Edwards Lifesciences Corp

Previous wording

We are the leading global structural heart disease innovation company, driven by a passion to improve patient lives. Through breakthrough technologies, world-class evidence, and partnerships with clinicians and healthcare stakeholders, our employees are inspired by our patient-focused culture to deliver life-changing innovations to those who need them most. We conduct operations worldwide and are managed in the following geographical regions: United States, Europe, Japan, and Rest of World. Our products are categorized into the following groups: Transcatheter Aortic Valve Replacement (“TAVR”), Transcatheter Mitral and Tricuspid Therapies (“TMTT”), and Surgical Structural Heart (“Surgical”).

Current wording

We are the leading global structural heart disease innovation company, driven by a passion to improve patient lives. Through breakthrough technologies, world-class evidence, and partnerships with clinicians and healthcare stakeholders, our employees are inspired by our patient-focused culture to deliver life-changing innovations to those who need them most. We conduct operations worldwide and are managed in the following geographical regions: United States, Europe, Japan, and Rest of World. Our products are categorized into the following groups: Transcatheter Aortic Valve Replacement (“TAVR”), Transcatheter Mitral and Tricuspid Therapies (“TMTT”), and Surgical.

Previous wording

On September 3, 2024, we sold our Critical Care product group (“Critical Care”). In addition, as a next step in our disposal plan to exit businesses that are not focused on implantable medical innovations for structural heart disease, we have entered into a definitive agreement to sell a non-core product group for $85 million up-front consideration, subject to customary adjustments, and additional earnouts of up to $40 million. The sale is expected to close in the fourth quarter of 2025. We concluded that Critical Care met the criteria to be classified as held-for-sale in June 2024 and that the non-core product group met the criteria to be classified as held-for-sale in September 2024. We determined that, when considered together, the conditions for discontinued operations presentation had been met with respect to Critical Care and the non-core product group (collectively, the “discontinued product groups”). As such, the historical financial condition and results of the discontinued product groups have been reflected as discontinued operations in our consolidated condensed financial statements. Prior period amounts have been adjusted to reflect the discontinued operations presentation. Our discussion and analysis of our results of operations is reflective of our continuing operations. See Note 4 to the Consolidated Condensed Financial Statements for further information.

Current wording

We sold (i) our Critical Care product group (“Critical Care”) to Becton, Dickinson and Company (“BD”) in September 2024 and (ii) a business that was not focused on implantable medical innovations for structural heart diseases (the “non-core product group”) in December 2025 (collectively, the “discontinued product groups”). We determined that the conditions for the discontinued operations presentation had been met with respect to the discontinued product groups for the periods presented prior to their sale. As such, the historical financial condition and results of the discontinued product groups have been reflected as discontinued operations in our Condensed Consolidated Financial Statements for the applicable periods presented. Our discussion and analysis of our results of operations is reflective of our continuing operations. See Note 4 to the Condensed Consolidated Financial Statements for further information.

Previous wording

In response to recent changes to U.S. trade policy, such as increased tariffs on imports and including non-U.S. retaliatory tariffs, we have and will continue to assess potential impacts on our business. As needed, we will pursue options to mitigate the impact of tariffs, including through our supply chain and potential exemptions and exclusions. Failure to sufficiently mitigate the impact of tariffs, including significant inflation and other impacts on our customers, could also reduce demand for our products and adversely affect our business, financial condition and results of operations. Given the uncertainties around U.S. trade policy and future tariff rates, we are unable to predict the nature of the tariffs and whether we will be able to successfully mitigate their impact.

Current wording

Due to changes to U.S. trade policy, such as increased tariffs on imports and including non-U.S. retaliatory tariffs, we have and will continue to assess potential impacts on our business. As needed, we will pursue options to mitigate the impact of tariffs, including through our supply chain and potential exemptions and exclusions. Failure to sufficiently mitigate the impact of tariffs, including significant inflation and other impacts on our customers, could also reduce demand for our products and adversely affect our business, financial condition and results of operations. Given the uncertainties around U.S. trade policy and future tariff rates, we are unable to predict the nature of the tariffs and whether we will be able to successfully mitigate their impact.

Previous wording

Our net sales for the first nine months of 2025 were $4.5 billion, representing an increase of $444.3 million compared to the first nine months of 2024, driven primarily by sales of our TAVR and TMTT products.

Current wording

Our net sales for the first three months of 2026 were $1.6 billion, representing an increase of $235.9 million compared to the first three months of 2025, driven primarily by sales of our TAVR and TMTT products.

Previous wording

Our gross profit increased in the nine months ended September 30, 2025, driven primarily by our sales growth. Gross profit as a percentage of sales decreased primarily due to impact from foreign currency rate fluctuations and higher operational expenses. The decrease in our diluted earnings per share in the nine months ended September 30, 2025, was driven by our aforementioned operational performance.

Current wording

Our gross profit increased in the three months ended March 31, 2026, driven primarily by our sales growth. Gross profit as a percentage of sales decreased primarily due to the impact from foreign currency rate fluctuations and additional manufacturing expenses related to expansion of new therapies. The increase in our diluted earnings per share in the three months ended March 31, 2026, was driven by our aforementioned operational performance.

Previous wording

Information on new accounting standards is included in Note 1 to the Consolidated Condensed Financial Statements.

Current wording

Information on new accounting standards is included in Note 1 to the Condensed Consolidated Financial Statements.

Previous wording

Net sales of TAVR products increased for the three and nine months ended September 30, 2025, driven by higher sales of the Edwards SAPIEN platform in 2025, primarily due to higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve in the United States and Europe. In addition, during the three and nine months ended September 30, 2025, foreign currency exchange rate fluctuations increased net sales outside of the United States by $17.0 million and $13.2 million, respectively, primarily due to the strengthening of the Euro against the United States dollar.

Current wording

Net sales of TAVR products increased for the three months ended March 31, 2026, driven by higher sales of the Edwards SAPIEN platform in 2026, primarily due to higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve in the United States, Europe, and Japan. In addition, during the three months ended March 31, 2026, foreign currency exchange rate fluctuations increased net sales outside of the United States by $32.0 million, primarily due to the strengthening of the Euro against the United States dollar.

Previous wording

In April 2025, we received United States Food and Drug Administration approval for the SAPIEN 3 platform for severe aortic stenosis patients without symptoms.

Current wording

In January 2026, we received United States Food and Drug Administration approval for the SAPIEN 3 transcatheter pulmonic valve delivery system, an advancement designed specifically to support pediatric and adult patients living with congenital heart disease.

Previous wording

Net sales of TMTT products increased for the three and nine months ended September 30, 2025, primarily due to higher sales of our PASCAL transcatheter edge-to-edge repair system and our continued launch of the EVOQUE tricuspid valve replacement system in the United States and Europe.

Current wording

Net sales of TMTT products increased for the three months ended March 31, 2026, primarily due to higher sales of our PASCAL transcatheter edge-to-edge repair system and EVOQUE tricuspid valve replacement system in the United States and Europe.

Previous wording

Net sales of Surgical products increased for the three and nine months ended September 30, 2025, primarily due to higher sales of the INSPIRIS RESILIA aortic valve in the United States, Europe and Rest of World, the MITRIS RESILIA valve in the United States, Europe, and China, and the KONECT RESILIA tissue valved conduit in the United States.

Current wording

Net sales of Surgical products increased for the three months ended March 31, 2026, primarily due to higher sales of the INSPIRIS RESILIA aortic valve, the MITRIS RESILIA valve, and KONECT RESILIA tissue valved conduit in the United States and Europe.

Previous wording

Our gross profit increased in the three and nine months ended September 30, 2025, primarily driven by our sales growth discussed above. Gross profit as a percentage of net sales decreased for the three and nine months ended September 30, 2025, primarily driven by a 1.1 percentage point negative impact from foreign currency rate fluctuations, including the settlement of foreign currency hedging contracts, for the three months ended September 30, 2025, and higher operational expenses for both the three and nine months ended September 30, 2025.

Current wording

Our gross profit increased in the three months ended March 31, 2026, primarily driven by our sales growth discussed above. Gross profit as a percentage of net sales decreased for the three months ended March 31, 2026, primarily driven by a 0.3 percentage point negative impact from foreign currency rate fluctuations, including the settlement of foreign currency hedging contracts, and additional manufacturing expenses related to expansion of new therapies.

Previous wording

SG&A expenses increased for the three and nine months ended September 30, 2025, primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States (b) increased performance-based compensation expenses, and (b) increased professional services costs to support the transition services agreement. Foreign currency exchange rate fluctuations increased expenses by $7.3 million and $1.9 million during the three and nine months ended September 30, 2025, primarily due to the weakening of United States dollar against the Euro.

Current wording

SG&A expenses increased for the three months ended March 31, 2026, primarily due to higher headcount related expenses to support patient care. Foreign currency exchange rate fluctuations increased expenses by $14.6 million during the three months ended March 31, 2026, primarily due to the weakening of United States dollar against the Euro.

Previous wording

R&D expenses increased for the three and nine months ended September 30, 2025, primarily due to increased clinical activity related to our recent investments in implantable heart failure management innovations and higher performance-based compensation expense, partially offset by decreased investments in our transcatheter aortic valve innovations.

Current wording

R&D expenses increased for the three months ended March 31, 2026, primarily due to increased investments in implantable heart failure management and advanced technology innovation.

Previous wording

We incurred certain litigation expenses related to legal proceedings, intellectual property litigation and tax litigation of $90.4 million and $10.8 million during the three months ended September 30, 2025 and 2024, respectively, and $116.8 million and $27.8 million during the nine months ended September 30, 2025 and 2024, respectively (See Note 11 to the Consolidated Condensed Financial Statements).

Current wording

We incurred certain litigation expenses related to legal proceedings, intellectual property litigation and tax litigation of $37.1 million and $10.9 million during the three months ended March 31, 2026 and 2025, respectively (see Note 12 to the Condensed Consolidated Financial Statements).

Previous wording

Other operating income, net of $12.5 million and $52.9 million in three and nine months ended September 30, 2025, respectively, included income from a transition services agreement of $12.7 million and $50.5 million, respectively (see Note 4 to the Consolidated Condensed Financial Statements).

Current wording

Other operating income of $14.2 million and $19.1 million in the three months ended March 31, 2026 and 2025, included income from transition services agreements of $13.2 million and $17.9 million, respectively (see Note 4 to the Condensed Consolidated Financial Statements).

Previous wording

Interest income was $38.6 million and $112.5 million for the three and nine months ended September 30, 2025, respectively, and $24.3 million and $56.3 million for the three and nine months ended September 30, 2024, respectively. The increase in interest income was primarily due to a higher average investment balance during the three and nine months ended September 30, 2025.

Current wording

Interest income was $33.5 million and $36.5 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in interest income was primarily due to a lower average investment balance and lower yield during the three months ended March 31, 2026.

Previous wording

Loss on impairment of $47.1 million in the nine months ended September 30, 2025 included loss on impairment related to our determination to not exercise an option to acquire one of our VIE investments (see Note 6 to the Consolidated Condensed Financial Statements).

Current wording

Loss on impairment of $123.6 million in the three months ended March 31, 2026 was due to the carrying amount of one of our VIE investments not being recoverable (see Note 6 to the Condensed Consolidated Financial Statements).

Previous wording

Our effective income tax rate attributable to continuing operations was 16.1% and 10.1% for the three months ended September 30, 2025 and 2024, respectively, and 16.1% and 9.2% for the nine months ended September 30, 2025 and 2024, respectively. The increase in the effective rate between the nine months ended September 30, 2025 and 2024 was primarily due toan increase in global minimum tax (“Pillar Two,” as noted below), a decrease in the tax benefit from employee share-based compensation, and a decrease in the benefit from favorable global income tax audit settlements. In addition, the effective rates for the nine months ended September 30, 2025 and 2024 were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from employee share-based compensation. The effective rates include a tax benefit (shortfall) from employee share-based compensation attributable to continuing operations of$(0.3) million and$0.6 million for the three months ended September 30, 2025 and 2024, respectively, and $0.8 million and$10.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

Our effective income tax rate attributable to continuing operations was 17.1% and 16.2% for the three months ended March 31, 2026 and 2025, respectively. The increase in the effective rate between the three months ended March 31, 2026 and 2025 was primarily due to a decrease in the benefit from foreign earnings taxed at a lower rate, an increase in global minimum tax (“Pillar Two,” as noted below), and a decrease in the tax benefit from employee share-based compensation. In addition, the effective rates for the three months ended March 31, 2026 and 2025 were lower than the federal statutory rate of 21.0% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from foreign-derived deduction eligible income.

Previous wording

Many countries are implementing some or all of the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting Pillar Two (“Pillar Two”) rules that impose a global minimum tax of 15% on reported profits. Although Pillar Two provides a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar Two. In addition, in January 2025, the United States issued an executive order announcing opposition to aspects of these rules. As countries continue to enact and refine the Pillar Two rules, we will evaluate the potential effects of Pillar Two on our effective tax rate. In 2025, we expect the Pillar Two provisions to result in additional tax expense of approximately $50 million.

Current wording

Many countries are implementing some or all of the Organisation for Economic Co-operation and Development’s (“OECD”) Base Erosion and Profit Shifting Pillar Two (“Pillar Two”) rules that impose a global minimum tax of 15.0% on reported profits. Although Pillar Two provides a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar Two. In January 2026, the OECD released its Side-by-Side Safe Harbour package, intended to reduce double taxation and compliance burdens by deeming Pillar Two top-up tax to be zero under the Income Inclusion Rule (“IIR”) and Undertaxed Profits Rule (“UTPR”) for groups headquartered in the United States while preserving application of local Qualified Domestic Minimum Top-up Taxes (“QDMTT”). As countries continue to enact and refine the Pillar Two rules, including jurisdictional enactment of the Side-by-Side Safe Harbour through the course of 2026, we will evaluate the potential effects of Pillar Two on our effective tax rate. In 2026, we expect the Pillar Two provisions to result in additional tax expense of approximately $70.0 million prior to offsets under current law. As countries enact the Side-by-Side Safe Harbour, the Pillar Two UTPR tax expense will be reduced accordingly.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact to our estimated annual effective rate for 2025 and we are currently evaluating the potential impact on future periods.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA is not expected to have a material impact on 2026 and future periods.

Previous wording

In the first quarter of 2022, we executed an Advance Pricing Agreement (“APA”) between Japan and Switzerland covering distribution transactions for tax years 2020 through 2024, and in 2023, we executed an APA between Japan and the United States covering tax years 2020 through 2024. We also executed an APA in the fourth quarter of 2024 between Japan and Singapore covering tax years 2022 through 2026 with roll-back terms to cover the distribution of TAVR products beginning in 2020 and the distribution of Surgical products beginning in 2018. Also in the fourth quarter of 2024, we filed with the Japanese tax authorities an APA renewal application between Japan and the United States covering tax years 2025 through 2029. We filed the APA renewal application with the United States tax authorities in the first quarter of 2025 and are engaged in ongoing discussions.

Current wording

In the first quarter of 2022, we executed an Advance Pricing Agreement (“APA”) between Japan and Switzerland covering distribution transactions for tax years 2020 through 2024, and in 2023, we executed an APA between Japan and the United States covering tax years 2020 through 2024. We also executed an APA in the fourth quarter of 2024 between Japan and Singapore covering tax years 2022 through 2026 with roll-back terms to cover the distribution of TAVR products beginning in 2020 and the distribution of Surgical products beginning in 2018.

Previous wording

The audits of our United States federal income tax returns through 2014 have been closed. The IRS audit field work for the 2015 through 2017 tax years was completed during the second quarter of 2021, except for transfer pricing and related matters. The IRS is currently examining the 2018 through 2020 tax years. At September 30, 2025, all material state, local, and foreign income tax matters have been concluded for years through 2015.

Current wording

The audits of our United States federal income tax returns through 2014 have been closed. The IRS audit field work for the 2015 through 2017 tax years was completed during the second quarter of 2021, except for transfer pricing and related matters. The IRS is currently examining the 2018 through 2020 tax years.

Previous wording

During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries. The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $255 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS. We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals (“Appeals”). The Appeals process culminated in the third quarter of 2023 when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.

Current wording

During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries. The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $260.0 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS. We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals (“Appeals”). The Appeals process culminated in the third quarter of 2023 when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.

Previous wording

We plan to vigorously contest the additional tax claimed by the IRS through the judicial process. Final resolution of this matter is not likely within the next 12 months. We believe the amounts previously accrued related to this uncertain tax position are appropriate for a number of reasons, including the interpretation and application of relevant tax laws and accounting standards to our facts and, accordingly, have not accrued any additional amount based on the NOD and other proceedings to date. Nonetheless, the outcome of the judicial process cannot be predicted with certainty, and it is possible that the outcome of that process could have a material impact on our consolidated financial statements. As noted below, similar material tax disputes may arise for the 2018 through 2024 tax years. We made deposits with the IRS of $75 million in November 2022, and $305.1 million in March 2024, to prevent the further accrual of interest on that portion of any additional tax and interest we may ultimately be found to owe while we prepare to contest through the judicial process the IRS's entitlement to any of the additional tax claimed by the IRS. The IRS converted those deposits to advance payments, and, on December 20, 2024, we filed administrative claims for refunds of those payments with the IRS for the 2015 through 2017 tax years. Though the IRS could still deny those refund claims, we are now able to sue for refunds in the appropriate judicial forum even without an IRS denial.

Current wording

We plan to vigorously contest the additional tax claimed by the IRS through the judicial process. Final resolution of this matter is not likely within the next 12 months. We believe the amounts previously accrued related to this uncertain tax position are appropriate for a number of reasons, including the interpretation and application of relevant tax laws and accounting standards to our facts and, accordingly, have not accrued any additional amount based on the NOD and other proceedings to date. Nonetheless, the outcome of the judicial process cannot be predicted with certainty, and it is possible that the outcome of that process could have a material impact on our consolidated financial statements. As noted below, similar material tax disputes may arise for the 2018 through 2026 tax years. We made deposits with the IRS of $75.0 million in November 2022, and $305.1 million in March 2024, to prevent the further accrual of interest on that portion of any additional tax and interest we may ultimately be found to owe while we prepare to contest through the judicial process the IRS's entitlement to any of the additional tax claimed by the IRS. The IRS converted those deposits to advance payments, and, on December 20, 2024, we filed administrative claims for refunds of those payments with the IRS for the 2015 through 2017 tax years. We are now able to sue for refunds in the appropriate judicial forum.

Previous wording

Surgical/TAVR intercompany royalty transactions covering tax years 2018 through 2024 remain subject to IRS examination, and those transactions and related tax positions remain uncertain as of September 30, 2025. We have considered this information, as well as information regarding the NOD and other proceedings described above, in our evaluation of our uncertain tax positions. The impact of these unresolved transfer pricing matters, net of any correlative tax adjustments, may be significant to our consolidated financial statements. Based on the information currently available and numerous possible outcomes, we cannot reasonably estimate what, if any, changes in our existing uncertain tax positions may occur in the next 12 months and, therefore, have continued to record the uncertain tax positions as a long-term liability.

Current wording

Surgical/TAVR intercompany royalty transactions covering tax years 2018 through 2026 remain subject to IRS examination, and those transactions and related tax positions remain uncertain as of March 31, 2026. We have considered this information, as well as information regarding the NOD and other proceedings described above, in our evaluation of our uncertain tax positions. The impact of these unresolved transfer pricing matters, net of any correlative tax adjustments, could have a material impact on our consolidated financial statements. Based on the information currently available and numerous possible outcomes, we cannot reasonably estimate what, if any, changes in our existing uncertain tax positions may occur in the next 12 months and, therefore, have continued to record the uncertain tax positions as a long-term liability.

Previous wording

During the first quarter of 2024, we received a notice of assessment from the Israel Tax Authority (the “ITA”) wherein the ITA claimed that we owe approximately $110 million of tax excluding interest and penalties in connection with a claimed 2017 transfer of intellectual property. On July 31, 2025, the ITA formally informed us that it was withdrawing its 2017 assessment but reserves the right to evaluate whether intellectual property was transferred in later years. We maintain that we did not transfer intellectual property outside of Israel and would vigorously defend that position through administrative proceedings including with appeals if the issue is raised in later years. If necessary, we expect to defend that position through judicial proceedings. During the fourth quarter of 2024, we received a notice of assessment from the ITA claiming that we owe additional tax of approximately $16 million excluding interest and penalties for the 2018 through 2022 tax years based entirely on the collateral impacts of the 2017 assessment. We filed a formal appeal in the first quarter of 2025 and, if necessary, expect to defend its position through judicial proceedings. While the appeals process for the 2018 through 2022 years runs through March 2026, we expect the 2018 through 2022 assessment to also be withdrawn prior to expiration of the appeals process based on the ITA’s conclusion that IP was not transferred in 2017.

Current wording

During the first quarter of 2024, we received a notice of assessment from the Israel Tax Authority (the “ITA”) wherein the ITA claimed that we owe approximately $110.0 million of tax excluding interest and penalties in connection with a claimed 2017 transfer of intellectual property. On July 31, 2025, the ITA formally informed us that it was withdrawing its 2017 assessment but reserves the right to evaluate whether intellectual property was transferred in later years. We maintain that we did not transfer intellectual property outside of Israel and would vigorously defend that position through administrative proceedings including with appeals if the issue is raised in later years. If necessary, we expect to defend that position through judicial proceedings. During the fourth quarter of 2024, we received a notice of assessment from the ITA claiming that we owe additional tax of approximately $16.0 million excluding interest and penalties for the 2018 through 2022 tax years based entirely on the collateral impacts of the 2017 assessment. We filed a formal appeal in the first quarter of 2025. In the third quarter of 2025, the ITA agreed that intellectual property was not transferred in 2017 and withdrew its assessment. In the first quarter of 2026, we were notified that the ITA had withdrawn its assessment for the 2018 and 2019 taxable years. For taxable years 2020-2022, the ITA has until the expiration of each year’s respective statute of limitations to respond to our appeal. If the 2020 through 2022 assessments are not withdrawn, we will defend our position through judicial proceedings.

Previous wording

As of September 30, 2025, cash and cash equivalents, and short-term investments held in the United States and outside of the United States were $3.4 billion and $438.0 million, respectively.

Current wording

As of March 31, 2026, cash and cash equivalents, and short-term investments held in the United States and outside of the United States were $3.2 billion and $436.7 million, respectively.

Previous wording

We have a Five-year Credit Agreement (the “Credit Agreement”) which provides for a $750.0 million multi-currency unsecured revolving credit facility and matures on July 15, 2027. We may increase the amount available under the Credit Agreement by up to an additional $250.0 million in the aggregate and extend the maturity date for an additional year, subject to agreement of the lenders. As of September 30, 2025, no amounts were outstanding under the Credit Agreement.

Current wording

We have a five-year Credit Agreement (the “Credit Agreement”) which provides for a $750.0 million multi-currency unsecured revolving credit facility and matures on July 15, 2027. We may increase the amount available under the Credit Agreement by up to an additional $250.0 million in the aggregate and extend the maturity date for an additional year, subject to the agreement of the lenders. As of March 31, 2026, no amounts were outstanding under the Credit Agreement.

Previous wording

In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the “2018 Notes”) due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of September 30, 2025, we have not elected to redeem any of the 2018 Notes. As of September 30, 2025, the carrying value of the 2018 Notes was $598.2 million.

Current wording

In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the “2018 Notes”) due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of March 31, 2026, we have not elected to redeem any of the 2018 Notes. As of March 31, 2026, the carrying value of the 2018 Notes was $598.5 million.

Previous wording

From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors. We consider several factors in determining when to execute share repurchases, including, among other things, expected dilution from stock plans, cash capacity, and the market price of our common stock. During the nine months ended September 30, 2025, under the Board authorized repurchase program, we repurchased a total of 11.2 million shares at an aggregate cost of $844.9 million, including pursuant to $750 million accelerated share repurchase agreements executed during the period (see Note 10 to the Consolidated Condensed Financial Statements). As of September 30, 2025, we had remaining authority to purchase $2.1 billion of our common stock under the share repurchase program.

Current wording

From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors. We consider several factors in determining when to execute share repurchases, including, among other things, expected dilution from stock plans, cash capacity, and the market price of our common stock. During the three months ended March 31, 2026, under the Board-authorized repurchase program, we repurchased a total of 4.9 million shares at an aggregate cost of $520.1 million, including pursuant to a $500.0 million accelerated share repurchase agreements executed during the period (see Note 11 to the Condensed Consolidated Financial Statements). As of March 31, 2026, we had remaining authority to purchase $1.5 billion of our common stock under the share repurchase program.

Previous wording

Consolidated Cash Flows - For the nine months ended September 30, 2025 and 2024:

Current wording

Consolidated Cash Flows - For the three months ended March 31, 2026 and 2025:

Previous wording

Net cash flows provided byoperating activities of $1,144.3 million for the nine months ended September 30, 2025, increased $474.5 million over the same period last year primarily due to (1) lower tax payments during the nine months ended September 30, 2025, which included $175.3 million of local tax payments associated with the sale of Critical Care, compared to the nine months ended September 30, 2024, which included a $305.1 million tax deposit we made to mitigate interest on potential tax liabilities we are contesting through the judicial process (see Note 14 to the Consolidated Condensed Financial Statements), and (2) improved operating performance.

Current wording

Net cash flows provided byoperating activities of $43.8 million for the three months ended March 31, 2026, decreased $236.6 million over the same period last year primarily due to higher working capital needs, partially offset by improved operating performance.

Previous wording

Net cash provided by investing activities of $2.9 billion for the nine months ended September 30, 2024, consisted primarily of the sale of our Critical Care product group for proceeds of $3.9 billion, partially offset by capital expenditures of $202.6 million and net proceeds from investments of $2.3 million.

Current wording

Net cash provided by investing activities of $85.3 million for the three months ended March 31, 2025, consisted primarily of net proceeds from investments of $198.4 million, partially offset by capital expenditures of $56.0 million and a payment for a net working capital adjustment of $36.3 million related to the sale of Critical Care.

Previous wording

Net cash used infinancing activities of $945.4 million for the nine months ended September 30, 2025, consisted primarily of purchases of treasury stock of $852.8 million and purchase of the remaining noncontrolling interest in a subsidiary of $233.7 million, partially offset by proceeds from stock plans of $141.8 million.

Current wording

Net cash used infinancing activities of $451.2 million for the three months ended March 31, 2026, consisted primarily of purchases of treasury stock of $521.8 million, partially offset by proceeds from stock plans of $68.9 million.

Previous wording

Net cash used in financing activities of $1.0 billion for the nine months ended September 30, 2024, consisted primarily of purchases of treasury stock of $1.2 billion, partially offset by proceeds from stock plans of $150.9 million.

Current wording

Net cash used in financing activities of $258.0 million for the three months ended March 31, 2025, consisted primarily of purchases of treasury stock of $308.6 million, partially offset by proceeds from stock plans of $49.9 million.

Previous wording

The consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated condensed financial statements and sales and expenses during the periods reported. Actual results could differ from those estimates. Information with respect to our critical accounting policies and estimates which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes from the information discussed therein.

Current wording

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and sales and expenses during the periods reported. Actual results could differ from those estimates. Information with respect to our critical accounting policies and estimates which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes from the information discussed therein.