What changed in this filing

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Item 9A. Controls and Procedures

2026-02-20 compared with 2025-02-28 · 531 added, 679 removed, 705 unchanged (63% of the section changed)

17 unchanged sentences

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fourth quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On December 31, 2025, we completed the sale of the P&HS business pursuant to the Purchase Agreement.

We designed and implemented internal controls over financial reporting, including those related to discontinued operations accounting, which were assessed as of December 31, 2025.

There were no other changes in our internal control over financial reporting that occurred during the fourth quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

During the three months ended December 31, 2025, none of our directors or officers informed us of the adoption or termination of a trading plan intended to satisfy Rule 10b5-1(c).

Amended and Restated Severance Arrangements

On February 27, 2025, our Board approved the amendment and restatement of the Owens & Minor, Inc.

Officer Severance Policy (the “Officer Severance Policy”), in which each of our named executive officers participates, and the Company’s existing Executive Change of Control Severance Agreements with each of our named executive officers (the “CIC Agreements”).

Among other things, (i) the Officer Severance Policy was updated to increase the applicable severance multiplier and severance period from 1.50x and 18 months, respectively, to 2.0x and 24 months, and (ii) the Board approved the amendment of the CIC Agreements to increase (a) the applicable severance multiplier from 2.0x to 3.0x, and (b) the applicable period for the employer portion of COBRA premiums from two years to three years.

The material terms of the Officer Severance Policy and CIC Agreements, as previously described in the Company’s 2024 Proxy Statement filed with the Securities and Exchange Commission on March 27, 2024, otherwise remain unchanged.

The foregoing descriptions are qualified in their entirety by reference to the amended Officer Severance Policy, a copy of which is filed herewith as Exhibit 10.13, and the Form of Amended and Restated Executive Change of Control Severance Agreement, a copy of which is filed herewith as Exhibit 10.61, each of which are incorporated by reference herein.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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To the Shareholders and Board of Directors

Owens & Minor, Inc.:

Accendra Health, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Owens & Minor, Inc.

We have audited Accendra Health, Inc.

and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

22 unchanged sentences

Information required by Items 10-14 can be found under Information about our Executive Officers under Part I of this Form 10-K and the registrant’s 2026 Proxy Statement pursuant to instructions G(3) of the General Instructions to Form 10-K.

We have adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers, and employees that is designed to promote compliance with insider trading laws, rules and regulations applicable to the Company.

We have adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers, and teammates that is designed to promote compliance with insider trading laws, rules and regulations applicable to the Company.

A copy of our insider trading policy is filed as an exhibit to this Annual Report on Form 10-K.

Because our common stock is listed on the New York Stock Exchange (NYSE), our Chief Executive Officer is required to make, and he has made, an annual certification to the NYSE stating that he was not aware of any violation of the corporate governance listing standards of the NYSE.

Our Chief Executive Officer made his annual certification to that effect to the NYSE as of May 28, 2024.

Our Chief Executive Officer made his annual certification to that effect to the NYSE as of June 10, 2025.

In addition, we have filed, as exhibits to this Annual Report on Form 10-K, the certifications of our principal executive officer and principal financial officer required under Sections 906 and 302 of the Sarbanes-Oxley Act of 2002 to be filed with the Securities and Exchange Commission regarding the quality of our public disclosure.

9 unchanged sentences

See Index to Exhibits on page 88.

OWENS & MINOR, INC.

ACCENDRA HEALTH, INC.

AND SUBSIDIARIES

2 unchanged sentences

Years Ended December 31,

Cost of goods sold

Distribution, selling and administrative expenses

Operating costs and expenses:

Cost of net revenue

Selling, general and administrative expenses

Goodwill impairment charge

Transaction breakage fee

Acquisition-related charges and intangible amortization

Exit and realignment charges, net

Other operating expense (income), net

Operating (loss) income

Total operating costs and expenses

Operating income (loss)

Interest expense, net

Loss (gain) on extinguishment of debt

Transaction financing fees, net

Other expense, net

(Loss) income before income taxes

Income tax provision (benefit)

Net (loss) income

Net (loss) income per common share

(Loss) income from continuing operations before income taxes

Income tax provision

(Loss) income from continuing operations, net of tax

Loss from discontinued operations, net of tax

( 1,100,642 )

Basic loss per common share:

(Loss) income from continuing operations, net of tax

Loss from discontinued operations, net of tax

Diluted loss per common share:

(Loss) income from continuing operations, net of tax

Loss from discontinued operations, net of tax

See accompanying notes to consolidated financial statements.

OWENS & MINOR, INC.

ACCENDRA HEALTH, INC.

AND SUBSIDIARIES

2 unchanged sentences

Years Ended December 31,

Net (loss) income

Other comprehensive (loss) income, net of tax:

( 1,100,642 )

Other comprehensive income (loss), net of tax:

Currency translation adjustments

1 unchanged sentence

Change in gains and losses on derivative instruments

Total other comprehensive (loss) income, net of tax

Comprehensive (loss) income

P&HS Sale reclassification adjustment

Total other comprehensive income (loss), net of tax

Comprehensive loss

( 1,052,183 )

See accompanying notes to consolidated financial statements.

OWENS & MINOR, INC.

ACCENDRA HEALTH, INC.

AND SUBSIDIARIES

4 unchanged sentences

Accounts receivable, net

Merchandise inventories

Inventories, net

Other current assets

Current assets held for sale - discontinued operations

Total current assets

Property and equipment, net

Patient service equipment and other fixed assets, net

Operating lease assets

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Other assets, net

Liabilities and equity

Noncurrent assets held for sale - discontinued operations

Liabilities and (deficit) equity

Current liabilities

3 unchanged sentences

Other current liabilities

Current liabilities held for sale - discontinued operations

Total current liabilities

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Other liabilities

Noncurrent liabilities held for sale - discontinued operations

Total liabilities

Commitments and contingencies

(Deficit) equity

Common stock, par value $ 2 per share;

authorized - 200,000 shares;

issued and outstanding - 77,199 shares and 76,546 shares as of December 31, 2024 and December 31, 2023

issued and outstanding - 76,388 shares and 77,199 shares

Paid-in capital

Retained earnings

(Accumulated deficit) retained earnings

( 1,079,752 )

Accumulated other comprehensive loss

Total liabilities and equity

Total (deficit) equity

Total liabilities and (deficit) equity

See accompanying notes to consolidated financial statements.

OWENS & MINOR, INC.

ACCENDRA HEALTH, INC.

AND SUBSIDIARIES

3 unchanged sentences

Operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to cash provided by operating activities:

( 1,100,642 )

Loss from discontinued operations, net of tax

Adjustments to reconcile net loss to cash (used for) provided by operating activities:

Depreciation and amortization

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Changes in operating lease right-of-use assets and lease liabilities

Gain from sales and dispositions of property and equipment

Gain from sale and dispositions of patient service equipment

Changes in operating assets and liabilities:

Accounts receivable

Merchandise inventories

Accounts receivable, net

Accounts payable

Net change in other assets and liabilities

Cash provided by operating activities

Cash (used for) provided by operating activities from discontinued operations

Cash (used for) provided by operating activities

Investing activities:

Acquisition, net of cash acquired

( 1,684,607 )

Additions to property and equipment

Proceeds from P&HS sale

Cash sold with P&HS sale

Additions to patient service equipment ($ 189 million, $ 167 million and $ 167 million) and other fixed assets

Proceeds from sale of patient service equipment

Additions to computer software

Proceeds from sales of property and equipment

Cash used for investing activities

( 1,804,476 )

Cash used for investing activities from discontinued operations

Cash provided by (used for) investing activities

Financing activities:

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( 1,465,800 )

( 1,156,300 )

Borrowings under Revolving Credit Facility

Repayments under Revolving Credit Facility

( 2,711,284 )

Repayments of debt

Proceeds from issuance of debt

Borrowings under Receivables Financing Agreement

Financing costs paid

Cash (used for) provided by financing activities

Repurchase of common stock

Cash used for financing activities from discontinued operations

Cash provided by (used for) financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

1 unchanged sentence

Supplemental disclosure of cash flow information:

Income taxes paid (received), net

Income taxes paid, net

Interest paid

Noncash investing activity:

Unpaid purchases of property and equipment and computer software at end of period

Unpaid purchases of patient service equipment and other fixed assets at end of period

See accompanying notes to consolidated financial statements.

OWENS & MINOR, INC.

ACCENDRA HEALTH, INC.

AND SUBSIDIARIES

8 unchanged sentences

Balance, December 31, 2023

Other comprehensive income

Other comprehensive loss

Share-based compensation expense, exercises and other

Balance, December 31, 2024

Other comprehensive loss

( 1,100,642 )

Other comprehensive income

Share-based compensation expense, exercises and other

Shares repurchased and retired

Balance, December 31, 2025

( 1,079,752 )

See accompanying notes to consolidated financial statements.

OWENS & MINOR, INC.

ACCENDRA HEALTH, INC.

AND SUBSIDIARIES

2 unchanged sentences

Note 1—Summary of Significant Accounting Policies

Owens & Minor, Inc.

and subsidiaries (we, us, our or the Company), a Fortune 500 company headquartered in Richmond, Virginia, is a global healthcare solutions company that incorporates product manufacturing, distribution support and innovative technology services to deliver significant and sustained value across the breadth of the industry – from acute care to patients in their home.

Our teammates serve healthcare industry customers in approximately 80 countries by producing quality products and helping to reduce total costs across the healthcare supply chain by optimizing point-of care performance, freeing up capital and clinical resources and managing contracts to optimize financial performance.

Accendra Health, Inc.

(f/k/a Owens & Minor, Inc.) and subsidiaries (we, us, our or the Company) is a leading nationwide provider of products, technology, and services that supports health beyond the hospital for millions of people each year.

We connect patients, providers, and insurers, delivering innovative solutions that help promote better health outcomes and improve quality of life for people living with chronic, complex, and acute health conditions.

Together, our trusted brands, Apria and Byram Healthcare, bring nearly 90 years of combined experience in promoting health beyond the hospital in communities across the country.

We are headquartered in Richmond, Virginia.

Basis of Presentation and Consolidation.

The consolidated financial statements include the accounts of Owens & Minor, Inc.

The consolidated financial statements include the accounts of Accendra Health, Inc.

and the subsidiaries it controls and contain all adjustments necessary to conform with U.S.

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All significant intercompany accounts and transactions have been eliminated.

The results of operations of businesses acquired by the Company are included as of the respective acquisition date.

We report our business under two distinct segments:

Products & Healthcare Services and Patient Direct.

The Products & Healthcare Services segment includes our United States (U.S.) distribution division (Medical Distribution), including outsourced logistics and value-added services, and Global Products division which manufactures and sources medical surgical products through our production and kitting operations.

The Patient Direct segment includes our home healthcare divisions (Byram and Apria).

In connection with the sale of our Products & Healthcare Services (P&HS) business as detailed in the discontinued operations section below, we determined that our continuing operations’ business activities comprise a single operating and reporting segment.

This determination is in accordance with ASC No.

280, Segment Reporting .

Revision of Prior Period Consolidated Financial Statements .

We revised our prior period financial statements to correct for a prior period accounting error that impacted our beginning retained earnings balance and total equity.

The error, which was discovered during the first quarter of 2025, related to the over accrual of accounts payable that had accumulated over multiple years.

We assessed the materiality of the error, both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin No.

99, and concluded that the error was not material to any of our previously reported financial statements based upon the nature of the error, including the immaterial annual quantitative impacts to prior period consolidated statements of operations.

Accordingly, the error was corrected through beginning retained earnings as of the earliest balance sheet date presented.

The cumulative impact of the error correction on our retained earnings and total equity as of the earliest balance sheet date presented, was an increase of $ 21 million.

The error also resulted in a cumulative $ 23 million reduction to accounts payable, a $ 1.6 million increase to other current liabilities, and a $ 0.5 million increase to other liabilities as of December 31, 2023.

Reclassifications.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Discontinued Operations and Assets Held-for-Sale.

On February 28, 2025, we announced that we were actively engaged in discussions regarding the anticipated sale of our P&HS business.

On October 7, 2025, we entered into an Equity Purchase Agreement, (the Purchase Agreement) by and among the Company, Dominion Healthcare Acquisition Corporation, a Delaware corporation (the Purchaser), and Dominion Healthcare Holdings, L.P., a Delaware limited partnership (Purchaser Parent) to sell the P&HS business, for an aggregate of $ 375 million in cash, subject to certain adjustments for cash, indebtedness, net working capital and transaction expenses.

On December 31, 2025, we completed the sale of the P&HS business pursuant to the Purchase Agreement.

We have retained a 5 % equity interest in the P&HS business, which is reflected in other assets, net on our consolidated balance sheets.

Following the sale, we retained a 5 % equity interest in the P&HS business, which is reflected in other assets, net on our consolidated balance sheets.

The P&HS business was initially classified as discontinued operations and assets held for sale as of June 30, 2025.

In accordance with GAAP, the financial position and results of operations of the P&HS business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented.

With the exception of Note 3, the Notes to the Consolidated Financial Statements reflect the continuing operations of Accendra

unless otherwise noted.

In connection with the sale, we entered into certain transitional services arrangements with the Purchaser that governs the parties’ relationship following the closing.

See Note 3 for additional information regarding discontinued operations and assets held for sale.

Use of Estimates.

The preparation of consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures.

Significant estimates are used for, but are not limited to, the allowances for losses on accounts receivable, inventory valuation allowances, variable consideration, depreciation and amortization, goodwill valuation, valuation of intangible assets and other long-lived assets, estimated fair values of the net assets acquired in business combinations, self-insurance liabilities, tax liabilities, defined benefit obligations, share-based compensation and other contingencies.

Significant estimates are used for, but are not limited to, variable consideration, depreciation and amortization, goodwill valuation, valuation of intangible assets and other long-lived assets, estimated fair values of the net assets acquired in business combinations, self-insurance liabilities, tax liabilities, defined benefit obligations, share-based compensation and other contingencies.

Actual results may differ from these estimates.

Cash, Cash Equivalents and Restricted Cash.

Cash, cash equivalents and restricted cash includes cash and marketable securities with an original maturity or maturity at acquisition of three months or less.

Cash, cash equivalents and restricted cash are stated at cost.

Nearly all of our cash, cash equivalents and restricted cash are held in cash depository accounts in major banks in North America, Europe, and Asia.

Cash that is held by a major bank and has restrictions on its availability to us is classified as restricted cash.

Restricted cash as of December 31, 2023 includes cash held in an escrow account as required by the Centers for Medicare & Medicaid Services in conjunction with the Bundled Payments for Care Improvement initiatives related to wind-down costs of Fusion5 and $ 14 million of cash deposits received subject to limitations on use until remitted to a third-party financial institution (the Purchaser), pursuant to the Master Receivables Purchase Agreement (RPA).

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying consolidated balance sheets that sum to the total of those same amounts presented in the accompanying consolidated statements of cash flows.

December 31, 2024

Cash and Cash Equivalents.

Cash and cash equivalents includes cash and marketable securities with an original maturity or maturity at acquisition of three months or less.

Cash and cash equivalents are stated at cost.

Nearly all of our cash and cash equivalents are held in cash depository accounts in major banks in the U.S.

Cash that has restrictions on its availability to us would be classified as restricted cash.

There was no restricted cash as of December 31, 2025 and 2024.

The following table provides a reconciliation of cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of those same amounts presented in the accompanying consolidated statements of cash flows.

As there were no discontinued operations or restricted cash as of December 31, 2025, only 2024 is presented below.

December 31, 2024

Cash and cash equivalents

Restricted cash included in Other current assets

Total cash, cash equivalents, and restricted cash

Cash and cash equivalents of held for sale - discontinued operations

Total cash and cash equivalents

Book overdrafts represent the amount of outstanding checks issued in excess of related bank balances and are included in accounts payable in our consolidated balance sheets, as they are similar to trade payables and are not subject to finance charges or interest.

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Accounts Receivable, Net.

Accounts receivable, net are recorded at net realizable value.

In the Products & Healthcare Services segment, accounts receivable from customers are recorded at net realizable value of the invoiced amount and are reduced by any rebates due to the customer, which are estimated based on contractual terms or historical experience.

We assess finance charges on overdue accounts receivable that are recognized as other operating income based on their estimated ultimate collectability.

We have arrangements with certain customers under which they make deposits on account.

Customer deposits in excess of outstanding receivable balances are classified as other current liabilities.

Due to the nature of our industry and the reimbursement environment in which we operate in the Patient Direct segment, certain estimates are required to record total net revenues and accounts receivable at their net realizable values, including estimating variable consideration.

Due to the nature of our industry and the reimbursement environment in which we operate, certain estimates are required to record net revenues and accounts receivable at their net realizable values, including estimating variable consideration.

Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available.

Specifically, the complexity of many third-party billing arrangements, contractual terms, and the uncertainty of reimbursement amounts for certain services may result in adjustments to amounts originally recorded.

Such adjustments are typically identified and recorded at the point of cash application, claim denial or account review.

We maintain valuation allowances based upon the expected collectability of accounts receivable.

Our allowances include specific amounts for accounts that are likely to be uncollectible, such as customer bankruptcies and disputed amounts and general allowances for accounts that may become uncollectible.

Allowances are estimated based on a number of factors, including industry trends, current economic conditions, creditworthiness of customers, age of the receivables, changes in customer payment patterns, and historical experience.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Allowances for losses on accounts receivable of $ 6.2 million and $ 7.9 million have been applied as reductions of accounts receivable at December 31, 2024 and 2023.

Receivables Financing Agreement.

On March 29, 2022, we entered into an amendment to our accounts receivable securitization program (Receivables Financing Agreement) which has a maximum borrowing capacity of $ 450 million.

Under the Receivables Financing Agreement, certain of our accounts receivable balances are sold to our wholly owned special purpose entity, O&M Funding LLC.

The sold accounts receivable balances are collateral and outstandings are recorded as debt.

This agreement was not in effect as of December 31, 2024, as it was amended and restated i n its entirety on October 18, 2024, as described below.

Receivables Purchase Agreement.

On March 14, 2023, we entered into the RPA, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $ 200 million are sold, on a limited-recourse basis, to the Purchaser (as defined therein) in exchange for cash.

We account for these transactions as sales with the sold receivables removed from our consolidated balance sheets.

Under the RPA, we provide certain servicing and collection actions on behalf of the Purchaser;

however, we do not maintain any beneficial interest in the accounts receivable sold.

The RPA is separate and distinct from the Receivables Financing Agreement and the amendment as described below.

As a result of the amendment described below, we do not expect to utilize the RPA in the future.

Proceeds from the sales of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net of allowances in the consolidated balance sheets.

Cash received from the sales of accounts receivable, net of payments made to the Purchaser, is reflected in the change in accounts receivable within cash provided by operating activities in the consolidated statements of cash flows.

Total accounts receivable sold under the RPA and net cash proceeds were $ 1.7 billion and $ 1.4 billion during the years ended December 31, 2024 and 2023.

We collected $ 1.9 billion and $ 1.3 billion of the sold accounts receivable for the years ended December 31, 2024 and 2023.

The losses on sales of accounts receivable are recorded in other operating expense (income), net in the consolidated statements of operations and were $ 11 million for the years ended December 31, 2024 and 2023.

Such adjustments are typically identified and recorded at the point of cash application, claim amount or account review.

Included in accounts receivable were earned but unbilled receivables of $ 30 million as of December 31, 2025 and 2024.

Delays, ranging from a single day to several weeks, between the date of service and billing can occur due to delays in obtaining certain required Payor-specific documentation from internal and external sources.

Earned but unbilled receivables are aged from the date of service and are considered in our analysis of historical performance and collectability.

Receivables Sale Program.

On October 18, 2024, O&M Funding and Owens & Minor Medical, LLC., each a wholly-owned subsidiary of the Company, entered into a Receivables Purchase Agreement (the Receivables Sale Program) with persons from time to time, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $ 450 million are sold, on a limited-recourse basis, to the Purchasers in exchange for cash.

The Receivables Sale Program amends and restates in its entirety, the Receivables Financing Agreement.

Transactions under this agreement are accounted for as sales in accordance with ASC 860, Transfers and Servicing, with the sold receivables removed from our consolidated balance sheets.

On October 18, 2024, we entered into a Receivables Purchase Agreement (the Receivables Sale Program) with persons from time to time, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $ 450 million are sold, on a limited-recourse basis, to the Purchasers in exchange for cash.

Transactions under this agreemen t are accounted for as sales in accordance with ASC 860, Transfers and Servicing , with the sold receivables removed from our consolidated balance sheets.

Under the Receivables Sale Program, we provide certain servicing and collection actions on behalf of the Purchasers;

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Cash received from the sales of accounts receivable is reflected in the change in accounts receivable within cash provided by operating activities in the consolidated statements of cash flows.

Total accounts receivable sold and net cash proceeds under the Receivables Sale program were $ 168 million during the year ended December 31, 2024.

We collected $ 98 million of the sold accounts receivable for the year ended December 31, 2024.

The losses on sales of accounts receivable, inclusive of professional fees incurred to establish the agreement, recorded in other operating expense (income), net in the consolidated statements of operations were $ 1.9 million for the year ended December 31, 2024.

As of December 31, 2024, there was a total of $ 70 million of uncollected accounts receivable sold and removed from our consolidated balance sheet under the Receivables Sale Program.

As of December 31, 2023 there was a total of $ 124 million of uncollected accounts receivable sold and removed from our consolidated balance sheet under the RPA.

As of December 31, 2024 the Receivables Sale Program was utilized and we do not anticipate utilizing the RPA in the future.

Merchandise Inventories.

Merchandise inventories are valued at the lower of cost or market, with the approximate cost determined by the last-in, first-out (LIFO) method for distribution inventories in the U.S.

within our Products & Healthcare Services segment.

Cost of remaining inventories are determined using the first-in, first out (FIFO) or weighted-average cost method at the lower of cost or net realizable value.

We periodically evaluate whether inventory valuation allowance adjustments are required, which includes consideration of recent sales trends.

In our evaluation, we review for expired or obsolete inventory and slow-moving inventory.

We write down inventories which are considered excess and obsolete as a result of these assessments.

Shifts in market trends and conditions, as well as changes in customer preferences and behavior could affect the value of our inventories.

At December 31, 2024 and 2023 we had net inventory of $ 1.1 billion and $ 1.1 billion, of which $ 658 million and $ 718 million were valued under LIFO, all of which relates to inventory in our Products & Healthcare Services segment.

If LIFO inventories had been valued on a current cost or FIFO basis, they would have been $ 234 million and $ 233 million greater as of December 31, 2024 and 2023.

Inventory, net, consists of the following:

December 31, 2024

December 31, 2023

Finished goods

Raw materials

Work in process

Inventory, gross

Inventory valuation allowances

Inventory, net

For the year ended December 31, 2022, primarily due to demand declines and builds in excess personal protective equipment (PPE), we increased our estimate of inventory valuation allowances.

This change in estimate contributed to a $ 92 million (approximately $ 70 million, net of tax) valuation adjustment, or an approximate $ 0.93 and $ 0.91 impact per basic and diluted common share.

Property and Equipment, net.

Property and equipment are stated at cost less accumulated depreciation and amortization.

Depreciation expense for financial reporting purposes is computed on a straight-line method over the estimated useful lives of the assets or, for capital leases and leasehold improvements, over the term of the lease, if shorter.

In general, the estimated useful lives for computing depreciation are three to 15 years for machinery and equipment, five to 40 years for buildings, one to 10 years for patient service equipment, and up to 15 years for leasehold and land improvements.

Straight-line and accelerated methods of depreciation are used for income tax purposes.

Total accounts receivable sold and net cash proceeds under the Receivables Sale Program were $ 1.6 billion during the year ended December 31, 2025, approximately $ 325 million of which related to continuing operations.

We collected $ 1.6 billion of the sold accounts receivable for the year ended December 31, 2025, approximately $ 330 million of which related to continuing operations.

The losses on sales of accounts receivable of continuing operations, inclusive of professional fees incurred to establish the agreement, recorded in selling, general, and administrative expenses in the consolidated statements of operations were $ 2.2 million for the year ended December 31, 2025.

In connection with the amendment to the Receivables Sale Program, as described below, any uncollected accounts receivable sold were settled on December 31, 2025.

Total accounts receivable sold and net cash proceeds under the Receivables Sale Program were $ 168 million during the year ended December 31, 2024, approximately $ 34 million of which related to continuing operations.

We collected $ 98 million of the sold accounts receivable for the year ended December 31, 2024, approximately $ 20 million of which related to continuing operations.

The losses on sales of accounts receivable of continuing operations, inclusive of professional fees incurred to establish the agreement, recorded in selling, general and administrative expense in the consolidated statements of operations were $ 0.4 million for the year ended December 31, 2024.

As of December 31, 2024, there was a total of $ 70 million of uncollected accounts receivable sold and removed from our consolidated balance sheet under the Receivables Sale Program, $ 14 million of which related to continuing operations.

Amended Receivables Sale Program.

On December 31, 2025, we entered into an Amended & Restated Receivables Purchase Agreement (the Amended Receivables Sale Program) with persons from time to time party thereto, as Purchasers, PNC Bank, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $ 150 million are sold, on a limited-recourse basis, to the Purchasers in exchange for cash.

The Receivables Sale Program amends and restates, in its entirety, the Receivables Sale Program, dated as of October 18, 2024.

Transactions under this agreement are accounted for as sales in accordance with ASC 860, Transfers and Servicing , with the sold receivables removed from our consolidated balance sheets.

Under the Receivables Sale Program, we provide certain servicing and collection actions on behalf of the Purchasers;

however, we do not maintain any beneficial interest in the accounts receivable sold.

The Receivables Sale Program has a Scheduled Termination Date of October 18, 2027.

Total accounts receivable sold under the Amended Receivables Sale Program were $ 134 million.

As of December 31, 2025 there was a total of $ 134 million of uncollected accounts receivable sold and removed from our consolidated balance sheet under the Amended Receivables Sale Program.

Inventories, net.

Inventories, net, which primarily include medical supplies to be sold to customers, are determined using the first-in, first-out or weighted-average cost method at the lower of cost or net realizable value.

We periodically evaluate whether inventory valuation allowance adjustments are required.

In our evaluation, we review for obsolete inventory and slow-moving inventory which includes consideration of recent sales trends.

We write down inventories which are considered excess and obsolete as a result of these assessments within cost of net revenue.

Shifts in market trends and conditions, as well as changes in customer or Payor preferences and behavior could affect the value of our inventories.

Patient Service Equipment and Other Fixed Assets, Net .

Patient service equipment consists of medical equipment rented to customers, primarily on a month-to-month basis, as well as equipment that may be sold.

Patient service equipment depreciation expense is classified in our consolidated statements of operations within cost of net revenue for equipment rented to customers.

Other fixed assets are stated at cost less accumulated depreciation and amortization.

Depreciation and amortization expense for financial reporting purposes is generally computed on a

straight-line method over the estimated useful lives of the assets.

In general, the estimated useful lives for computing depreciation are one to 10 years for patient service equipment, and up to 15 years for other fixed assets.

Straight-line and

accelerated methods of depreciation are used for income tax purposes.

Normal maintenance and repairs are expensed as incurred, and renovations and betterments are capitalized.

We suspend depreciation and amortization on assets that are held for sale.

In addition, we record capital-related government grants earned as reductions to the cost of property and equipment;

and associated unpaid liabilities and grant proceeds receivable are considered non-cash changes in such balances for purposes of preparation of our consolidated statements of cash flows.

Patient service equipment consists of medical equipment rented to patients, primarily on a month-to-month basis.

Patient service equipment depreciation is classified in our consolidated statements of operations within cost of goods sold as the equipment is rented to patients as part of our primary operations within the Patient Direct segment.

We enter into non-cancelable agreements to lease most of our office and warehouse facilities with remaining terms generally ranging from one to 11 years.

Certain leases include renewal options, generally for one to five-year increments.

The exercise of lease renewal options is at our sole discretion.

We include options to renew (or terminate) in our lease term, and as part of our right-of-use assets and lease liabilities, when it is reasonably certain that we will exercise that option.

We also lease some of our transportation and material handling equipment for terms generally ranging from three to 10 years.

We account for all of our lease arrangements, including for real estate, trucks, and patient service equipment, as operating leases.

We enter into non-cancelable agreements to lease most of our office, branch and warehouse facilities with remaining terms generally ranging from one to six years .

Certain building leases include renewal options which the exercise of is at our sole discretion.

We generally do not include options to renew (or terminate) in our lease term, as part of our right-of-use assets and lease liabilities, as we generally do not have leases for which we believe we are reasonably certain to exercise those options.

Leases with a term of 12 months or less are not recorded on the consolidated balance sheets;

we recognize lease expense for these leases on a straight-line basis over the lease term.

The depreciable life of right-of-use assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

The depreciable lives of right-of-use assets are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

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We elected the practical expedient to not separate lease and non-lease components for our leases.

Operating lease assets and liabilities are recognized at commencement date based on the present value of unpaid lease payments over the lease term.

Operating lease assets and liabilities are recognized at the commencement date based on the present value of unpaid lease payments over the lease term.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

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Qualitative factors are first assessed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If it is determined that it is more likely than not that the fair value does not exceed the carrying amount, then a

quantitative test is performed.

The quantitative goodwill impairment test involves a comparison of the estimated fair value of the reporting unit to the respective carrying amount.

We determine the estimated fair value of our reporting units by using an equally weighted combination of the income-based approach and the market-based approach.

The income-based approach is dependent upon several significant assumptions and estimates regarding future period cash flows, including assumptions with respect to future sales growth and a terminal growth rate.

In addition, a weighted average cost of capital (WACC) is used to discount future estimated cash flows to their present values.

The WACC is based on externally observable data considering market participants’ cost of equity and debt, optimal capital structure and interest rates, as well as the risk and uncertainty with respect to the reporting unit and internally developed financial projections.

Under the market-based approach, significant estimates and assumptions also include the selection of appropriate guideline public companies whose stock is actively traded in public markets and the determination of appropriate valuation multiples to apply to the reporting unit.

Although we believe our assumptions and estimates are reasonable and appropriate, any significant adverse changes in one or a combination of key assumptions, including, but not limited to, a failure to meet our business plans or expected earnings and cash flows, unanticipated events and circumstances such as the loss of a contract with a large payor, changes in assumptions about the duration and magnitude of increased supply chain expense, commodities costs or inflationary pressures and our planned efforts to mitigate such impacts, disruptions in the supply chain, estimated demand and selling prices for PPE or other products, a decline in our market capitalization, an increase in the discount rate, a decrease in the terminal growth rate, increases in tax rates (including potential tax reform) or a significant change in industry or economic trends, may affect the accuracy or validity of such estimates and may result in goodwill impairment.

We may be required to record a material charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill is determined, which could adversely affect our results of operations.

During the year ended December 31, 2024 we recognized a pre-tax impairment charge of $ 307 million ($ 305 million net of tax), or a $ 3.97 negative impact per share, related to the Apria reporting unit.

No impairment of goodwill was recorded for the years ended December 31, 2023 and 2022.

If it is determined that it is more likely than not the fair value does not exceed the carrying amount, then a quantitative test is performed.

We may be required to record a material charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill is determined.

Intangible Assets, net.

Intangible assets acquired through purchases or business combinations are stated at fair value at the acquisition date and net of accumulated amortization in the consolidated balance sheets.

Intangible assets, consisting primarily of customer relationships, customer contracts, trademarks, and tradenames are amortized over their estimated useful lives.

Intangible assets, consisting primarily of customer relationships, customer contracts and tradenames are amortized over their estimated useful lives.

In determining the useful life of an intangible asset, we consider our historical experience in renewing or extending similar arrangements.

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Once the software has been installed and tested, and is ready for use, additional costs incurred in connection with the software are expensed as incurred.

We also develop software for external use.

Capitalized computer software costs are amortized over the estimated useful life of the software, usually between three and 10 years .

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Unamortized software at December 31, 2025 and 2024 was $ 15 million and $ 26 million.

Depreciation and amortization expense includes $ 17 million, $ 16 million and $ 14 million of software amortization for the years ended December 31, 2024, 2023, and 2022.

Long-Lived Assets.

Long-lived assets, which include property and equipment, finite-lived intangible assets, right-of-use assets, and unamortized software costs, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable.

We assess long-lived assets for potential impairment by comparing the carrying value of an asset, or group of related assets, to their estimated undiscounted future cash flows.

No material impairments of long-lived assets were recorded for the years ended December 31, 2024, 2023, and 2022.

We suspend depreciation and amortization on assets that are held for sale.

Long-lived assets, which include patient service equipment, finite-lived intangible assets, right-of-use assets, unamortized software costs, and other fixed assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable.

We assess long-

lived assets for the potential impairments by comparing the carrying value of an asset, or group of related assets, to their estimated undiscounted future cash flows.

Self-Insurance Liabilities.

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Liabilities for workers’ compensation and automobile liability claims are estimated using historical claims data and loss development factors.

If the underlying facts and circumstances of existing claims change or historical trends are not indicative of future trends, then we may be required to adjust the liability and related expense accordingly.

Self-insurance liabilities are included in other current

liabilities and other liabilities in the consolidated balance sheets and were $ 27 million and $ 26 million in total at December 31, 2024 and 2023.

If the underlying facts and circumstances of existing claims change or the historical trends are not indicative of future trends, then we may be required to adjust the liability and related expense accordingly.

Self-insurance liabilities are included in other current liabilities and other liabilities in the consolidated balance sheets and were $ 28 million and $ 27 million in total at December 31, 2025 and 2024.

Revenue Recognition.

Our revenue is primarily generated from sales contracts with customers.

Revenue for sales of products, including equipment and supplies, is recorded when control of the promised goods is transferred.

Revenue for activity-based fees and other services is recognized over time as activities are performed.

Depending on the specific contractual provisions and nature of the performance obligation, revenue from services may be recognized on a straight-line basis over the term of the service, on a proportional performance model, based on level of effort, or when final deliverables have been provided.

In our Products & Healthcare Services segment, under most of our distribution and product sales arrangements, our performance obligations are limited to delivery of products to a customer upon receipt of a purchase order.

For these arrangements, we recognize revenue at the point in time when shipment is completed, as control passes to the customer upon product receipt.

Our contracts sometime allow for forms of variable consideration including rebates, discounts, performance guarantees, and implicit price concessions.

We estimate the amount of consideration to which we will be entitled in exchange for transferring the product or service to the customer under the expected value method as part of determining the sales transaction price using contractual terms, historical experience, and other operating trends.

The amounts accrued for rebates due to customers, which are recorded in accounts receivable, net, were $ 80 million and $ 81 million at December 31, 2024 and 2023.

In most cases, we record revenue gross, as we are the primary obligor.

When we act as an agent in a sales arrangement and do not bear a significant portion of inventory risks, primarily for our outsourced logistics business, we record revenue net of product cost.

Sales taxes collected from customers and remitted to governmental authorities are excluded from revenues.

Within our Patient Direct segment, revenues are recognized under fee-for-service arrangements for equipment we rent to patients and sales of equipment, supplies and other items we sell to patients.

Revenue that is generated from equipment that we rent to patients is primarily recognized over the noncancelable rental period, typically one month, and commences on delivery of the equipment to the patients.

Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and patients.

Revenues are primarily recognized under fee-for-service arrangements for sales of supplies, equipment and other items we sell to customers and equipment we rent to customers.

Revenue for sales of products, including equipment and supplies, is recognized when control of the promised goods is transferred to customers and is presented net of applicable sales taxes.

Revenue generated from equipment that we rent to customers is primarily recognized as earned on a straight-line basis over the non-cancellable rental period, typically one month, and commences on delivery of the equipment to the customers.

Fee-for-service arrangement revenues are recorded only to the extent it is probable that a significant reversal will not occur in the future as amounts may include implicit price concessions under reimbursement arrangements with third-party payors, including private insurers under both commercial and Medicare Advantage plans, prepaid health plans, Medicare, Medicaid and customers.

Revenue is recognized under a portfolio approach, as we expect that this approach would not differ materially from considering each contract or performance obligation separately.

Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancellable lease term.

We recorded $ 591 million, $ 617 million and $ 447 million in revenue related to equipment we rent to patients for the years ended December 31, 2024, 2023, and 2022.

See Note 16 for disaggregation of revenue by segment and geography as we believe that best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Cost of Goods Sold.

Cost of goods sold includes the cost of the product (net of supplier incentives and cash discounts) and all costs incurred for shipments of products from manufacturers to our distribution centers for all customer arrangements where we are the primary obligor, bear the risk of general and physical inventory loss and carry all credit risk associated with sales.

Cost of goods sold also includes direct and certain indirect labor, material and overhead costs, including depreciation expense, associated with our Global Products division.

We have contractual arrangements with certain suppliers that provide incentives, including cash discounts for prompt payment, operational efficiency and performance-based incentives.

These incentives are recognized as a reduction in cost of goods sold as targets become probable of achievement.

In situations where we act as an agent in a sales arrangement and do not bear a significant portion of these risks, primarily for our outsourced logistics business, there is no cost of goods sold and all costs to provide the service to the customer are recorded in distribution, selling and administrative expenses.

Within our Patient Direct segment, patient service equipment depreciation and the net book value of dispositions are classified in the Company’s consolidated statements of operations within cost of goods sold as the equipment is rented to patients as part of the Company’s primary operations.

Depreciation expense for patient service equipment was $ 127 million, $ 138 million and $ 89 million for the years ended December 31, 2024, 2023 and 2022.

The net book value of patient service equipment sales and dispositions within the Patient Direct segment, net of the gain for returned equipment to Philips Respironics for previously recalled equipment, were $ 34 million, $ 36 million and $ 22 million for the years ended December 31, 2024, 2023 and 2022.

As a result of different practices of categorizing costs and different business models throughout our industry, our gross profits may not necessarily be comparable to other companies in our industry.

Inventory valuation allowance adjustments, including for excess and obsolete inventory, are recorded as a charge to cost of goods sold.

Distribution, Selling and Administrative (DS&A) Expenses.

DS&A expenses include shipping and handling costs, labor, certain depreciation and amortization, certain research and development costs and other costs for selling and administrative functions.

We incurred research and development costs, primarily included in DS&A expenses on the consolidated statement of operations, of $ 13 million, $ 13 million, and $ 12 million for the years ended 2024, 2023 and 2022.

We use the expected value method in determining the variable consideration as part of determining the sales transaction price using historical reimbursement experience, historical sales returns, and other operating trends.

Payment terms and conditions vary by contract.

Sales of equipment and supplies inclusive of amounts recognized under capitation arrangements for the years ended December 31, 2025, 2024 and 2023 were $ 2.1 billion, $ 2.0 billion and $ 1.8 billion.

Rental revenues inclusive of amounts recognized under capitation arrangements for the years ended December 31, 2025, 2024 and 2023 were $ 679 million, $ 678 million and $ 708 million.

Certain revenues are recognized under arrangements with third-party payors for which we stand ready to provide all necessary healthcare services to members for the period of the stand ready obligation which generally extends beyond one year.

These agreements are generally referred to as capitation arrangements.

Revenue is recognized over the month that the members are entitled to healthcare services using the monthly contractual rate for each covered member.

The actual number of covered members may vary each month.

Capitation payments are typically received in the month members are entitled to healthcare services.

Revenue for these agreements amounted to $ 244 million, $ 238 million and $ 237 million for the years ended December 31, 2025, 2024, and 2023.

The following table summarizes net revenue by product category:

Years Ended December 31,

Sleep therapy

Home respiratory therapy

The following table summarizes net revenue by payor type:

Years Ended December 31,

Commercial payors (1)

(1) Commercial payors includes revenue from Medicare Advantage plans.

Cost of Net Revenue .

Cost of net revenue includes the cost of product sold, patient service equipment depreciation expense, and other costs which are primarily personnel costs related to the set-up and utilization of equipment.

Cost of product sold includes non-cash expenses primarily for equipment converted from rental to sales in the amount of $ 47 million, $ 34 million and $ 36 million for the years ended December 31, 2025, 2024 and 2023.

Years Ended December 31,

Cost of product sold

Patient service equipment depreciation

Cost of net revenue

Selling, General and Administrative (SG&A) Expenses.

SG&A expenses include compensation costs, expenses for selling and administrative functions, shipping and handling costs and certain depreciation and amortization expense.

Shipping and Handling.

Shipping and handling costs are primarily included in DS&A expenses in the consolidated statements of operations and include costs to store, to move, and to prepare products for shipment, as well as costs to deliver products to customers.

Shipping and handling costs are primarily included in SG&A expenses in the consolidated statements of operations and include costs to store, move, and prepare products for shipment, as well as costs to deliver products to customers.

Shipping and handling costs totaled $ 288 million, $ 274 million, and $ 265 million for the years ended December 31, 2025, 2024, and 2023.

Share-Based Compensation.

We account for share-based payments to teammates at fair value and recognize the related expense primarily in DS&A expenses over the service period for awards expected to vest.

We account for share-based payments to teammates at fair value and recognize the related expense primarily in SG&A expenses over the service period for awards expected to vest.

The fair value of nonvested performance shares is dependent upon our assessment of the probability of achievement of financial targets for the performance period.

Derivative Financial Instruments.

We are directly and indirectly affected by changes in foreign currency, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks.

We use forward contracts, which are agreements to buy or sell a quantity at a predetermined future date and at a predetermined rate or price.

We do not enter into derivative financial instruments for trading purposes.

All derivatives are carried at fair value in our consolidated balance sheets.

The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how we record the change in fair value of the derivative instrument in our consolidated financial statements.

A derivative qualifies for hedge accounting if, at inception, we expect the derivative will be highly effective in offsetting the underlying hedged cash flows and we fulfill the hedge documentation standards at the time we enter into the derivative contract.

We designate a hedge as a cash flow hedge, fair value hedge, or a net investment hedge based on the exposure we are hedging.

For the effective portion of qualifying cash flow hedges, we record changes in fair value in other comprehensive income (OCI).

We release the derivative’s gain or loss from OCI to match the timing of the underlying hedged items’ effect on earnings.

We review the effectiveness of our hedging instruments quarterly, recognize current period hedge ineffectiveness immediately in earnings, and discontinue hedge accounting for any hedge that we no longer consider to be highly effective.

We recognize changes in fair value for derivatives not designated as hedges or those not qualifying for hedge accounting in current period earnings.

The cash flow impacts of the derivative instruments are included in our consolidated statements of cash flows as a component of operating or financing activities.

Income Taxes.

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Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable

income in the years in which those temporary differences are expected to be recovered or settled.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

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When we have claimed tax benefits that may be challenged by a tax authority, an estimate of the effect of these uncertain tax positions is recorded.

It is our policy to provide for uncertain tax positions and the related interest and penalties based upon an assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities.

It is our policy to provide for uncertain tax positions and related interest and penalties based upon an assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities.

To the extent that the tax outcome of these uncertain tax positions changes, based on our assessment, such changes in estimate may impact the income tax provision in the period in which such determination is made.

We earn a portion of our operating income in foreign jurisdictions outside the U.S.

We are permanently reinvested in our foreign subsidiaries.

Our policy election for global intangible low-taxed income is that we will record such taxes as a current period expense once incurred and will follow the tax law ordering approach.

Fair Value Measurements.

Fair value is determined based on assumptions that a market participant would use in pricing an asset or liability.

The assumptions used are in accordance with a three-tier hierarchy, defined by GAAP, that draws a distinction between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the use of present value and other valuation techniques in the determination of fair value (Level 3).

The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments.

The estimated fair value of our reporting units determined during a quantitative review of goodwill utilizes unobservable inputs (Level 3).

The fair value of debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2).

indirectly (Level 2) and (iii) unobservable inputs that require the use of present value and other valuation techniques in the determination of fair value (Level 3).

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments.

The estimated fair value of our reporting unit determined during a quantitative review of goodwill utilizes unobservable inputs (Level 3).The fair value of debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2).

See Note 8 for the fair value of debt.

The fair value of our derivative contracts are determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities.

The fair value of our derivative contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities.

Observable Level 2 inputs are used to determine the present value of expected future cash flows.

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Acquisition-Related Charges and Intangible Amortization.

Acquisition-related charges consist primarily of one-time costs related to the expected acquisition of Rotech Healthcare Holdings Inc., (Rotech) and the Agreement and Plan of Merger dated January 7, 2022 to acquire Apria, Inc.

(Apria Acquisition), including transaction costs necessary to consummate the acquisition, which consisted of investment banking advisory fees and legal fees, director and officer tail insurance expense, severance and retention bonuses, and professional fees.

Acquisition-related charges and intangible amortization also includes transition expenses and costs to integrate personnel, systems and processes along with amortization of intangible assets established during acquisition method of accounting for business combinations.

These amounts are highly dependent on the size and frequency of acquisitions and are excluded from our segment results to allow for a more consistent comparison with forecasted, current and historical results.

Acquisition-related charges consist primarily of one-time costs related to acquisitions, including transaction costs necessary to consummate acquisitions, which consist of investment banking advisory fees and legal fees, director and officer tail insurance expense, as well as transition costs, such as severance and retention bonuses, information technology (IT) integration costs and professional fees.

For the years ended December 31, 2025 and 2024, we incurred $ 22 million of acquisition-related costs related to the terminated acquisition of Rotech Healthcare Holdings Inc.

(Rotech), which consisted primarily of legal and professional fees.

Acquisition-related charges for the year ended December 31, 2023 were $ 17 million, consisting of costs related to the acquisition of Apria.

Acquisition-related charges and intangible amortization also include amortization of intangible assets established during acquisition method of accounting for business combinations.

These amounts are highly dependent on the size and frequency of acquisitions.

Transaction Breakage Fee.

As previously disclosed, on July 22, 2024, we entered into an Agreement and Plan of Merger (the Merger Agreement) pursuant to which we agreed to acquire Rotech subject to the terms and conditions within the Merger Agreement.

On June 3, 2025, the Company, Rotech and Hitchcock Merger Sub Inc.

mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement (the Termination Agreement).

In accordance with the terms of the Termination Agreement, we incurred and made a cash payment to Rotech of $ 80 million during the year ended December 31, 2025.

Exit and Realignment Charges, net .

Exit and realignment charges, net consist of costs associated with optimizing our operations which includes the consolidation of certain production facilities, distribution centers, warehouses, administrative offices and IT strategic initiatives, divestiture related costs and other strategic actions.

These charges also include costs associated with our 2023-2024 Operating Model Realignment Program, which includes professional fees, severance and other costs to streamline functions and processes.

Exit and realignment charges, net consist of costs associated with optimizing our operations including significant changes to certain processes to increase net revenue and lower costs along with costs related to IT strategic initiatives and other strategic actions.

These costs include, but are not limited to, professional fees, severance and other costs to streamline functions and processes.

Costs associated with exit and realignment activities are recorded at their fair value when incurred.

Liabilities are established at the cease-use date for

remaining contractual obligations discounted using a credit-adjusted risk-free rate of interest.

We evaluate these assumptions quarterly and adjust the liability accordingly.

Liabilities are established at the cease-use date for remaining contractual obligations discounted using a credit-adjusted risk-free rate of interest.

We evaluate these assumptions quarterly and adjust the liabilities accordingly.

Severance benefits are generally recorded when payment is considered probable and reasonably estimable.

These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis .

These costs are not normal, cash operating expenses necessary for the Company to operate its business on an ongoing basis.

Net (Loss) Income Per Share.

Basic and diluted net (loss) income per share are calculated pursuant to the two-class method, under which unvested share-based payment awards containing non-forfeitable rights to dividends are participating securities.

Diluted income per share reflects the potential dilution that could occur if restricted awards were exercised or converted into common stock.

Foreign Currency Translation.

Our foreign subsidiaries generally consider their local currency to be their functional currency.

Assets and liabilities of these foreign subsidiaries are translated into U.S.

dollars at period-end exchange rates and revenues, cost of goods sold and expenses are translated at average exchange rates during the period.

Cumulative currency translation adjustments are included in accumulated other comprehensive loss in shareholders’ equity.

Gains and losses on intercompany foreign currency transactions that are long-term in nature and which we do not intend to settle in the foreseeable future are also recognized in other comprehensive income (loss) in shareholders’ equity.

Realized gains and losses from foreign currency transactions are recorded in other operating expense (income), net in the consolidated statements of operations and were not material to our consolidated results of operations in 2024, 2023, and 2022.

Basic earnings per share is calculated by dividing net (loss) income by the weighted average number of common shares outstanding for the period.

Diluted earnings per share reflects the potential dilution that could occur if restricted awards were exercised or converted into common stock.

Business Combinations .

We account for acquired businesses using the acquisition method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values.

Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

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Recently Adopted Accounting Pronouncements .

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires disclosure of additional detailed information about a reportable segment’s expenses, including significant segment expenses regularly provided to the Chief Operating Decision Maker (CODM), the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment’s profit or loss.

This ASU is effective for us in annual periods beginning after December 15, 2023 and interim periods within annual years beginning after December 15, 2024.

The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted.

We adopted this ASU effective with the annual year ending December 31, 2024.

Its adoption impacted our disclosures with no impacts to our results of operations, financial condition and cash flows.

Recently Issued Accounting Pronouncements Not Yet Adopted.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which will require additional annual income tax disclosures, including disclosure of reconciling items by jurisdiction and nature to the extent those items exceed a specified threshold.

In addition, this ASU will require disclosure of income taxes paid, net of refunds received disaggregated by federal, state, and foreign and by jurisdiction if the amount is more than 5% of total income tax payments, net of refunds received.

Improvements to Income Tax Disclosures, which requires additional annual income tax disclosures, including disclosure of reconciling items by jurisdiction and nature to the extent those items exceed a specified threshold.

In addition, this ASU requires disclosure of income taxes paid, net of refunds received disaggregated by federal, state, and foreign and by jurisdiction if the amount is more than 5% of total income tax payments, net of refunds received.

The amendments in this ASU are effective for us in annual periods beginning after December 15, 2024.

The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted.

We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows .

I n November 2024, the FASB issued ASU No.

We have adopted this ASU, which impacted our disclosures with no impacts to our results of operations, financial condition and cash flows.

Recently Issued Accounting Pronouncements Not Yet Adopted.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement – Reporting Comprehensive Income – Expense disaggregation Disclosures (Subtopic 220-40):

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We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows .

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient permitting the assumption that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets.

The amendments in this ASU are effective for us in annual and interim periods beginning after December 15, 2025.

We do not expect this ASU to have a material impact on our consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-06—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which will require us to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”).

The amendments in this ASU are effective for us in annual periods beginning after December 15, 2027 and early adoption is permitted for all entities.

The amendments in this Update allow us to apply the new guidance using either a prospective transition approach, a modified transition approach, or a retrospective transition approach.

We expect this ASU to impact our disclosures and our results of operations, financial condition and cash flows and we will assess the impact upon adoption.

In December 2025, the FASB issued ASU No.

2025-11—Interim Reporting (Topic 270):

Narrow-Scope Improvements, which will require entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

The amendments in this Update apply to all entities that provide interim financial statements and notes in accordance with GAAP.

The amendments in this ASU are effective for us in annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods.

Early adoption is permitted for all entities.

The amendments in this Update can be applied either prospectively or retrospectively.

We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows .

Note 2—Significant Concentration Risk

Many of our hospital customers in the U.S.

are represented by group purchasing organizations (GPOs) that contract with us for services on behalf of the GPO members.

GPOs representing a significant portion of our business are Vizient, Premier, Inc.

and Health Trust Purchasing Group.

Members of these GPOs have incentives to purchase from their primary selected distributor;

however, they operate independently and are free to negotiate directly with distributors and manufacturers.

For 2024, net revenue from hospitals under contract with these GPOs represented approximately 65 % of our consolidated net revenue.

In 2024, 2023 and 2022, no sales of products of any individual suppliers exceeded 10% of our consolidated net revenue.

Note 3—Acquisitions

Acquisition of Apria.

On March 29, 2022 (the Apria Acquisition Date), we completed the acquisition of 100 % of Apria, Inc.

(Apria) pursuant to the Agreement and Plan of Merger dated January 7, 2022, in exchange for approximately $ 1.7 billion, net of $ 144 million of cash acquired.

The purchase was funded with a combination of debt and cash on hand.

Apria is a leading provider of integrated home healthcare equipment and related services in the U.S.

This division is reported as part of the Patient Direct segment.

The following table provides pro forma results of net revenue and net loss for the year ended December 31, 2022 as if Apria was acquired on January 1, 2021, based on the final purchase price allocation.

The pro forma results below are not necessarily indicative of the results that would have been if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future.

Year Ended December 31, 2022

Pro forma net loss of $ 98 million for the year ended December 31, 2022 includes pro forma adjustments for interest expense of $ 21 million and amortization of intangible assets of $ 11 million.

The pro forma net loss for the year ended December 31, 2022 also includes $ 39 million in seller transaction expenses and stock compensation expense associated with $ 108 million owed to the holders of Apria stock awards in connection with the Apria Acquisition.

Revenue and net loss of Apria since the Apria Acquisition Date included in the consolidated statement of operations for the year ended December 31, 2022 were $ 937 million and $ 3.3 million, respectively.

Acquisition-related charges within acquisition-related charges and intangible amortization presented in our consolidated statements of operations for the year ended December 31, 2024 were $ 22 million, related to the expected acquisition of Rotech, which consisted primarily of legal and professional fees.

Acquisition-related charges for the years ended December 31, 2023 and 2022 were $ 18 million, and $ 48 million, consisting of costs primarily related to the acquisition of Apria.

These amounts are excluded from our segments’ operating income.

Note 4—Property and Equipment, Net

Property and equipment, net, consists of the following:

Land and land improvements

Buildings and leasehold improvements

Machinery and equipment

During the year ended December 31, 2025, our two largest commercial payors represented approximately 23 % and 14 % of our net revenue, derived from multiple separately managed contracts.

Revenue reimbursed under arrangements with Medicare and state Medicaid programs was approximately 19 % of our net revenue for the year ended December 31, 2025.

The largest commercial payor has terminated, or is in the process of terminating, certain of our contracts with them .

The terminated agreements reflected $ 322 million or 12 % of our net revenue, including $ 231 million of capitation revenue, which represents nearly all of our capitation revenue, for the year ended December 31, 2025.

During the year ended December 31, 2025, our three largest suppliers contributed 16 %, 14 % and 11 % of our patient service equipment and supplies purchases collectively accounting for approximately 40 % of our total purchases.

Note 3—Discontinued Operations and Assets Held-for-Sale

On February 28, 2025, we announced that we were actively engaged in discussions regarding the anticipated sale of our P&HS business.

On October 7, 2025, we entered into the Purchase Agreement by and among the Company, the Purchaser, and Purchaser Parent to sell the P&HS business, for an aggregate of $ 375 million in cash, subject to certain adjustments for cash, indebtedness, net working capital and transaction expenses.

On December 31, 2025 we completed the sale of the P&HS business pursuant to the Purchase Agreement.

We have retained a 5 % equity interest in the P&HS business.

In accordance with GAAP, the financial position and results of operations of the P&HS business are presented as discontinued operations and assets held for sale and, as such, have been excluded from continuing operations for all periods presented.

The P&HS business was initially classified as discontinued operations and assets held for sale as of June 30, 2025.

Accordingly, the results of operations from our P&HS business are reported in the accompanying consolidated statements of operations as “Loss from discontinued operations, net of tax” for the years ended December 31, 2025, 2024 and 2023 and the related assets and liabilities are classified as held-for-sale as of December 31, 2024 in the accompanying consolidated balance sheets.

We have allocated interest expense, net to discontinued operations as a ratio of net assets and total debt in accordance with ASC 205, Presentation of Financial Statements .

The P&HS goodwill balance of $ 106 million was fully impaired during the second quarter of 2025.

Our sale process provided a basis for the fair value of the P&HS business, which includes the Global Products reporting unit.

We recognized a loss of $ 799 million during the year ended December 31, 2025 in connection with the classification of the related assets and liabilities as held-for-sale, based on the estimated fair value, less costs to sell.

The fair value of the P&HS business was determined from information received during our sale process, including the completion of the sale on December 31, 2025.

On December 31, 2025, we received cash proceeds of $ 342 million and recorded a $ 20 million equity investment for the 5 % retained equity interest, which is in other assets, net on our consolidated balance sheet as of December 31, 2025.

Net proceeds of $ 324 million from the P&HS Sale, net of cash sold, as reported on our consolidated statement of cash flows, reflects $ 342 million of cash proceeds received and $ 18 million of P&HS cash conveyed.

The final purchase price will be determined subsequent to the completion of the sale to reflect adjustments in accordance with the Purchase Agreement, including final net working capital adjustments.

As of December 31, 2025, we estimated a purchase price adjustment receivable of approximately $ 12 million to $ 15 million, which is recorded within other current assets on our consolidated balance sheet.

Subsequent changes in fair value will be recorded within discontinued operations.

We have agreed to reimburse the Purchaser and its affiliates for 80 % of certain costs incurred in connection with the separation of P&HS from the Company’s retained business, subject to an aggregate cap of $ 65 million.

We will be obligated to reimburse Purchaser for any such costs incurred after December 31, 2025, except that such reimbursements will not need to be paid:

(1) in advance of April 1, 2026;

(2) for amounts in excess of $ 15 million prior to October 1, 2026, or (3) for amounts in excess of $ 55 million prior to January 1, 2027.

We and the Purchaser will provide certain transition services to the other party pursuant to a certain customary transition services agreement.

Pursuant to the terms of the transition services agreement, we have agreed that, in certain circumstances, we may be obligated to provide up to $ 115 million in credit support to the P&HS business.

The following table summarizes the financial results of our discontinued operations for the years ended December 31, 2025, 2024 and 2023:

Years Ended December 31,

Cost of goods sold

Distribution, selling, and administrative expenses

Acquisition-related charges and intangible amortization

Exit and realignment charges, net

Goodwill impairment charge

Loss on classification to held for sale

Other operating expense, net

Operating (loss) income

Interest expense, net

Other expense

Loss from discontinued operations before income taxes

( 1,036,867 )

Income tax benefit for discontinued operations

Loss from discontinued operations, net of tax

As discussed above, the sale of the P&HS business was completed and therefore the assets and liabilities are not reflected on the consolidated balance sheets at December 31, 2025.

The assets and liabilities of the P&HS business reflected on the consolidated balance sheets at December 31, 2024 are as follows:

Assets held for sale - discontinued operations

Cash and cash equivalents

Accounts receivable, net

Merchandise inventories

Other current assets, net

Current assets held for sale - discontinued operations

Property and equipment, net

Operating lease assets

Intangible assets, net

Deferred tax assets

Other noncurrent assets, net

Total assets held for sale - discontinued operations

Liabilities held for sale - discontinued operations

Accounts payable

Accrued payroll and related liabilities

Current portion of long-term debt

Other current liabilities

Operating lease liabilities, current portion

Current liabilities held for sale - discontinued operations

Long-term debt, excluding current portion

Operating lease liabilities, excluding current portion

Other liabilities

Deferred tax liabilities

Total liabilities held for sale - discontinued operations

As of December 31, 2024, the assets and liabilities held for sale are classified separately as current or noncurrent because the noncurrent assets and liabilities did not meet the criteria for current classification as of December 31, 2024.

Receivables Purchase Agreement (RPA).

We account for these transactions as sales with the sold receivables removed from our consolidated balance sheets.

Under the RPA, we provide certain servicing and collection actions on behalf of the Purchaser;

however, we do not maintain any beneficial interest in the accounts receivable sold.

The RPA is separate and distinct from the Receivables Financing Agreement and the amendment as described below.

As a result of the amendment described below, we did not utilize the RPA in the year ended December 31, 2025.

Proceeds from the sale of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to current assets of discontinued operations, in the consolidated balance sheets.

Cash received from the sale of accounts receivable, net of payments made to the Purchaser, is reflected as cash provided by operating activities in the consolidated statements of cash flows.

The accounts receivable sold under the RPA were entirely accounts receivable of the P&HS business.

Total accounts receivable sold under the RPA and net cash proceeds were $ 1.7 billion and $ 1.4 billion during the years ended December 31, 2024 and 2023.

We collected $ 1.9 billion and $ 1.3 billion of the sold accounts receivable for the years ended December 31, 2024 and 2023.

Receivables Sale Program.

Transactions under this agreement are accounted for as sales in accordance with ASC 860, Transfers and Servicing , with the sold receivables removed from our consolidated balance sheets.

Under the Receivables Sale Program, we provide certain servicing and collection actions on behalf of the Purchasers;

however, we do not maintain any beneficial interest in the accounts receivable sold.

Proceeds from the sales of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net of allowances in the consolidated balance sheets.

Cash received from the sales of accounts receivable, is reflected in the change in accounts receivable within cash provided by operating activities in the consolidated statements of cash flows.

Total accounts receivable sold and net cash proceeds under the Receivables Sale program were $ 1.6 billion during the year ended December 31, 2025, approximately $ 1.3 billion of which related to discontinued operations.

We collected $ 1.6 billion of the sold accounts receivable for the year ended December 31, 2025, approximately $ 1.3 billion of which related to discontinued operations.

The losses on sales of accounts receivable of continuing operations, inclusive of professional fees incurred to establish the agreement, recorded in loss on discontinued operations, net of tax in the consolidated statements of operations were $ 8.7 million for the year ended December 31, 2025.

In connection with the amendment to the Receivables Sale Program, as described below, any uncollected accounts receivable sold were settled on December 31, 2025.

Total accounts receivable sold and net cash proceeds under the Receivables Sale program were $ 168 million during the year ended December 31, 2024, approximately $ 134 million of which related to discontinued operations.

We collected $ 98 million of the sold accounts receivable for the year ended December 31, 2024, approximately $ 78 million of which related to discontinued operations.

As of December 31, 2025, there was no uncollected accounts receivable sold and removed from our consolidated balance sheet related to discontinued operations.

As of December 31, 2024, there was a total of $ 70 million of uncollected accounts receivable sold and removed from our consolidated balance sheet under the Receivables Sale Program, $ 56 million of which related to discontinued operations.

Note 4—Patient Service Equipment and Other Fixed Assets, Net

Patient service equipment and other fixed assets, net, consists of the following:

Patient service equipment

Construction in progress

Property and equipment, gross

Building and leasehold improvements

Other fixed assets

Patient service equipment and other fixed assets, gross

Accumulated depreciation and amortization

Property and equipment, net

Depreciation and amortization expense for property and equipment and assets under finance leases was $ 183 million, $ 188 million, and $ 136 million for the years ended December 31, 2024, 2023, and 2022.

Patient service equipment and other fixed assets, net

Note 5—Goodwill and Intangible Assets, Net

The following table summarizes the changes in the carrying amount of goodwill through December 31, 2024:

Patient Direct

Carrying amount of goodwill, December 31, 2022

Currency translation adjustments

Acquisition adjustment

Carrying amount of goodwill, December 31, 2023

Goodwill impairment charge

Currency translation adjustments

Carrying amount of goodwill, December 31, 2024

At December 31, 2025 and 2024 we had goodwill of $ 1.2 billion, net of accumulated goodwill impairment of $ 307 million.

As of October 1, 2025, we performed our annual impairment test and there were no impairments of goodwill.

During the three months ended December 31, 2024, we experienced financial market changes inclusive of a decline in Owens & Minor’s stock price and an increase in the risk free interest rate resulting in an increase in the discount rate used for impairment analysis.

Additionally, anticipated changes in pricing of a capitated contract contributed to a reduction in projected future cash flows within our Apria reporting unit.

As a result of these factors during the three months ended December 31, 2024, we performed an interim quantitative goodwill impairment test and concluded that the fair value for our Apria reporting unit within our Patient Direct segment was below its carrying amount.

The amount by which the carrying value of the impaired reporting unit exceeded its fair value was $ 305 million and we recognized a pre-tax impairment charge of $ 307 million ($ 305 million after-tax) for the quarter ended December 31, 2024.

We recorded these amounts in ‘Goodwill impairment charge’ in our consolidated statements of operations.

No impairment of goodwill was recorded for the years ended December 31, 2023 and 2022.

Intangible assets subject to amortization, which excludes indefinite-lived intangible assets at December 31, 2024 and 2023 were as follows:

No impairment of goodwill was recorded for the year ended December 31, 2025 within continuing operations.

Intangible assets subject to amortization, at December 31, 2025 and 2024 were as follows:

Relationships

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Weighted average useful life

At December 31, 2024 and 2023, $ 210 million and $ 250 million in net intangible assets were held in the Patient Direct segment and $ 89 million and $ 112 million were held in the Products & Healthcare Services segment.

Amortization expense for intangible assets was $ 65 million for 2024, $ 84 million for 2023 and $ 79 million for 2022.

As of December 31, 2024, based on the carrying value of intangible assets subject to amortization, estimated future amortization expense was as follows:

Amortization expense for intangible assets was $ 74 million, $ 40 million and $ 58 million for the years ended December 31, 2025, 2024, and 2023.

The increase as compared to the prior year was driven by the remaining useful life for an intangible asset being modified as of June 30, 2025, as a result of a notice of a contract termination with a commercial Payor.

The updated future intangible amortization is reflected in the table below.

As of December 31, 2025, based on the current carrying value of intangible assets subject to amortization and expected remaining useful life, estimated amortization expense were as follows:

Total future amortization

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Operating lease cost

DS&A Expenses

Finance lease cost:

Amortization of lease assets

DS&A Expenses

Interest on lease liabilities

Interest expense, net

Total finance lease cost

SG&A expenses

Short-term lease cost

DS&A Expenses, Cost of goods sold

SG&A expenses, Cost of net revenue

Variable lease cost

DS&A Expenses, Cost of goods sold

SG&A expenses, Cost of net revenue

Total lease cost

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As of December 31,

Classification

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Operating lease assets

Finance lease assets

Property and equipment, net

Total lease assets

Current operating leases

Other current liabilities

Current portion of long-term debt

Noncurrent operating leases

Operating lease liabilities, excluding current portion

Long-term debt, excluding current portion

Total lease liabilities

The gross values recorded under finance leases were $ 22 million and $ 22 million with associated accumulated depreciation of $ 16 million and $ 14 million as of December 31, 2024 and 2023.

Total operating lease liabilities

Other information related to leases was as follows:

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Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating and finance leases

Financing cash flows from finance leases

Right-of-use assets obtained in exchange for new operating and finance lease liabilities

Operating cash flows from operating leases

Right-of-use assets obtained in exchange for new operating lease liabilities

Weighted average remaining lease term (years)

Operating leases

Finance leases

Weighted average discount rate

Operating leases

Finance leases

Maturities of lease liabilities as of December 31, 2025 were as follows:

Operating Leases

Finance Leases

Total lease payments

Present value of lease liabilities

Note 7—Exit and Realignment Costs, Net

We periodically incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain facilities, IT strategic initiatives, and other strategic actions.

These charges also include costs associated with our 2023-2024 Operating Model Realignment Program, which includes professional fees, severance and other costs to streamline functions and processes.

Note 7—Exit and Realignment Charges, Net

We incur exit and realignment and other charges associated with optimizing our operations which include IT strategic initiatives and other strategic actions.

These charges include professional fees, severance and other costs to streamline functions and enhance processes.

These costs are not normal, cash operating expenses necessary for the Company to operate its business on an ongoing basis.

Exit and realignment charges, net were $ 18 million, $ 47 million and $ 7.3 million for the years ended December 31, 2025, 2024 and 2023.

These amounts are excluded from our segments’ operating income.

We have incurred $ 110 million and $ 92 million in charges under our 2023-2024 Operating Model Realignment Program and IT strategic initiatives for the years ended December 31, 2024, and 2023, which are included in the total exit and realignment charges above.

These charges were primarily related to strategic operational improvements to increase net revenue and lower costs as well as a provision to accounts receivable related to our Fusion5 business which is in the process of being wound down.

Exit and realignment charges, net for the year ended December 31, 2025 also

included a gain of $ 7.4 million associated with the sale of our corporate headquarters.

We may incur material future costs relating to certain exit and realignment actions , which remain underway and we are not able to reasonably estimate.

included a $ 4.8 million gain on sales of patient service equipment in response to the contract termination with a commercial Payor.

As a result of the sale of our P&HS business, we expect to incur up to $ 65 million in future exit & realignment costs associated with reimbursement to the Purchaser for certain future costs incurred by the Purchaser, as described in Note 3.

We will be obligated to reimburse Purchaser for any such costs incurred after December 31, 2025, except that such reimbursements will not need to be paid:

(1) in advance of April 1, 2026;

(2) for amounts in excess of $ 15 million prior to October 1, 2026, or (3) for amounts in excess of $ 55 million prior to January 1, 2027.

The following table summarizes the activity related to exit and realignment cost accruals through December 31, 2025:

Accrued exit and realignment charges, December 31, 2021

Accrued exit and realignment costs, December 31, 2022

Provision for exit and realignment activities:

Professional fees

IT strategic initiatives and other

Cash payments

Accrued exit and realignment charges, December 31, 2022

Accrued exit and realignment costs, December 31, 2023

Provision for exit and realignment activities:

Professional fees

Vendor contract and lease termination costs

IT strategic initiatives

IT strategic initiatives and other

Cash payments

Accrued exit and realignment charges, December 31, 2023

Accrued exit and realignment costs, December 31, 2024

Provision for exit and realignment activities:

Professional fees

Vendor contract and lease termination costs

IT strategic initiatives

IT strategic initiatives and other

Cash payments

Accrued exit and realignment charges, December 31, 2024

In addition to the exit and realignment accruals in the preceding table and the $ 7.4 million gain associated with the sale of our corporate headquarters, we also incurred $ 15 million of costs that were expensed as incurred for the year ended December 31, 2024, which primarily related to accelerated depreciation of certain assets held in our Products & Healthcare Services segment.

We also incurred $ 3.4 million and $ 0.7 million of costs that were expensed as incurred for the years ended December 31, 2023 and 2022, which primarily related to charges associated with a lease termination and wind-down costs related to a subsidiary, Fusion5.

Debt consists of the following:

4.375 % Senior Notes, due December 2024

Accrued exit and realignment costs, December 31, 2025

In addition to the exit and realignment accruals in the preceding table and the $ 4.8 million gain on sales of patient service equipment, we also incurred $ 8.0 million of costs that were expensed as incurred for the year ended December 31, 2025, which primarily related to wind-down costs of Fusion5.

Debt, net of unamortized deferred financing costs, as of December 31, 2025 and 2024 consisted of the following:

December 31, 2025

December 31, 2024

Revolving Credit Facility

4.500 % Senior Notes, due March 2029

6.625 % Senior Notes, due April 2030

Finance leases and other

Less current maturities

Less current maturities, including anticipated repayments

Long-term debt

On September 16, 2024 (the Redemption Date), we redeemed all of our outstanding 4.375 % senior notes due in December 2024 (the 2024 Notes), which had an outstanding aggregate principal balance amount of $ 171 million, pursuant to the terms of the indenture governing the 2024 Notes, at a redemption price equal to 100 % of the principal amount of the 2024 Notes, plus accrued and unpaid interest to, but excluding, the Redemption Date.

As of the Redemption Date, the 2024 Notes were no longer deemed outstanding and interest on the 2024 Notes ceased to accrue.

On March 29, 2022, we entered into a Security Agreement supplement pursuant to which the Security and Pledge Agreement (the Security Agreement), dated March 10, 2021 was supplemented to grant collateral on behalf of the holders of the 2024 Notes, and the parties secured under the credit agreements (the Secured Parties) including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Grantors (as defined in the Security Agreement) in the Grantors’ present and future subsidiaries, subject to certain customary exceptions, and (b) all present and future personal property and assets of the Grantors, subject to certain exceptions.

This agreement was terminated on the Redemption Date.

On March 29, 2022, we entered into an amendment to our Receivables Financing Agreement.

The amended Receivables Financing Agreement has a maximum borrowing capacity of $ 450 million.

The interest rate under the Receivables Financing Agreement is based on a spread over a benchmark SOFR rate (as described in the Fourth Amendment to the Receivables Financing Agreement, as further amended by the Fifth Amendment to the Receivables Financing Agreement).

Under the Receivables Financing Agreement, certain of our accounts receivable balances are sold to our wholly owned special purpose entity, O&M Funding LLC.

On October 18, 2024, we entered into the Receivables Sale Program, which amends and restates in its entirety, the Receivables Financing Agreement.

Refer to Note 1 for additional content related to the Receivables Sale Program.

We had no borrowings at December 31, 2023 under our Receivables Financing Agreement.

At December 31, 2023, we had maximum revolving borrowing capacity of $ 450 million available under our Receivables Financing Agreement.

On March 29, 2022, we entered into a term loan credit agreement with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (the Credit Agreement) that provides for two new credit facilities (i) a $ 500 million Term Loan A facility (the Term Loan A), and (ii) a $ 600 million Term Loan B facility (the Term Loan B).

On March 29, 2022, we entered into a Security Agreement Supplement pursuant to which the Security and Pledge Agreement (the Security Agreement), dated March 10, 2021 was supplemented to grant collateral on behalf of the holders of the 2024 Notes, and the parties secured under the credit agreements including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Grantors (as defined in the Security Agreement) in the Grantors’ present and future subsidiaries, subject to certain customary exceptions, and (b) all present and future personal property and assets of the Grantors, subject to certain exceptions.

(i) a $ 500 million Term Loan A facility (the Term Loan A), and (ii) a $ 600 million Term Loan B facility (the Term Loan B).

The interest rate on the Term Loan A is based on the sum of either Term SOFR or the Base Rate and an Applicable Rate which varies depending on the current Debt Ratings or Total Leverage Ratio, determined as to whichever shall result in more favorable pricing to the Borrowers (each as defined in the Credit Agreement).

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The Term Loan A will mature in March 2027 and the Term Loan B will mature in March 2029.

In addition to our scheduled principal payments of $ 22 million on the Term Loan A and $ 6.0 million on the Term Loan B, we made unscheduled principal payments of $ 45 million on Term Loan A during 2024.

On March 10, 2021, we issued $ 500 million of 4.500 % senior unsecured notes due in March 2029 (the 2029 Unsecured Notes), with interest payable semi-annually (the Notes Offering).

The Term Loan A and Term Loan B have $ 326 million and $ 511 million of principal outstanding excluding unamortized deferred financing costs as of December 31, 2025.

On March 10, 2021, we issued $ 500 million of 4.500 % senior unsecured notes due in March 2029 (the 2029 Unsecured Notes), with interest payable semi-annually.

The 2029 Unsecured Notes were sold at 100 % of the principal amount with an effective yield of 4.500 %.

We may redeem all or part of the 2029 Unsecured Notes prior to March 31, 2024, at a price equal to 100 % of the principal amount of the 2029 Unsecured Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make-whole” premium, as described in the Indenture dated March 10, 2021 (the Indenture).

On or after March 31, 2024, we may redeem all or part of the 2029 Unsecured Notes at the applicable redemption prices described in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

We may also redeem up to 40 % of the aggregate principal amount of the 2029 Unsecured Notes at any time prior to March 31, 2024, at a redemption price equal to 104.5 % with an amount equal to or less than the net cash proceeds from certain equity offerings, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The 2029 Unsecured Notes have $ 479 million in principal outstanding excluding unamortized deferred financing costs as of December 31, 2025.

On March 29, 2022, we issued $ 600 million of 6.625 % senior unsecured notes due in April 2030 (the 2030 Unsecured Notes), with interest payable semi-annually.

The 2030 Unsecured Notes were sold at 100 % of the principal amount with an effective yield of 6.625 %.

We may redeem all or part of the 2030 Unsecured Notes, prior to April 1, 2025, at a price equal to 100 % of the principal amount of the 2030 Unsecured Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a “make-whole” premium, as described in the Indenture dated March 29, 2022 (the New Indenture).

From and after April 1, 2025, we may redeem all or part of the 2030 Unsecured Notes at the applicable redemption prices described in the New Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

We may also redeem up to 40 % of the aggregate principal amount of the 2030 Unsecured Notes at any time prior to April 1, 2025, at a redemption price equal to 106.625 % with an amount equal to or less than the net cash proceeds from certain equity offerings, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The 2030 Unsecured Notes have $ 552 million in principal outstanding excluding unamortized deferred financing costs as of December 31, 2025.

The 2029 Unsecured Notes and the 2030 Unsecured Notes are subordinated to any of our secured indebtedness, including indebtedness under our credit agreements.

On March 29, 2022, we entered into an amendment to our revolving credit agreement, dated as of March 10, 2021 with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (Revolving Credit Agreement).

The amendment (i) increased the aggregate revolving credit commitments under the Revolving Credit Agreement by $ 150 million, to an aggregate amount of $ 450 million and (ii) replaced the Eurocurrency Rate with the Adjusted Term SOFR Rate (each as defined in the Revolving Credit Agreement).

The amendment:

(i) increased the aggregate revolving credit commitments under the Revolving Credit Agreement by $ 150 million, to an aggregate amount of $ 450 million and (ii) replaced the Eurocurrency Rate with the Adjusted Term SOFR Rate (each as defined in the Revolving Credit Agreement).

The Revolving Credit Agreement matures in March 2027.

At December 31, 2024 and 2023, our Revolving Credit Agreement was undrawn, and we had letters of credit, which reduce revolver availability, totaling $ 31 million and $ 27 million, leaving $ 419 million and $ 423 million available for borrowing.

We also had letters of credit and bank guarantees, which support certain leased facilities as well as other normal business activities in the U.S.

and Europe that were issued outside of the Revolving Credit Agreement for $ 2.9 million and $ 3.0 million as of December 31, 2024 and 2023.

At December 31, 2025 we had $ 204 million in outstanding borrowings on our Revolving Credit Agreement.

At December 31, 2024 our Revolving Credit Agreement was undrawn.

At December 31, 2025 and December 31, 2024, we

had letters of credit, which reduce Revolver availability, totaling $ 30 million and $ 31 million, leaving $ 217 million and $ 419 million available for borrowing.

The Revolving Credit Agreement, the Credit Agreement, the 2029 Unsecured Notes and the 2030 Unsecured Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements.

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We were in compliance with our debt covenants at December 31, 2025.

As of December 31, 2024, scheduled future principal payments of debt, excluding finance leases and other, were as follows:

Current maturities at December 31, 2024 include $ 34 million in principal payments on our Term Loan A, $ 6.0 million in principal payments on our Term Loan B, and $ 5.2 million in current portion of finance leases and other.

As of December 31, 2025 , future principal payments due under our debt agreements or anticipated to be repaid within twelve months, were as follow s:

Current maturities at December 31, 2025 include $ 250 million in debt anticipated to be voluntarily repaid within the next twelve months in connection with net cash proceeds received from the P&HS business sale.

Note 9—Share-Based Compensation

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At December 31, 2025, approximately 4.6 million common shares were available for issuance under the Plan.

Unvested shares of approximately 1.8 million were cancelled in connection with closing the sale of the P&HS business.

RSAs under the Plan generally vest over one , three or five years .

PSAs under the Plan are issuable as restricted stock or common shares upon meeting performance goals and generally have a total performance and vesting period of three years .

Under the 2018 Stock Incentive Plan, if outstanding equity awards are not assumed or substituted in connection with a change in control, unvested awards will vest in full upon the change in control.

Under the 2023 Omnibus Incentive Plan, unless the individual award agreements provide otherwise, if the successor company assumes the awards, vesting of the award will be accelerated upon a subsequent termination of employment without cause or, if the teammates resigns for good reason (to the extent applicable), in each case, within 24 months following the change in control, with any performance-based awards deemed earned based on the greater of the target and actual performance levels.

We recognize the fair value of stock-based compensation awards, which is based upon the market price of the underlying common stock at the grant date, on a straight-line basis over the estimated requisite service period.

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Total share-based compensation expense for December 31, 2025, 2024 and 2023 was $ 13 million, $ 17 million and $ 14 million with recognized tax benefits of $ 3.3 million, $ 4.3 million and $ 3.7 million.

During the year ended

December 31, 2025, we incurred a $ 4.0 million benefit for changes in performance achievement assumptions associated with our 2023, 2024, and 2025 PSAs within selling, general and administrative expenses in our consolidated statement of operations.

Unrecognized compensation cost related to nonvested RSAs, net of estimated forfeitures, was $ 20 million at December 31, 2025.

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Grant-date Fair

Nonvested awards at beginning of year

Nonvested awards at end of year

Nonvested awards at beginning of period

Nonvested awards at end of period

The total fair value of RSAs and PSAs vested during the years ended December 31, 2025, 2024 and 2023 was $ 12 million, $ 16 million and $ 11 million.

Note 10—Retirement Plans

Savings and Retirement Plans.

We maintain a voluntary 401(k) savings and retirement plans covering substantially all full-time and certain part-time teammates in the U.S.

who have met eligibility requirements.

We match a certain percentage of each teammates’ contribution.

These plans also provide for discretionary contributions by us for all eligible teammates, subject to certain limits, and discretionary profit-sharing contributions.

We may increase or decrease our contributions at our discretion, on a prospective basis.

We incurred $ 35 million, $ 15 million and $ 14 million of expense related to these plans in 2024, 2023 and 2022.

We also maintain defined contribution plans in some countries outside of the U.S.

in which we operate.

Expenses related to these plans were not material in 2024, 2023 and 2022.

Retirement Plans.

Note 10—Retirement Plan

Retirement Plan.

We have a frozen noncontributory, unfunded retirement plan for certain retirees in the U.S.

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Retirement Plan were as follows:

Years Ended December 31,

Interest cost

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Retirement Plan were as follows:

International Retirement Plans.

Certain of our foreign subsidiaries have defined benefit pension plans covering substantially all of their respective teammates.

As of December 31, 2024 and 2023, the accumulated benefit obligation under these plans was $ 14 million and $ 16 million.

We recorded $ 3.3 million, $ 4.3 million and $ 3.6 million in net periodic benefit cost for the years ended December 31, 2024, 2023 and 2022.

Note 11—Derivatives

We are directly and indirectly affected by changes in interest rates, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks.

We do not enter into derivative financial instruments for trading purposes.

We enter into foreign currency contracts to manage our foreign exchange exposure related to certain balance sheet items that do not meet the requirements for hedge accounting.

These derivative instruments are adjusted to fair value at the end of each period through earnings.

The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability.

We pay interest on our Credit Agreement which fluctuates based on changes in our benchmark interest rates.

In order to mitigate the risk of increases in benchmark rates on our term loans, we entered into an interest rate swap agreement whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable amounts calculated by reference to the notional amount.

The interest rate swap was designated as a cash flow hedge.

The interest rate swaps were designated as cash flow hedges.

Cash flows related to the interest rate swap agreement are included in interest expense, net.

We determine the fair value of our foreign currency derivatives and interest rate swaps based on observable market-based inputs or unobservable inputs that are corroborated by market data.

We determine the fair value of our interest rate swaps based on observable market-based inputs or unobservable inputs that are corroborated by market data.

We do not view the fair value of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying exposure.

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Classification

Cash flow hedges

Interest rate swaps

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Other liabilities

Economic (non-designated) hedges

Foreign currency contracts

Other current assets

Other current liabilities

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2024:

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Classification

Cash flow hedges

Interest rate swaps

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Other liabilities

Economic (non-designated) hedges

Foreign currency contracts

Other current assets

Other current liabilities

The notional amount of the interest rate swap represents the amount in effect at the end of the period.

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The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the year ended December 31, 2025:

Amount of Gain

Amount of Loss

Location of Gain

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Line Items Presented in the

(Loss) Reclassified

Accumulated Other

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Total Amount of Expense

Amount of Gain

Recognized in

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Line Items Presented in the

Reclassified from

Accumulated Other

Consolidated Statement of

Accumulated Other

from Accumulated

Comprehensive

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Operations in Which the

Comprehensive Loss

Other Comprehensive

(Loss) Income

Effects are Recorded

Loss into Income

Interest rate swaps

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Total Amount of Expense

Amount of Gain

Recognized in

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Line Items Presented in the

Reclassified from

Accumulated Other

Consolidated Statement of

Accumulated Other

from Accumulated

Comprehensive

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Operations in Which the

Comprehensive Loss

Other Comprehensive

(Loss) Income

Effects are Recorded

Loss into Income

Interest rate swaps

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The amount of ineffectiveness associated with these contracts was immaterial for the periods presented.

For the years ended December 31, 2024, 2023 and 2022 we recognized losses of $ 3.5 million, $ 0.3 million and $ 0.9 million, associated with our economic (non-designated) foreign currency contracts.

We recorded the change in fair value of derivative instruments and the remeasurement adjustment of the foreign currency denominated asset or liability in other operating expense (income), net for our foreign exchange contracts.

Note 12—Income Taxes

The components of net (loss) income before income taxes consist of the following:

The components of (loss) income from continuing operations before income taxes consist of the following:

Years Ended December 31,

Net (loss) income before income taxes:

Net (loss) income before income taxes

The income tax provision (benefit) consists of the following:

(Loss) income from continuing operations before income taxes

The income tax provision consists of the following:

Years Ended December 31,

Income tax provision from continuing operations

Current tax provision

Total current tax provision

Deferred tax benefit:

Deferred tax (benefit) provision:

Total deferred tax benefit

Total income tax provision (benefit):

Total income tax provision

A reconciliation of the federal statutory rate to our effective income tax rate is shown below:

Years Ended December 31,

Federal statutory rate

Increases (decreases) in the rate resulting from:

Unrecognized tax benefits

State income taxes, net of federal income tax impact

Research and development (R&D) credit

Foreign income taxes

Valuation allowance

Restricted stock vestings

Nondeductible Interest

Nondeductible compensation

Foreign repatriation change (Thailand)

Non-deductible transaction costs

Foreign derived intangible income (FDII)

Global intangible low-taxed income

US federal statutory income tax rate

Domestic state and local income taxes, net of federal effect

Nondeductible / nontaxable items

Goodwill impairment

Effective income tax rate

Excess tax expense on share-based payments

Changes in unrecognized tax benefits

Other adjustments

Total income tax provision

The domestic state jurisdictions that comprise the majority of the domestic state and local income taxes, net of federal benefit are California, New York, Illinois and Oregon for all years presented.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

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Accrued liabilities not currently deductible

Finance charges

Lease liabilities

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Interest limitation

R&D capitalized costs

Merchandise Inventories

Total deferred tax assets

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Deferred tax liabilities:

Merchandise inventories

Property, equipment and computer software

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Total deferred tax liabilities

Net deferred tax liability

Net deferred tax asset (liability)

The valuation allowances relate to deferred tax assets for U.S.

federal and state capital loss carryforwards and net operating loss carryforwards and credit carryforwards in various state jurisdictions.

capital loss carryforward, which has a full valuation allowance, has an expiration date of five years.

As of December 31, 2024,

federal net operating losses of approximately $ 32 million are available to offset future federal taxable income.

gross capital loss carryforward of $ 184 million has an expiration date of five years.

A gross valuation allowance of $ 164 million has been established against the capital loss as future capital gain income of $ 20 million is projected before the expiration.

As of December 31, 2025, gross federal net operating losses of approximately $ 362 million are available to offset future federal taxable income, of which $ 206 million represents reattributed net operating loss carryforwards resulting from negotiated terms included within the sale agreement of our P&HS business.

The entire $ 362 million of net operating losses have an unlimited carryforward period and will not expire.

The capital loss and net operating loss carryforwards in various state jurisdictions have various expiration dates ranging from five years to an unlimited carryforward period.

In addition, as of December 31, 2025 $ 147 million of gross deferred interest deductions that have an unlimited carryforward period are available, of which $ 33 million has been reattributed resulting from the negotiated terms included within the sale agreement of our P&HS business.

As of December 31, 2025, there are $ 13 million of state tax effected net operating losses available with various expiration dates ranging from five years to an unlimited carryforward period.

As of December 31, 2025, there are $ 4.0 million of credit carryforwards available, with various expiration dates ranging from five to twenty years.

Based on management’s judgment using available evidence about historical and expected future taxable earnings, management believes it is more likely than not that we will realize the benefit of the existing deferred tax assets, net of valuation allowances, at December 31, 2024.

Cash payments for income taxes, including interest, for 2024, 2023 and 2022 were $ 11 million, $ 13 million and $ 38 million.

Cash tax refunds received for 2024, 2023 and 2022 were $ 5.8 million, $ 20 million and $ 4.2 million.

Cash payments for income taxes (net of refunds), including interest, for 2025, 2024 and 2023 were as follows disaggregated for jurisdictions that comprise 5% or more of total taxes paid in the year presented:

Years Ended December 31,

State and local

Massachusetts

* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

A summary of the changes in the liability for unrecognized tax benefits from the beginning to the end of the reporting period is as follows:

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Unrecognized tax benefits at December 31,

Included in the liability for unrecognized tax benefits at December 31, 2024 and 2023, there were no and $ 2.7 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

These tax positions are temporary differences which do not impact the annual effective tax rate under deferred tax accounting.

Any change in the deductibility period of these tax positions would impact the timing of cash payments to taxing jurisdictions.

Unrecognized tax benefits of $ 35 million and $ 20 million at December 31, 2024 and 2023 would impact our effective tax rate if recognized and the remaining would not impact our effective tax rate.

Unrecognized tax benefits of $ 49 million and $ 36 million at December 31, 2025 and 2024 would impact our effective tax rate if recognized.

We recognize accrued interest and penalties related to unrecognized tax benefits.

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As a result, we remeasured the uncertain tax position for the 2015 through 2018 tax years, as well as the affected 2019 through 2022 tax years, to the amount expected to be paid upon a final agreement with the IRS.

In June 2025, we received the final assessment from the IRS for the 2015 through 2018 tax years including interest.

The uncertain tax position for these years and related accrued interest has been remeasured to reflect the final amount to be paid.

This matter does not impact our 2023, 2024 or future tax years.

The total change in estimate, net of an income tax benefit from the foreign taxing authority, was $ 19 million, or a $ 0.24 negative impact per basic and diluted common share, including $ 5.3 million of interest, for the twelve months ended December 31, 2024 and is reflected within the income tax provision on our consolidated statements of operations.

The total change in estimate reflects an increase in the liability for unrecognized tax benefits of $ 20 million recorded within other current liabilities, partially offset by a $ 1.9 million increase in the receivable from the foreign taxing authority recorded within other current assets, on our consolidated balance sheet at December 31, 2024.

As of December 31, 2025, we owed $ 35 million associated with the NOPA matter, which includes $ 11 million of interest accrued on the matter through December 31, 2025.

The balance sheet classification and amount owed may be subject to change depending on the timing of a final agreement with the IRS.

On July 4, 2025, the U.S.

Congress enacted budget reconciliation bill H.R.

1 referred to as the One Big Beautiful Bill (OBBB).

The OBBB contains several changes to corporate taxation including modification to limitations on deductions for interest expense and accelerated fixed asset depreciation.

We expect the legislation to decrease future U.S.

cash taxes with no material impact to the effective tax rate.

We file income tax returns in the U.S.

federal and various state and foreign jurisdictions.

federal and various state jurisdictions.

federal income tax returns for the years 2019 through 2024 are subject to examination.

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however, certain returns may be subject to examination for differing periods.

The former owners are contractually obligated to indemnify us for all income tax liabilities incurred by the Halyard foreign entities located in Thailand prior to its acquisition on April 30, 2018.

Note 13—Net (Loss) Income per Common Share

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(in thousands, except per share data)

Year Ended December 31,

Net (loss) income

Years Ended December 31,

(Loss) income from continuing operations, net of tax

Loss from discontinued operations, net of tax

( 1,100,642 )

Weighted average shares outstanding - basic

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Weighted average shares outstanding - diluted

Net (loss) income per common share

Basic loss per common share:

(Loss) income from continuing operations, net of tax

Loss from discontinued operations, net of tax

Diluted loss per common share:

(Loss) income from continuing operations, net of tax

Loss from discontinued operations, net of tax

Share-based awards for the years ended December 31, 2025 and 2024, of approximately 2.2 million and 1.5 million shares were excluded from the calculation of net loss per diluted common share as the effect would be anti-dilutive.

In accordance with ASC 260, dilutive shares are included in computing the diluted loss per common share from discontinued operations, net of tax and net loss per diluted common share for the year ended December 31, 2023 even though they were anti-dilutive, as the control number (income from continuing operations, net of tax) was in an income position.

Note 14—Accumulated Other Comprehensive (Loss) Income

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Accumulated other comprehensive (loss) income, December 31, 2024

Other comprehensive (loss) income before reclassifications

Other comprehensive (loss) income before reclassifications, net of tax

Other comprehensive income (loss) before reclassifications

Other comprehensive income (loss) before reclassifications, net of tax

Amounts reclassified from accumulated other comprehensive income (loss)

Amounts reclassified from accumulated other comprehensive income (loss), net of tax

Other comprehensive loss

Other comprehensive income (loss)

P&HS Sale reclassification adjustment

Accumulated other comprehensive (loss) income, December 31, 2025

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Amounts reclassified from accumulated other comprehensive income (loss), net of tax

Other comprehensive income (loss)

Other comprehensive loss

Accumulated other comprehensive (loss) income, December 31, 2024

Accumulated other comprehensive loss, December 31, 2021

Accumulated other comprehensive (loss) income, December 31, 2022

Other comprehensive income (loss) before reclassifications

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Other comprehensive income (loss)

Accumulated other comprehensive income (loss), December 31, 2022

Accumulated other comprehensive loss, December 31, 2023

We include amounts reclassified out of accumulated other comprehensive (loss) income related to defined benefit pension plans as a component of net periodic benefit cost recorded in Other expense, net.

Note 15— Commitments, Contingent Liabilities, and Legal Proceedings

Co mmitments include $ 48 million of legally binding lease payments for the Morgantown, West Virginia center of excellence for medical supplies and logistics lease signed, but not yet commenced, as well as $ 23 million of legally binding lease payments for the Sioux Falls, South Dakota integrated service center lease signed, but not yet commenced.

On July 22, 2024, we entered into an Agreement and Plan of Merger to acquire Rotech for $ 1.36 billion in cash.

Given anticipated tax benefits of approximately $ 40 million from the transaction, the net purchase price is approximately $ 1.32 billion.

Rotech is a national leader in providing home medical equipment in the U.S.

The definitive agreement contains certain termination rights for the Company and Rotech.

In the event that we terminate the contract, we will be required to pay Rotech a termination fee of $ 70 million.

The transaction is subject to customary closing conditions, including expiration or termination of the applicable waiting period under the Hart Scott Rodino Act, and is expected to close in the first half of 2025.

We have fully committed financing in place and expect to use a combination of cash and incremental borrowings to fund the purchase price.

We are party to various legal claims that are ordinary and incidental to our business, including ones related to commercial disputes, employment, workers’ compensation, product liability, regulatory, cybersecurity, environmental tort and other matters.

We maintain insurance coverage for cybersecurity, employment, product liability, workers’ compensation and other personal injury litigation matters, subject to policy limits, applicable deductibles and insurer solvency.

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Note 16—Segment Information

We periodically evaluate our application of accounting guidance for reportable segments and disclose information about reportable segments based on the way management organizes the enterprise for making operating decisions and assessing performance.

We report our business under two segments:

Products & Healthcare Services and Patient Direct.

The Products & Healthcare Services segment includes our U.S.

distribution division (Medical Distribution), including outsourced logistics and value-added services business, and our Global Products division which manufactures and sources medical surgical products through our production and kitting operations.

The Patient Direct segment includes our home healthcare divisions (Byram and Apria).

The CODM for both of our segments is the President, Chief Executive Officer & Director.

The CODM uses segment income to evaluate the performance of our segments, determine incentive compensation, and engage in financial and operational planning, including the allocation of labor, financial and capital resources.

Segment income excludes acquisition-related charges and intangible amortization, exit and realignment charges, net, and goodwill impairment charges, along with other adjustments, that, either as a result of their nature or size, would not be expected to occur as part of our normal business operations on a regular basis.

Segment assets exclude inter-segment account balances as we believe their inclusion would be misleading and not meaningful.

The following tables present financial information by segment:

Year Ended December 31, 2024

Products & Healthcare Services

Patient Direct

Cost of goods sold

Distribution, selling and administrative expenses

Other operating expense (income), net

Segment income

Acquisition-related charges and intangible amortization

Exit and realignment charges, net

Goodwill impairment charge

Litigation and related charges (1)

Operating loss

Capital expenditures

Year Ended December 31, 2023

Products & Healthcare Services

Patient Direct

Cost of goods sold

Distribution, selling and administrative expenses

Other operating expense, net

Segment income

Acquisition-related charges and intangible amortization

Exit and realignment charges, net

Operating income

Capital expenditures

Year Ended December 31, 2022

Products & Healthcare Services

Patient Direct

Cost of goods sold

Distribution, selling and administrative expenses

Other operating (income) expense, net

Segment income

Acquisition-related charges and intangible amortization

Exit and realignment charges, net

Inventory valuation adjustment (2)

Operating income

Capital expenditures

Years Ended December 31,

Share-based compensation:

Products & Healthcare Services

Patient Direct

Consolidated share-based compensation:

Depreciation and amortization:

Products & Healthcare Services

Patient Direct

Intangible amortization

Consolidated depreciation and amortization:

(1) Litigation and related charges includes settlement costs and related fees of legal matters within our Apria division, which do not occur in the ordinary course of our business, are non-recurring/infrequent and are inherently unpredictable in timing and amount.

These charges are reported within Other operating (income) expense, net in our Statements of Operations for the year ended December 31, 2024.

(2) Relates to an inventory valuation adjustment in our Products & Healthcare Services segment, primarily associated with PPE inventory built up and a subsequent decline in demand as a result of the COVID-19 pandemic.

(3) Other share-based compensation expense is captured within exit and realignment charges, net or acquisition-related charges and intangible amortization for the years ended December 31, 2024, 2023 and 2022.

(4) Other depreciation and amortization expense is captured within exit and realignment charges, net for the years ended December 31, 2024 and 2023 .

December 31, 2024

December 31, 2023

Total assets:

Products & Healthcare Services

Patient Direct

Segment assets

Cash and cash equivalents

Consolidated total assets

Non-cash LIFO charges to merchandise inventories valued at the lower of cost or market, with the approximate cost determined by the LIFO method for distribution inventories in the U.S.

within our Products & Healthcare Services

segment, were $ 0.9 million, $ 2.4 million, and $ 5.4 million for the years ended December 31, 2024, 2023 and 2022.

The net book value of patient service equipment sales and dispositions within the Patient Direct segment, net of the gain for returned equipment to Philips Respironics for previously recalled equipment, were $ 34 million, $ 36 million, and $ 22 million for the years ended December 31, 2024, 2023, and 2022.

Excess and obsolete inventory adjustments included in our Products & Healthcare Services segment were $ 12 million, $ 7.3 million and $ 17 million for the years ended December 31 2024, 2023, and 2022.

For the year ended December 31, 2022, we recorded a $ 92 million inventory valuation adjustment, primarily associated with PPE inventory built up and a subsequent decline in demand as a result of the COVID-19 pandemic that was not allocated to the Products & Healthcare Services segment due to its one time nature and size.

Excess and obsolete inventory adjustments are not material to the Patient Direct segment for the years ended December 31, 2024, 2023, and 2022.

The following tables present information by geographic area.

Net revenues were attributed to geographic areas based on the locations from which we ship products or provide services.

Years Ended December 31,

United States

International

Consolidated net revenue

Long-lived assets:

United States

International

Consolidated long-lived assets

Note 17—Subsequent Events

On February 28, 2025, we announced that we are actively engaged in discussions regarding the potential sale of our Products & Healthcare Services segment.

There is no set timetable for the potential sale and there can be no assurance that we will complete a transaction.

On February 26, 2025, the Owens & Minor Board of Directors authorized a share repurchase program of up to $ 100 million over the next 24 months.

Under the program, Owens & Minor may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans.

As described in Note 1, the P&HS business sale was completed on December 31, 2025, and we no longer report the P&HS business within continuing operations.

The P&HS business was initially classified as discontinued operations and assets held for sale as of June 30, 2025.

Our President and Chief Executive Officer is the chief operating decision maker (CODM).

The CODM reviews financial information about the continuing operations business at an enterprise-wide consolidated level when allocating resources and assessing business performance.

Accordingly, we have determined that our business activities comprise a single operating and reporting segment.

Net income (loss) from continuing operations is the profit or loss measure used by the CODM that is most consistent with GAAP and therefore is the required measure of profitability.

Note 17—Shareholders’ Equity

On February 26, 2025, our Board of Directors authorized a share repurchase program of up to $ 100 million.

The program expires February 2027.

Under the program, we may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans.

During the year ended December 31, 2025, we repurchased in open-market transactions and retired approximately 2.0 million shares of our common stock for an aggregate of $ 10 million, or a weighted average price per share of $ 5.19 .

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Owens & Minor, Inc.:

Accendra Health, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Owens & Minor, Inc.

We have audited the accompanying consolidated balance sheets of Accendra Health, Inc.

and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements).

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of the goodwill impairment analyses for the Apria and Global Products reporting units

As discussed in Note 1 and 5 to the consolidated financial statements, the goodwill balance as of December 31, 2024 was $1,331 million.

Of this total, $1,228 million was related to the Patient Direct reportable segment, of which $944 million was related to the Apria reporting unit.

Additionally, $103 million was related to the Products & Healthcare Services reportable segment, all of which was related to the Global Products reporting

The Company performs goodwill impairment testing on an annual basis as of October 1, and if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company performed an interim quantitative goodwill impairment test during the three months ended December 31, 2024.

This involved estimating the fair value of the reporting units using an equally weighted combination of the income-based approach and the market-based approach.

The Company concluded that the fair value of the Apria reporting unit was below its carrying amount and recorded a pre-tax impairment charge of $307 million ($305 million after-tax).

The Company determined that the fair value of the Global Products reporting unit was in excess of its carrying amount and, therefore, did not record any goodwill impairment for this reporting unit.

We identified the evaluation of the goodwill impairment analyses for the Apria and Global Products reporting units as a critical audit matter.

Subjective auditor judgment was required in evaluating certain projected revenues used in the income-based approach to estimate the fair value of the reporting units as changes to those assumptions could have had a significant effect on each reporting unit’s estimated fair value.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of internal controls related to the Company’s goodwill impairment assessment process for the reporting units.

This included controls related to the development of certain projected revenues.

We evaluated the Company’s forecasted revenue growth rates for the reporting units by comparing the growth assumptions to forecasted growth rates in the Company’s budget plans and comparing the Company’s historical revenue forecasts to actual results to assess the Company’s ability to accurately forecast.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating projected revenues by comparing them to the projected revenues of a set of comparable companies and other market data.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Estimates of variable consideration on equipment and supplies sales and estimated adjustments on equipment rental revenues

As discussed in Note 1 to the consolidated financial statements, within the Company’s Patient Direct segment, revenues are recognized under fee-for-service arrangements for equipment rented to patients and sales of equipment, supplies and other items sold to patients.

The Company’s Patient Direct segment net revenue was $2,680 million for the year ended December 31, 2024.

Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and patients.

As discussed in Note 1 to the consolidated financial statements, revenues are recognized under fee-for-service arrangements for equipment rented to patients and sales of equipment, supplies and other items sold to patients.

The Company’s net revenue was $2,762 million for the year ended December 31, 2025.

Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid

health plans, Medicare, Medicaid and patients.

The Company determines the transaction price based on contractually agreed-upon amounts or rates, adjusted for estimates of variable consideration on equipment and supplies sales and estimated adjustments to record revenue at an amount probable of being collected for equipment rental revenues.

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(incorporated herein by reference to our Current Report on Form 8-K, Exhibit 2.1, dated May 1, 2018)

Purchase Agreement, dated as of April 6, 2020 by and among EHDH Holding Group and Owens & Minor, Inc.

(incorporated herein by reference to our Current Report on Form 8-K/A Exhibit 2.1, dated January 16, 2020)**

Agreement and Plan of Merger, dated as of January 7, 2022, by and among the Company, Apria and Merger Sub (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 2.1, dated January 10, 2022)

Agreement and Plan of Merger, dated as of July 22, 2024, by and among the Company, Rotech, Merger Sub and Representative (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 2.1, dated July 23, 2024)

Equity Purchase Agreement, dated as of October 7, 2025, by and among the Company, Purchaser and Purchaser Parent (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on October 7, 2025).**

Amended and Restated Articles of Incorporation of Owens & Minor, Inc.

(incorporated herein by reference to our Current Report on Form 8 K, Exhibit 3.1, dated July 29, 2008)

Amended and Restated Bylaws of the Company effective October 28, 2022 (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 3.1, dated November 2, 2022)

Indenture, dated September 16, 2014, by and among Owens & Minor, Inc., Owens and Minor Distribution, Inc., Owens & Minor Medical, Inc.

Bank National Association, as trustee (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 4.1, dated September 17, 2014)

First Supplemental Indenture, dated September 16, 2014, by and among Owens & Minor, Inc., Owens and Minor Distribution, Inc., Owens & Minor Medical, Inc.

Bank National Association, as trustee (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 4.2, dated September 17, 2014)

Form of Global Note for the 4.375% Senior Notes due 2024 (incorporated herein by reference to our Current Report on Form 8-K, Exhibit B of Exhibit 4.2, dated September 17, 2014)

Third Supplemental Indenture, dated as of April 30, 2018, by and among Owens & Minor, Inc., the guarantors signatory thereto and U.S.

Bank National Association, as trustee.

(incorporated herein by reference to our Current Report on Form 8-K, Exhibit 4.1, dated May 4, 2018)

Fourth Supplemental Indenture, dated as of February 12, 2019, among Owens & Minor, Inc., the guarantors signatory thereto and U.S.

Bank National Association, as trustee.

(incorporated herein by reference to our Current Report on Form 8-K, Exhibit 4.1, dated February 19, 2019)

Article of Amendment of Owens & Minor, Inc.

(incorporated herein by reference to our Current Report on Form 8 K, Exhibit 3.1, dated December 24, 2025)

Amended and Restated Bylaws of Accendra Health, Inc.

effective December 31, 2025 (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 3.2, dated December 24, 2025)

Indenture, dated March 10, 2021, among Owens & Minor, Inc., the guarantors named therein and Regions Bank, as Trustee (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.1, dated March 11, 2021)

Form of Global Note for the 4.500% Senior Notes due 2029 (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.2, dated March 11, 2021)

Sixth Supplemental Indenture, dated as of March 10, 2021, by and among Owens & Minor, Inc., the guarantors signatory thereto and U.S.

Bank National Association, as trustee (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.3, dated March 11, 2021).

Indenture dated March 29, 2022 by and among the Company, the guarantors named therein and Regions Bank, as trustee (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.1, dated March 29, 2022)

Form of Global Note for the 6.625% Senior Notes due 2030 (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.2, dated March 29, 2022)

Seventh Supplemental Indenture dated as of March 29, 2022, by and among the Company, the guarantors named therein and U.S.

Bank National Association, as trustee (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.3, dated March 29, 2022)

First Supplemental Indenture dated as of March 29, 2022, by and among the Company, the guarantors named therein and Regions Bank, as trustee, to the Indenture dated as of March 10, 2021 (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.4, dated March 29, 2022)

4 unchanged sentences

Form of Owens & Minor, Inc.

Executive Severance Agreement effective January 1, 2011 (incorporated herein by reference to our Annual Report on Form 10-K, Exhibit 10.10, for the year ended December 31, 2010)*

Form of Owens & Minor, Inc.

Executive Change in Control Severance Agreement between Owens & Minor, Inc.

15 unchanged sentences

Owens & Minor, Inc.

Officer Severance Policy dated February 27, 2025* - filed herewith

Officer Severance Policy dated February 27, 2025 (incorporated herein by reference to our Form 10-K, Exhibit 10.13, dated February 28, 2025)*

Owens & Minor, Inc.

2018 Stock Incentive Plan (incorporated herein by reference to our Registration Statement on Form S-8, Registration number 333-224787)*

Credit Agreement dated as of June 5, 2012 by and among Owens & Minor Distribution, Inc.

and Owens & Minor Medical, Inc.

(as Borrowers), Owens & Minor, Inc.

and certain of its domestic subsidiaries (as Guarantors), Wells Fargo Bank, N.A.

(as Administrative Agent), JPMorgan Chase Bank, N.A.

(as Syndication Agent) and a syndicate of banks as specified on the signature pages thereof (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated June 8, 2012)

First Amendment dated as of September 17, 2014 by and among Owens & Minor Distribution, Inc.

and Owens & Minor Medical, Inc.

( as Borrowers), Owens & Minor, Inc.

and certain of its domestic subsidiaries (as Guarantors) and Wells Fargo Bank, N.A.

( as Administrative Agent), to the Credit Agreement dated as of June 5, 2012 by and among the Borrowers, the Guarantors, a syndicate of financial institutions party thereto, the Administrative Agent, and the other agents party thereto (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated September 18, 2014)

Interest Purchase Agreement, dated as of May 2, 2017, by and among Owens & Minor, Inc., Barista Acquisition I, LLC, Barista Acquisition II, LLC, Mediq B.V., Mediq International B.V.

and Mediq USA Holdings (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended March 31, 2017)

Credit Agreement, dated as of July 27, 2017, by and among Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC, and Barista Acquisition II, LLC, (the “Borrowers”), Owens & Minor, Inc.

and certain of its domestic subsidiaries (together, the “Guarantors), Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo Bank, N.A.

(the “Administrative Agent”), a syndicate of financial institutions party thereto, and the other agents party thereto (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated July 28, 2017)

Restated Guaranty Agreement, dated as of the February 12, 2019, by and among Owens & Minor, Inc., the other Guarantors party thereto and Bank of America, N.A., as administrative agent for the Pro Rata Facilities and the Term B Facility (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.2, dated February 19, 2019)**

2 unchanged sentences

(incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.2, dated May 4, 2018)**

First Amendment to Credit Agreement, dated as of March 29, 2018, by and among Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC, and Barista Acquisition II, LLC, as Borrowers, Owens & Minor, Inc.

and certain of its domestic subsidiaries, as Guarantors, the banks party thereto and Wells Fargo Bank, N.A., as Administrative Agent for the banks party thereto (incorporated herein by reference to our Current Report on Form 8-K/A, Exhibit 10.1, dated April 18, 2018)

Second Amendment to Credit Agreement, dated as of April 30, 2018, by and among O&M Halyard, Inc., Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC and Barista Acquisition II, LLC, Owens & Minor, Inc.

and each other domestic subsidiary of the Company party thereto from time to time, Wells Fargo Bank, N.A., as administrative agent for certain of the credit facilities, Bank of America, N.A., as collateral agent and administrative agent for the term B facility, and the other agents party thereto.

(incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated May 4, 2018)

Third Amendment to Credit Agreement, dated as of May 9, 2018, by and among O&M Halyard, Inc., Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC and Barista Acquisition II, LLC, Owens & Minor, Inc.

(incorporated herein by reference to our Form 10-Q, Exhibit 10.9, dated May 10, 2018)

Fourth Amendment to Credit Agreement, dated as of February 12, 2019, by and among O&M Halyard, Inc., Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC and Barista Acquisition II, LLC, Owens & Minor, Inc.

and each other domestic subsidiary of the Company party thereto from time to time, Bank of America, N.A., as administrative agent for certain of the credit facilities and as collateral agent and administrative agent for the term B facility, and the other agents party thereto.

(incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated February 19, 2019)

Amendment to the Owens & Minor, Inc.

2 unchanged sentences

Directors’ Deferred Compensation Plan, as Amended and Restated Effective May 10, 2019 (Incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.2, dated May 10, 2019)*

Fifth Amendment to Credit Agreement, dated as of February 13, 2020, by and among O&M Halyard, Inc., Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC and Barista Acquisition II, LLC, Owens & Minor, Inc.

(Incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated February 18, 2020)

Receivables Financing Agreement, dated as of February 19, 2020, by and among Owens & Minor Medical, Inc., as the initial servicer, O&M Funding LLC, as borrower, the lenders from time to time party thereto, PNC Bank, National Association, as administrative agent, and PNC Capital Markets LLC, as structuring agent.

(Incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated February 19, 2020)

Purchase and Sale Agreement, dated as of February 19, 2020, by and among Owens & Minor Distribution, Inc., as the originator, Owens & Minor Medical, Inc., as servicer, and O&M Funding LLC, as buyer.

(Incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.2, dated February 19, 2020)

Performance Guaranty of Owens & Minor, Inc., dated as of February 19, 2020 in favor of PNC Bank, National Association.

(Incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.3, dated February 19, 2020)

Amendment No.

1 unchanged sentence

2018 Stock Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed March 19, 2020.

First Amendment to the Receivables Financing Agreement, dated as of May 19, 2020, by and among Owens & Minor Medical, Inc., as the initial servicer, O&M Funding LLC, as borrower, the lenders from time to time party thereto, PNC Bank, National Association, as administrative agent, and PNC Capital Markets LLC, as structuring agent (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended June 30, 2020)

Second Amendment to the Receivables Financing Agreement, dated as of July 1, 2020, by and among Owens & Minor Medical, Inc., as the initial servicer, O&M Funding LLC, as borrower, the lenders from time to time party thereto, PNC Bank, National Association, as administrative agent, and PNC Capital Markets LLC, as structuring agent (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.2, for the quarter ended June 30, 2020)

Form of Restricted Stock Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated February 26, 2021)*

1 unchanged sentence

Credit Agreement, dated as of March 10, 2021, by and among Owens & Minor, Inc, and certain subsidiaries of Owens & Minor, Inc, as borrowers, Bank of America, N.A., as an administrative agent and collateral agent, and a syndicate of financial institutions, as lenders (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated March 11, 2021)**

Third Amendment to Receivables Financing Agreement, dated as of March 10, 2021, by and among Owens & Minor Medical, Inc., as the initial servicer, O&M Funding LLC, as borrower, the lenders from time to time party thereto, PNC Bank, National Association, as administrative agent, and PNC Capital Markets LLC, as structuring agent (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.2, dated March 11, 2021)

Amendment to Purchase and Sale Agreement, dated as of March 10, 2021, by and among Owens & Minor Distribution, Inc., as the originator, Owens & Minor Medical, Inc., as servicer, and O&M Funding LLC, as buyer (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.3, dated March 11, 2021).

Owens & Minor, Inc.

12 unchanged sentences

Credit Agreement dated as of March 29, 2022, by and among the Company, certain subsidiaries of the Company party thereto, as borrowers, JPMorgan Chase Bank, N.A., as an administrative agent and collateral agent, and a syndicate of financial institutions, as lenders (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated March 29, 2022)**

Fourth Amendment to Receivables Financing Agreement, dated as of March 29, 2022, by and among O&M Funding LLC, as borrower, Owens & Minor Medical, Inc., as initial servicer, the lenders party thereto, and PNC Bank, National Association, as administrative agent (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.2, dated March 29, 2022)**

Joinder to Credit Agreement, Amendment No.

5 unchanged sentences

2018 Stock Incentive Plan (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.7, for the quarter ended March 31, 2022)*

Fifth Amendment to the Receivables Financing Agreement, dated March 14, 2023 by and among O&M Funding LLC, as borrower, Owens & Minor Medical, Inc.

as initial servicer, Regions Bank, Capital One Bank, and Bank of America, N.A., as lenders, and PNC Bank, National Association, as lender and administrative agent.

(incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended March 31, 2023)

Form of Employee Restricted Stock Unit Grant Notice and Award Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated May 10, 2023)*

9 unchanged sentences

(incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended June 30, 2024)*,**

Receivables Purchase Agreement, dated as of October 18, 2024, by and among O&M Funding LLC, as Seller, the persons from time to time party hereto, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated October 18, 2024)

Amended and Restated Purchase and Sale Agreement, dated as of October 18, 2024, by and among various entities, as Originators, Owens & Minor Medical LLC, as Servicer, and O&M Funding LLC, as Buyer (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.2, dated October 18, 2024)

Performance Guaranty of Owens & Minor, Inc., dated as of October 18, 2024, in favor of PNC Bank National Association (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.3, dated October 18, 2024)

Form of Amended and Restated Executive Change of Control Severance Agreement* - filed herewith

Amended & Restated Receivables Purchase Agreement, dated as of December 31, 2025, by and among Accendra Funding LLC (formerly known as O&M Funding LLC), as seller, the persons from time to time party thereto, as purchasers, PNC Bank, National Association, as administrative agent, and PNC Capital Markets LLC, as structuring agent (incorporated herein by reference to the Company's Current Report on Form 8-K, Exhibit 10.1, dated December 31, 2025)**

Second Amended and Restated Purchase and Sale Agreement, dated as of December 31, 2025, by and among various entities, as originators, Accendra Medical, Inc.

(formerly known as Owens & Minor Medical, Inc.), as servicer, and Accendra Funding LLC (formerly known as O&M Funding LLC), as buyer (incorporated herein by reference to the Company's Current Report on Form 8-K, Exhibit 10.2, dated December 31, 2025)**

Second Amended and Restated Performance Guaranty of Accendra Health, Inc.

(formerly known as Owens & Minor, Inc.), dated as of December 31, 2025, in favor of PNC Bank, National Association (incorporated herein by reference to the Company's Current Report on Form 8-K, Exhibit 10.3, dated December 31, 2025)

Form of Amended and Restated Executive Change of Control Severance Agreement (incorporated herein by reference to the Company's Current Report on Form 10-K, Exhibit 10.61, dated December 31, 2024)*

Termination Agreement, dates as of June 3, 2025, by and among Owens & Minor, Inc., Rotech Healthcare Holdings Inc., and Hitchcock Merger Sub Inc.

(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on June 5, 2025).

Amendment to the Accendra Health, Inc.

Executive Deferred Compensation and Retirement Plan, dated as of December 16, 2025 (filed herewith)*

Amended Accendra Health, Inc.

Executive Deferred Compensation and Retirement Plan, dated as of December 31, 2025 (filed herewith)*

Insider Trading Policy

21 unchanged sentences

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 20 th day of February, 2026.

OWENS & MINOR, INC.

ACCENDRA HEALTH, INC.

/s/ Edward A.

8 unchanged sentences

Executive Vice President & Chief Financial Officer

/s/ Michael W.

/s/ Stephen W.

Senior Vice President, Corporate Controller & Chief

Accounting Officer

/s/ Teresa L.

Chair of the Board of Directors

/s/ Teresa L.

/s/ Gwendolyn M.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures