Solventum SOLV Litigation provision

When making determinations about recording liabilities related to legal proceedings, the Company complies with the requirements of ASC 450, Contingencies, and related guidance, and records liabilities in those instances where it can reasonably estimate the amount of the loss and when the loss is probable. Where the reasonable estimate of the probable loss is a range, the Company records as an accrual in its financial statements the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such an estimate cannot be made. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred. Based on experience and developments, the Company reexamines its estimates of probable liabilities and associated expenses and receivables each period, and whether a loss previously determined to not be reasonably estimable and/or not probable is now able to be reasonably estimated or has become probable. Where appropriate, the Company makes additions to or adjustments of its reasonably estimated losses and/or accruals. As a result, the current accruals and/or estimates of loss and the estimates of the potential impact on the Company’s consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company will likely change over time. During the three months ended June 30, 2026, the Company recognized $204 million in legal charges. There were no legal charges recognized in the three months ended March 31, 2026. During the three and six months ended June 30, 2025, the Company recognized zero and $12 million in legal charges, respectively. During the six months ended June 30, 2026 and 2025, the Company made payments of zero and $16 million, respectively, related to a legal settlement, which reduced the accrued litigation balance. At June 30, 2026 and December 31, 2025, accrued litigation costs were $235 million and $31 million, respectively.