Solventum CorpSOLV

Solventum Corp Leases Disclosure

10-KFiled Feb 27, 20262 min read
Leases
Solventum's lease arrangements include both operating and finance leases. Amounts associated with finance leases were not material to the consolidated financial statements for all periods presented.
During 2024, Solventum entered into a finance lease arrangement through April 2046 for the future location of the Company's principal office in Eagan, Minnesota. The new location will include office, R&D and manufacturing space. The lease will commence on the date that construction is complete and control of the location is transferred to the Company, which is anticipated to be the first quarter of 2026. The Company will record approximately $200 million of finance lease right-of-use assets with corresponding finance lease liabilities upon commencement.
Year ended December 31,
(Millions)202520242023
Operating lease cost$122 $75 $28 
Variable lease costs, short-term lease cost and income related to sub-lease activity is immaterial for the Company.
Supplemental balance sheet, lease term and discount rate information related to operating leases is as follows:
December 31,
(Millions, unless noted)Location on face of Balance Sheet20252024
Operating leases:
Operating lease right of use assetsOther assets$214 $176 
Current operating lease liabilitiesOther current liabilities70 87 
Noncurrent operating lease liabilitiesOther liabilities142 86 
Total operating lease liabilities$212 $173 
Weighted average remaining lease term (in years):5.42.9
Weighted average discount rate:5.7 %4.2 %
Supplemental cash flow information related to operating lease is as follows:
Year ended December 31,
(Millions)202520242023
Cash paid for amounts included in the measurement of lease liabilities:$115 $76 $29 
Right of use assets obtained in exchange for operating lease liabilities:
152 148 37 
There was no sale-leaseback activity for the periods presented.
Maturities of operating leases as of December 31, 2025 are as follows:
(Millions)
2026$72 
202749 
202831 
202919 
203014 
After 203044 
Total expected lease payments
229 
Less: Amounts representing interest(17)
Present value of future minimum lease payments$212 

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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