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Item 1. Financial Statements

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Item 1. Financial Statements

Solventum Corporation

Condensed Consolidated Statements of Income (Unaudited)

Three months ended September 30,Nine months ended September 30,
(Millions, except per share data)2025202420252024
Net sales of product$1,594$1,608$4,859$4,766
Net sales of software and rentals5024741,4681,413
Total net sales2,0962,0826,3276,179
Cost of product8477932,5472,341
Cost of software and rentals114124356364
Gross profit1,1351,1653,4243,474
Selling, general and administrative expenses7807012,3211,998
Research and development expenses183189564576
Gain on sale of business(1,518)—(1,518)—
Operating income1,6902752,057900
Interest expense, net89107296260
Loss on debt extinguishment, net82—82—
Other expense (income), net512448
Income before income taxes1,5141671,655592
Provision for (benefit from) income taxes24845162144
Net income$1,266$122$1,493$448
Earnings per share:
Basic earnings per share$7.26$0.70$8.58$2.59
Diluted earnings per share7.220.708.532.58
Weighted-average number of shares outstanding:
Basic174.3173.4174.0173.1
Diluted175.4173.9175.1173.4

The accompanying notes are an integral part of these condensed consolidated financial statements.

Solventum Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three months ended September 30,Nine months ended September 30,
(Millions)2025202420252024
Net income$1,266$122$1,493$448
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment(24)17941494
Defined benefit pension and postretirement plans44107020
Cash flow hedging instruments7(11)(32)(10)
Total other comprehensive income (loss), net of tax27178452104
Comprehensive income$1,293$300$1,945$552

The accompanying notes are an integral part of these condensed consolidated financial statements.

Solventum Corporation

Condensed Consolidated Balance Sheets (Unaudited)

September 30,December 31,
(Millions, except share information)20252024
Assets
Current assets
Cash and cash equivalents$1,642$762
Accounts receivable — net of allowances of $86 and $861,0191,044
Due from related parties157185
Inventories
Finished goods625539
Work in process191190
Raw materials and supplies233236
Total inventories1,049965
Other current assets540293
Total current assets4,4073,249
Property, plant and equipment — net1,3361,622
Goodwill5,2606,377
Intangible assets — net2,2232,544
Other assets747665
Total assets$13,973$14,457
Liabilities
Current liabilities
Short-term borrowings and current portion of long-term debt$—$200
Accounts payable669618
Due to related parties464272
Unearned revenue576572
Other current liabilities1,2291,041
Total current liabilities2,9382,703
Long-term debt5,1377,810
Pension and postretirement benefits306350
Deferred income taxes169225
Other liabilities437410
Total liabilities$8,987$11,498
Commitments and contingencies (Note 12)
Equity
Common stock, par value $0.01 per share, 750,000,000 shares authorized$2$2
Shares issued and outstanding - September 30, 2025: 173,439,525
Shares issued and outstanding - December 31, 2024: 172,785,606
Additional paid-in-capital3,8543,771
Retained earnings1,734242
Accumulated other comprehensive income (loss)(604)(1,056)
Total equity4,9862,959
Total liabilities and equity$13,973$14,457

The accompanying notes are an integral part of these condensed consolidated financial statements.

Solventum Corporation

Condensed Consolidated Statements of Changes in Equity (Unaudited)

Three Months Ended September 30, 2025 and September 30, 2024

Common Stock
(Millions)Shares OutstandingPar ValueAdditional Paid-In-CapitalRetained EarningsNet Parent InvestmentAccumulated Other Comprehensive Income (Loss)Total
Balance at June 30, 2025173$2$3,806$468$—$(631)$3,645
Net income———1,266——1,266
Other comprehensive income (loss), net of tax—————2727
Net transfers from 3M——9———9
Stock-based compensation——41———41
Common stock for tax withholding obligations——(2)———(2)
Balance at September 30, 2025173$2$3,854$1,734$—$(604)$4,986
Balance at June 30, 2024173$2$3,719$89$—$(943)$2,867
Net income———122——122
Other comprehensive income (loss), net of tax—————178178
Stock-based compensation——27———27
Common stock for tax withholding obligations——(2)———(2)
Balance at September 30, 2024173$2$3,744$211$—$(765)$3,192

Nine Months Ended September 30, 2025 and September 30, 2024

Common Stock
(Millions)Shares OutstandingPar ValueAdditional Paid-In-CapitalRetained EarningsNet Parent InvestmentAccumulated Other Comprehensive Income (Loss)Total
Balance at December 31, 2024173$2$3,771$242$—$(1,056)$2,959
Net income———1,493——1,493
Other comprehensive income (loss), net of tax—————452452
Net transfers to 3M——(21)———(21)
Stock-based compensation——124———124
Common stock for tax withholding obligations——(20)———(20)
Balance at September 30, 2025173$2$3,854$1,734$—$(604)$4,986
Balance at December 31, 2023—$—$—$—$12,003$(337)$11,666
Net income———211237—448
Other comprehensive income (loss), net of tax—————104104
Net transfers to 3M————(8,575)(532)(9,107)
Stock-based compensation——83———83
Common stock for tax withholding obligations——(2)———(2)
Issuance of common stock in connection with Spin-Off and reclassification of net parent investment17323,663—(3,665)——
Balance at September 30, 2024173$2$3,744$211$—$(765)$3,192

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

Solventum Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine months ended September 30,
(Millions)20252024
Cash Flows from Operating Activities
Net income$1,493$448
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization372405
Pension and postretirement benefit expense4930
Stock-based compensation expense12487
Gain on sale of business(1,518)—
Purification and Filtration transaction costs(86)—
Deferred income taxes(47)(93)
Changes in assets and liabilities
Accounts receivable3614
Due from related parties37200
Inventories(134)(99)
Accounts payable74200
Due to related parties18(321)
Accrued compensation(9)53
All other operating activities — net(135)42
Net cash provided by operating activities274966
Cash Flows from Investing Activities
Purchases of property, plant and equipment(316)(253)
Proceeds from sale of business3,870—
Other — net(12)—
Net cash provided by (used in) investing activities3,542(253)
Cash Flows from Financing Activities
Repayment of debt(2,970)(200)
Net transfers to 3M(21)(8,247)
Proceeds from long-term debt, net of issuance costs—8,303
Other — net498
Net cash used in financing activities(2,942)(136)
Effect of exchange rate changes on cash and cash equivalents61
Net increase (decrease) in cash and cash equivalents880578
Cash and cash equivalents at beginning of period762194
Cash and cash equivalents at end of period$1,642$772

The accompanying notes are an integral part of these condensed consolidated financial statements.

Solventum Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

NOTE 1. Significant Accounting Policies

Organization and Description of Business

Solventum Corporation (“Solventum” or the “Company”) was a business of 3M Company (“3M”). On April 1, 2024 (the “Distribution Date”), 3M completed the previously announced spin-off of Solventum Corporation (the “Spin-Off”). The Spin-Off was completed through a distribution of approximately 80.1% of the Company’s outstanding common stock to holders of record of 3M’s common stock as of the close of business on March 18, 2024 (the “Distribution”), which resulted in the issuance of 172,709,505 shares of common stock. As a result of the Distribution, the Company became an independent public company. Solventum’s common stock is listed under the symbol “SOLV” on the New York Stock Exchange (“NYSE”).

Solventum is a leading global healthcare company with a broad portfolio of trusted solutions that leverage deep material science, data science, and digital capabilities to address critical customer needs. Solventum is organized into three reportable business segments that are aligned with the end markets that the Company serves: MedSurg, Dental Solutions and Health Information Systems.

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and present the financial position, results of operations, and cash flows for the periods presented. The interim condensed consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. These adjustments consist of normal, recurring items. The results of operations for any interim periods are not necessarily indicative of results for the full year.

The Company’s financial statements are presented on a consolidated basis. Prior to April 1, 2024, Solventum was a carve-out business of 3M. The Company’s financial statements prior to April 1, 2024 were prepared on a combined basis and were derived from the consolidated financial statements and accounting records of 3M, including the historical cost basis of assets and liabilities comprising the Company, as well as the historical revenues, direct costs, and allocations of indirect costs attributable to the operations of the Company, using the historical accounting policies applied by 3M. The financial statements included in this interim report are referred to as the “Condensed Consolidated Financial Statements” for all periods presented.

All amounts discussed are in millions of U.S. dollars, unless otherwise indicated. Amounts reported within this interim report are rounded to the nearest million and the sum of the components may not equal the total amount reported due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding.

All intercompany transactions and balances within Solventum have been eliminated. These unaudited condensed consolidated financial statements include certain transactions with 3M, which are disclosed as related party transactions in Note 16, “Related Parties”.

The unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual Report”).

New Accounting Pronouncements

The table below provides summaries of recently issued financial accounting standards.

StandardRelevant DescriptionEffective Date for SolventumImpact of Adoption
ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax DisclosuresIssued in December 2023. Requires disaggregated information about a Company’s effective tax rate reconciliation as well as information on income taxes paid.Year-end December 31, 2025The Company is currently assessing the impact that the updated standard will have on financial statement disclosures.
ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement ExpensesIssued in November 2024. Requires additional disclosure of the nature of expenses included in the income statement.Year-end December 31, 2027The Company is currently assessing the impact that the updated standard will have on financial statement disclosures.
ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use SoftwareIssued September 2025. Updates existing accounting guidance regarding the capitalization of internal-use software costs.January 1, 2028The Company is currently assessing the impact that the updated standard will have on financial statement disclosures.

NOTE 2. Revenue Recognition

Contract Balances

Unearned revenue primarily relates to revenue that is recognized over time for one-year software license contracts. Approximately $98 million and $477 million of the December 31, 2024 balance was recognized as revenue during the three and nine months ended September 30, 2025, while approximately $110 million and $500 million of the December 31, 2023 balance was recognized as revenue during the three and nine months ended September 30, 2024.

Operating Lease Revenue

Sales of software and rental includes rental revenue from durable medical devices as part of operating lease arrangements (reported within the MedSurg segment), which was $157 million and $456 million for the three and nine months ended September 30, 2025, and $148 million and $442 million for the three and nine months ended September 30, 2024.

Customer Concentration

No customer accounted for more than 10% of the Company’s revenues for the three and nine months ended September 30, 2025 or 2024. Additionally, no customers accounted for more than 10% of accounts receivable as of September 30, 2025 or December 31, 2024.

NOTE 3. Acquisitions and Divestitures

Acquisitions

The Company had no acquisitions during the three and nine months ended September 30, 2025 or 2024.

Divestitures

On February 25, 2025, the Company entered into a Transaction Agreement to sell its Purification and Filtration business to Thermo Fisher Scientific Inc. ("Buyer"). On June 25, 2025, the Company and Buyer entered into an Amended and Restated Transaction Agreement (the "Agreement") to exclude the Company’s drinking water filtration business (the "Water Business") from the scope of the Purification and Filtration business to be acquired by Buyer (such acquired business, the "Business").

On September 1, 2025, Solventum completed the sale of the Business to the Buyer. The cash consideration paid to Solventum at closing was approximately $4 billion, which is subject to further working capital adjustments, resulting in a pre-tax gain of approximately $1.5 billion. The pre-tax gain was recorded net of transaction fees of $86 million.

Under the Agreement, Buyer is entitled to receive a payment of up to $75 million from the Company either upon a sale of the Water Business or after an agreed upon 3-year period. The Company recorded $64 million within the other liabilities on the condensed consolidated balance sheets, which was the present value of the expected future obligation at close of the Transaction.

In connection with the sale of the Business, the Company entered into various transition service agreements to provide certain support services at cost, below fair market value, for a period of up to 24 months from the closing of the sale. These transition services include product distribution and supply chain management, contract manufacturing, information technology, finance, customer support, among others. In connection with these agreements, the Company recognized an unfavorable contract liability of $113 million, which will be recognized over the terms of the agreements.

In September 2025, the Company recognized approximately $14 million of transition service income, including amortization of the unfavorable contract liability, within selling, general and administrative expenses on the Company's condensed consolidated statements of income. Sales and cost of sales associated with products sold to Buyer, as well as cost of products purchased from Buyer under the supply agreements were not material.

Immediately following the closing, the Company repurchased inventory from Buyer to fulfill its product distribution services under the transition agreement with Buyer. The Company recorded $83 million within other current liabilities on the condensed consolidated balance sheets related to this repurchase that the Company expects to pay in the fourth quarter of 2025.

NOTE 4. Goodwill and Intangible Assets

Goodwill

There was no goodwill recorded from acquisitions during the nine months ended September 30, 2025.

The goodwill balance by business segment is as follows:

(Millions)MedSurgDental SolutionsHealth Information SystemsPurification and FiltrationAll OtherTotal
Balance as of December 31, 2024$3,597$439$871$1,470$—$6,377
Translation and other203374(80)108272
Divestiture activity———(1,389)—(1,389)
Balance as of September 30, 2025$3,800$477$875$—$108$5,260

Acquired Intangible Assets: The carrying amount and accumulated amortization of acquired finite-lived intangible assets are as follows:

September 30,December 31,
(Millions)20252024
Customer related intangible assets$2,070$2,720
Patents and other technology-based intangible assets1,6321,895
Tradenames and other amortizable intangible assets611729
Total gross carrying amount4,3135,344
Accumulated amortization — customer related(741)(1,208)
Accumulated amortization — patents and other technology-based(1,068)(1,224)
Accumulated amortization — tradenames and other(281)(368)
Total accumulated amortization(2,090)(2,800)
Total intangible assets — net$2,223$2,544

Amortization expense was as follows:

Three months ended September 30,Nine months ended September 30,
(Millions)2025202420252024
Amortization expense$77$88$235$261

Expected amortization expense for acquired amortizable intangible assets recorded as of September 30, 2025 is as follows:

(Millions)Remainder of 202520262027202820292030After 2030
Amortization expense$77$305$300$296$257$152$836

NOTE 5. Other Current Liabilities

Other current liabilities included in the condensed consolidated balance sheets consist of the following:

September 30,December 31,
(Millions)20252024
Other current liabilities
Accrued compensation$259$281
Accrued taxes212122
Accrued rebates171146
Accrued interest41114
Purification and Filtration-related193—
Other353378
Total other current liabilities$1,229$1,041

Purification and Filtration-related in the table above includes the liability recorded in conjunction with the repurchase of inventory and the current portion of the unfavorable contract liability as described in Note 3, along with other activity with Buyer, including amounts owed under the transition agreements, since the close of the Transaction.

NOTE 6. Property, Plant, and Equipment - Net

Property, plant and equipment - net consisted of the following:

September 30,December 31,
(Millions)20252024
Property, plant and equipment - at cost
Buildings and leasehold improvements$832$956
Machinery and equipment1,7792,150
Construction in progress568504
Gross property, plant and equipment3,1793,610
Accumulated depreciation(1,843)(1,988)
Property, plant and equipment - net$1,336$1,622

Depreciation expense consisted of the following:

Three months ended September 30,Nine months ended September 30,
(Millions)2025202420252024
Depreciation expense$37$37$117$121

NOTE 7. Comprehensive Income Information

Changes in Accumulated Other Comprehensive Income (Loss) by Component

The table below presents the changes in accumulated other comprehensive income (loss) (“AOCI”), including the reclassifications out of AOCI by component:

Three months ended September 30, 2025

(Millions)Cumulative Translation AdjustmentDefined Benefit Pension and Postretirement PlansCash Flow HedgingTotal Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2025, net of tax:$(112)$(500)$(19)$(631)
Other comprehensive income (loss), before tax:
Amount of gain (loss) recognized in AOCI(23)55638
Amount of gain (loss) reclassified from AOCI—639
Total other comprehensive income (loss), before tax(23)61947
Tax effect(1)(17)(2)(20)
Total other comprehensive income (loss), net of tax(24)44727
Balance at September 30, 2025, net of tax:$(136)$(456)$(12)$(604)

Three months ended September 30, 2024

(Millions)Cumulative Translation AdjustmentDefined Benefit Pension and Postretirement PlansCash Flow HedgingTotal Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2024, net of tax:$(432)$(512)$1$(943)
Other comprehensive income (loss), before tax:
Amount of gain (loss) recognized in AOCI179—(15)164
Amount of gain (loss) reclassified from AOCI—13—13
Total other comprehensive income (loss), before tax17913(15)177
Tax effect—(3)41
Total other comprehensive income (loss), net of tax17910(11)178
Balance at September 30, 2024, net of tax:$(253)$(502)$(10)$(765)

Nine months ended September 30, 2025

(Millions)Cumulative Translation AdjustmentDefined Benefit Pension and Postretirement PlansCash Flow HedgingTotal Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2024, net of tax:$(550)$(526)$20$(1,056)
Other comprehensive income (loss), before tax:
Amount of gain (loss) recognized in AOCI39555(37)413
Amount of gain (loss) reclassified from AOCI—41(4)37
Total other comprehensive income (loss), before tax39596(41)450
Tax effect19(26)92
Total other comprehensive income (loss), net of tax41470(32)452
Balance at September 30, 2025, net of tax:$(136)$(456)$(12)$(604)

Nine months ended September 30, 2024

(Millions)Cumulative Translation AdjustmentDefined Benefit Pension and Postretirement PlansCash Flow HedgingTotal Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2023, net of tax:$(347)$10$—$(337)
Other comprehensive income (loss), before tax:
Amount of gain (loss) recognized in AOCI56—(13)43
Amount of gain (loss) reclassified from AOCI3826—64
Total other comprehensive income (loss), before tax9426(13)107
Tax effect—(6)3(3)
Total other comprehensive income (loss), net of tax9420(10)104
Transfers from 3M, net of tax—(532)—(532)
Balance at September 30, 2024, net of tax:$(253)$(502)$(10)$(765)

Additional details on the amounts reclassified from AOCI into consolidated income include:

  • Cumulative translation adjustment: amounts were reclassified into other expense (income), net and were related to charges associated with the substantial liquidation of foreign operations completed as part of our separation from 3M.

  • Defined benefit pension and postretirement plans: amounts were reclassified into other expense (income), net (see Note 10).

  • Cash flow hedging: foreign currency forward contracts amounts were reclassified into cost of sales (see Note 11).

  • The tax effects, if applicable, associated with these reclassifications were reflected in provision for (benefit from) income taxes.

NOTE 8. Income Taxes

The Company’s income tax provision through March 31, 2024 was prepared on a separate return basis. The income tax provision post Spin-Off is prepared on a stand-alone basis.

The effective tax rates for the three months ended September 30, 2025 and 2024 were 16.4% and 26.9%, respectively. The decrease in our effective tax rate is primarily related to the divestiture of the Purification and Filtration business.

The effective tax rates for the nine months ended September 30, 2025 and 2024 were 9.8% and 24.3%, respectively. The decrease in our effective tax rate is primarily related to the divestiture of the Purification and Filtration business.

The Company’s income tax provision or benefit for the interim periods is determined based on an estimated annual effective tax rate, adjusted for discrete items. Because significant foreign earnings are generated by the Company’s subsidiaries organized in jurisdictions with lower statutory tax rates, the Company’s estimated annual effective tax rate may be materially impacted if earnings in these lower-tax jurisdictions fluctuate.

The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized based on evaluation of all available positive and negative evidence. On the basis of this evaluation, the Company continues to maintain a valuation allowance to reduce its deferred tax assets to the amount realizable.

In 2021, the Organisation for Economic Co-operation and Development (“OECD”) announced Pillar Two Model Rules which call for the taxation of large multinational corporations at a global minimum tax rate of 15%. Many non-U.S. tax jurisdictions, including Ireland, have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in fiscal year 2024 or announced their plans to enact legislation in future years. In the nine months ended September 30, 2025, the Company incurred an insignificant tax impact in connection with Pillar Two.

On July 4, 2025, the One Big Beautiful Bill Act (the "Act”) was enacted in the U.S. The Act includes changes to U.S. corporate income tax provisions, including immediate expensing of domestic Research and Development costs, 100% bonus depreciation, modified limits of interest deductibility, and revisions to U.S. international tax provisions. The Act did not materially impact the Company's income tax provision for the three and nine months ended September 30, 2025. The Company will continue to monitor and evaluate the potential tax impacts of the Act in future periods.

NOTE 9. Long-Term Debt and Short-Term Borrowings

Carrying value includes the impact of debt issuance costs. Long-term debt and short-term borrowings as of September 30, 2025 and December 31, 2024 consisted of the following:

(Millions)Currency/ Fixed vs. FloatingEffective Interest RateFinal Maturity DateCarrying Value
DescriptionSeptember 30, 2025December 31, 2024
Eighteen month senior term loan credit facilityUSD Floating—%2025$—$200
Three year senior term loan credit facilityUSD Floating5.532027210979
$1 billion 5.45 percent three year senior notesUSD Fixed5.362027349995
$1.5 billion 5.40 percent five year senior notesUSD Fixed5.2320296981,487
$1 billion 5.45 percent seven year senior notesUSD Fixed5.222031991990
$1.65 billion 5.60 percent ten year senior notesUSD Fixed5.3920341,6371,636
$1.25 billion 5.90 percent thirty year senior notesUSD Fixed5.7620541,2101,231
$500 million 6.00 percent forty year senior notesUSD Fixed5.89206442492
Total long-term debt5,1378,010
Less: current portion of long-term debt—200
Long-term debt (excluding current portion)$5,137$7,810

Senior Notes

The Company’s borrowings include $5.0 billion aggregate principal amount of senior notes with maturity dates ranging from 2027 through 2064 (collectively, the “Senior Notes”). The Senior Notes are governed by an indenture and supplemental indenture between the Company and a trustee (collectively, the “Indenture”). The Indenture contains certain customary affirmative and negative covenants, including restrictions on the Company’s ability to consolidate, merge, convey, transfer or lease substantially all of its assets. In addition, the Indenture contains other customary terms, including certain events of default, upon the occurrence of which the Senior Notes may be declared immediately due and payable. The Company is in compliance with all covenants related to the Senior Notes.

In September 2025, the Company repurchased multiple series of its outstanding Senior Notes via cash tender offers with a combined aggregate principal amount of $1.9 billion: $650 million aggregate principal amount of 5.45% senior notes due 2027, $797 million aggregate principal amount of 5.40% senior notes due 2029, $22 million aggregate principal amount of 5.90% senior notes due 2054, and $458 million aggregate principal amount of 6.00% senior notes due 2064. Neither the 5.45% senior notes due 2031 nor the 5.60% senior notes due 2034 were tendered.

As a result of tendering a portion of its Senior Notes, the Company recognized a loss on debt extinguishment of approximately $94 million within loss on debt extinguishment, net within its condensed consolidated statements of income, the cash outflow for which is recorded within other financing activities within its condensed consolidated statements of cash flows. This loss on extinguishment reflects the difference between the carrying value and the amount paid to acquire the tendered Senior Notes and related expenses.

Credit Facilities

On February 16, 2024, the Company entered into credit agreements providing for:

  • a five year senior unsecured revolving credit facility in an aggregate committed amount of $2.0 billion expiring in 2029 (the “5-year Revolving Credit Facility”); and

  • an eighteen month senior unsecured term loan credit facility in an aggregate principal amount of $500 million and a three year senior unsecured term credit loan facility in an aggregate principal amount of $1.0 billion (together, the “Term Loan Credit Facilities,” and together with the 5-Year Revolving Credit Facility, the “Credit Facilities”). The Term Loan Credit Facilities have a floating interest rate based on a Secured Overnight Financing Rate (“SOFR”) index.

At September 30, 2025, there are no amounts outstanding under the 5-year Revolving Credit Facility.

There were no amounts outstanding under the eighteen month senior unsecured term loan facility when it reached maturity in August 2025. In September 2025, the Company prepaid $770 million of the aggregate principal amount outstanding under the three year senior unsecured term loan credit facility.

Commercial Paper

On March 4, 2024, the Company entered into a commercial paper program that allows it to issue up to $2.0 billion aggregate principal amount of short-term notes to finance short-term liabilities. Any such issuance will mature within 364 days from date of issue. There was no commercial paper outstanding as of September 30, 2025.

Future Maturities of Long-term Debt: Maturities of long-term debt in the table below reflect the impact of repayment such that total maturities equal the contractual value of long-term debt net of amounts repaid as of September 30, 2025. The maturities of long-term debt for the periods subsequent to September 30, 2025 are as follows (in millions):

Remainder of 202520262027202820292030After 2030Total
$—$—$560$—$703$—$3,920$5,183

Financial Instruments Not Measured at Fair Value

The fair values of cash equivalents, accounts receivable, and accounts payable approximated carrying values because of the short-term nature of these instruments. At September 30, 2025, the estimated fair value of the Company’s long-term debt obligations, comprised of both Senior Notes and Term Loan Credit Facilities with current portions excluded, was $5.4 billion compared to a carrying value of $5.1 billion. At December 31, 2024, the estimated fair value of the Company’s long-term debt obligations, comprised of both Senior Notes and Term Loan Credit Facilities with current portions excluded, was $7.8 billion compared to a carrying value of $7.8 billion. The fair value was estimated using quoted market prices for the publicly registered Senior Notes, which are classified as Level 2 within the fair value hierarchy. The fair values and principal values consider the terms of the related debt and exclude the impacts of debt discounts. Because there is no active market for trading outstanding term loans, the fair values of the Term Loan Credit Facilities are estimated to be equal to their respective carrying values.

NOTE 10. Pension and Postretirement Benefit Plans

Transfer of Solventum Sponsored Pension and Postretirement Benefit Plans

Historically, certain employees of Solventum participated in U.S. and non-U.S. retirement plans sponsored by 3M. The primary U.S. defined-benefit pension plan was closed to new participants effective January 1, 2009. In December 2023, 3M committed to the future freeze of U.S. defined benefit pension benefits for non-union U.S. employees, effective December 31, 2028. During March 2024, in advance of the Spin-Off, all U.S. and most remaining 3M sponsored non-U.S. pension and postretirement plan obligations and assets with respect to current and former employees of Solventum were legally transferred to Solventum from 3M, except for certain assets held back within the 3M sponsored pension plans for regulatory purposes. The final asset transfer from the 3M sponsored pension plans occurred in June 2025.

As these plans are sponsored by Solventum, they are accounted for as single employer plans. Therefore, the funded status is reflected in the condensed consolidated balance sheets, and the net periodic benefit costs are included in the condensed consolidated statements of income.

The Company has made deposits for its defined benefit plans with independent trustees. In certain non-U.S. jurisdictions, trust funds and deposits with insurance companies are maintained to provide pension benefits to plan participants and their beneficiaries. There are no plan assets in the U.S. non-qualified plan due to its nature. For the U.S. postretirement health care benefit plan, the Company has set aside amounts at least equal to annual benefit payments with an independent trustee.

C****omponents of net periodic cost and other amounts recognized in other comprehensive (income) loss

Components of net periodic benefit cost and other supplemental information for the three and nine months ended September 30, 2025 and 2024 are as follows:

Three months ended September 30,

Qualified and Non-qualified Pension Benefits
United StatesInternationalPostretirement Benefits
(Millions)202520242025202420252024
Net periodic benefit cost (benefit)
Service cost - Operating$6$7$5$5$1$1
Interest cost24235533
Expected return on plan assets(31)(34)(6)(5)(2)(2)
Amortization of prior service benefit—(1)———(1)
Amortization of net actuarial loss1614——11
Non-operating92(1)—21
Total net periodic benefit cost (benefit)$15$9$4$5$3$2

Nine months ended September 30,

Qualified and Non-qualified Pension Benefits
United StatesInternationalPostretirement Benefits
(Millions)202520242025202420252024
Net periodic benefit cost (benefit)
Service cost - Operating$18$14$15$14$3$2
Interest cost7246151596
Expected return on plan assets(93)(68)(18)(15)(6)(4)
Amortization of prior service benefit—(2)———(2)
Amortization of net actuarial loss4828——32
Non-operating274(3)—62
Total net periodic benefit cost (benefit)$45$18$12$14$9$4

During the nine months ended September 30, 2025, the Company made cash contributions totaling $4 million to its U.S. pension plans and $13 million to its international pension plans. In 2025, the Company expects to make total cash contributions of approximately $23 million to these plans. The Company funds annually, at a minimum, the statutorily required minimum amount for our qualified plans. Non-qualified plans are unfunded and we pay benefits from our cash on hand. Future contributions will depend on market conditions, interest rates and other factors.

On September 1, 2025, in connection with the sale of the Purification and Filtration business, the Company transferred certain eligible U.S. and international employees from Company-sponsored pension and postretirement benefit plans to benefit plans of the Buyer. The transfers required remeasurement of the plans prior to the calculation of the transfer amount. The net impact of the remeasurements was a decrease of approximately $42 million in the pension and postretirement benefits liability and a corresponding decrease in accumulated other comprehensive income (loss). Additionally, the pension and postretirement benefits liability decreased by $33 million related to the curtailment and settlement of benefits for these employees.

NOTE 11. Derivatives

Prior to April 1, 2024, Solventum indirectly participated in 3M’s centrally managed hedging program, which utilizes a number of tools to manage currency risk including natural hedges such as pricing, productivity, hard currency, hard currency-indexed billings, and localizing source of supply. 3M also used financial hedges to mitigate currency risk. After Spin-Off, the Company established its own hedging program.

Cash Flow Hedges - For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized in current earnings.

Cash Flow Hedging - Foreign Currency Forward Contracts: The Company enters into foreign exchange forward contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. The settlement or extension of these derivatives will result in reclassifications (from accumulated other comprehensive income) to earnings in the period during which the hedged transactions affect earnings. Solventum may de-designate these cash flow hedge relationships in advance of the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously included in accumulated other comprehensive income (loss) for de-designated hedges remains in accumulated other comprehensive income (loss) until the forecasted transaction occurs or becomes probable of not occurring. Changes in the value of derivative instruments after de-designation are recorded in earnings. The maximum length of time over which Solventum hedges its exposure to the variability in future cash flows of the forecasted transactions is 24 months.

As of September 30, 2025, the Company had a balance of $12 million associated with the after-tax net unrealized loss associated with cash flow hedging instruments recorded in accumulated other comprehensive income. Of the total after-tax net unrealized balance as of September 30, 2025, Solventum expects to reclassify to earnings approximately $8 million after-tax net unrealized loss over the next 12 months based on exchange rates as of September 30, 2025.

The amount of pretax gain (loss) recognized in other comprehensive income (loss) related to derivative instruments designated as cash flow hedges is provided within amount of gain (loss) recognized in AOCI in Note 7.

Net Investment Hedges - The Company enters into cross-currency swaps to hedge portions of the Company’s investment in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as hedges of net investments in foreign operations and that meet the effectiveness requirements, the net gains and losses attributable to changes in spot exchange rates are recorded in cumulative translation within other comprehensive income. The remainder of the change in value of such instruments is recorded in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the foreign operation.

Solventum’s use of cross-currency swaps designated as hedges of the Company’s net investment in foreign subsidiaries can vary by time period in connection with the extent of the Company's desired foreign exchange risk coverage.

In March 2025, the Company entered into additional cross-currency swaps designated as net investment hedges of approximately $377 million.

Derivatives Not Designated as Hedging Instruments - Derivatives not designated as hedging instruments include foreign currency contracts to offset, in part, the impacts of changes in value of various non-functional currency denominated items including certain intercompany financing balances.

During the third quarter of 2025, the Company entered into $200 million notional fixed-to-floating forward interest rate swaps and $400 million notional treasury locks in connection with the anticipated closing of the Purification and Filtration sale and planned purchase of a portion of our outstanding registered debt. These instruments were settled during the quarter for a gain of $11 million that was reflected within loss on debt extinguishment, net on the condensed consolidated statements of income.

These derivative instruments are not designated in a hedging relationship; therefore, fair value gains and losses on these contracts are recorded in earnings. The Company does not hold or issue derivative financial instruments for trading purposes.

Statement of Income Location and Impact of Derivative Instruments

The impact to income related to both derivative instruments designated in cash flow hedging relationships and those not designated as hedging instruments for the three and nine months ended September 30, 2025 was not material. The impact from derivative instruments designated in cash flow hedging relationships was reflected within cost of sales and the impact from derivatives not designated as hedging instruments was reflected within other expense (income), net on the condensed consolidated statements of income.

The amount of gain (loss) excluded from effectiveness testing recognized in income relative to instruments designated in net investment hedge relationships is not material.

Location, Fair Value, and Gross Notional Amounts of Derivative Instruments

The following tables summarize the fair value of Solventum’s derivative instruments and their location in the condensed consolidated balance sheets. Notional amounts below are presented at period end foreign exchange rates.

Gross Notional AmountAssetsLiabilities
(Millions)LocationFair Value AmountLocationFair Value Amount
September 30,December 31,September 30,December 31,September 30,December 31,
202520242025202420252024
Derivatives designated as hedging instruments
Foreign currency forward contracts$334$355Other current assets$2$17Other current liabilities$11$—
Foreign currency forward contracts131157Other assets—6Other liabilities4—
Cross-currency swaps756380Other assets—$10Other liabilities64—
Total derivatives designated as hedging instruments$1,221$892$2$33$79$—
Derivatives not designated as hedging instruments
Foreign currency forward contracts$400$397Other current assets$1$—Other current liabilities$2$—

Fair Value Disclosure: The Company’s derivative assets and liabilities within the scope of ASC 815, Derivatives and Hedging, are required to be recorded at fair value. The Company’s derivatives that are recorded at fair value include foreign currency forward contracts and cross-currency swaps. Solventum has determined that these derivatives are considered Level 2 fair value measurements. Solventum determines fair value using observable inputs including foreign currency exchange rates.

Credit Risk and Offsetting of Assets and Liabilities of Derivative Instruments: The Company is exposed to credit loss in the event of nonperformance by counterparties in forward contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. Solventum enters into master netting arrangements with counterparties, which may allow each counterparty to net settle amounts owed between a Solventum entity and the counterparty as a result of multiple, separate derivative transactions. The Company does not anticipate nonperformance by any of these counterparties.

Solventum has elected to present the fair value of derivative assets and liabilities within the Company’s condensed consolidated balance sheets on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. Solventum determined that the impact of the amount of eligible offsetting derivative assets and liabilities was not material if it had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties. For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period based on the Solventum entity that is a party to the transactions. Derivatives not subject to master netting agreements are not eligible for net presentation. For the periods presented, Solventum has not received cash collateral from derivative counterparties.

NOTE 12. Commitments and Contingencies

Legal Proceedings

Solventum is involved in numerous claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. These claims, lawsuits and proceedings relate to matters including, but not limited to, product liability (involving products that the Company now or formerly manufactured and sold, including products made by the Health Care Business Group at 3M), intellectual property, commercial, antitrust, federal healthcare program related laws and regulations, such as the False Claims Act and anti-kickback laws in the United States and other jurisdictions. Unless otherwise stated, Solventum is vigorously defending all such litigation and proceedings. From time to time, Solventum also receives subpoenas, investigative demands or requests for information from various government agencies in the United States and foreign countries. Solventum generally responds in a cooperative, thorough and timely manner. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company. Such requests can also lead to the assertion of claims or the commencement of administrative, civil, or criminal legal proceedings against Solventum and others, as well as to settlements. The outcomes of legal proceedings and regulatory matters are often difficult to predict. Any determination that the Company’s operations or activities are not, or were not, in compliance with applicable laws or regulations could result in the imposition of fines, civil or criminal penalties, and equitable remedies, including disgorgement, suspension or debarment or injunctive relief.

Process for Disclosure and Recording of Liabilities Related to Legal Proceedings

Many lawsuits and claims involve highly complex issues relating to causation, scientific evidence, and alleged actual damages, all of which are otherwise subject to substantial uncertainties. Assessments of lawsuits and claims can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. The categories of legal proceedings in which the Company is involved may include multiple lawsuits and claims, may be spread across multiple jurisdictions and courts that may handle the lawsuits and claims differently, may involve numerous and different types of plaintiffs, raising claims and legal theories based on specific allegations that may not apply to other matters, and may seek substantial compensatory and, in some cases, punitive, damages. These and other factors contribute to the complexity of these lawsuits and claims and make it difficult for the Company to predict outcomes and make reasonable estimates of any resulting losses. The Company’s ability to predict outcomes and make reasonable estimates of potential losses is further influenced by the fact that a resolution of one or more matters within a category of legal proceedings may impact the resolution of other matters in that category in terms of timing, amount of liability, or both.

When making determinations about recording liabilities related to legal proceedings, the Company complies with the requirements of ASC 450, Contingencies, and related guidance, and records liabilities in those instances where it can reasonably estimate the amount of the loss and when the loss is probable. Where the reasonable estimate of the probable loss is a range, the Company records as an accrual in its financial statements the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such an estimate cannot be made. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred. Based on experience and developments, the Company reexamines its estimates of probable liabilities and associated expenses and receivables each period, and whether a loss previously determined to not be reasonably estimable and/or not probable is now able to be reasonably estimated or has become probable. Where appropriate, the Company makes additions to or adjustments of its reasonably estimated losses and/or accruals. As a result, the current accruals and/or estimates of loss and the estimates of the potential impact on the Company’s consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company will likely change over time. During the three and nine months ended September 30, 2025, the Company recognized $0 and $12 million in legal charges, respectively. During both the three and nine months ended September 30, 2024, the Company recognized $3 million and $8 million in legal charges. During the nine months ended September 30, 2025 and 2024 the Company made payments of $16 million and $6 million related to legal settlements. At September 30, 2025 and December 31, 2024, accrued litigation costs were $21 million and $25 million, respectively.

Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, the Company may ultimately incur charges substantially in excess of presently recorded liabilities, including with respect to matters for which no accruals are currently recorded because losses are not currently probable and reasonably estimable. Many of the matters described herein are at varying stages, seek an indeterminate amount of damages or seek damages in amounts that the Company believes are not indicative of the ultimate losses that may be incurred. It is not uncommon for claims to be resolved over many years. As a matter progresses, the Company may receive information, through plaintiff demands, through discovery, in the form of reports of purported experts, or in the context of settlement or mediation discussions that purport to quantify an amount of alleged damages, but with which the Company may not agree. Such information may or may not lead the Company to determine that it is able to make a reasonable estimate as to a probable loss or range of loss in connection with a matter. However, even when a loss or range of loss is not probable and reasonably estimable, developments in, or the ultimate resolution of, a matter could be material to the Company and could have a material adverse effect on the Company, its

consolidated financial position, results of operations and cash flows. In addition, future adverse rulings or developments, or settlements in, one or more matters could result in future changes to determinations of probable and reasonably estimable losses in other matters.

Process for Disclosure and Recording of Insurance Receivables Related to Legal Proceedings

The Company estimates insurance receivables based on an analysis of the terms of its numerous policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim and remaining coverage, and records an amount it has concluded is recognizable and expects to receive in light of the loss recovery and/or gain contingency models under ASC 450, ASC 610-30, and related guidance. For those insured legal proceedings for which the Company has recorded an accrued liability in its financial statements, the Company also records receivables for the amount of insurance that it concludes as recognizable from the Company’s insurance program. For those insured matters for which the Company has not recorded an accrued liability because the liability is not probable or the amount of the liability is not estimable, or both, but for which the Company has incurred an expense in defending itself, the Company records receivables for the amount of insurance that it concludes as recognizable for the expense incurred.

Product Liability Litigation

The following sections first describe the significant legal proceedings in which the Company is involved, and then describe the liabilities, if any, the Company has accrued relating to its significant legal proceedings.

3M is a named defendant in over 8,900 lawsuits in the United States and one Canadian putative class action with a single named plaintiff, alleging that they underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections due to the use of the Bair Hugger patient warming system. Under the terms of the Separation and Distribution Agreement by and between Solventum and 3M (the “Separation and Distribution Agreement”), Solventum has agreed to indemnify 3M for uninsured liabilities related to the Bair Hugger patient warming system, to manage the litigation, and pay for legal expenses.

The plaintiffs seek damages and other relief based on theories of strict liability, negligence, breach of express and implied warranties, failure to warn, design and manufacturing defect, fraudulent and/or negligent misrepresentation/concealment, unjust enrichment, and violations of various state consumer fraud, deceptive or unlawful trade practices and/or false advertising acts.

The U.S. Judicial Panel on Multidistrict Litigation (“JPML”) has consolidated all cases pending in federal courts to the U.S. District Court for the District of Minnesota to be managed in a multi-district litigation (“MDL”) proceeding. In July 2019, the court excluded several of the plaintiffs’ causation experts, and granted summary judgment for 3M in all cases pending at that time in the MDL; however, those decisions were subsequently reversed by the U.S. Court of Appeals for the Eighth Circuit. The parties are actively litigating several MDL bellwether and state court cases, with trials anticipated in 2026.

In addition to the federal MDL cases, there are seven state court personal injury cases relating to the Bair Hugger patient warming systems, including a multi-plaintiff case of amputees in Ramsey County, Minnesota. Additionally, a putative class action has been filed in Ramsey County, Minnesota, seeking economic damages for the use of the Bair Hugger system in knee and hip replacement surgeries involving medically obese people in Minnesota from May 2017 to the present.

In June 2016, 3M was served with a putative class action filed in the Ontario Superior Court of Justice for all Canadian residents who underwent various joint arthroplasty, cardiovascular, and other surgeries and later developed surgical site infections that the representative plaintiff claims were due to the use of the Bair Hugger patient warming system. The representative plaintiff seeks relief (including punitive damages) under Canadian law based on theories similar to those asserted in the MDL.

For product liability litigation matters described in this section for which a liability has been recorded, the amount recorded is included in the disclosed amounts in the preceding “Process for Disclosure and Recording of Liabilities Related to Legal Proceedings” section and is not material to the Company’s results of operations or financial condition. In addition, the Company is not able to estimate a possible loss or range of possible loss in excess of the recorded liability at this time.

Federal False Claims Act/Qui Tam Litigation

In October 2019, 3M acquired Acelity, Inc. and its KCI subsidiaries, including Kinetic Concepts, Inc. and KCI USA, Inc. In 2008 two former employees filed qui tam actions against Kinetic Concepts, Inc. and KCI USA, Inc. (collectively, the “KCI Defendants”), alleging that the KCI Defendants violated the federal False Claims Act by submitting false or fraudulent claims to federal healthcare programs related to billing for 3M V.A.C. Therapy. One qui tam action (the Godecke case) was dismissed in January 2022.

In the remaining action (the Hartpence case), the litigation remained in a pre-trial stage through July 2023 when the parties agreed to mediate the matter. The parties updated the court periodically during their mediation and subsequent negotiation of an agreement to settle the matter. The parties entered into an agreement resolving the matter on May 15, 2025. On July 2, 2025, pursuant to that agreement, the relator-plaintiff filed a joint stipulation of voluntary dismissal, dismissing the matter with prejudice as to the relator-plaintiff and without prejudice as to the United States. On July 3, 2025, the court entered an order dismissing the matter consistent with the parties’ stipulation.

Warranties/Guarantees

The Company had approximately $84 million and $40 million in bank guarantees, surety bonds, and other similar instruments issued and outstanding at September 30, 2025 and December 31, 2024, respectively. These instruments are utilized in connection with normal business activities. Furthermore, the Company does not disclose information on its product warranties, as management considers the balance immaterial to its consolidated results of operations and financial condition.

NOTE 13. Restructuring

In the fourth quarter of 2024, the Company announced its Solventum Way restructuring program, which is a reorganization designed to establish a more flexible and decentralized structure, create headroom to invest for growth and an operating model that enhances margins over time. Solventum expects that substantially all actions under this program will be complete by the end of 2025.

The related restructuring charges for periods presented were recorded in the condensed consolidated statement of income as follows:

Three months ended September 30,Nine months ended September 30,
(Millions)20252025
Cost of product$(2)$9
Cost of software and rentals——
Selling, general and administrative expenses414
Research and development expenses—5
Total operating income impact$2$28

Restructuring actions, including cash and non-cash impacts, are as follows:

(Millions)Employee Termination BenefitsAsset-Related and OtherTotal
Expense incurred in 2024$46$16$62
Non-cash changes—(8)(8)
Cash payments(1)—(1)
Accrued liabilities as of December 31, 2024$45$8$53
Expense incurred in first quarter of 2025$14$4$18
Non-cash changes—(4)(4)
Cash payments(38)—(38)
Accrued liabilities as of March 31, 2025$21$8$29
Expense incurred in second quarter of 2025$9$(1)$8
Cash payments(9)(2)(11)
Accrued liabilities as of June 30, 2025$21$5$26
Expense incurred in third quarter of 2025$5$(3)$2
Cash payments(14)—(14)
Accrued liabilities as of September 30, 2025$13$1$14

Asset-related and other primarily includes charges associated with asset write-offs and other contractual third party termination costs. All program charges were recognized within Corporate and are not included within business segment results.

NOTE 14. Earnings Per Share

Prior to the completion of the Spin-Off, the Company had no common shares issued and outstanding. On April 1, 2024, there were 172,709,505 shares of Solventum common stock issued and outstanding as part of the Distribution. For the nine months ended September 30, 2024, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

Subsequent to Spin-Off, the dilutive effect of outstanding stock options, restricted stock units (“RSUs”) and performance share units (“PSUs”) is reflected in the calculation of earnings per share using the treasury stock method. Diluted earnings per share excludes certain shares issuable under stock-based compensation plans because the effect would have been antidilutive.

The computations for basic and diluted earnings per share are as follows:

Three months ended September 30,Nine months ended September 30,
(Amounts in millions, except per share amounts)2025202420252024
Numerator:
Net income$1,266$122$1,493$448
Denominator:
Weighted average common shares outstanding – basic174.3173.4174.0173.1
Dilution associated with stock-based compensation plans1.10.51.10.3
Weighted average common shares outstanding – diluted175.4173.9175.1173.4
Basic earnings per share$7.26$0.70$8.58$2.59
Diluted earnings per share$7.22$0.70$8.53$2.58
Antidilutive shares4.35.04.15.0

NOTE 15. Stock-Based Compensation

Solventum grants annual stock-based compensation awards to certain employees and non-employee directors. In 2025, the Company’s annual grant occurred in the first quarter and included: 1.2 million RSUs that vest over 3 years with a weighted average grant date fair value of $75.74 and 0.4 million PSUs that vest based on a combination of service, performance and market conditions, with a weighted average grant date fair value of $83.15. The actual number of PSUs that vest could range from 0% to 200% of the target number of shares granted, and will be determined based on the Company's performance against financial targets and total shareholder return relative to a selected industry peer group; performance is measured over a three-year period ending December 31, 2027.

The annual grant contains a retirement provision whereby employees who have reached age 55 and completed ten years of service with the Company will continue to vest in their award after they retire. For these awards, expense is recognized over the required service period. The compensation cost of awards to grant recipients who meet these conditions on the grant date is recognized on the grant date.

Stock-Based Compensation Expense

Amounts recognized in the condensed consolidated financial statements related to stock-based compensation awards, including stock options, RSUs, and PSUs, are provided in the following table. Total stock-based compensation expense recognized in cost of product and cost of software and rentals has been combined in the table below within Cost of sales. Capitalized stock-based compensation amounts were not material.

Three months ended September 30,Nine months ended September 30,
(Millions)2025202420252024
Cost of sales$2$3$10$12
Selling, general and administrative expenses362210061
Research and development expenses321414
Stock-based compensation expenses412712487
Income tax benefits (expense)(6)(5)(17)(13)
Stock-based compensation expenses, net of tax$35$22$107$74

NOTE 16. Related Parties

Related Party Transactions Prior to Spin-Off

Prior to the Spin-Off, the Company participated in centralized 3M treasury programs. This arrangement was not reflective of the manner in which the Company would have financed its operations had it been a standalone business separate from 3M during the periods presented prior to April 1, 2024. All adjustments relating to certain transactions among the Company and 3M, which include the transfer of the balance of cash to and from 3M, transfer of the balance of cash held in centralized cash management arrangements to and from 3M, and pushdown of all costs of doing business that were paid on behalf of the Company by 3M, are excluded from the asset and liability balances in the condensed consolidated balance sheets and have instead been reported within Net parent investment as a component of equity*.*

Corporate Allocations

The condensed consolidated statements of income for periods prior to April 1, 2024 include general corporate expenses of 3M for services provided by 3M for certain corporate and shared service functions that were provided on a centralized basis, including the use of shared assets. Expenses had been included on a direct usage basis where costs were specifically identifiable to Solventum or allocated based on the Company’s pro rata proportion of 3M's revenue.

Management believes that the expense allocations were determined on a basis that was a reasonable reflection of the utilization of services provided for or the benefit received by the Company during each of the periods presented prior to April 1, 2024. The amounts that would have been incurred on a standalone basis could materially differ from the amounts allocated. Management does not believe, however, that it is practicable to estimate what these expenses would have been had the Company operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities. There was no expense allocation activity from 3M after April 1, 2024.

3M expense allocations were recorded in the condensed consolidated statements of income within the following captions:

Three months ended September 30,Nine months ended September 30,
(Millions)20242024
Cost of product$—$15
Cost of software and rentals——
Selling, general and administrative expenses—177
Research and development expenses—28
Total$—$220

Related Party Transactions After Spin-Off

Separation and Distribution Agreement and Other Related Party Transactions with 3M

In connection with the Spin-Off on April 1, 2024, the Company entered into or adopted several agreements that provide a framework for Solventum's relationship with 3M after the separation and distribution. Below is a summary of activity between Solventum and 3M for the periods presented:

*•*Separation related adjustments, which are the net impact of certain assets and liabilities that were retained by 3M and those that were transferred to Solventum as of March 31, 2024 , resulted in a decrease to net assets and total equity of $1.1 billion in the second quarter of 2024. This activity was reflected in the “Net transfers to 3M” line item of the condensed consolidated statements of changes in equity. The impact on net assets primarily represents liabilities payable to 3M for services received prior to Spin-Off as well as cash and accounts receivable retained by 3M.

  • Transition agreement expenses for the three and nine months ended September 30, 2025 were $145 million and $417 million, respectively, and for both the three and nine months ended September 30, 2024 were $144 million and $231 million, respectively, and are related to services received under transition agreements between the Company and 3M and its affiliates. These expenses are reflected in cost of product and operating expense (which is comprised of selling, general and administrative and research and development expenses) on the Company's condensed consolidated statements of income.

  • Master Supply Agreements - The Company recognized revenue and cost of sales associated with products sold to 3M of $22 million and $17 million, respectively, for the three months ended September 30, 2025 and $64 million and $48 million, respectively, for the nine months ended September 30, 2025. The Company recognized revenue and cost of

sales associated with products sold to 3M of $17 million and $12 million, respectively, for the three months ended September 30, 2024 and $27 million and $20 million, respectively, for the nine months ended September 30, 2024. Cost of product related to purchases from 3M under the master supply agreements was $64 million and $185 million for the three and nine months ended September 30, 2025, respectively. Cost of product related to purchases from 3M under the master supply agreements was $68 million for the three and nine months ended September 30, 2024.

Related Party Transactions

The Company had the following transactions with 3M and its affiliates, primarily in connection with the transition and master supply agreements, reported in the Company’s condensed consolidated financial statements:

Three months ended September 30,Nine months ended September 30,
(Amounts in millions)2025202420252024
Net sales of product$22$17$64$27
Cost of product167171481201
Selling, general and administrative expenses6763193135
Research and development expenses2285

Current amounts due from and due to 3M under various agreements described above are recognized within the due from related parties and due to related parties, as applicable, in the condensed consolidated financial statements. There were no non-current amounts due to 3M at September 30, 2025.

Net Parent Investment

Net transfers to 3M are included within Net parent investment in the condensed consolidated statements of changes in equity and within financing activities in the condensed consolidated statements of cash flows and represent the net effect of transactions between the Company and 3M.

The reconciliation of net transfers to 3M between the condensed consolidated changes in equity and the condensed consolidated statements of cash flows are as follows:

Three months ended September 30,Nine months ended September 30,
(Millions)2025202420252024
Net transfers from (to) 3M on the condensed consolidated changes in equity$9$—$(21)$(8,575)
Stock compensation expense———(4)
Multiemployer pension expense———(5)
Net balances transferred from 3M———337
Net transfers from (to) 3M on the condensed consolidated statements of cash flows$9$—$(21)$(8,247)

NOTE 17. Business Segments

Operating segments include components of an enterprise where separate financial information is available that is evaluated regularly by the Company’s Chief Operating Decision Maker (“CODM”) for the purpose of assessing performance and allocating resources. The Company’s CODM is its Chief Executive Officer. The primary profitability measurement used by the CODM to review segment operating results is segment operating income. The CODM uses segment operating income to allocate resources during the strategic planning process and then holds the segments accountable to the resourcing decisions during the annual budgeting process. The CODM does not use asset information by segment to evaluate reportable segments as the CODM does not receive discrete asset information by segment. Beginning in third quarter 2025, as a result of the sale of the Purification and Filtration business, the Company’s operating activities are managed primarily through the following reportable segments: MedSurg, Dental Solutions, and Health Information Systems. There have been no changes to the composition of or to financial information reported within each of these reportable segments. These segments have been identified based on the nature of the products sold and how the Company manages its operations. Transactions among reportable segments are recorded at cost. No operating segments have been aggregated to form reportable segments.

All Other includes the Water Business, which was previously reported within the Purification and Filtration business segment. The Water Business results have been reclassified for comparability within All Other for all historical periods. All Other also includes sales and cost of sales related to our supply agreements with 3M and other supply agreements assumed by the Company at Spin-Off related to legacy 3M businesses, which were historically included in Corporate and Unallocated.

Corporate and Unallocated primarily includes restructuring and related charges, benefits or costs related to capitalized manufacturing variances, and Spin-Off and separation related costs. Spin-Off and separation related costs include any costs incurred as part of our separation from 3M and costs to set up operations as a standalone company, including system implementations, manufacturing relocation, legal entity separation, certain equity awards granted as part of the Spin-Off, profit mark-ups on transition service arrangements with 3M and other one-time costs.

Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis. Business segment operating income is reconciled to total operating income and pre-tax income below.

Consistent accounting policies have been applied on a consolidated basis as well as by all segments for all reporting periods.

Business Segment Information and Disaggregated Net Sales

Three months ended September 30,Nine months ended September 30,
Net Sales (Millions)2025202420252024
Advanced Wound Care$485$468$1,400$1,369
Infection Prevention and Surgical Solutions7227132,1822,093
MedSurg1,2061,1823,5813,463
Dental Solutions3403131,006979
Health Information Systems3453261,012971
Total reportable segment net sales1,8911,8215,6005,413
Purification and Filtration128180497532
All Other7781230234
Total net sales$2,096$2,082$6,327$6,179
Three months ended September 30,Nine months ended September 30,
Cost of Sales (Millions)2025202420252024
MedSurg$599$539$1,750$1,593
Dental Solutions118109350320
Health Information Systems8092259269
Three months ended September 30,Nine months ended September 30,
Operating Expenses (Millions)*2025202420252024
MedSurg$405$399$1,213$1,192
Dental Solutions134130394382
Health Information Systems131129391385
* Operating expenses are comprised of selling, general and administrative expenses and research and development expenses as shown on the condensed consolidated statements of income.
Three months ended September 30,Nine months ended September 30,
Operating Performance (Millions)2025202420252024
MedSurg$203$243$619$678
Dental Solutions8774262277
Health Information Systems134105363317
Total reportable segment operating income4244221,2441,272
Purification and Filtration26199662
All Other1253124
Amortization expense(77)(88)(235)(261)
Corporate and Unallocated1,305(83)921(197)
Total operating income1,6902752,057900
Interest expense, net89107296260
Loss on extinguishment of debt, net82—82—
Other expense/(income), net512448
Income before income taxes$1,514$167$1,655$592

NOTE 18. Subsequent Events

Transform for the Future

In November 2025, the Company approved its new multiyear 'Transform for the Future' global initiative (the "Program") to further enable its long-term growth strategy and ensure it's best positioned to compete-to-win in a rapidly changing healthcare environment. Designed to transform the cost structure, enhance operational efficiency, and reposition for profitable growth, the primary activities of the Program include operating structure optimization and workforce reorganization, procurement and cost management, supply chain, manufacturing and global footprint optimization, and streamlining systems and increased automation to improve operational efficiency. Once fully implemented, the 4-year Program is expected to generate approximately $500 million in annual cost savings, a portion of which will be reinvested in strategic growth initiatives. The Company anticipates cumulative pretax costs related to the Program will be approximately $500 million.

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