shares of common stock can elect all of the directors and can control our management and affairs. Prior to the Mandatory Conversion Date, holders of common stock were junior to holders of MCPS in terms of liquidation preference.

On December 14, 2020, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $1.000 billion of our common stock. We did not repurchase any shares of our common stock during 2025 and had the full amount available under the authorization as of December 31, 2025.

There were approximately 263 million shares in treasury as of December 31, 2025 and 2024.

NOTE K – STOCK INCENTIVE AND PURCHASE PLANS

Employee and Director Stock Incentive Plans

In 2020, our Board of Directors and stockholders approved amendments to our 2011 Long-Term Incentive Plan effective October 1, 2020 (Amended and Restated 2011 LTIP), authorizing for issuance up to 171 million shares of our common stock. The Amended and Restated 2011 LTIP covers officers, directors, employees and consultants and provides for the grant of restricted or unrestricted common stock, restricted stock units (RSUs), options to acquire our common stock, stock appreciation rights, performance awards (market-based and performance-based RSUs) and other stock and non-stock awards. Shares reserved under our current and former stock incentive plans totaled approximately 132 million as of December 31, 2025. The Executive Compensation and Human Resources Committee (the Committee) of the Board of Directors, consisting of independent, non-employee directors, may authorize the issuance of common stock and cash awards under the Amended and Restated 2011 LTIP in recognition of the achievement of long-term performance objectives established by the Committee.

Non-qualified options issued to employees are generally granted with an exercise price equal to the market price of our stock on the grant date, vest over a three or four-year service period and have a ten-year contractual life. In the case of qualified options, if the recipient owns more than ten percent of the voting power of all classes of stock, the option granted will be at an exercise price of 110 percent of the fair market value of our common stock on the date of grant and will expire over a period not to exceed five years. Non-vested stock awards, including restricted stock awards (RSAs) and RSUs issued to employees are generally granted with an exercise price of zero and typically vest in four equal annual installments. These awards represent our commitment to issue shares to recipients after the vesting period. Upon each vesting date, such awards are no longer subject to risk of forfeiture and we issue shares of our common stock to the recipient.

The following presents the impact of stock-based compensation on our consolidated statements of operations:

			Year Ended December 31,
(in millions, except per share data)			2025						2024						2023
Cost of products sold			$	16					$	14					$	12
Selling, general and administrative expenses			231						206						179
Research and development expenses			53						46						42
			299						266						233
Income tax (benefit) expense			(42)						(39)						(35)
			$	257					$	227					$	198
Net impact per common share - basic			$	0.17					$	0.15					$	0.14
Net impact per common share - assuming dilution			$	0.17					$	0.15					$	0.14

Stock Options

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of stock options granted to employees under our stock incentive plans. We calculated the fair value for options granted using the following estimated weighted-average assumptions:

			Year Ended December 31,
			2025												2024												2023
Options granted (in thousands)			1,340												2,443												2,934
Weighted-average exercise price			$	106.06											$	65.00											$	47.43
Weighted-average grant-date fair value			$	36.30											$	23.30											$	16.83
Black-Scholes Assumptions
Expected volatility			24								%				24								%				26								%
Expected term (in years, weighted)			6.2												6.3												6.3
Risk-free interest rate			3.88%			-			4.47%						4.16%			-			4.20%						3.62%			-			4.75%

We use our historical volatility and implied volatility as a basis to estimate expected volatility in our valuation of stock options. We estimate the expected term of options using historical exercise and forfeiture data. We believe that this historical data provides the best estimate of the expected term of new option grants. We use yield rates on U.S. Treasury securities for a period approximating the expected term of the award to estimate the risk-free interest rate in our grant-date fair value assessment. We have not historically paid cash dividends on our common stock and currently we do not intend to pay cash dividends on our common stock. Therefore, we have assumed an expected dividend yield of zero in our grant-date fair value assessment.

Information related to stock options under stock incentive plans are as follows:

			Stock Options (in thousands)						Weighted Average Exercise Price						Weighted Average Remaining Contractual Life (in years)						Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2022			21,489						$	32
Granted			2,934						47
Exercised			(3,325)						25
Cancelled/forfeited			(249)						44
Outstanding as of December 31, 2023			20,850						$	36
Granted			2,443						65
Exercised			(3,866)						28
Cancelled/forfeited			(243)						50
Outstanding as of December 31, 2024			19,183						$	41
Granted			1,340						106
Exercised			(4,056)						32
Cancelled/forfeited			(206)						74
Outstanding as of December 31, 2025			16,261						$	48					5.5						$	783
Exercisable as of December 31, 2025			11,537						40						4.5						643
Expected to vest as of December 31, 2025			4,583						68						7.9						137
Total vested and expected to vest as of December 31, 2025			16,120						$	48					5.4						$	780

The total intrinsic value of stock options exercised was $290 million in 2025, $184 million in 2024 and $89 million in 2023.

Non-Vested Stock

We value RSAs and RSUs based on the closing trading value of our shares on the date of grant. Information related to non-vested stock awards is as follows:

			Non-Vested Stock Award Units (in thousands)						Weighted Average Grant-Date Fair Value
Balance as of December 31, 2022			9,438						$	41
Granted			3,958						49
Vested(1)			(3,624)						39
Forfeited			(485)						44
Balance as of December 31, 2023			9,287						$	45
Granted			3,322						66
Vested(1)			(3,717)						43
Forfeited			(349)						50
Balance as of December 31, 2024			8,544						$	54
Granted			2,554						106
Vested(1)			(3,495)						50
Forfeited			(371)						77
Balance as of December 31, 2025			7,232						$	72

(1) The number of shares vested includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements.

The total vesting date fair value of shares that vested was approximately $367 million in 2025, $248 million in 2024 and $171 million in 2023.

Market-based RSU Awards

During 2025, 2024 and 2023 we granted market-based RSU awards to certain members of our senior management team. The number of shares ultimately issued to the recipient is based on the total stockholder return (TSR) of our common stock as compared to the TSR of the common stock of the other companies in the S&P 500 Health Care Index over a three-year period. The number of RSUs ultimately granted under this program range from 0 percent to 200 percent of the target number awarded to the participant as determined by achievement of the TSR criteria of the program. In addition, in general, award recipients must remain employed by us throughout the three-year period to attain the full amount of the market-based RSUs that satisfied the market performance criteria.

The following table presents the fair value of the awards currently expected to vest as of December 31, 2025, and the assumptions used in Monte Carlo simulations to determine fair value of the awards:

			2025						2024						2023
			Awards						Awards						Awards
Fair value, net of forfeitures to date (in millions)			$	19					$	14					$	13
Stock price on date of grant			$	106.14					$	64.99					$	47.28
Measurement period (in years)			2.9						2.9						2.9
Risk-free rate			4.26		%				4.23		%				4.31		%

We recognize the expense on these awards in our consolidated statements of operations on a straight-line basis over the three-year measurement period.

Organic Net Sales Growth Performance-based RSU Awards

During 2025, 2024 and 2023 we granted organic net sales growth (ONSG) performance-based RSU awards to certain members of our senior management team. The attainment of these performance-based RSUs is based on our organic net sales growth over a three-year performance period against a target set by the Committee. The number of RSUs ultimately granted under this program range from 0 percent to 200 percent of the target number of performance-based RSUs awarded to the participant as determined by achievement of the performance criteria of the program.

The following table presents our assumptions used in determining the fair value of our ONSG awards currently expected to vest as of December 31, 2025:

			2025 ONSG						2024 ONSG						2023 ONSG
Fair value, net of forfeitures to date (in millions)			$	23					$	20					$	19
Achievement of target payout(1)			200		%				200		%				200		%
Stock price used in determining fair value			$	106.14					$	64.99					$	47.28

(1) Company's estimate of target payout as of December 31, 2025.

We recognize the expense on these awards in our consolidated statements of operations over the vesting period which is three years after the date of grant.

Expense Attribution

We recognize compensation expense for our stock incentive plan using a straight-line method over the substantive vesting period. Most of our stock awards provide for immediate vesting upon death or disability of the participant. In addition, our stock grants to employees provide for accelerated vesting of our stock-based awards, other than performance-based and market-based awards, upon retirement, if the stock award has been held for at least one year by the recipient. In accordance with the terms of our stock grants, for employees who will become retirement eligible prior to the vest date we expense stock-based awards, other than performance-based and market-based awards, over the greater of one year or the period between grant date and retirement-eligibility. The performance-based and market-based awards discussed above do not contain provisions that would accelerate the full vesting of the awards upon retirement-eligibility.

We recognize stock-based compensation expense for the value of the portion of awards that are ultimately expected to vest. FASB ASC Topic 718, Compensation – Stock Compensation allows forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock-based award. We have applied, based on an analysis of our historical forfeitures, a weighted-average annual forfeiture rate of approximately five percent to all unvested stock-based awards as of December 31, 2025, which represents the portion that we expect will be forfeited each year over the vesting period. We re-evaluate this analysis annually or more frequently if there are significant changes in circumstances and adjust the forfeiture rate as necessary. Ultimately, we will only recognize expense for those shares that vest.

Unrecognized Compensation Cost

We expect to recognize the following future expense for awards outstanding as of December 31, 2025:

			Unrecognized Compensation Cost (in millions) (1)						Weighted Average Remaining Vesting Period (in years)
Stock options			$	41
Non-vested stock awards			258
			$	299					1.6

(1) Amounts presented represent compensation cost, net of estimated forfeitures.

Employee Stock Purchase Plan

Our global employee stock purchase plan provides for the granting of options to purchase up to 60 million shares of our common stock to all eligible employees. Under the global employee stock purchase plan, we grant each eligible employee, at the beginning of each six-month offering period, an option to purchase shares of our common stock equal to not more than ten percent of the employee’s eligible compensation or the statutory limit under the U.S. Internal Revenue Code. Such options may be exercised only to the extent of accumulated payroll deductions at the end of the offering period, at a purchase price equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. As of December 31, 2025, there were approximately 4 million shares available for future issuance under the employee stock purchase plan.

Information related to shares issued or to be issued in connection with the employee stock purchase plan based on employee contributions and the range of purchase prices is as follows:

			Year Ended December 31,
			2025												2024												2023
Shares issued or to be issued (in thousands)			2,113												2,409												2,623
Range of purchase prices			$	75.97		-			$	81.05					$	49.16		-			$	64.95					$	39.11		-			$	45.51
Expense recognized (in millions)			$	45											$	34											$	29

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of shares issued under the employee stock purchase plan. We recognize expense related to shares purchased through the employee stock purchase plan ratably over the offering period.

NOTE L – WEIGHTED AVERAGE SHARES OUTSTANDING

			Year Ended December 31,
(in millions)			2025						2024						2023
Weighted average shares outstanding - basic			1,480.4						1,471.5						1,453.0
Net effect of common stock equivalents			14.1						14.4						10.6
Weighted average shares outstanding - diluted			1,494.5						1,485.9						1,463.5

The following securities were excluded from the calculation of weighted average shares outstanding - diluted because their effect in the periods presented below would have been antidilutive:

			Year Ended December 31,
(in millions)			2025						2024						2023
Stock options outstanding(1)			1						—						0
MCPS(2)			—						—						10

(1) Represents stock options outstanding pursuant to our employee stock-based compensation plans with exercise prices that were greater than the average fair market value of our common stock for the related periods.

(2) Represents common stock issuable upon the conversion of our MCPS. Refer to Note J – Stockholders' Equity for additional information.

We base Net income (loss) per common share - diluted upon the weighted-average number of common shares and common stock equivalents outstanding during each year. Potential common stock equivalents are determined using the treasury stock method. We exclude stock options, stock awards and, prior to the Mandatory Conversion Date, our MCPS, from the calculation if the effect would be anti-dilutive. The dilutive effect of MCPS is calculated using the if-converted method. The if-converted method assumes that these securities were converted to shares of common stock at the beginning of the reporting period to the extent that the effect is dilutive.

In 2023, the effect of assuming the conversion of our MCPS into shares of common stock was anti-dilutive, and therefore excluded from the calculation of earnings per share (EPS). Accordingly, Net income (loss) was reduced by cumulative Preferred stock dividends, as presented in our consolidated statements of operations, for purposes of calculating Net income (loss) attributable to Boston Scientific common stockholders. On June 1, 2023, all outstanding shares of MCPS automatically converted into shares of common stock.

NOTE M – SEGMENT REPORTING

We aggregate our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. In accordance with FASB ASC Topic 280, Segment Reporting, we identified our reportable segments based on the nature of our products, production processes, type of customer, selling and distribution methods and regulatory environment, as well as the economic characteristics of each of our operating segments. In the fourth quarter of 2025, we reorganized our operating segments; this change had no impact on our reportable segments. Our chief operating decision maker (CODM) is our President and Chief Executive Officer.

We measure and evaluate our reportable segments based on their respective net sales, cost of goods sold, selling, general and administrative expenses, research and development expenses, operating income, excluding intersegment profits, and operating income as a percentage of net sales, all based on internally-derived standard currency exchange rates to exclude the impact of foreign currency, which may be updated from year to year. We exclude from segment expenses and segment operating income certain corporate-related expenses and certain transactions or adjustments that our CODM considers to be non-operational, such as amounts related to amortization expense, goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from segment expenses and segment operating income, they are included in reported Income (loss) before income taxes within our consolidated statements of operations and are included in the reconciliation below. The CODM uses segment operating income in the strategic plan, annual operating plan and other forecasting cycles. During these forecasting cycles, the CODM compares budget versus actual results to evaluate both internal and external events and conditions, which are used in assessing the performance of the reportable segments and to allocate resources across our reportable segments. Refer to Note N – Revenue for net sales by reportable segment presented in accordance with GAAP.

A reconciliation of sales and operating income for the reportable segments to the applicable line items within our accompanying consolidated statements of operations is as follows (in millions, except percentages). Prior period amounts have been restated at constant currency to conform to the current year presentation.

			Year Ended December 31, 2025
			MedSurg			% of Net Sales			Cardiovascular			% of Net Sales			Total
Net sales of reportable segments			$	6,829					$	13,266					$	20,095
Impact of foreign currency fluctuations															(21)
Total net sales															$	20,074
Segment expenses:
Cost of products sold			1,917			28.1		%	3,945			29.7		%
Selling, general and administrative expenses			2,117			31.0		%	3,685			27.8		%
Research and development expenses			507			7.4		%	1,309			9.9		%
Other segment items(1)			20			0.3		%	25			0.2		%
Segment operating income(2)			2,268			33.2		%	4,303			32.4		%	6,570
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments															(958)
Goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs															(1,102)
Amortization expense															(897)
Operating income (loss)															3,613
Other income (expense), net															(228)
Income (loss) before income taxes															$	3,385

			Year Ended December 31, 2024
			MedSurg			% of Net Sales			Cardiovascular			% of Net Sales			Total
Net sales of reportable segments			$	6,032					$	10,840					$	16,873
Impact of foreign currency fluctuations															(125)
Total net sales															$	16,747
Segment expenses:
Cost of products sold			1,650			27.4		%	3,411			31.5		%
Selling, general and administrative expenses			1,817			30.1		%	3,201			29.5		%
Research and development expenses			463			7.7		%	979			9.0		%
Other segment items(1)			14			0.2		%	19			0.2		%
Segment operating income(2)			2,088			34.6		%	3,230			29.8		%	5,318
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments															(788)
Goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs															(1,070)
Amortization expense															(856)
Operating income (loss)															2,603
Other income (expense), net															(321)
Income (loss) before income taxes															$	2,282

			Year Ended December 31, 2023
			MedSurg			% of Net Sales			Cardiovascular			% of Net Sales			Total
Net sales of reportable segments			$	5,433					$	8,828					$	14,261
Impact of foreign currency fluctuations															(21)
Total net sales															$	14,240
Segment expenses:
Cost of products sold			1,471			27.1		%	2,809			31.8		%
Selling, general and administrative expenses			1,642			30.2		%	2,781			31.5		%
Research and development expenses			428			7.9		%	859			9.7		%
Other segment items(1)			20			0.4		%	23			0.3		%
Segment operating income(2)			1,872			34.5		%	2,355			26.7		%	4,227
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments															(489)
Goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs															(567)
Amortization expense															(828)
Operating income (loss)															2,343
Other income (expense), net															(358)
Income (loss) before income taxes															$	1,985

(1) Includes royalty expense.

(2) Calculated as Net sales of reportable segments less Segment expenses.

			Year Ended December 31,
Depreciation expense (in millions)			2025						2024						2023
MedSurg			$	115					$	110					$	103
Cardiovascular			355						302						263
Consolidated depreciation expense			$	471					$	412					$	367

			As of December 31,
Total assets (in millions)			2025						2024
MedSurg			$	3,392					$	3,093
Cardiovascular			7,999						7,084
Total assets of reportable segments			11,391						10,177
Goodwill			18,282						17,089
Other intangible assets, net			7,019						6,684
All other corporate assets			6,981						5,446
			$	43,673					$	39,395

			As of December 31,
Long-lived assets (in millions)			2025						2024
U.S.			$	1,919					$	1,461
Ireland			750						631
Costa Rica			637						530
Other countries			730						672
Property, plant and equipment, net			4,036						3,294
Goodwill			18,282						17,089
Other intangible assets, net			7,019						6,684
Operating lease right-of-use assets in Other long-term assets			465						449
			$	29,802					$	27,516

NOTE N – REVENUE

We generate revenue primarily from the sale of single-use medical devices and present revenue net of sales taxes within our consolidated statements of operations. In the fourth quarter of 2025, we reorganized our business structure into four operating segments. The following tables disaggregate our revenue from contracts with customers by business unit and geographic region (in millions). Generally, we allocate revenue from contracts with customers to geographic regions based on the location where the sale originated. We have revised prior periods to conform to current year presentation.

			Year Ended December 31,
			2025																		2024																		2023
Businesses			U.S.						Int'l						Total						U.S.						Int'l						Total						U.S.						Int'l						Total
Endoscopy			$	1,802					$	1,115					$	2,916					$	1,651					$	1,036					$	2,687					$	1,511					$	970					$	2,482
Urology			2,000						709						2,709						1,557						643						2,200						1,369						595						1,964
Neuromodulation			914						285						1,199						847						259						1,106						736						240						976
MedSurg			4,715						2,108						6,824						4,054						1,939						5,993						3,617						1,805						5,422
Interventional Cardiology & Vascular Therapies			2,007						2,632						4,639						1,607						2,592						4,199						1,436						2,355						3,791
Watchman			1,791						167						1,958						1,371						145						1,516						1,155						119						1,274
Electrophysiology			2,311						1,014						3,325						1,256						648						1,904						370						430						800
Cardiac Rhythm Management			1,425						907						2,332						1,403						876						2,279						1,405						813						2,218
Interventional Oncology & Embolization			615						381						996						518						338						856						442						294						736
Cardiovascular			8,149						5,101						13,250						6,156						4,599						10,755						4,808						4,011						8,819
Total Net Sales			$	12,864					$	7,210					$	20,074					$	10,210					$	6,538					$	16,747					$	8,425					$	5,816					$	14,240

Refer to Note M – Segment Reporting for information on our reportable segments.

			Year Ended December 31,
Geographic Regions			2025						2024						2023
U.S.			$	12,864					$	10,210					$	8,425
Europe, Middle East and Africa			3,451						3,228						2,856
Asia-Pacific			3,080						2,686						2,400
Latin America and Canada			678						624						560
Total Net Sales			$	20,074					$	16,747					$	14,240
Emerging Markets(1)			$	2,985					$	2,680					$	2,310

(1) Our Emerging Markets countries include all countries except the United States, Western and Central Europe, Japan, Australia, New Zealand and Canada.

Deferred Revenue

Contract liabilities are classified within Other current liabilities and Other long-term liabilities within our accompanying consolidated balance sheets. Our deferred revenue balance was $682 million as of December 31, 2025 and $635 million as of December 31, 2024. Our contract liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System within our Cardiovascular business, for which revenue is recognized over the average service period based on device and patient longevity. Our contract liabilities also include deferred revenue related to the LUX-Dx II+™ Insertable Cardiac Monitor system, also within our Cardiovascular business, for which revenue is recognized over the average service period based on device longevity and usage. We recognized revenue of $264 million in 2025 that was included in the above contract liability balance as of December 31, 2024.

We capitalize sales force commissions related to contracts with customers when the associated revenue is expected to be earned over a period that exceeds one year. Deferred commissions are primarily related to the sale of devices enabled with our LATITUDE™ Patient Management System. We have elected to expense commission costs when incurred for contracts with an expected duration of one year or less. Capitalized commission fees are amortized over the period the associated products or services are transferred. Similarly, we capitalize certain recoverable costs related to the delivery of the LATITUDE™ Remote Monitoring Service. These fulfillment costs are amortized over the average service period.

Refer to Note A – Significant Accounting Policies for additional information on our accounting policies relating to revenue recognition.

NOTE O – CHANGES IN OTHER COMPREHENSIVE INCOME

The following tables provide the reclassifications out of Other comprehensive income (loss), net of tax attributable to Boston Scientific common stockholders:

(in millions)			Foreign Currency Translation Adjustments						Net Change in Derivative Financial Instruments												Net Change in Defined Benefit Pensions and Other Items						Total
Balance as of December 31, 2024			$	136					$	155											$	(16)					$	275
Other comprehensive income (loss) before reclassifications			(673)						(145)												12						(806)
(Income) loss amounts reclassified from accumulated other comprehensive income			(24)						(58)												3						(79)
Total other comprehensive income (loss)			(697)						(202)												15						(885)
Balance as of December 31, 2025			$	(561)					$	(48)											$	(2)					$	(610)

(in millions)			Foreign Currency Translation Adjustments						Net Change in Derivative Financial Instruments												Net Change in Defined Benefit Pensions and Other Items						Total
Balance as of December 31, 2023			$	(96)					$	154											$	(8)					$	49
Other comprehensive income (loss) before reclassifications			246						142												(9)						379
(Income) loss amounts reclassified from accumulated other comprehensive income			(14)						(141)												1						(154)
Total other comprehensive income (loss)			232						1												(8)						225
Balance as of December 31, 2024			$	136					$	155											$	(16)					$	275

Refer to Note D – Hedging Activities and Fair Value Measurements for further detail on our net investment hedges recorded in Foreign currency translation adjustment and our cash flow hedges recorded in Net change in derivative financial instruments.

The gains and losses on defined benefit and pension items before reclassifications and gains and losses on defined benefit and pension items reclassified from Accumulated other comprehensive income (loss), net of tax were reduced by income tax impacts of approximately $5 million in 2025 and approximately $3 million in 2024.

NOTE P – NEW ACCOUNTING PRONOUNCEMENTS

Periodically, new accounting pronouncements are issued by the FASB or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, we evaluate the pronouncements to determine the potential effects of adoption on our consolidated financial statements. During 2025, we implemented the following standard on a prospective basis, which did not have a material impact on our consolidated financial statements:

ASC Update No. 2023-09

ASU 2023-09 aims to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 modifies the rules on income tax disclosures to require entities to annually disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state, and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

Standards to be Implemented

In November 2024, the FASB issued ASC Update No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. Update No. 2024-03 aims to improve transparency of expense disclosures to enhance investor understanding of an entity's performance and to assist in comparing an entity's performance over time and with that of other entities. Update No. 2024-03 modifies the disclosures over certain costs and expenses and requires entities to disclose (1) the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion, included in each relevant expense caption, (2) within the same disclosure, certain amounts that are already required to be disclosed under current GAAP, (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and (4) the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Update No. 2024-03 allows for early adoption and requires either prospective adoption to financial statements issued for reporting periods after the effective date, or retrospectively to any or all prior periods presented in the financial statements. We are currently assessing the impact of Update No. 2024-03 to our consolidated financial statement disclosures.

In September 2025, the FASB issued ASC Update No. 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). Update No. 2025-06 modernizes the accounting for software costs by removing all references to a sequential software development method, requiring entities to begin capitalizing software costs when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used for its intended purpose. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Update No. 2025-06 allows for early adoption and permits either a prospective, modified prospective, or retrospective adoption approach. We are currently assessing the impact of Update No. 2025-06 to our consolidated financial statements.

In September 2025, the FASB issued ASC Update No. 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (606): Derivatives scope refinements and scope clarification for share-based noncash consideration from a customer in a revenue contract. Update No. 2025-07 clarifies the application of derivative accounting to certain contracts and refines the guidance for share-based noncash consideration received from customers. Specifically, Update No. 2025-07 introduces a scope exception for contracts that are not exchange-traded and whose underlying is tied to operations or activities specific to one of the parties to the contract. It also clarifies that share-based noncash consideration from a customer should initially be accounted for under Topic 606 until the right to receive or retain such consideration becomes unconditional. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Update No. 2025-07 allows for early adoption and the amendments can be applied either prospectively or on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings. We are currently assessing the impact of Update No. 2025-07 to our consolidated financial statements.

No other new accounting pronouncements issued or effective in the period had or are expected to have a material impact on our consolidated financial statements.

NOTE Q – EMPLOYEE RETIREMENT PLANS

Defined Benefit Pension Plans

Domestic Retirement Plans

Following our 2006 acquisition of Guidant Corporation (Guidant), we assumed the Guidant Supplemental Retirement Plan, a frozen, non-qualified defined benefit plan for certain former officers and employees of Guidant. The Guidant Supplemental Retirement Plan was partially funded through a Rabbi Trust that contains segregated company assets within restricted cash used to pay the benefit obligations related to the plan.

We also maintain an Executive Retirement Plan, a defined benefit plan covering executive officers and other key contributors. Participants may retire with benefits once retirement conditions have been satisfied.

Other International Retirement Plans

In addition, we maintain retirement plans covering certain international employees.

We use a December 31 measurement date for these plans and record the net unfunded and underfunded portion as a liability within non-current liabilities, with the current portion within accrued expenses, on the consolidated balance sheets, recognizing changes primarily through OCI. As of December 31, 2025 and 2024, the funded status of our plans was unfunded or underfunded in aggregate. The outstanding obligation is as follows:

			As of December 31, 2025
(in millions)			Accumulated Benefit Obligation (ABO)						Projected Benefit Obligation (PBO)						Fair value of Plan Assets						Unfunded/Underfunded PBO Recognized
Domestic Retirement Plans			$	58					$	62					$	—					$	62
Other International Retirement Plans			142						170						113						57
			$	200					$	232					$	113					$	119

			As of December 31, 2024
(in millions)			ABO						PBO						Fair value of Plan Assets						Unfunded/Underfunded PBO Recognized
Domestic Retirement Plans			$	56					$	60					$	—					$	60
Other International Retirement Plans			150						167						100						67
			$	206					$	227					$	100					$	127

A reconciliation of the changes in the PBO for our retirement plans is as follows:

			Year Ended December 31,
(in millions)			2025						2024
Beginning obligations			$	227					$	218
Service costs			11						10
Interest costs			7						7
Actuarial (gain) loss			(10)						10
Plan curtailments/settlements			(4)						—
Employee contributions			0						—
Plan amendments and assumption changes			(7)						4
Benefits paid			(10)						(10)
Impact of foreign currency fluctuations			18						(11)
Ending obligation			$	232					$	227

The critical assumptions associated with our employee retirement plans for 2025 are as follows:

			Weighted Average Discount Rate						Weighted Average Expected Return												Weighted Average Rate of Compensation Increase**(1)**
Domestic Retirement Plans			4.85%						n/a						2.00%
Other International Retirement Plans			3.09%												2.99%						3.25%

(1) Rates of compensation increase were not weighted by relative fair value. As such, the amount represents the median of the inputs and is not a weighted average.

The critical assumptions associated with our employee retirement plans for 2024 are as follows:

			Weighted Average Discount Rate						Weighted Average Expected Return						Weighted Average Rate of Compensation Increase**(1)**
Domestic Retirement Plans			5.28%						n/a						2.00%
Other International Retirement Plans			2.50%						2.76%						3.25%

(1) Rates of compensation increase were not weighted by relative fair value. As such, the amount represents the median of the inputs and is not a weighted average.

A reconciliation of the changes in the fair value of plan assets for our funded retirement plans is as follows:

			Year Ended December 31,
(in millions)			2025						2024
Beginning fair value			$	100					$	101
Actual return on plan assets			2						3
Employer contributions			15						11
Participant contributions			1						1
Plan curtailments/settlements			(4)						—
Actuarial gain (loss)			0						1
Benefits paid			(9)						(10)
Impact of foreign currency fluctuations			8						(8)
Ending fair value			$	113					$	100

For our defined benefit plans, we base our discount rate on the rates of return available on high-quality bonds with maturities approximating the expected period over which benefits will be paid. The rate of compensation increase is based on historical and expected rate increases. We base our rate of expected return on plan assets on historical experience, our investment guidelines and expectations for long-term rates of return. Our assets are invested in a variety of securities, primarily equity securities and government bonds. These securities are considered Level 1 and Level 2 investments.

Expected benefit payments are estimated based on the same assumptions used in determining our benefit obligation as of December 31, 2025. Actual benefit payments will depend on future employment and compensation, average years employed and average life spans, in addition to other factors. Changes in any of these factors could significantly impact these estimated future benefit payments. Benefit payments expected to be paid during the next ten years for our Domestic Retirement Plans and our Other International Retirement Plans are as follows:

(in millions)			Post Retirement Benefits
2026			$	22
2027			16
2028			12
2029			10
2030			20
2031 - 2035			79

Defined Contribution Plan

We also sponsor a voluntary 401(k) Retirement Savings Plan for eligible employees. We match 200 percent of employee elective deferrals for the first two percent of employee eligible compensation and 50 percent of employee elective deferrals greater than two percent, but not exceeding six percent, of employee eligible compensation. Total expense for our matching contributions to the plan was $166 million in 2025, $147 million in 2024 and $135 million in 2023.