Company: ICUI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000883984-25-000035
Chunk: 128

Company: ICU MEDICAL INC/DE
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 128
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 compel OPF to purchase our retained 40% ownership interest in the joint venture. The call and put options are exercisable at certain specified dates and for specified amounts based on certain historical financial metrics as set forth in the joint venture's Operating Agreement beginning five years after the closing. The call and put options were not recorded in our condensed consolidated financial statements since they do not meet the definition of a derivative specifically due to the absence of a net settlement feature.Related Party TransactionsWe account for our retained 40% interest in the joint venture as an equity method investment (see Note 11: Investment Securities), having the ability to exercise significant influence over operating and financial policies of the joint venture, primarily through having two of the five seats on its Board of Directors. Additionally, in connection with the closing of the transaction on May 1, 2025, we entered into certain agreements with OPF, which cover the governance of the joint venture and require us to provide certain commercial, logistics, manufacturing supply, administrative, and other services for a period of up to five years from transaction close.The following table presents condensed consolidated financial statement data resulting from transactions with the joint venture (in thousands): Three months ended September 30,Nine months ended September 30,20252025Condensed consolidated statement of operations:Manufacturing services agreement revenue$3,632 $7,145 Manufacturing services agreement cost of goods sold$3,428 $6,529 Service fees - Otsuka ICU Medical LLC (cost of goods sold)$311 $428 Service fees - Otsuka ICU Medical LLC (selling, general & administrative)$2,843 $4,917 Equity in (losses) earnings of unconsolidated affiliates$(1,541)$1,296  The joint venture is a pass-through entity for income tax purposes and, as such, does not record income tax at the entity level. We record our equity in (losses) earnings of unconsolidated affiliates before any related income tax recognized as a separate line item in our condensed consolidated statements of operations. Income taxes on our share of the joint venture's earnings are included within provision for income taxes in our condensed consolidated statements of operations.

13

ICU MEDICAL, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

As of September 30, 2025, a $0.5 million related-party receivable to the joint venture was included within