SOLV · 10-Q · 2026Q2 · Full report

FX / Currency Headwinds

Solventum Corp · 2026-08-05 · Importance 50 · Surprise 24 · In source text

Solventum operates through foreign subsidiaries and uses foreign-currency forward contracts and cross-currency swaps to manage exchange-rate exposure. At June 30, 2026, the Company had approximately $1.2 billion of cross-currency swaps designated as net-investment hedges and expected to reclassify approximately $ million of after-tax unrealized cash-flow-hedging gains to earnings over the following 12 months. Foreign-currency movements also contributed to changes in accumulated other comprehensive income and goodwill translation during the six months ended June 30, 2026.

Key facts

• As of June 30, 2026, the total notional amount of cross-currency swaps designated as net investment hedges was approximately $1.2 billion. source
• As of June 30, 2026, the Company had an after-tax net unrealized gain associated with cash flow hedging instruments recorded in accumulated other comprehensive income of $__ million and expects to reclassify approximately $__ million of after-tax net unrealized gain to earnings over the next 12 months (amounts redacted). source
• Net increase (decrease) in cash and cash equivalents: $(475) and $(268). source
• The maximum length of time over which Solventum hedges variability in future cash flows of forecasted transactions is __ months (term redacted). source
• Solventum estimates that year-on-year foreign currency transaction effects, including hedging impacts, decreased pre-tax income by approximately $5 million and $10 million for the three and six months ended June 30, 2026, respectively. source
• For the three and six months ended June 30, 2026, the Company recognized a pre-tax loss of $__ million and a pre-tax gain of $__ million, respectively, as adjustments to cumulative translation within other comprehensive income (amounts redacted). source
• The Company uses foreign currency forward contracts, interest rate swaps and cross-currency swaps to manage risks associated with foreign currency exchange rates, interest rates and net investments in foreign operations. source

Impact estimates