Solventum Corp

Results of Operations

Net Sales

Refer to the preceding“—Overview” section and the“—Performance by Business Segment” section later in MD&A for discussion of sales change.

Operating Expenses

Cost of Product

Cost of product includes manufacturing, engineering and logistics costs. The Company operates a global supply chain and sourcing organization, including product sourced under master supply and transition manufacturing agreements with 3M. As a result, the Company is impacted by changes in the global regulatory and economic environment, including tariffs. The evolving regulatory and economic environment may impact our cost or ability to source products. To the extent possible the Company takes actions to offset these costs or identify alternative sources of supply.

Cost of product, measured as a percent of sales of product, increased in the third quarter of 2026 as compared to the same period last year. The increase was primarily driven by the impact of additional freight, warehousing and other costs related to supporting the Company's U.S. ERP deployment.

Cost of product, measured as a percent of sales of product, decreased for the first nine months of 2026 as compared to the same period last year. The decrease was primarily driven by the IEEPA tariff refunds of $100 million received in 2026. Inflation and incremental new tariff activity was partially offset by savings programs.

Cost of Software and Rentals

Cost of software and rentals includes compensation-related costs associated with installation, training and maintenance for our software products, and depreciation, maintenance and refurbishment costs and logistics costs related to our hardware rental units.

Cost of software and rentals, measured as a percent of sales of software and rentals, decreased during both the third quarter and first nine months of 2026 as compared to the same periods last year driven by benefits from both price and product mix.

Selling, General and Administrative

SG&A, measured as a percent of total net sales, increased in both the third quarter and first nine months of 2026 when compared to the same period last year. The increase in the third quarter was driven by higher costs associated with our transform for the future restructuring program and lower sales due to our July ERP deployment. The increase for the nine months ended was primarily driven by our transform for the future restructuring, accrued legal expenses, partially offset by insurance recoveries, and higher costs associated with activities to separate operations from 3M.

Research and Development

R&D, measured as a percent of total net sales, increased in the third quarter and remained flat for the first nine months of 2026 when compared to the same period last year. The increase in the third quarter was driven by the impact of additional amortization expense from the acquisition of Acera, partially offset by higher capitalized software development costs.

Gain on Sale of Business

The Company completed the sale of the Purification and Filtration business in the third quarter of 2025. This resulted in a net gain of $1.5 billion for both the third quarter and first nine months of 2025.

Interest Expense, Net and Other Expense (Income), Net

Interest expense, net includes interest accrued on debt obligations, offset by interest income from cash and marketable securities. Interest expense, net decreased for both the three and nine months ended September 30, 2026 as compared to the same period last year due to lower interest expense as a result of lower debt outstanding.

Loss on debt extinguishment, net includes charges incurred in the third quarter of 2025 from the differential between carrying value and the amount paid to acquire the tendered Senior Notes and related expenses. These charges were partially offset by the gain from interest rate swaps entered into and subsequently settled in connection with the sale of the Purification and Filtration business.

Other expense (income), net includes the non-service component of periodic pension cost, investment gains and losses, and foreign currency transaction gain (loss). Other expense (income), net increased for the three months ended September 30, 2026 as compared to the same period last year primarily due to higher foreign currency transaction losses. Other expense (income), net decreased slightly for the nine months ended September 30, 2026 as compared to the same period last year primarily due to lower periodic pension costs, higher gains on investments, largely offset by higher foreign currency transaction losses.

Provision for (benefit from) Income Taxes:

Refer to Note 8 to the condensed consolidated financial statements for further discussion of income taxes.