5.Notes to the consolidated statements of income

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a)Revenue

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The Company recognized the following revenue in the consolidated statements of income for the years ended December 31, 2025, 2024, and 2023:

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The following table contains a disaggregation of revenue by categories for the years ended December 31, 2025, 2024, and 2023:

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The Company recognized the following amounts as receivables and contract liabilities relating to contracts with customers for the years ended December 31, 2025 and 2024:

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Impairment loss in the amount of €29,252, €18,694, and €111,193 for the years ended December 31, 2025, 2024, and 2023, respectively, related to receivables arising from contracts with customers.

The change in contract liabilities during the period results from the ordinary course of business.

Contract liabilities primarily relate to advance payments from customers and to sales of dialysis machines where revenue is recognized upon installation and provision of the necessary technical instructions.

Contract liabilities are shown in the consolidated balance sheet in line items “Current provisions and other current liabilities” and “Non-current provisions and other non-current liabilities.”

At December 31, 2025, revenue recognized that was included in contract liabilities at the beginning of the period was €46,252 (2024: €31,713).

At December 31, 2025, performance obligations of €771,302 (2024: €697,620) are unsatisfied (or partially unsatisfied).

The expected recognition of the transaction price allocated to unsatisfied performance obligations as revenue for the next five years and in the aggregate for the five years thereafter is as follows:

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b)Selling, general and administrative expense

Selling, general and administrative expense recorded in the consolidated statements of income comprises both distribution costs as well as general and administrative expense. Distribution costs are generated in the selling, marketing, and warehousing functions of the Company which are not attributable to production or R&D. General and administrative expense is generated in the administrative function of the Company’s business and is not attributable to selling, production or R&D.

The following table discloses the distribution costs as well as general and administrative expense recorded by the Company for the years ended December 31, 2025, 2024, and 2023:

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c)Cost of materials

The cost of materials for the year ended December 31, 2025, 2024, and 2023 consisted of the following:

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d)Personnel expenses

Personnel expenses included within costs of revenue, selling, general and administrative expenses, and research and development expenses consisted of the following:

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The Company employed the following personnel on a total headcount basis, on average, for the following years:

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(1)The Company reclassified personnel on a total headcount basis, on average, in the amount of 1,071 and 1,185 from “Sales and marketing” to “Administration” for the years ended December 31, 2024 and 2023 as a result of a change in accounting policy made to improve the presentation of core administrative functions that support the Company’s operational infrastructure, particularly in relation to patient service - related costs within the revenue cycle management process, including insurance verification, pre-authorizations, coding, claims submission, cash posting, and denial management.

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e)Other operating income and expense

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The following table contains reconciliations of the amounts included in other operating income and expense for the years ended December 31, 2025, 2024, and 2023:

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Included within the “income from strategic transactions and programs” line item in other operating income are the gains from divestitures of certain businesses in connection with strategic programs such as Legacy Portfolio Optimization. The amount presented for the year ended December 31, 2025 primarily relates to the recovery of receivables associated with the divestiture of the Company’s service business in Ecuador, gains from the sale of the Company’s service businesses in Kazakhstan and Malaysia, and the gain from the sale of select assets of the Company’s wholly owned Spectra Laboratories. The amount presented for the year ended December 31, 2024 primarily relates to the revaluation of certain assets held for sale in the amount of €14,896 and gains from the divestiture of certain businesses in the amount of €89,248. The gains from the divestiture of certain businesses relate primarily to the divestiture of Cura Day Hospitals Group in Australia and the divestiture of certain clinics, both as part of Legacy Portfolio Optimization. The amount presented for the year ended December 31, 2023 relates to a gain on the divestiture of National Cardiovascular Partners (NCP).

Included within the “expenses from strategic transactions and programs” line item in other operating expense are the divestitures (including proposed divestitures as of each reporting date and associated impairment losses) of certain businesses in connection with strategic programs such as Legacy Portfolio Optimization and the FME25+ Program. For further information on the proposed divestitures and associated impairment losses, see note 4. Consistent with the Company’s policy to present impairment losses within other operating expense, such costs related to costs of revenue, selling, general and administrative expense, or R&D expense are included within other operating expense. “Expenses from strategic transactions and programs” primarily consist of:

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Expenses from strategic transactions and programs comprised the following for the years ended December 31, 2025, 2024, and 2023:

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For more information on the disposal groups classified as held for sale, see note 4.

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f)Net interest

Net interest in the amount of €314,798 (2024: €335,469 and 2023: €336,423) included interest expense of €384,409 (2024: €407,044 and 2023: €424,640) and interest income of €69,611 (2024: €71,575 and 2023: €88,217). Interest expense resulted mainly from the Company’s financial liabilities including outstanding bonds and loans (see note 16 and note 17), lease liabilities and lease liabilities from related parties (see note 6 b) and note 24), foreign currency swaps and, in 2024, interest expense on taxes related to a settlement. In 2025, interest income primarily resulted from bank deposits, investments and debt securities, foreign currency swaps, finance lease receivables, and trade accounts receivable from unrelated parties. In 2024, interest income primarily resulted from bank deposits, investments and debt securities, finance lease receivables, and foreign currency swaps. In 2023, interest income primarily resulted from investments, debt securities and royalty receivables, interest on lease receivables, and interest on bank deposits.

g)Income taxes

Income before income taxes is attributable to the following geographic locations:

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Income tax expense (benefit) for the years ended December 31, 2025, 2024, and 2023 consisted of the following:

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The expected corporate income tax expense is computed by applying the German corporation tax rate (including the solidarity surcharge) and the trade tax rate on income before income taxes. The German combined statutory tax rates were 30.28%, 30.34%, and 30.32% for the fiscal years ended December 31, 2025, 2024, and 2023, respectively. A reconciliation between the expected and actual income tax expense is shown below. In 2025, the decrease in non - deductible expenses as compared to 2024 results from lower non - deductible expenses related to Legacy Portfolio Optimization while the change from tax expense for prior years recorded in 2024 to tax income for prior years recorded in 2025 is mainly related to the derecognition of certain deferred tax liabilities initially established in connection with the 2022 Interwell Health transaction (Interwell Health Deferred Tax Reversal) (see note 26). In Germany, the legislature implemented a gradual reduction of the corporate tax rate from 15% to 10% from 2028 until 2032 leading to increased effects in tax rate changes. The increase in withholding taxes in 2025 as compared to 2024 mainly relates to non - deductible and non - creditable foreign taxes in the U.S.

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The tax effects of the temporary differences and net operating losses that give rise to deferred tax assets and liabilities at December 31, 2025 and 2024, are presented below:

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In the consolidated balance sheets, the accumulated amounts of deferred tax assets and liabilities are shown as follows:

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The change in the balance of deferred tax assets and deferred tax liabilities does not equal the deferred tax expense/(benefit) due to deferred taxes that are booked directly to equity, the effects of exchange rate changes on tax assets and liabilities denominated in currencies other than euro, and the acquisition and disposal of entities as part of ordinary activities.

The net operating losses included in the table below reflect U.S. federal tax, German corporate income tax, and other tax loss carryforwards in the various countries in which the Company operates, and expire as follows:

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Included in the balance of net operating loss carryforwards at December 31, 2025 are €689,694 (2024: €731,303) not expected to be absorbed. Deferred tax assets regarding this portion are not recognized. The utilization of deferred tax assets arising from entities which suffered a loss is dependent on future taxable profits in excess of the profits arising from the reversal of existing taxable differences. Additionally, at December 31, 2025 and 2024, the Company had an unrecognized net deferred tax asset arising from unutilized notional interest deduction of $479,008 and $323,999, respectively (€407,667 and €311,867, respectively).

In assessing the realizability of deferred tax assets, management considers to which extent it is probable that the deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences and tax loss carryforwards become deductible. Management considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment and believes it is probable the Company will realize the benefits of these deferred tax assets at December 31, 2025.

The Company provides for income taxes and foreign withholding taxes on the cumulative earnings of foreign subsidiaries and foreign subsidiaries in which the Company has ownership of less than 100% that will not be reinvested. At December 31, 2025, the Company provided for €10,523 (2024: €8,643) of deferred tax liabilities associated with earnings that are likely to be distributed in the following year(s). Provision has not been made for additional taxes on €8,967,622 (2024: €9,558,889) undistributed earnings of foreign subsidiaries as these earnings are considered indefinitely reinvested. The earnings could become subject to additional tax if remitted or deemed remitted as dividends; however, calculation of such additional tax is not practicable. These taxes would predominantly comprise foreign withholding tax on dividends of foreign subsidiaries, and German income tax; however, those dividends and capital gains would generally be 95% tax free for German tax purposes.

At December 31, 2025, the Company recognized income tax expenses related to Pillar Two income taxes in the amount of €7,630 (2024: €5,702). The main jurisdictions in which exposures to this tax exist include Malta and Türkiye.