What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-08 · 119 added, 100 removed, 279 unchanged (44% of the section changed)

1 unchanged sentence

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Company’s condensed consolidated financial statements and corresponding notes elsewhere in this Quarterly Report on Form 10-Q.

The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Solventum for the six months ended June 30, 2025 and 2024.

For full understanding of the Company’s financial condition and results of operations, the below discussion should be read alongside the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s 2024 Annual Report on Form 10-K.

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Operating Segments and Sales Change Information

Solventum manages its operations in four business segments:

MedSurg, Dental Solutions, Health Information Systems, and Purification and Filtration.

On February 25, 2025, the Company entered into a Transaction Agreement to sell its Purification and Filtration business to Thermo Fisher Scientific Inc.

(“Buyer”) for $4.1 billion.

On June 25, 2025, the Company and Buyer entered into an additional Agreement to exclude the Company’s Water Business from the scope of the Purification and Filtration business to be acquired by Buyer and reduce the cash consideration at closing of the transaction to approximately $4.0 billion.

The closing of the transaction is expected to be completed by the end of 2025, subject to regulatory approvals and customary closing conditions.

The company intends to use the net proceeds from the transaction primarily to pay down a portion of the Company’s outstanding debt through the pay down of our term loan and bond buybacks.

References are made to organic sales change, which is defined as the change in net sales, absent the separate impacts on sales from foreign currency translation and acquisitions, net of divestitures, and to constant currency change, which is defined as the change in net sales absent the impact on sales from foreign currency translation.

Solventum manages its operations in three business segments:

MedSurg, Dental Solutions, and Health Information Systems.

On February 25, 2025, the Company entered into a Transaction Agreement to sell its Purification and Filtration business to Buyer.

On June 25, 2025, the Company and Buyer entered into an additional Agreement to exclude the Company’s Water Business from the scope of the Business to be acquired by Buyer.

On September 1, 2025, Solventum completed the sale of the Business to the Buyer in accordance with the terms of the Agreement.

The cash consideration paid to Solventum at closing was approximately $4 billion.

Refer to Note 3, “Acquisitions and Divestitures” for additional information.

References are made to organic sales change, which is defined as the change in net sales, absent the separate impacts on sales from foreign currency translation and acquisitions, net of divestitures.

Constant currency, as reflected in the tables below, is defined as the change in net sales absent the impact on sales from foreign currency translation.

Other, as comprised in the tables below, includes acquisition and divestiture-related activities.

Acquisitions include non-health care related supply agreements that conveyed from 3M to the Company at Spin-Off and sales from new supply agreements with 3M that commenced at Spin-Off.

Divestiture impacts include lost sales from the Company’s dental anesthetics business that was sold in August 2023 as well as lost sales from certain health care businesses retained by 3M India in connection with the Spin-Off.

Divestiture impacts include lost sales from both the Company’s Purification and Filtration business that was sold in September 2025 and the dental anesthetics business that was sold in August 2023, as well as lost sales from certain health care businesses retained by 3M India in connection with the Spin-Off.

Solventum believes this information is useful to investors and management in understanding ongoing operations and in analysis of ongoing operating trends.

5 unchanged sentences

Segment and Total Company Net Sales

Three months ended June 30, Increase/(Decrease)

Three months ended September 30, Increase/(Decrease)

(Millions) 2025 2024 Reported Growth Currency Impact Constant Currency Other Organic Growth

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Purification and Filtration 128 180 (28.7) 3.4 (32.1) (38.5) 6.4

Corporate and Unallocated 15 22 NM NM NM NM NM

All Other 77 81 (5.4) 0.4 (5.8) — (5.8)

Total Company $ 2,096 $ 2,082 0.7 % 1.1 % (0.4) % (3.1) % 2.7 %

Six months ended June 30, Increase/(Decrease)

Nine months ended September 30, Increase/(Decrease)

(Dollars in millions) 2025 2024 Reported Growth Currency Impact Constant Currency Other Organic Growth

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Purification and Filtration 497 532 (6.6) 1.0 (7.6) (13.1) 5.5

Corporate and Unallocated 28 22 NM NM NM NM NM

All Other 230 234 (2.0) 0.1 (2.1) 5.6 (7.6)

Total Company $ 6,327 $ 6,179 2.4 % 0.2 % 2.2 % (1.1) % 3.2 %

Segment and Total Company Operating Income

Three months ended June 30,

Three months ended September 30,

(Millions) 2025 2024 2025 vs 2024 change

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Purification and Filtration 26 19 36.8

All Other 12 5 140.0

Corporate and Unallocated 1,228 (171) 818.1

Total Company $ 1,690 $ 275 514.5 %

Six months ended June 30,

Nine months ended September 30,

(Dollars in millions) 2025 2024 2025 vs 2024 change

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Purification and Filtration 96 62 54.8

All Other 31 24 29.2

Corporate and Unallocated 686 (458) 249.8

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Sales are generally reported within the geographic area based on the location of the customer taking possession of the products or in which services are rendered.

Percent change information compares the three and six months ended June 30, 2025 with the same period for the prior year, unless otherwise indicated.

Three months ended June 30, 2025

Percent change information compares the three and nine months ended September 30, 2025 with the same period for the prior year, unless otherwise indicated.

Three months ended September 30, 2025

(Millions) United States International Worldwide

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Organic growth 3.4 % 1.7 % 2.7 %

Other (1.5) (5.2) (3.1)

Constant currency 1.9 (3.5) (0.4)

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Reported growth 1.9 % (0.9) % 0.7 %

Six months ended June 30, 2025

United States International Worldwide

Nine months ended September 30, 2025

(Millions) United States International Worldwide

Net sales (millions) $ 3,513 $ 2,814 $ 6,327

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Additional information beyond what is included in the preceding table is as follows:

Second quarter 2025 results:

Third quarter 2025 results:

• In the United States geographic area, both total sales and organic sales increased.

Organic growth occurred across all segments, led by MedSurg and Purification and Filtration.

• In the International geographic area, both total sales and organic sales increased.

Organic growth was led by MedSurg, partially offset by a decline in Purification and Filtration.

First six months 2025 results:

Organic growth occurred across all segments, led by MedSurg and Health Information Systems.

• In the International geographic area, total sales decreased while organic sales increased.

Organic growth was led by Dental Solutions.

First nine months 2025 results:

• In the United States geographic area, both total sales and organic sales increased.

Organic growth occurred across all segments, led by MedSurg.

Organic growth occurred across all segments, led by MedSurg and Health Information Systems.

• In the International geographic area, both total sales and organic sales increased.

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Refer to Note 11 to the condensed consolidated financial statements for additional details.

The weaker U.S.

dollar had a positive worldwide impact on sales for the second quarter 2025 compared to the same period last year.

The worldwide impact on sales for the six months ended 2025 was minimal, as the negative impact in the first quarter 2025 was partially offset by the positive impact in the second quarter 2025.

Solventum estimates that year-on-year foreign

currency transaction effects, including hedging impacts, increased pre-tax income by approximately $13 million and $10 million for the three and six months ended June 30, 2025, respectively.

Foreign currency had a positive worldwide impact on sales for the third quarter 2025 compared to the same period last year.

The worldwide impact on sales for the nine months ended 2025 was positive compared to the same period last year.

Solventum estimates that year-on-year foreign currency transaction effects, including hedging impacts, decreased pre-tax income by

approximately $4 million and increased pre-tax income by approximately $6 million for the three and nine months ended September 30, 2025, respectively.

Financial condition

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Operating Expenses

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

(Percent of corresponding net sales) 2025 2024 Change 2025 2024 Change

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Cost of product includes manufacturing, engineering and freight costs.

Cost of product, measured as a percent of sales of product, increased in the second quarter of 2025 when compared to the second quarter of 2024.

The increase was driven by increased costs due to the impact of higher costs on inventory sourced under the master supply and transition manufacturing agreements with 3M and due to the cost of other transition support provided by 3M.

Cost of product, measured as a percent of sales of product, increased in the first six months of 2025 when compared to the first six months of 2024.

Cost of product, measured as a percent of sales of product, increased in the third quarter of 2025 when compared to the third quarter of 2024.

The increase was driven by increased costs due to the impact of higher sourcing costs from tariffs and inventory sourced under the master supply and transition manufacturing agreements with 3M, partially offset by benefits from cost savings programs.

Cost of product, measured as a percent of sales of product, increased in the first nine months of 2025 when compared to the first nine months of 2024.

The increase was driven by increased costs due to the impact of higher sourcing costs from tariffs and inventory sourced under the master supply and transition manufacturing agreements with 3M partially offset by benefits from cost savings programs.

Cost of Software and Rentals

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

Cost of software and rentals, measured as a percent of sales of software and rentals, decreased during the second quarter of 2025 as compared to the same period last year due to the impact of sales mix, primarily driven by higher sales of our revenue cycle management solutions.

Cost of software and rentals, measured as a percent of sales of software and rentals, decreased during the first six months of 2025 as compared to the same period last year due to the impact of sales mix, primarily driven by higher sales of our revenue cycle management solution.

Three months ended June 30, Six months ended June 30,

Cost of software and rentals, measured as a percent of sales of software and rentals, decreased during the third quarter of 2025 as compared to the same period last year due to the impact, primarily driven by benefits from lower external license fees and product mix benefit from higher sales of our revenue cycle management solutions.

Cost of software and rentals, measured as a percent of sales of software and rentals, decreased during the first nine months of 2025 as compared to the same period last year due to the impact of lower external license fees, price and sales mix, primarily driven by higher sales of our revenue cycle management solution.

Three months ended September 30, Nine months ended September 30,

(Percent of total net sales) 2025 2024 Change 2025 2024 Change

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Research and development (R&D) 8.7 9.1 (0.4) 8.9 9.3 (0.4)

Gain on sale of business (72.4) — (72.4) (24.0) — (24.0)

Operating income 80.6 13.2 67.4 32.5 14.6 17.9

Selling, General and Administrative

SG&A, measured as a percent of total net sales, increased in the second quarter of 2025 when compared to the same period last year.

The increase was driven by higher costs associated with activities to separate operations from 3M, including deployment of our enterprise resource planning and other information technology solutions.

SG&A, measured as a percent of total net sales, increased in the first six months of 2025 when compared to the same period last year.

The increase was driven by higher compensation, including equity-based awards, and higher costs associated with both initial stand-up and ongoing operations to support a standalone company.

SG&A, measured as a percent of total net sales, increased in the third quarter of 2025 when compared to the same period last year.

The increase was driven by higher costs associated with activities to separate operations from 3M, costs incurred to separate the Purification and Filtration business, and higher compensation expense, including equity-based awards, partially offset by benefits from the Solventum Way restructuring program.

SG&A, measured as a percent of total net sales, increased in the first nine months of 2025 when compared to the same period last year.

The increase was driven by costs incurred to separate the Purification and Filtration business, higher compensation, including equity-based awards, and higher costs associated with both initial stand-up and ongoing operations to support a standalone company.

Research and Development

R&D, measured as a percent of total net sales, decreased in the second quarter of 2025 when compared to the same period last year due to similar costs year-on-year in relation to higher net sales.

R&D, measured as a percent of total net sales, decreased in the first six months of 2025 when compared to the same period last year due to similar costs year-on-year in relation to higher net sales.

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

Three months ended June 30, Six months ended June 30,

R&D, measured as a percent of total net sales, decreased in the third quarter of 2025 when compared to the same period last year due to lower cost from the sale of the Purification and Filtration business in relation to higher net sales.

R&D, measured as a percent of total net sales, decreased in the first nine months of 2025 when compared to the same period last year due to lower cost from the sale of the Purification and Filtration business in relation to higher net sales.

Gain on Sale of Business

The Company completed the sale of the Purification and Filtration business in the third quarter of 2025.

This resulted in a net gain of $1.5 billion for both the third quarter and first nine months of 2025.

Interest Expense, Net, Loss on Debt Extinguishment, Net, and Other Expense (Income), Net

Three months ended September 30, Nine months ended September 30,

(Millions) 2025 2024 2025 2024

Interest expense, net $ 89 $ 107 $ 296 $ 260

Loss on debt extinguishment, net 82 — 82 —

Other expense (income), net 5 1 $ 24 $ 48

Interest expense, net includes interest accrued on debt obligations, offset by interest income from cash and marketable securities.

Interest expense, net decreased in the second quarter as compared to the same period last year due to lower interest expense as a result of lower debt outstanding.

Interest expense, net increased in the first six months of 2025 as compared to the same period last year due to a full quarter of interest incurred in the first quarter of 2025 related to the February 2024 issuance of senior notes and March 2024 draw on the senior term loan credit facilities.

Interest expense, net decreased in the third quarter as compared to the same period last year due to lower interest expense as a result of lower debt outstanding.

Interest expense, net increased in the first nine months of 2025 as compared to the same period last year due to a full quarter of interest incurred in the first quarter of 2025 related to the February 2024 issuance of senior notes and March 2024 draw on the senior term loan credit facilities.

Refer to Note 9 to the condensed consolidated financial statements for more information.

Loss on debt extinguishment, net includes charges incurred in the third quarter of 2025 from the differential between carrying value and the amount paid to acquire the tendered Senior Notes and related expenses.

Refer to Note 9 to the condensed consolidated financial statements for additional information.

These charges were partially offset by the gain from interest rate swaps entered into and subsequently settled in connection with the sale of the Purification and Filtration business.

Refer to Note 11 to the condensed consolidated financial statements for additional information.

Other expense (income), net includes the non-service component of periodic pension cost, investment gains and losses, and foreign currency transaction gain (loss).

Other expense (income), net decreased for both the second quarter and first six months of 2025 as compared to the same period last year primarily due to charges associated with the substantial liquidation of foreign operations completed as part of our separation from 3M.

Other expense (income), net increased for the third quarter of 2025 primarily due to higher non-service periodic pension costs.

Other expense (income), net decreased for the nine months of 2025 as compared to the same period last year primarily due to charges associated with the substantial liquidation of foreign operations completed as part of our separation from 3M.

Provision for (benefit from) Income Taxes:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

(Percent of pre-tax income/loss) 2025 2024 2025 2024

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Note 17 to the condensed consolidated financial statements provides an overview of Solventum’s business segments in addition to disclosures relating to Solventum’s segments.

We manage our operations in four business segments.

Our reportable segments are MedSurg, Dental Solutions, Health Information Systems, and Purification and Filtration.

Upon closing the sale of our Purification and Filtration business, we primarily manage our operations in three business segments.

Our reportable segments are MedSurg, Dental Solutions, and Health Information Systems.

Our Chief Operating Decision Maker evaluates segment operating performance using net sales and business segment operating income.

All Other primarily consists of the Water Business that was retained after the sale of the Purification and Filtration Business.

All Other also includes sales and cost of sales related to our agreements to supply 3M and other supply agreements assumed by the Company at Spin-Off related to legacy 3M businesses, which were historically included within Corporate and Unallocated.

Corporate and Unallocated

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Spin-Off and separation related costs include any costs incurred as part of our separation from 3M and costs to setup operations as a standalone company, including system implementations, manufacturing relocations, legal entity separations, certain equity awards granted as part of the Spin-Off, profit mark-ups on transition service arrangements with 3M and other one-time costs.

Corporate and Unallocated also includes sales and cost of sales related to our supply agreements with 3M and other supply agreements assumed by the Company at Spin-Off related to legacy 3M businesses.

Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

Operating Business Segments

Business Segment Information

Information related to the Company’s segments is presented in the tables that follow with additional context in the corresponding narrative below the tables.

MedSurg (56.4% and 56.1% of consolidated sales for the three and six months ended June 30, 2025)

Three months ended June 30, Six months ended June 30,

MedSurg ( 57.5% and 56.6% of consolidated sales for the three and nine months ended September 30, 2025)

Three months ended September 30, Nine months ended September 30,

(Millions) 2025 2024 2025 2024

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Percent of sales 16.8 % 20.6 % 17.3 % 19.6 %

Second quarter 2025 results:

Third quarter 2025 results:

Sales in MedSurg were up 2.1%:

• Organic growth was driven by strong broad-based volumes in Infection Prevention and Surgical Solutions, led by surgical solutions and I.V.

site management products.

Growth benefited from advanced order timing as part of enterprise resource planning and distribution cutovers that were completed during the second quarter 2025.

• Organic growth was driven by volumes in Advanced Wound Care, due to negative pressure wound therapy.

Growth within our Infection Prevention and Surgical Solutions business was negatively impacted by advanced order timing as part of enterprise resource planning and distribution center cutovers that occurred during the second quarter 2025.

• Foreign currency translation positively impacted sales by 1.0%.

Business segment operating income margin decreased when compared to the same period last year.

The decrease was primarily driven by the impact of higher tariffs on product manufactured during the second quarter of 2025.

First six months 2025 results:

The decrease was primarily driven by the impact of higher product costs due to tariffs.

First nine months 2025 results:

Sales in MedSurg were up 3.4%:

• Organic growth was led by Infection Prevention and Surgical Solutions, led by I.V.

site management and hospital consumable products.

site management and surgical solutions products.

• Other includes certain health care businesses retained by 3M India in connection with the Spin-Off.

• Foreign currency translation negatively impacted sales by (0.3%).

• Foreign currency translation positively impacted sales by 0.1%.

Business segment operating income margin decreased when compared to the same period last year.

The decrease was driven by higher costs to stand-up and operate our standalone structure after Spin-Off.

Dental Solutions (15.6% and 15.8% of consolidated sales for the three and six months ended June 30, 2025)

Three months ended June 30, Six months ended June 30,

The decrease was driven by higher costs to stand-up and operate our standalone structure after Spin-Off and the impact on product cost from tariffs.

Dental Solutions ( 16.2% and 15.9% of consolidated sales for the three and nine months ended September 30, 2025)

Three months ended September 30, Nine months ended September 30,

(Millions) 2025 2024 2025 2024

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Percent of sales 25.7 % 23.6 % 26.1 % 28.3 %

Second quarter 2025 results:

Third quarter 2025 results:

Sales in Dental Solutions were up 8.4%:

• Organic growth in new restorative and prevention solution products was partially offset by a decline in traditional orthodontic products.

• Organic growth across all businesses, led by new restorative and prevention solutions products.

The quarter benefitted from a reduction in backorders driven by improved service levels.

• Foreign currency translation positively impacted sales by 1.9%.

Business segment operating income margin increased when compared to the same period last year primarily due to lower business operating expenses.

First six months 2025 results:

Sales in Dental Solutions were up slightly at 0.1%:

Business segment operating income margin increased when compared to the same period last year primarily due to the benefit of higher sales volume growth.

Tariff and inflation impacts were largely offset by savings from Solventum Way and other supply chain benefits.

First nine months 2025 results:

Sales in Dental Solutions were up 2.8%:

• Organic growth in new restorative and prevention solutions products was partially offset by a decline in traditional orthodontic products.

• Other includes certain health care businesses retained by 3M India in connection with the Spin-Off.

• Foreign currency translation negatively impacted sales by (0.2%)

• Foreign currency translation positively impacted sales by 0.5%

Business segment operating income margin decreased when compared to the same period last year as a result of higher costs to stand-up and operate our standalone structure after Spin-Off.

Health Information Systems (15.7% and 15.8% of consolidated sales for the three and six months ended June 30, 2025)

Three months ended June 30, Six months ended June 30,

Health Information Systems ( 16.5% and 16.0% of consolidated sales for the three and nine months ended September 30, 2025)

Three months ended September 30, Nine months ended September 30,

(Millions) 2025 2024 2025 2024

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Percent of sales 38.8 % 32.2 % 35.8 % 32.6 %

Second quarter 2025 results:

Third quarter 2025 results:

Sales in Health Information Systems were up 5.9%:

• Organic growth was driven by continued adoption of our Solventum™ 360 Encompass TM .

• Organic growth was driven by continued adoption of our Solventum™ 360 Encompass TM and a timing benefit from consulting product milestones.

• Clinician productivity solutions declined primarily due to impacts from changing market conditions.

• Foreign currency translation positively impacted sales by 0.3%.

Business segment operating income margin increased when compared to the same period last year, driven by sales price growth, product mix, partially offset by the impact of higher compensation costs.

First six months 2025 results:

Business segment operating income margin increased when compared to the same period last year, driven by sales mix and lower external license fees.

First nine months 2025 results:

Sales in Health Information Systems were up 4.3%:

1 unchanged sentence

• Clinician productivity solutions declined primarily due to impacts from changing market conditions.

Business segment operating income margin increased when compared to the same period last year, driven by sales price growth, product mix, partially offset by the impact of higher compensation costs.

Purification and Filtration (11.7% and 11.7% of consolidated sales for the three and six months ended June 30, 2025)

Three months ended June 30, Six months ended June 30,

• Foreign currency translation positively impacted sales by 0.1%.

Business segment operating income margin increased when compared to the same period last year, driven by sales price growth, product mix and lower external license fees.

Other Segment Information

Purification and Filtration

Three months ended September 30, Nine months ended September 30,

(Millions) 2025 2024 2025 2024

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Percent of sales 20.1 % 10.6 % 19.3 % 11.7 %

Second quarter 2025 results:

Sales in Purification and Filtration were up 5.4%:

• Organic growth was driven by growth in both bioprocessing filtration and industrial filtration, which benefited from added production capacity, partially offset by declines in membrane OEM products.

Third quarter 2025 results:

Sales in Purification and Filtration were down (28.7)%:

• Results above represent the two months of sales prior to the close of the sale in September 2025.

• Other includes lost sales from the Company’s Purification and Filtration business that was sold in September 2025.

• Foreign currency translation positively impacted sales by 3.4%.

Business segment operating income margin increased due to volume growth, favorable sales mix and a benefit resulting from the Company stopping depreciation on assets classified as held for sale.

First six months 2025 results:

Sales in Purification and Filtration were up 2.2%:

Business segment operating income margin increased due to volume growth and favorable sales mix.

First nine months 2025 results:

Sales in Purification and Filtration were down (6.6)%:

• Other includes certain health care businesses retained by 3M India in connection with the Spin-Off.

• Foreign currency translation positively impacted growth by 0.1%.

• Other includes lost sales from the Company’s Purification and Filtration business that was sold in September 2025 and certain health care businesses retained by 3M India in connection with the Spin-Off.

• Foreign currency translation positively impacted sales by 1.0%.

Business segment operating income margin increased due to volume growth, favorable sales mix and a benefit resulting from the Company stopping depreciation on assets classified as held for sale, partially offset by additional standalone structure costs.

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Refer to Note 9 of the Company's condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for information on the Company's long-term debt and short-term borrowings.

The Company had approximately $71 million and $40 million in bank guarantees, surety bonds, and other similar instruments issued and outstanding at June 30, 2025 and December 31, 2024, respectively.

The Company had approximately $84 million and $40 million in bank guarantees, surety bonds, and other similar instruments issued and outstanding at September 30, 2025 and December 31, 2024, respectively.

These instruments are utilized in connection with normal business activities.

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Any such issuance will mature within 364 days from date of issue.

There was no commercial paper outstanding as of June 30, 2025.

There was no commercial paper outstanding as of September 30, 2025.

Cash, cash equivalents and marketable securities

As of June 30, 2025, Solventum had $492 million of cash and cash equivalents, of which approximately $395 million was held by the Company’s foreign subsidiaries and approximately $99 million was held in the United States.

$2 million of cash and cash equivalents held for sale are included in the geographic breakout.

As of September 30, 2025, Solventum had $1,642 million of cash and cash equivalents, of which approximately $1,438 million was held by the Company’s foreign subsidiaries and approximately $204 million was held in the United States.

These balances are invested in bank instruments and other high-quality fixed income securities.

As of December 31, 2024, Solventum had $762 million of cash and cash equivalents, of which approximately $611 million was held by the Company’s foreign subsidiaries and $151 million was held in the United States.

There were immaterial amounts of marketable securities at both June 30, 2025 and December 31, 2024.

There were immaterial amounts of marketable securities at both September 30, 2025 and December 31, 2024.

The increase from December 31, 2024 was driven by proceeds from the sale of the Purification and Filtration business, partially offset by repurchases of a portion of our senior notes via tender offers and a prepayment on our outstanding term loan.

Cash flows from operating, investing and financing activities are provided in the tables that follow.

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Thus, the amounts presented in the following operating, investing and financing activities tables reflect changes in balances from period to period adjusted for these effects.

Six months ended June 30,

Nine months ended September 30,

(Millions) 2025 2024

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Operating Activities

In the first six months of 2025, cash flows provided by operating activities decreased compared to the first six months of 2024 primarily due to higher year-on-year interest payments on the Company's debt, standalone company tax payments, higher annual incentive compensation payments and lower net income.

In the first nine months of 2025, cash flows provided by operating activities decreased compared to the first nine months of 2024 primarily due to lower net income, excluding the gain on sale of the Purification and Filtration business, transaction costs on sale of the business, higher inventories, and accrued compensation activity.

Investing Activities

Purchases of property, plant and equipment increased in the first six months of 2025 as compared to the first six months of 2024.

The increase in investing activities is related to proceeds from sale of the Purification and Filtration business in September 2025.

Purchases of property, plant and equipment increased in the first nine months of 2025 as compared to the first nine months of 2024.

The increase is primarily driven by additional separation related capital spending as the Company relocates manufacturing and source of supply from 3M.

1 unchanged sentence

Financing Activities

For the first six months of 2025, cash flows used by financing activities increased as compared to the first six months of 2024, primarily due to the Company's repayment of $200 million outstanding principal issued under the senior term loan credit facilities.

For the first nine months of 2025, cash flows used by financing activities increased as compared to the first nine months of 2024, primarily due to the Company's repayment of $1.9 billion of senior notes via tender offers upon completion of the sale of the Purification and Filtration business and $770 million repayment of outstanding principal issued under the senior term loan credit facility.

Material Cash Requirements from Known Contractual and Other Obligations:

51 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-Q

Item 2. Management’s Discussion and Analysis