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We are also exposed to the risk that our earnings and cash flows could be adversely impacted by fluctuations in interest rates. Our policy is to manage interest costs using the mix of fixed- and floating-rate debt that we …

• Changes in foreign currency exchange rates and interest rates have had, and may in the future have, an adverse effect on our results of operations, financial condition, cash flows, and liquidity.

… Both our domestic and international markets experience varying degrees of inflationary and interest rate pressures. These changes in global economic conditions may affect the demand for, and supply of, the Company’s products and services. This may result in a …

In addition, in certain of the Company’s businesses demand depends on customers’ capital spending budgets, government funding policies and interest rates, and matters of public policy and government budget, fiscal and monetary dynamics as well as product and economic …

… Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise. As of December 31, 2025, an increase of 100 basis points in interest rates would have decreased the fair …

… As a result, the Company’s primary interest rate exposure results from changes in short-term interest rates. In 2025, the average annual interest rate associated with the Company’s outstanding commercial

Borrowings under our Credit Facility bear interest at variable rates, including rates based on the Secured Overnight Financing Rate (“SOFR”), exposing us to interest rate risk. If interest rates were to increase, our debt service obligations under our variable-rate Credit Facility would increase even if the principal amount borrowed remained the same.

Interest Expense and Income. Interest expense was $38.9 million for the year ended December 31, 2025, compared to $31.2 million for the prior year. The increase in interest expense was primarily due to higher average debt levels and higher interest rates. Interest income was $3.0 million for the year ended December 31, 2025, compared to $12.7 million for the prior year. This decrease in interest income is primarily due to a decrease in money market investments.

We are also exposed to volatility due to changes in interest rates, which primarily impacts our borrowings, postretirement assets and liabilities, and investments. Changes in interest rates may impact the fair value of our fixed interest rate borrowings, the cash …

Changes in foreign currency exchange rates, equity prices, and interest rates, and unfavorable changes in economic conditions or uncertainties that affect the capital markets, could adversely affect our financial performance.

… A one percentage point increase in the average interest rate of this debt would increase the combined interest expense by approximately $2.6 million per year. Accordingly, for both potential new debt issuances and floating rate exposures, a spike in …

• increasing our vulnerability to increases in interest rates in general related to any of our indebtedness that bears interest at floating rates or when refinancing maturing debt at higher rates;

(u) Increases in interest rates and negative changes in our credit ratings from Standard & Poor's, Moody's Investor Services or Fitch Ratings causing an unfavorable impact on our cost of or access to capital.

… Increases in interest rates may increase our financing costs making it more challenging for us to incur additional debt necessary to fund our operations and strategic objectives. Our ability to make principal and interest payments will depend on our ability …

Interest income increased primarily due to increased interest rates. Interest expense increased primarily due to

finance lease obligations, including interest (assuming a weighted average interest rate of 4.62%), as well as

Net interest expense (interest expense less interest income) increased due primarily to lower cash, and cash equivalents and short-term investments balances, as well as lower interest rates on these balances when compared to 2024. See additional discussion under the …

… and other factors, including factors that are beyond our control such as the impact of foreign exchange rates and interest rates. Our failure to comply with any of these restrictions or covenants may result in an event of default under …

We have significant retirement and post retirement pension plan assets and obligations. The performance of the financial markets and interest rates impact our plan expenses and funding obligations. Significant decreases in market interest rates, decreases in the fair value of plan assets and investment losses on plan assets will increase our funding obligations and adversely impact our results of operations and cash flows.

Our business is sensitive to negative changes in general economic conditions, both inside and outside the United States. Slower global economic growth, increasing interest rates, inflationary pressures, instability and uncertainty in the markets in which we operate may adversely impact our business resulting in:

… Interest expense may fluctuate based on timing, amounts, and interest rates of term debt repaid and new term debt issued, amounts and interest rates of commercial paper borrowings, as well as amounts incurred associated with financing fees. Refer to Financial …

… Inflationary pressure is increased by factors such as supply chain disruptions, labor market tightness, actual or announced tariffs, government policies, interest rate changes, and foreign exchange rate changes. An economic slowdown or a recession could also reduce the prices our …

The Company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to reduce its overall cost of borrowing. The Company does not use leveraged swaps and, in general, does not leverage any of its investment activities that would put principal at risk.

The Company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to reduce its overall cost of borrowing. The Company does not use leveraged swaps and, in general, does not leverage any of its investment activities that would put principal at risk.

Volatility in the securities markets, interest rates, and other factors could substantially increase our defined benefit plan costs.

Interest expense decreased during fiscal 2025 compared to the prior year, primarily due to lower interest rates and lower average debt balances.

Interest expense decreased $29 million, or 4.4%, from $660 million in the 2024 period to $631 million in the 2025 period primarily due to decrease in interest rates and average debt balances.

Volatility or disruption in the securities and credit markets, including changes in interest rates, may significantly and adversely affect the value of our investment portfolio and the investment income that we derive from this portfolio.

Our $700 million, 1.65% senior notes ("2026 Notes") mature on September 1, 2026. Market interest rates have increased significantly since the 2026 Notes were issued in 2021. We expect that we will refinance the 2026 Notes at significantly higher interest rates which will significantly increase our interest expense thereby decreasing our net income attributable to UHS.

Our $700 million, 1.65% senior notes ("2026 Notes") mature on September 1, 2026. Market interest rates have increased significantly since the 2026 Notes were issued in 2021. We expect that we will refinance the 2026 Notes at significantly higher interest rates which will significantly increase our interest expense thereby decreasing our net income attributable to UHS.

For additional information on our debt, including types of debt, maturity dates, interest rates, debt covenants and available revolving credit facilities, see Note 12 to our consolidated financial statements.

In addition, the interest rates applicable to certain of our debt obligations are based on a fluctuating rate of interest determined by reference to the Secure Overnight Financing Rate (“SOFR”) or other externally-determined rates. SOFR and such other rates …

The impact that changes in interest rates would have on interest rate derivatives outstanding at September 30, 2025 and 2024, as well as the effect that changes in interest rates would have on our earnings or cash flows over a one-year period, based upon our overall interest rate exposure, were estimated as follows:

When managing interest rate exposures, we strive to achieve an appropriate balance between fixed and floating rate instruments. We may enter into interest rate swaps to help maintain this balance and manage debt and interest-bearing investments in tandem, since …

See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” for discussion on the impact of interest rate risk and market risk on our investment portfolio.

Our future results of operations and liquidity could be materially adversely affected by uncertainties surrounding macroeconomic and geopolitical factors both in the U.S. and globally. These uncertainties include any introduction or modification of tariffs or trade barriers, supply chain challenges, inflationary pressures, elevated interest rates, and disruptions in the commodity markets stemming from conflicts, such as those between Russia and Ukraine and conflicts in the Middle East.

Interest Rate Risk - The fair values of our financial instrument holdings are analyzed at year-end to determine their sensitivity to interest rate changes. In this analysis, holding all other assumptions constant and assuming a parallel shift in the interest rate curve for all maturities and for

Market Risk - - We are subject to foreign exchange risk, interest rate risk, and equity price risk. The objective of our financial risk management program is to minimize the impact of foreign exchange rate and interest rate movements on our earnings …

The Company’s uses of financial instruments to limit its exposure to interest rate and currency exchange fluctuations could expose it to risks and financial losses that may adversely affect the Company’s financial condition, liquidity, and results of operations.

For the year ended December 31, 2025, interest expense increased 7.6% as compared with the corresponding period in 2024. The increase was primarily due to higher weighted-average interest rates during the year ended December 31, 2025, when compared to the year ended December 31, 2024.

Interest expense was $68.5 million in 2025, compared to $74.6 million in 2024 and $77.4 million in 2023. The decrease in interest expense is primarily related to lower interest rates throughout the year.

In January 2025, we entered into an agreement to issue and sell EUR 100 million 10 1/2-year Senior Notes with a fixed interest rate of 3.80% (3.8% Euro Senior Notes) in a private placement, which will

(2) Represents interest that will become due on our long-term debt obligations and interest rate swap agreements, which are subject to change based on economic rates. See Note s 6 and 10 of the "Notes to Consolidated Financial Statements" for additional information on long-term debt obligations and interest rate swap agreements, respectively.

We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities on our fixed-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Solventum is exposed to changes in interest rates, including through variable rate debt and due to the fact that increases in interest rates may adversely affect the financial condition of Solventum’s counterparties in a manner that may affect their ability

Refer to Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," for further discussion of foreign exchange rates risk, and interest rates risk and commodity prices risk.

… In 2025, interest expense decreased primarily due to the repayment of approximately $2.0 billion of long-term debt in November 2024, March 2025, and September 2025, as well as the maturity of an interest rate swap associated with the …

… The modified, 5-year term loan bears interest at the Tokyo Interbank Offered Rate (TIBOR) plus a fixed spread, and the interest rate is reset quarterly. The net proceeds equated to approximately $201 million. The ¥92.0 billion loan is …

… We invest excess cash on hand in short-term financial instruments that earn market interest rates while mitigating principal risk through instrument and counterparty diversification, as well as what we believe to be prudent instrument selection. We limit our direct …

The global macroeconomic environment has continued to experience challenging conditions and uncertainty, including with respect to inflation, interest rates, monetary policy, exchange rates, tariff and trade policies and geopolitical developments, which could adversely impact our business, financial condition, cash flows …

• exposing us to the risk of increased interest rates as certain of our borrowings may in the future be at variable rates of interest;

… efficiencies, production margins, anticipated timing of generic market entries, integration of acquired businesses, anticipated impact or timing of divestitures, interest rates, tax rates, tariffs, changes in tax regimes and laws, impacts of the timing and processing of sales in the …

… Interest payments on debt are calculated for future periods using forecasted interest rates in effect at the end of 2025. Projected interest payments include the related effects of interest rate swap agreements. Certain of these projected interest payments may differ …

Interest expense in 2025 increased compared to 2024 primarily due to the impact of higher effective interest rates.

… Changes in the value of our investment assets, as a result of interest rate fluctuations, changes in issuer financial or market conditions, illiquidity or otherwise, could have an adverse effect on our equity interests. In addition, if it should become …

… Volatility in interest rates affects our interest income and the market value of our investments in debt securities of varying maturities which constitute the substantial majority of the fair value of our investments as of December 31, 2025. In addition …

Interest income decreased by $2.1 million, or 10.7%, in 2025, due primarily to a decline in interest rates and the Company having a lower average cash balance in 2025, as compared to 2024.

General global economic downturns and macroeconomic trends, including heightened inflation, capital market volatility, interest rate and currency rate fluctuations, and economic slowdown or recession, may result in unfavorable conditions. Those conditions could negatively affect demand for our products due to …

We are also exposed to market risk related to changes in interest rates. Debt of $2.507 billion at December 31, 2025 was subject to variable rates of interest, while the remaining debt balance of $43.985 billion at December …

We are also exposed to market risk related to changes in interest rates that impact the amount of the interest expense we incur with respect to our floating rate obligations as well as the value of certain investments. We periodically …

The Company invests in both fixed rate and floating rate interest earning securities which carry a degree of interest rate risk. The fair market value of fixed rate securities may be adversely impacted due to a rise in interest rates …

• local and regional economic environments and policies in the markets that we serve, including interest rates, monetary policy, inflation, economic growth, recession, commodity prices, and currency controls or other limitations on the ability to expatriate cash;

Our investment portfolio includes marketable debt securities, which are subject to changes in fair value as a result of interest rate fluctuations and other market factors. Our investment policy establishes limits on the amount and time to maturity of investments …

… Any credit rating downgrade may affect the interest rate of any debt we may incur, the fair market value of existing debt and our ability to access the capital markets generally.

We had an interest rate swap with a notional amount of $500 million to manage interest rate fluctuation related to our floating rate borrowings under the revolving credit facility, at a fixed rate of 4.65%. Our swap matured in fiscal year 2024 and we have not entered into any additional interest rate swap contracts.

Interest income for fiscal year 2025 was $4.9 million, a decrease of $3.6 million, or 42.4%, driven primarily from lower interest rates and interest earning asset balances.

Interest rates on advances of our Credit Facility are determined by a pricing matrix based on our long-term debt ratings assigned by Standard & Poor's Ratings Services (S&P) and Moody's Investors Service (Moody’s). Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. We are in compliance with all covenants related to the Credit Facility.

… Changes in business and economic conditions will impact interest rates and can cause periods of tightened credit availability and volatility in borrowing terms. In addition, there can be no assurance that we will be able to maintain our credit rating …

Interest expense, net and the respective weighted average interest rates are as follows:

We also have market risk exposure to interest rate fluctuations relating to our cash and cash equivalents. We had $4.4 billion in cash and cash equivalents as of September 30, 2025. The unfavorable impact of a hypothetical decrease in …

… However, we periodically consider various financing alternatives and may, from time to time, seek to take advantage of favorable interest rate environments or other market conditions.

… These include, but are not limited to, conditions impacting inflation, credit and capital markets, interest rates, tax law, including tax rate and policy changes, factors affecting global economic stability, tariffs and the political environment relating to health care. These and …

(1) Interest on debt and lease obligations are projected for future periods using the interest rates in effect as of December 31, 2025. Certain of these projected interest payments may differ in the future based on changes in market interest rates. Additional information regarding our leases is provided in Note 12 to the consolidated financial statements.

(2) Excludes the impact of the interest rate swaps discussed in Note 15 to our consolidated financial statements.

For the year ended December 31, 2025, changes in the fair value of our contingent consideration obligations were primarily due to changes in interest rates used to revalue our contingent consideration liabilities and the passage of time.

… The value of our investments may decline due to, among other things, increases in interest rates, downgrades of the bonds and other securities in our portfolio, negative company-specific news, biotechnology market sentiment, instability in the global financial markets that …

We maintain a significant investment portfolio of cash equivalents and short-term and long-term investments in a variety of securities, which are subject to general credit, liquidity, market and interest rate risks and will decline in value if interest …

Investment and other income. Investment and other income decreased by $212 million for the year ended December 31, 2025 compared to 2024. The decrease was driven by lower interest rates and lower average investment balances during 2025, partially offset by increased equity earnings and net gains on private equity investments. The year ended December 31, 2024 included net gains on divestitures described above, partially offset by a private equity investment reduction.

• other events or factors, including the ongoing international conflicts, recessions, rising interest rates, inflation, local and national elections, international currency fluctuations, corruption, political instability and acts of war or terrorism.

Other income, net Other income, net, increased primarily due to $79.5 million in higher net gains on equity investments and $8.7 million in higher net foreign currency gains, offset by $21.5 million in lower interest and dividend income on our cash, cash equivalents, and marketable securities portfolio. The decrease in interest income was primarily related to a change in market interest rates, as well as a decrease in the average invested balances compared to the same period in 2024.

• Interest Rates and Inflation: We have interest-generating assets and interest-bearing liabilities, including our senior unsecured notes and credit facilities. Fluctuations in interest rates could expose us to increased financial risk. In addition, high inflation, such as what we have seen in recent years, has adversely impacted and may in the future adversely impact our business and financial results.

Interest expense increased 5% to $1.0 billion in 2025, compared to 2024, primarily due to higher debt balances and a higher weighted-average interest rate on the debt. See Note 10. Debt and Credit Facilities of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information on our long-term debt and related interest rates.

As of December 31, 2025, we had approximately $8.1 billion in cash, cash equivalents and investments, which includes a $600 million draw down from our term loan facility, which is subject to general credit, liquidity, market, inflation and interest …

… Adverse macroeconomic conditions, and perceptions or expectations about current or future conditions, such as inflation, slowing growth, rising interest rates, the imposition of tariffs (either on imports or exports, which may impact us directly or indirectly through increased costs in …

Interest income decreased in 2025 compared to the same period in 2024 primarily due to lower interest rates earned on cash and cash equivalent balances.

• general economic market conditions, including elevated interest rates, new, proposed or retaliatory tariffs, uncertainty regarding changes in trade policies, including trade wars, inflationary pressures, recessions, consumer sentiment and demand, global geopolitical conflict, and industry factors unrelated to our actual performance.

Our primary interest rate risk exposure results from changes in short-term U.S. dollar interest rates. In an effort to manage interest-rate exposures, we may enter into derivative contracts to achieve an acceptable balance between fixed- and floating …

Changes in foreign currency rates, interest rate risks, and inflation or deflation affect our results of operations.

interest rates. Our future interest income is dependent on the amount of, and prevailing market interest rates on, our

investments in cash equivalents and debt securities, and fluctuations in interest rates, among other factors, could materially

• general economic conditions, including rising interest rates, inflationary pressures, recessions, consumer sentiment and demand, global political conflict and industry factors unrelated to our actual performance.

and other macroeconomic factors, including inflation, supply chain disruptions, such as recent shipping disruptions, interest rate and foreign currency rate fluctuations, and volatility in the capital markets could negatively impact our business, financial condition, and results of operations. The growth …

In addition, our ability and the ability of our Customers, suppliers and other business counterparties to obtain indebtedness and the cost thereof is dependent on credit profiles, prevailing market interest rates and other factors. Credit rating downgrades, a high interest …

The potential impacts of geopolitical instability, which may result from the actions of state and non-state actors, include supply chain and logistics disruptions, financial impacts including volatility in foreign exchange and interest rates, increased inflationary pressure on raw materials …

• pressure on healthcare budgets resulting from macroeconomic factors such as inflation, rising interest rates and the economic effects of geopolitical conflicts; and

Interest income for the years ended December 31, 2025 and 2024 was $105.6 million and $128.7 million, respectively. The decrease in Interest income for the year ended December 31, 2025 is primarily due to a lower interest rate environment in 2025 as compared to 2024.

• Uncertain macroeconomic and geopolitical factors, including as a result of changes in trade policies and practices (including the imposition of additional tariffs or threats to impose additional tariffs), worldwide inflationary pressures, currency exchange fluctuations, changes in interest rates or other …

… Certain of our customers or potential customers may also be negatively impacted by high interest rates and may find access to debt and other financing more difficult as a result.

Worsening economic conditions, including inflation, increasing interest rates, decreasing economic activity, volatility in equity and credit markets or other changes in the economic environment, may adversely affect our business, financial condition, or results of operations. For example, we depend on …

… As the notes have fixed annual interest rates, we do not have economic interest rate exposure or financial statement risk associated with changes in interest rates. The fair value of the notes, however, may fluctuate when interest rates change. See …

• exposing us to interest rate risk as a portion of our debt obligations are at variable rates;

… Our ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to prevailing economic conditions and other factors, including factors that are beyond our control, such as foreign exchange rates, interest rates …

… Common Stock, which is based on our historical practice and expectation of future dividend payments, and (iv) risk-free interest rates, which are based on quoted U.S. Treasury rates for securities with maturities approximating the options' expected lives. Expected …

… These fixed-income investments are subject to external factors that may adversely affect their market value or liquidity, such as interest rate, liquidity, market, and issuer credit risks, including actual or anticipated changes in credit ratings. The equity securities we …

Long-term debt - The carrying amounts reported in the Consolidated Balance Sheets for the amount drawn on our line-of-credit facility and long-term debt approximates fair value because our interest rate is variable and reflects current market rates.

… The risk-free interest rate is based on U.S. Treasury constant maturity interest rates with a term consistent with the expected life of the options granted. Stock option activity under the Plans for the three years ended June 30 …

Option Value and Assumptions 2025 2024 2023 Weighted-average fair value per share $141.40 $118.22 $83.59 Assumptions: Risk-free interest rate 4.4% 4.3% 4.0% Expected dividend yield 0.9% 1.1% 1.2% Expected stock price volatility 29.1% 29.9% 29.0% Expected option life (years) 6.4 6.3 6.2