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Item 8. Financial Statements and Supplementary Data

2026-02-20 compared with 2025-02-20 · 402 added, 450 removed, 1042 unchanged (45% of the section changed)

Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm - Internal Controls Over Financial Reporting

(Ernst & Young LLP, Tysons, VA, Auditor Firm ID:

Report of Independent Registered Public Accounting Firm - Consolidated and Combined Financial Statements (Ernst & Young LLP, Tysons, VA, Auditor Firm ID:

Consolidated and Combined Statements of Operations 49

Consolidated and Combined Statements of Comprehensive Income 50

Report of Independent Registered Public Accounting Firm - Consolidated Financial Statements (Ernst & Young LLP, Tysons, VA, Auditor Firm ID:

Consolidated Statements of Operations 49

Consolidated Statements of Comprehensive Income 50

Consolidated Balance Sheets 51

Consolidated and Combined Statements of Equity 52

Consolidated and Combined Statements of Cash Flows 53

Notes to Consolidated and Combined Financial Statements 54

Consolidated Statements of Equity 52

Consolidated Statements of Cash Flows 53

Notes to Consolidated Financial Statements 54

Organization and Basis of Presentation 54

14 unchanged sentences

Segment Information 86

Related Party Transactions 89

Subsequent Events 88

4 unchanged sentences

In our opinion, ESAB Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated and combined statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2024 and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 20, 2025 expressed an unqualified opinion thereon.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of EWM GmbH (“EWM”) (acquired on August 22, 2025), which is included in the 2025 consolidated financial statements of the Company and constituted approximately 8% of total assets as of December 31, 2025 and approximately 2% of net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of EWM.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025 and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 20, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be

independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

16 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of ESAB Corporation (the Company) as of December 31, 2024 and 2023, the related consolidated and combined statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of ESAB Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

36 unchanged sentences

ESAB CORPORATION

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF OPERATIONS

Dollars in thousands, except per share amounts

7 unchanged sentences

Operating income 412,170 447,450 404,166

Pension settlement loss (gain) 12,155 — ( 9,136 )

Pension settlement loss — 12,155 —

Interest expense and other, net 83,910 64,890 85,074

14 unchanged sentences

Net income per share - diluted $ 3.67 $ 4.31 $ 3.36

See Notes to Consolidated and Combined Financial Statements.

See Notes to Consolidated Financial Statements.

ESAB CORPORATION

CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Dollars in thousands

2 unchanged sentences

Net income $ 233,232 $ 270,748 $ 211,024

Other comprehensive (loss) income:

Foreign currency translation, net of tax expense (benefit) of $ 6,141 , $ 4,545 and $( 2,930 )

Other comprehensive income (loss):

Foreign currency translation, net of tax (benefit) expense of $( 12,865 ), $ 6,141 and $ 4,545

190,923 ( 108,472 ) 47,258

Unrealized (loss) gain on derivatives designated and qualifying as cash flow hedges, net of tax (benefit) expense of $( 1,611 ), $( 1,087 ) and $ 3,240

Unrealized loss on derivatives designated and qualifying as cash flow hedges, net of tax benefit of $( 497 ), $( 1,611 ) and $( 1,087 )

( 1,816 ) ( 5,554 ) ( 3,732 )

Defined benefit pension and other post-retirement plan activity, net of tax expense (benefit) of $ 2,458 , $ 2,639 and $( 1,840 )

Defined benefit pension and other post-retirement plan activity, net of tax (benefit) expense of $( 388 ) , $ 2,458 and $ 2,639

( 771 ) 8,918 7,338

Other comprehensive (loss) income ( 105,108 ) 50,864 ( 158,425 )

Other comprehensive income (loss) 188,336 ( 105,108 ) 50,864

Comprehensive income 421,568 165,640 261,888

1 unchanged sentence

Comprehensive income attributable to ESAB Corporation $ 416,624 $ 161,246 $ 256,001

See Notes to Consolidated and Combined Financial Statements.

See Notes to Consolidated Financial Statements.

ESAB CORPORATION

24 unchanged sentences

Total liabilities 2,554,565 2,225,726

Common stock - $ 0.001 par value - Authorized 600,000,000 ;

Common stock - $ 0.001 par value - 600,000,000 shares authorized;

60,721,079 and 60,517,574 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

6 unchanged sentences

Total liabilities and equity $ 4,766,094 $ 4,033,975

See Notes to Consolidated and Combined Financial Statements.

See Notes to Consolidated Financial Statements.

ESAB CORPORATION

CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY

CONSOLIDATED STATEMENTS OF EQUITY

Dollars in thousands, except share and per share amounts

Common Stock Additional Paid-in Capital Retained Earnings Former Parent’s Investment Accumulated Other Comprehensive Loss Noncontrolling Interest Total

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Noncontrolling Interest Total

Shares Amount

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Net income — — — 205,285 — 5,739 211,024

Distributions to noncontrolling owners — — — — — — ( 3,420 ) ( 3,420 )

Dividends declared ($ 0.23 per share)

— — — ( 13,959 ) — — ( 13,959 )

Former Parent Common stock-based award activity — — — — 1,728 — — 1,728

Net Transfers from Former Parent, including Separation Adjustments — — 4,346 — 70,643 ( 59,263 ) — 15,726

Net consideration paid to Former Parent, in connection with the Separation — — — — ( 1,200,000 ) — — ( 1,200,000 )

Issuance of common stock in connection with the Separation and reclassification of Net Investment from Former Parent 60,034,311 60 1,849,371 — ( 1,849,431 ) — — —

Distributions to noncontrolling owners — — — — — ( 3,880 ) ( 3,880 )

Other comprehensive loss, net of tax benefit of $ 6,097

— — — — 50,716 148 50,864

Former Parent Common stock-based award activity 60,414 — 12,187 — — — — 12,187

Common stock-based award activity 200,909 — 15,150 — — — 15,150

Balance at December 31, 2023

3 unchanged sentences

— — — ( 18,219 ) — — ( 18,219 )

Distributions to noncontrolling owners — — — — — — ( 3,880 ) ( 3,880 )

Distributions and purchases relating to noncontrolling owners — — 2,860 — ( 1,706 ) ( 5,407 ) ( 4,253 )

Other comprehensive income, net of tax expense of $ 6,988

6 unchanged sentences

— — — ( 23,140 ) — — ( 23,140 )

Distributions and purchases relating to noncontrolling interest — — 2,860 — — ( 1,706 ) ( 5,407 ) ( 4,253 )

Other comprehensive loss, net of tax expense of $ 6,988

Distributions and purchases relating to noncontrolling owners — — — — — 1,300 1,300

Other comprehensive loss, net of tax benefit of $( 13,750 )

— — — — 189,858 ( 1,522 ) 188,336

2 unchanged sentences

60,721,079 $ 61 $ 1,904,889 $ 800,806 $ ( 539,716 ) $ 45,489 $ 2,211,529

See Notes to Consolidated and Combined Financial Statements.

See Notes to Consolidated Financial Statements.

ESAB CORPORATION

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in thousands

5 unchanged sentences

Depreciation, amortization and other impairment charges 84,105 66,790 75,034

Net gain on sale of property, plant and equipment ( 5,645 ) ( 986 ) ( 1,570 )

Stock-based compensation expense 16,937 19,780 16,122

Deferred income tax ( 2,601 ) ( 25,408 ) ( 20,199 )

Deferred income tax benefit ( 35,664 ) ( 2,601 ) ( 25,408 )

Non-cash interest expense 2,864 2,886 1,195

Pension settlement loss (gain) 12,155 — ( 9,136 )

Pension settlement loss — 12,155 —

Changes in operating assets and liabilities:

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Proceeds from borrowings on Senior Notes — 700,000 —

Proceeds from borrowings on Term Loans — — 1,000,000

Proceeds from borrowings on revolving credit facility and other 205,000 574,150 805,881

Repayments of borrowings on Term Loans ( 602,500 ) ( 12,500 ) —

Repayments of borrowings on revolving credit facility and other ( 237,005 ) ( 763,173 ) ( 585,491 )

Payment of debt issuance costs and other ( 13,156 ) ( 972 ) ( 6,206 )

Proceeds from borrowings on Term Loan 350,000 — —

Proceeds from borrowings on revolving credit facilities and other 410,715 205,000 574,150

Repayments of borrowings on Term Loan ( 385,000 ) ( 602,500 ) ( 12,500 )

Repayments of borrowings on revolving credit facilities and other ( 217,149 ) ( 237,005 ) ( 763,173 )

Payment of debt issuance costs ( 5,396 ) ( 10,423 ) —

Payment of dividends ( 21,913 ) ( 16,992 ) ( 13,342 )

Consideration to Former Parent in connection with the Separation — — ( 1,200,000 )

Distributions to noncontrolling interest holders ( 4,171 ) ( 3,678 ) ( 3,880 )

Transfers from Former Parent, net — — 2,847

Other financing ( 13,385 ) ( 2,733 ) ( 972 )

Net cash provided by (used in) financing activities 113,701 31,669 ( 219,717 )

Effect of foreign exchange rates on Cash and cash equivalents 42,119 ( 34,017 ) ( 18,555 )

Increase in Cash and cash equivalents 147,355 29,979 30,815

(Decrease) increase in Cash and cash equivalents ( 63,495 ) 147,355 29,979

Cash and cash equivalents, beginning of period 249,358 102,003 72,024

3 unchanged sentences

Income tax payments, net $ 92,690 $ 94,525 $ 132,902

See Notes to Consolidated and Combined Financial Statements.

See Notes to Consolidated Financial Statements.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Organization and Basis of Presentation

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ESAB provides its partners with fabrication technology advanced equipment, consumables, gas control equipment, robotics and digital solutions.

The Company’s rich history of innovative products, workflow solutions and its business management system, ESAB Business Excellence (“EBX”), enables the Company’s purpose of Shaping the world we imagine TM .

The Company’s products are utilized to solve challenges in a wide range of industries, including cutting, joining and automated welding.

The Company’s rich history of innovative products, workflow solutions and its business management system, ESAB Business Excellence (“EBXai”), enables the Company’s purpose of Shaping the world we imagine TM .

The Company’s products are utilized to solve challenges in a wide range of industries, including cutting, joining, automated welding and gas control.

The Company conducts its operations through two reportable segments.

These segments consist of the “Americas,” which includes operations in North America and South America and “EMEA & APAC,” which includes Europe, Middle East, India, Africa and Asia Pacific.

These segments consist of the “Americas,” which includes operations in North America and South America and “EMEA & APAC,” which includes Europe, the Middle East, India, Africa and Asia Pacific.

The Company’s fiscal year ends December 31.

The Company’s first three quarters end on the last business day of the 13th week after the end of the prior quarter.

Separation from Enovis

On April 4, 2022 (the “Distribution Date”), Colfax Corporation (“Colfax,” “Enovis” or the “Former Parent”) completed the spin-off of Colfax’s Fabrication Technology business and certain other corporate entities, through a tax-free, pro rata distribution (the “Distribution”) of 90 % of the outstanding common stock of ESAB to Colfax stockholders (the spin-off and related distribution, collectively, the “Separation”).

To effect the Separation, each Colfax stockholder of record as of close of business on March 23, 2022 received one share of ESAB common stock for every three shares of Colfax common stock held on the record date.

As of the year ended December 31, 2022, Enovis no longer owned any of the Company’s outstanding common stock.

In connection with the Separation, on April 4, 2022, ESAB and Enovis entered into a separation and distribution agreement as well as various other related agreements (collectively the “Separation Agreements”) that govern the Separation and the relationships between the parties going forward, including a transition services agreement, an employee matters agreement, a tax matters agreement, an intellectual property matters agreement and license agreement for EBX.

Refer to Note 21, “Related Party Transactions” for further details.

The Company’s first three quarters end on the last business day of the 13th complete week after the end of the prior quarter.

Basis of Presentation

The accompanying Consolidated Financial Statements present the Company’s historical financial position, results of operations, changes in equity and cash flows in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) in conformity with generally accepted accounting principles in the United States (“GAAP”).

The Consolidated Financial Statements reflect, in the opinion of management, all adjustments necessary to present fairly the Company’s results of operations, financial position and cash flows as of and for the periods indicated.

Intercompany transactions and accounts are eliminated in consolidation.

The Company’s Consolidated Financial Statements include all majority-owned subsidiaries over which the Company exercises control and, when applicable, entities or joint ventures for which the Company has a controlling financial interest or is the primary beneficiary.

When protective rights, substantive rights or other factors exist, further analysis is performed to determine whether or not there is a controlling financial interest.

The Consolidated Financial Statements reflect the assets, liabilities, revenues and expenses of consolidated subsidiaries and the noncontrolling parties’ ownership share is presented as noncontrolling interest.

Russia and Ukraine Conflict

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While ESAB continues to closely monitor the situation and evaluate options, the Company is meeting current contractual obligations while addressing applicable laws and regulations.

For the year ended December 31, 2024, Russia represented approximately 5 % of the Company’s total revenue, and approximately $ 13 million of its Net income.

Excluding any goodwill allocation, Russia has approximately 4 % of the Company’s total net assets as of December 31, 2024, including approximately $ 30 million of Cash and cash equivalents that may be subject to delays in withdrawing from Russia, based upon the current environment at that time.

For the year ended December 31, 2025, Russia represented approximately 5 % of the Company’s Net sales, and approximately $ 9 million of its Net income.

Russia has approximately 5 % of the Company’s total net assets as of December 31, 2025, including approximately $ 50 million of Cash and cash equivalents that may be subject to delays in withdrawing from Russia, based upon the current environment at that time.

In case of the disposition of the Russia business, a portion of goodwill would need to be allocated and disposed of at the relative fair value attributable to the Russia business.

Russia has a cumulative translation loss of approximately $ 130 million as of December 31, 2024, which could be realized upon a transition out.

Russia has a cumulative translation loss of approximately $ 110 million as of December 31, 2025, which would be realized upon a transition out.

The Company is closely monitoring developments in Ukraine and Russia.

Changes in laws and regulations or other factors impacting the Company’s ability to fulfill contractual obligations could have an adverse effect on the results of operations and cash flows.

Basis of Presentation

The accompanying Consolidated and Combined Financial Statements present the Company’s historical financial position, results of operations, changes in equity and cash flows in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) in conformity with generally accepted accounting principles in the United States (“GAAP”).

The Consolidated and Combined Financial Statements reflect, in the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations as of and for the periods indicated.

Intercompany transactions and accounts are eliminated in consolidation.

The combined financial statements for the period prior to the Separation were derived from Enovis’s consolidated financial statements and accounting records and prepared in accordance with GAAP for the preparation of carved-out combined financial statements.

Through the date of the Separation, all revenues and costs as well as assets and liabilities directly associated with ESAB have been included in the combined financial statements.

Prior to the Separation, the combined financial statements also

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

included allocations of certain general, administrative, sales and marketing expenses from Enovis’s corporate office and from other Enovis businesses to the Company and allocations of related assets, liabilities and the Former Parent’s investment, as applicable.

The allocations were determined on a reasonable basis, however, the amounts are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company been an entity that operated independently of Enovis during the applicable periods.

Related party allocations prior to the Separation, including the method for such allocation, are discussed further in Note 21, “Related Party Transactions.” Transactions with the Former Parent are reflected in the accompanying Consolidated and Combined Statements of Equity as “Net Transfers from Former Parent, including Separation Adjustments” for the year ended December 31, 2022.

For the periods subsequent to April 4, 2022, the financial statements are presented on a consolidated basis and no longer include any allocations of expenses from Enovis, as the Company became a standalone public company.

Summary of Significant Accounting Policies

Principles of Consolidation

The Company’s Consolidated and Combined Financial Statements include all majority-owned subsidiaries over which the Company exercises control and, when applicable, entities or joint ventures for which the Company has a controlling financial interest or is the primary beneficiary.

When protective rights, substantive rights or other factors exist, further analysis is performed to determine whether or not there is a controlling financial interest.

The Consolidated and Combined Financial Statements reflect the assets, liabilities, revenues and expenses of consolidated subsidiaries and the noncontrolling parties’ ownership share is presented as a noncontrolling interest.

All significant intercompany accounts and transactions have been eliminated.

Equity Method Investments

2 unchanged sentences

If the decline in fair value is considered to be other-than-temporary, an impairment loss is recorded and the investment is written down to a new carrying value.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Revenue Recognition

11 unchanged sentences

As control typically transfers to the customer upon shipment of the product in these circumstances, revenue is generally recognized at that point in time.

Revenue recognition and billing typically occur simultaneously for

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

contracts recognized at a point in time.

Revenue recognition and billing typically occur simultaneously for contracts recognized at a point in time.

Therefore, we do not have material revenues in excess of customer billings or billings to customers in excess of recognized revenues.

4 unchanged sentences

The Company collects various taxes and fees as an agent in connection with the sale of products and remits these amounts to the respective taxing authorities.

These taxes and fees have been presented on a net basis within Net sales in the Consolidated and Combined Statements of Operations and are recorded as a component of Accrued liabilities in the Consolidated Balance Sheets until remitted to the respective taxing authority.

These taxes and fees have been presented on a net basis within Net sales in the Consolidated Statements of Operations and are recorded as a component of Accrued liabilities in the Consolidated Balance Sheets until remitted to the respective taxing authority.

Research and Development Expense

Research and development costs of $ 39.2 million , $ 38.8 million and $ 36.0 million for the years ended December 31, 2024 , 2023 and 2022 , respectively, are expensed as incurred and are included in Selling, general and administrative expense in the Consolidated and Combined Statements of Operations.

Research and development costs of $ 44.0 million , $ 39.2 million and $ 38.8 million for the years ended December 31, 2025 , 2024 and 2023 , respectively, are expensed as incurred and are included in Selling, general and administrative expense in the Consolidated Statements of Operations.

These amounts do not include development and application engineering costs incurred in conjunction with fulfilling customer orders and executing customer projects.

5 unchanged sentences

Estimated credit losses are reviewed periodically.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Inventories are valued at the lower of cost or net realizable value.

Fixed manufacturing overhead costs are allocated to inventory based on normal production capacity and abnormal manufacturing activities are recognized as period costs.

As of December 31, 2023 , cost for a substantial portion of United States inventories was determined using the last-in, first-out (“LIFO”) method.

The value of inventory stated on a LIFO basis as of December 31, 2023 was $ 107.8 million and t he valuation of LIFO inventories was made at the end of the year based on inventory levels and costs at that time.

Cost of other inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) method.

During the fourth quarter of 2024 , the Company changed its inventory costing methodology from the previously disclosed LIFO method to the FIFO method for a portion of its inventory, as of the year ended December 31, 2024 all inventory is valued under FIFO.

Cost of inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) method.

During the fourth quarter of 2024 , the Company changed its inventory costing methodology from the last-in, first-out (“LIFO”) method to the FIFO method for a portion of its inventory.

As of the year ended December 31, 2024, all inventory is valued under FIFO.

The Company performed this change because it believes FIFO is preferable given it provides a more consistent method for valuing inventory across the Company, better matches costs with revenues, improves comparability with peers and better reflects the current value of inventory at the balance sheet date.

The LIFO expense for the years ended December 31, 2023 and 2022 were $ 2.1 million and $ 3.3 million, respectively which are not considered material to the Company’s financial statements.

The LIFO expense for the year ended December 31, 2023 was $ 2.1 million, which is not considered material to the Company’s financial statements.

The Company recorded the pre-tax cumulative benefit related to this change in accounting principle of $ 4.3 million as a reduction of Cost of sales for the year ended December 31, 2024.

Since these amounts are immaterial to all periods presented, the impact of this change was not retrospectively reflected in prior years.

For further information, refer to Note 11, “Inventories, Net.”

Reserves are maintained for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the net realizable value based upon assumptions about future demand and market conditions.

The reserve for excess and obsolete inventory was $ 39.2 million and $ 41.2 million as of December 31, 2025 and 2024, respectively.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Property, Plant and Equipment

Property, plant and equipment, net is stated at historical cost, which includes the fair values of such assets acquired through acquisitions and depreciated by the straight-line method over the estimated useful lives of the related assets.

Repair and maintenance expenditures are expensed as incurred unless the repair extends the useful life of the asset.

10 unchanged sentences

In certain instances, the Company may elect to forgo the qualitative assessment and proceed directly to the quantitative impairment test.

If the carrying value of a reporting unit exceeds its fair value, goodwill of that reporting unit is impaired and an impairment loss is recorded equal to the excess of the reporting unit’s carrying value over its fair value.

When a quantitative impairment test is needed, the Company measures fair value of reporting units based on a present value of future discounted cash flows.

The discounted cash flow models indicate the fair value of the reporting units based on the present value of the cash flows that the reporting units are expected to generate in the future.

Significant estimates in the discounted cash flow models include the weighted-average cost of capital, net sales and profitability of our business.

For the years ended December 31, 2024, 2023 and 2022, a qualitative Goodwill impairment assessment was performed for the three reporting units, all of which indicated no impairment existed and therefore, no impairment charges were recorded for the respective periods.

When a quantitative impairment test is performed, the Company measures fair value of reporting units based on a combination of the income approach and market approach.

Under the income approach, the Company uses a discounted cash flow model that calculates the fair value as the present value of the cash flows of the reporting units.

Under the market approach, the fair value of the business based on comparison against certain market information.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions.

These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, value of net operating losses, future economic and market conditions and determination of appropriate market comparables.

Management bases fair value estimates on assumptions it believes to be reasonable but that are unpredictable and inherently uncertain.

Actual future results may differ from these estimates and the estimate is inherently sensitive to any material changes to the inputs noted above;

these changes could potentially impact the fair value of reporting units.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the year ended December 31, 2025, a quantitative goodwill impairment assessment was performed and for the years ended December 31, 2024 and 2023, a qualitative goodwill impairment assessment was performed for the three reporting units, all of which indicated no impairment existed and therefore, no impairment charges were recorded for the respective periods.

No material events that would represent impairment indicators have occurred subsequent to the performance of the 2025 annual impairment test.

6 unchanged sentences

Significant estimates in this approach include projected revenues and royalty and discount rates for each trade name evaluated.

At the impairment testing date, the first day of the fourth quarter, quantitative impairment tests were performed for all the indefinite-lived trade name brands for the years ended December 31, 2024, 2023 and 2022, all of which indicated no impairment existed.

Any material deviation in actual results could affect the calculated fair value of the intangible asset.

At the impairment testing date, the first day of the fourth quarter, quantitative impairment tests were performed for all the indefinite-lived trade names for the years ended December 31, 2025, 2024 and 2023, all of which indicated no impairment existed.

Impairment of Long-Lived Assets Other than Goodwill and Indefinite-Lived Intangible Assets

2 unchanged sentences

The Company assesses its long-lived assets and definite-lived intangible assets for impairment whenever facts and circumstances indicate that the carrying amounts may not be fully recoverable.

To analyze recoverability, the Company projects

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

undiscounted net future cash flows over the remaining lives of such assets.

To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining lives of such assets.

If these projected cash flows are less than the carrying amounts, an impairment loss equal to the difference between the carrying amount of the asset and its fair value would be recognized, resulting in a write-down of the assets with a corresponding charge to earnings.

10 unchanged sentences

The Company manages individual counterparty exposure by monitoring the credit rating of the counterparty and the size of financial commitments and exposures between the Company and the counterparty.

Certain interest rate swap agreements are qualified and designated as cash flow hedges.

The effective portion of the fair value unrealized gain or loss on cash flow hedges are reported as a component of Accumulated other comprehensive loss ("AOCL") with offsetting amounts recorded in the Company’s Consolidated Balance Sheets depending on the position and the duration of the contract.

The gain or loss on the derivative instrument due to the change in fair value is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

If a derivative is deemed to be ineffective, the change in fair value of the derivative is recognized directly in earnings.

Certain cross-currency swap agreements are designated and qualify as a net investment hedge.

The Company had certain interest rate swap agreements that were designated and qualified as cash flow hedges.

The final swap matured on April 3, 2025.

Therefore, the Company does not have any interest rate swaps outstanding as of the year ended December 31, 2025.

The effective portion of the fair value of unrealized gain or loss on cash flow hedges was reported as a component of Accumulated other comprehensive loss ("AOCL") with offsetting amounts recorded in the Company’s Consolidated Balance Sheets depending on the position and the duration of the contract.

The gain or loss on the derivative instrument due to the change in fair value was reclassified into earnings in the same period or periods during which the hedged

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

transaction affected earnings.

If a derivative were deemed to be ineffective, the change in fair value of the derivative would be recognized directly in earnings.

The Company has certain cross-currency swap agreements that are designated and qualify as a net investment hedge.

The changes in the fair value of these instruments are recorded in AOCL in equity partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in AOCL.

2 unchanged sentences

These derivatives are held as offsets to certain balance sheet exposures.

The gains or losses on these contracts are recognized in Interest expense and other, net, in the Company’s Consolidated and Combined Statement of Operations.

The gains or losses on these contracts are recognized in Interest expense and other, net, in the Company’s Consolidated Statement of Operations.

Warranty Costs

Estimated expenses related to product warranties are accrued as the revenue is recognized on products sold to customers and included in Cost of sales in the Consolidated and Combined Statements of Operations.

Estimated expenses related to product warranties are accrued as the revenue is recognized on products sold to customers and included in Cost of sales in the Consolidated Statements of Operations.

Estimates are established using historical information as to the nature, frequency and average costs of warranty claims.

Prior to the Separation, the Company’s domestic and foreign operating results were included in the income tax returns of Enovis.

The Company accounted for income taxes under the separate return method.

Under this approach, the Company determined its deferred tax assets and liabilities and related tax expense as if it were filing separate tax returns.

The Company accounts for income taxes under ASC 740 , Income Taxes (“ASC 740”), which requires recognition of deferred income tax assets and liabilities reflecting the tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the Consolidated and Combined Financial Statements and their respective tax basis.

The Company accounts for income taxes under ASC 740 , Income Taxes (“ASC 740”), which requires recognition of deferred income tax assets and liabilities reflecting the tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the Consolidated Financial Statements and their respective tax basis.

Deferred income tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled.

2 unchanged sentences

Global Intangible Low-Taxed Income is accounted for as a current tax expense in the year the tax is incurred.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Valuation allowances are recorded if it is more likely than not that some portion of the deferred income tax assets will not be realized.

4 unchanged sentences

The Company establishes a liability for unrecognized income tax benefits for income tax positions for which it is more likely than not that a tax position will not be sustained upon examination by the respective taxing authority to the extent such tax positions reduce the Company’s income tax liability.

The Company recognizes interest and penalties related to unrecognized income tax benefits in Income tax expense in the Consolidated and Combined Statements of Operations.

The Company recognizes interest and penalties related to unrecognized income tax benefits in Income tax expense in the Consolidated Statements of Operations.

Interest Expense and Other, Net

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• foreign exchange exposure on cash and intercompany positions and interest income or expense on foreign currency contracts not designated in hedging relationships and

• Argentina highly inflationary accounting transaction exchange loss on cash and cash equivalent remeasured into the Brazilian real - the direct parent’s currency.

• Argentina highly inflationary accounting transaction exchange loss on cash and cash equivalents remeasured into the Brazilian real - the direct parent’s currency.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

See “Foreign Currency Exchange Gains and Losses” and “Argentina Highly Inflationary Accounting” policies below for additional information.

Foreign Currency Exchange Gains and Losses

The Company’s Consolidated and Combined Financial Statements are presented in U.S.

The Company’s Consolidated Financial Statements are presented in U.S.

The functional currencies of the Company’s operating subsidiaries are generally the local currencies of the countries in which each subsidiary is located.

3 unchanged sentences

Transactions in foreign currencies are translated at the exchange rate in effect at the date of each transaction.

Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is either settled or translated for inclusion in the Consolidated Balance Sheets are recognized in Selling, general and administrative expense or Interest expense and other, net in the Consolidated and Combined Statements of Operations for that period.

The following table summarizes the Company’s net foreign transaction gains and losses included within the Consolidated and Combined Statements of Operations.

The following table summarizes the Company’s net foreign transaction gains and losses included within the Consolidated Statements of Operations.

Year Ended December 31,

6 unchanged sentences

(1) This table excludes the foreign currency exchange impacts of applying highly inflationary accounting for the Company’s Argentina operations, as described in the “Argentina Highly Inflationary Accounting” paragraph below.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

(2) During 2023, the weakening of the Ruble and certain South American currencies drove the increase in the loss on transactions denominated in foreign currencies.

1 unchanged sentence

Argentina is deemed to have a highly inflationary economy, resulting in the remeasurement of the Company’s Argentinian operations into Brazilian real, the functional currency of the Argentinian entity’s direct parent.

Gains and losses from the remeasurement are recorded in the Company’s Consolidated and Combined Statements of Operations.

Gains and losses from the remeasurement are recorded in the Company’s Consolidated Statements of Operations.

In December 2023, the Argentine peso significantly devalued due to changes in the foreign currency exchange policy introduced by the Argentine government.

For the year ended December 31, 2024 , the remeasurement of the financial statements of the Company’s subsidiary operating in a highly inflationary economy has resulted in a transaction foreign currency exchange loss to Cost of sales of $ 8.9 million , Selling, general and administrative benefit of $ 0.6 million and Interest expense and other, net loss of $ 0.3 million .

For the year ended December 31, 2025 , the remeasurement of the financial statements of the Company’s subsidiary operating in a highly inflationary economy has resulted in a transaction foreign currency exchange loss to Cost of sales of $ 5.2 million , Selling, general and administrative expense of $ 4.6 million and Interest expense and other, net loss of $ 1.0 million .

For the year ended December 31, 2024, the remeasurement of the financial statements of the Company’s subsidiary operating in a highly inflationary economy has resulted in a transaction foreign currency exchange loss to Cost of sales of $ 8.9 million, Selling, general and administrative benefit of $ 0.6 million and Interest expense and other, net loss of $ 0.3 million.

1 unchanged sentence

Use of Estimates

The Company makes certain estimates and assumptions in preparing its Consolidated and Combined Financial Statements in accordance with GAAP.

These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated and Combined Financial Statements and the reported amounts of revenues and expenses for the period presented.

The Company makes certain estimates and assumptions in preparing its Consolidated Financial Statements in accordance with GAAP.

These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses for the period presented.

Actual results may differ from those estimates.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Recently Issued Accounting Pronouncements

The Company assesses the adoption impacts of recently issued accounting pronouncements on the Company’s Consolidated and Combined Financial Statements as well as material updates to previous assessments.

The Company assesses the adoption impacts of recently issued accounting pronouncements on the Company’s Consolidated Financial Statements as well as material updates to previous assessments.

Accounting Guidance Implemented in 2025

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances segment reporting by expanding the breadth and frequency of disclosures through incremental information about significant segment expenses.

The guidance also requires disclosure of the Chief Operating Decision Maker’s (the “CODM”) position and detail of how the CODM uses financial reporting to assess the segment’s performance.

The new guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024.

The Company has adopted this guidance for the year ending December 31, 2024, and as discussed above, the primary impact is increased disclosure of certain financial information by segment.

Refer to Note 20.

“Segment Information” for further information on the impact on the Company’s disclosures.

Recently Issued Accounting Guidance Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures , which expands disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which expands disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

The ASU is effective for fiscal years beginning after December 15, 2024 .

The Company has adopted this guidance for the year ended December 31, 2025, refer to Note 8.

“Income Taxes” for further information on the impact on the Company’s disclosures.

Recently Issued Accounting Guidance Not Yet Adopted

In November 2024, the FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses , which expands disclosure requirements for more detailed information about the types of expenses in commonly presented expense captions.

The ASU is effective for fiscal years beginning after December 15, 2026.

The Company is currently evaluating the effect the adoption of the ASU may have on its disclosures.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Discontinued Operations

The Company holds certain asbestos-related contingencies and insurance coverages from divested businesses that it does not have an interest in the ongoing operations.

The Company has classified asbestos-related activity included in its Consolidated and Combined Statements of Operations as part of Loss from discontinued operations, net of taxes.

The Company has classified asbestos-related activity included in its Consolidated Statements of Operations as part of Loss from discontinued operations, net of taxes.

This activity consists primarily of expected settlements, legal and administrative expenses associated with the above liabilities.

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Cash used in operating activities related to discontinued operations was $ 15.0 million, $ 15.0 million and $ 15.2 million for the years ended December 31, 2025, 2024 and 2023 , respectively.

The Company continually evaluates potential acquisitions that either strategically fit with our existing portfolio or expand our portfolio into a new and attractive business area.

The Company has completed a number of acquisitions that have been accounted for under the acquisition method of accounting.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon our understanding of the fair value of the acquired assets and assumed liabilities.

The Company obtains this information during due diligence and through other sources.

The Company continually evaluates potential acquisitions that either strategically fit with its existing portfolio or expand its portfolio into a new and attractive business area.

The Company has completed a number of acquisitions that have been accounted for using the acquisition method and have resulted in the recognition of goodwill in the Company’s financial statements.

This goodwill arises because the purchase prices for these businesses exceeded the fair value of acquired identifiable net assets.

This excess is attributable to a variety of factors, including, but not limited to, the anticipated future earnings and cash flow potential of the acquired businesses;

prevailing market multiples applied to earnings and cash flows in comparable transactions;

the competitive nature of the acquisition processes;

the strategic benefits of accelerating market entry or enhancing existing product offerings without incurring the time, cost and risk associated with internal development;

and the complementary fit and expected synergies these businesses contribute to the Company’s existing operations.

Under the acquisition method of accounting, the Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities from information obtained during due diligence and through other sources.

As the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, the Company is able to refine the estimates of fair value and more accurately allocate the purchase price.

The fair values of acquired intangibles are determined based on estimates and assumptions that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and customer attrition rates.

These assumptions are forward-looking and could be affected by future economic and market conditions.

The Company engages third-party valuation specialists who provide guidance on the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions.

The Company makes appropriate adjustments to purchase price allocations prior to completion of the applicable measurement period, as required.

The following describes our acquisition activity for the three years ended December 31, 2024.

On October 31, 2024, the Company completed the acquisition of SUMIG Soluções para Solda e Corte Ltda., a South American light automation and equipment business for approximately $ 68 million, net of cash received, to open market opportunities and expand our portfolio in the Americas.

The Company recognized intangible assets and goodwill of approximately $ 23 million and $ 37 million, respectively.

On July 2, 2024, the Company completed the acquisition of ESAB Bangladesh Private Limited (formerly known as Linde Industries Private Limited), a leading welding company in Bangladesh, for approximately $ 69 million, net of cash received, to extend the Company’s position in this fast-growing region.

Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following describes our acquisition activity for the three years ended December 31, 2025, for which the Company acquired 100% of the equity and voting interest of each acquired entity.

None of the goodwill is expected to be deductible for tax purposes.

2025 Acquisitions

Acquisition Date Company Description Segment

April 30, 2025 Bavaria Schweisstechnik (“Bavaria”) A European provider of submerged-arc welding applications EMEA & APAC

June 4, 2025 DeltaP s.r.l.

(“DeltaP”) A European provider of medical central gas systems and aftermarket services EMEA & APAC

July 9, 2025 Aktiv Technologies Private Limited (“Aktiv”)

An industrial gas equipment manufacturer based in India

August 22, 2025 EWM GmbH (“EWM”)

A Global leader in heavy industrial welding equipment and advanced automation

The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed for the year ended December 31, 2025.

These amounts, including inventory, property, plant and equipment, intangible assets and deferred taxes are determined based upon certain valuations and studies that have yet to be finalized.

Accordingly, the assets acquired and liabilities assumed, as detailed below, are subject to adjustment once the detailed analyses are completed.

EWM All Others Total

(In thousands)

Cash and cash equivalents $ 10,360 $ 6,803 $ 17,163

Inventories, net 40,081 7,662 47,743

Property, plant and equipment, net 51,481 6,284 57,765

153,567 63,562 217,129

Intangible assets 129,746 46,656 176,402

Deferred tax liability ( 38,224 ) ( 12,443 ) ( 50,667 )

Other, net (2)

( 12,271 ) ( 890 ) ( 13,161 )

Purchase price consideration $ 334,740 $ 117,634 $ 452,374

(1) Goodwill for “All Others” includes approximately $ 39 million for Bavaria and $ 16 million for Aktiv.

(2) Includes current and non-current amounts and non-controlling interest.

The following table summarizes the values of the significant identifiable intangible assets acquired, excluding Goodwill, for the year ended December 31, 2025:

EWM All Others

Intangible Asset Amortization Period Intangible Asset Weighted-Average Amortization Period

(In thousands) (In years) (In thousands) (In years)

Customer relationships (1)

$ 89,095 20 $ 37,984 17

Trade names 20,536 10 6,484 10

Technology and other 20,115 10 2,188 5

$ 129,746 $ 46,656

(1) Customer relationships for “All Others” includes approximately $ 23 million for Bavaria with an amortization period of 18 years.

The fair value of the customer relationships was preliminarily estimated based on the multiple excess earnings approach and the fair value of the trade names was preliminarily estimated based on the relief from royalty method.

Other preliminary fair value adjustments were made to inventories and property and equipment to reflect the fair value of certain assets upon acquisition.

Deferred taxes were preliminarily adjusted to record the book-tax basis difference of acquisition accounting adjustments primarily related to amounts allocated to intangible assets, certain property and equipment, inventories and other liabilities.

The fair value of the cash and cash equivalents and other liabilities were estimated to approximate their book values.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the year ended December 31, 2025, the above acquisitions added approximately $ 79 million to Net sales and contributed an immaterial amount related to Net income.

The Company incurred approximately $ 11 million of acquisition-related transaction costs for the acquisitions completed in 2025 in the year ended December 31, 2025.

These costs were expensed in Selling, general and administrative expense in the Consolidated Statements of Operations.

2024 Acquisitions

The Company recognized intangible assets and goodwill of approximately $ 29 million and $ 39 million, respectively.

On February 26, 2024, the Company completed the acquisition of Sager S.A., a welding repair and maintenance product and service leader in South America, for approximately $ 18 million, net of cash received, to expand our portfolio in the Company’s Americas region.

On January 11, 2023, the Company completed the acquisition of Therapy Equipment Limited, a regional leader in oxygen regulators, for approximately $ 19 million, net of cash received, to strengthen the Company’s leading global gas control equipment portfolio.

On October 31, 2022, the Company completed the acquisition of Swift Cut Automation Limited, a provider of light industrial cutting systems, for approximately $ 22 million, net of cash received.

This acquisition provides a market-leading automated cutting portfolio.

On October 14, 2022, the Company completed the acquisition of Ohio Medical, LLC, a United States based global leader in oxygen regulators and central gas systems, for approximately $ 127 million, net of cash received.

This acquisition expands the Company’s presence in industrial specialty gas applications and products and broadens the Company’s United States presence.

On July 2, 2024, the Company completed the acquisition of ESAB Bangladesh Private Limited, a leading welding company in Bangladesh, for approximately $ 69 million, net of cash received, to extend its position in this fast-growing region in the EMEA & APAC segment.

The Company recognized intangible assets and goodwill of approximately $ 15 million and $ 46 million, respectively.

The Company provides fabrication technology advanced equipment, consumables, gas control equipment, robotics and digital solutions.

2023 Acquisitions

The Company provides fabrication technology advanced equipment, consumables, gas control equipment, related robotics and digital solutions.

Substantially all revenue is recognized at a point in time.

The Company disaggregates its revenue into the product groups included in the table below.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The Company disaggregates its revenue into the product groups:

Year Ended December 31,

3 unchanged sentences

Consumables 1,870,561 1,847,490 1,919,817

Total $ 2,740,803 $ 2,774,766 $ 2,593,480

$ 2,842,555 $ 2,740,803 $ 2,774,766

The sales mix in the above table is relatively consistent across both reportable segments.

4 unchanged sentences

During the years ended December 31, 2025 and 2024, substantially all amounts included in the contract liability balance at the beginning of the respective year were recognized as revenue in the following year.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The table below summarizes the activity in the Company’s Allowance for credit losses included within Trade receivables in the Consolidated Balance Sheets.

6 unchanged sentences

The Company has unvested share-based payment awards with a right to receive non-forfeitable dividends that are considered participating securities.

The table below summarizes how the Company allocates earnings to participating securities and computed earnings per share using the two-class method.

The Company allocates earnings to participating securities and computed earnings per share using the two-class method as follows:

Year Ended December 31,

10 unchanged sentences

$ 4.14 $ 4.73 $ 3.59

Computation of earnings (loss) per share from continuing operations – diluted:

Computation of earnings per share from continuing operations – diluted:

Income from continuing operations attributable to common stockholders $ 251,419 $ 285,781 $ 216,071

8 unchanged sentences

(1) Net income from continuing operations attributable to ESAB Corporation for the respective periods is calculated using Net income from continuing operations, less Income attributable to noncontrolling interest, net of taxes, o f $ 6.5 million, $ 5.9 million and $ 5.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.

(2) Potentially dilutive securities include stock options, performance-based restricted stock units and non performance-based restricted stock units.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Separation from Enovis

Prior to the Separation, our operating results were included in the Former Parent’s various consolidated United States federal and certain state income tax returns, as well as certain non-United States returns.

For periods prior to the Separation, our combined financial statements reflect Income tax expense and deferred tax balances as if we had filed tax returns on a standalone basis separate from the Former Parent.

The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if we were a separate taxpayer and a standalone enterprise for the periods prior to the Separation.

For periods prior to the Separation, our pretax operating results include any transactions with the Former Parent as if it were an unrelated party.

In connection with the Separation, we entered into agreements with the Former Parent, including a Tax Matters Agreement.

The Tax Matters Agreement distinguishes between the treatment of tax matters for “joint” filings compared to “separate” and “unitary state” filings prior to the Separation.

“Joint” filings are returns, such as the United States federal return, which include operations from both Former Parent legal entities and the Company.

By contrast, “separate” filings are tax returns (primarily United States state returns and non-United States returns) that exclusively include either the Former Parent’s or the Company’s operations.

“Unitary state” filings are state tax returns, which may include legal entities of both the Company and the Former Parent.

In accordance with the Tax Matters Agreement, the Company is liable for and has indemnified the Former Parent against all income tax liabilities involving “separate” and “unitary state” filings for periods prior to the Separation, except to the extent a unitary state filing includes a legal entity of the Former Parent and the adjustment relates to that legal entity.

The Company is also liable for fifty percent of all cash taxes paid as a result of any adjustment or redetermination or otherwise in connection with any tax contest relating to any joint return.

Additionally, under the Separation Agreement, the Company is responsible for any tax indemnity related to the discontinued operations by the Former Parent.

(2) Potentially dilutive securities include stock options, performance-based restricted stock units and nonperformance-based restricted stock units.

Income from continuing operations before income taxes and Income tax expense consisted of the following per the table below.

The classification of tax expense between federal, state and foreign has been recast for prior years to make all years comparable after the adoption of ASU 2023-09.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31,

15 unchanged sentences

$ 69,157 $ 77,348 $ 95,727

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The Company’s Income tax expense differs from the amount that would be computed by applying the United States federal statutory rate as follows in the table below.

Year Ended December 31,

(Dollars in thousands)

United States federal statutory tax $ 68,950 21.0 %

State and local income tax, net of federal income tax effect (1)

Foreign tax effects:

United Kingdom:

Valuation allowance ( 11,965 ) ( 3.7 ) %

Other 1,147 0.4 %

Statutory tax rate difference between Switzerland and United States ( 5,913 ) ( 1.8 ) %

Other ( 2,286 ) ( 0.7 ) %

Peru 5,248 1.6 %

Other foreign jurisdictions 19,651 6.0 %

Effect of changes in tax laws or rates enacted in the current period — — %

Effect of cross-border tax laws:

Global Intangible Low-Taxed Income inclusion 24,828 7.6 %

Subpart F income inclusion 9,663 2.9 %

Foreign-Derived Intangible Income deduction ( 5,563 ) ( 1.7 ) %

Foreign tax credit ( 33,516 ) ( 10.2 ) %

Other ( 93 ) — %

Tax credits ( 916 ) ( 0.3 ) %

Changes in valuation allowances ( 1,555 ) ( 0.5 ) %

Nontaxable or nondeductible items:

Nondeductible officer compensation 4,762 1.5 %

Other ( 1,250 ) ( 0.4 ) %

Changes in unrecognized tax benefits ( 2,897 ) ( 0.9 ) %

Other adjustments ( 646 ) ( 0.2 ) %

$ 69,157 21.1 %

(1) State taxes in California, Illinois, Kentucky, Louisiana, Minnesota, New York and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table presents the required disclosures prior to our adoption of ASU 2023-09 and reconciles the taxes calculated at the United States federal statutory tax rate to the total income tax expense for the years ended December 31, 2024 and 2023.

Year Ended December 31,

(In thousands)

9 unchanged sentences

Withholding taxes 6,634 11,172

Capital gain — — ( 3,655 )

Valuation Allowance ( 761 ) ( 12,308 )

1 unchanged sentence

Income tax expense $ 77,348 $ 95,727

For the year ended December 31, 2024, the Company’s effective rate of 20.9 % differs from the United States federal statutory rate of 21% due to favorable impacts from an agreement with a taxing authority on the treatment of subsidy income in a foreign jurisdiction, favorable changes in tax reserves primarily related to a final ruling in a tax case in a foreign jurisdiction, partially offset by withholding taxes.

The Company’s effective tax rate of 30.0 % for the year ended December 31, 2023 differed from the United States federal statutory rate of 21% due to changes in tax reserves, permanent differences relating to foreign subsidiaries and withholding taxes, partially offset by the favorable impact from changes in valuation allowances.

The Company’s effective tax rate of 23.0 % for the year ended December 31, 2022 differed from the United States federal statutory rate of 21% due to the impact of withholding taxes and permanent differences relating to foreign subsidiaries, partially offset by the favorable impact of the jurisdictional mix of income.

Certain countries in which we operate have adopted Pillar Two legislation effective January 1, 2024.

Pillar Two did not have a material impact on our 2024 effective tax rate.

For the year ended December 31, 2025, the Company’s effective rate of 21.1% differs from the United States federal statutory rate of 21.0% due to the jurisdictional mix of earnings, including foreign withholding tax, partially offset by the release of a valuation allowance.

F or the year ended December 31, 2024, the Company’s effective tax rate of 20.9% differed from the United States federal statutory rate of 21.0% due to favorable impacts from an agreement with a taxing authority on the treatment of subsidy income in a foreign jurisdiction, favorable changes in tax reserves primarily related to a final ruling in a tax case in a foreign jurisdiction partially offset by withholding taxes.

For the year ended December 31, 2023, the Company’s effective tax rate of 30.0 % differed from the United States federal statutory rate of 21.0% due to changes in tax reserves, permanent differences relating to foreign subsidiaries and withholding taxes partially offset by the favorable impact from changes in valuation allowances.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

2 unchanged sentences

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands)

8 unchanged sentences

Leases 27,831 21,490

Other — 2,867

Net investment hedge 10,859 —

Valuation allowance ( 54,883 ) ( 65,007 )

13 unchanged sentences

To the extent a portion or all of the applicable deferred tax assets do not meet the more likely than not threshold, a valuation allowance is recorded.

During the year ended December 31, 2024, the valuation allowance decreased from $ 79.4 million to $ 65.0 million primarily due to a net decrease in the valuation allowance and underlying deferred tax balance of $ 12.5 million.

The decrease related to changes in the underlying deferred balances primarily relates to the reversal of the valuation allowance and the associated deferred balances in connection with a legal entity rationalization.

During the year ended December 31, 2025, the valuation allo wance decreased from $ 65.0 million to $ 54.9 million primarily due to the release of a valuation allowance in a foreign jurisdiction for which the benefit of the deferred tax asset is now considered more likely than not to be realized.

In determining how much of the relevant deferred tax asset could be realized on a more likely than not basis, consideration was given to tax planning strategies and, when applicable, future taxable income.

6 unchanged sentences

The Company has made no provision for United States income taxes or additional non-United States taxes on certain undistributed earnings or outside basis differences of non-United States subsidiaries in which the Company remains indefinitely reinvested.

A portion of these undistributed earnings may

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

be subject to foreign and United States tax consequences upon remittance.

A portion of these undistributed earnings may be subject to foreign and United States tax consequences upon remittance.

The Company cannot practically estimate the amount of additional taxes that might be payable on those undistributed earnings.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company records a liability for certain unrecognized income tax benefits for which it is more likely than not that a tax position will not be sustained upon examination by the respective taxing authority (“uncertain tax positions”).

This liability for such uncertain tax positions includes the amount of benefit included in (i) its previously filed income tax returns and (ii) its financial results expected to be included in income tax returns to be filed for periods through the date of its Consolidated and Combined Financial Statements.

The Company’s total unrecognized tax benefits were $ 18.6 million, $ 17.1 million and $ 30.9 million as of December 31, 2025, 2024 and 2023, respectively, inclusive of $ 5.3 million, $ 4.7 million and $ 12.1 million, respectively, of interest and penalties.

The Company records interest and penalties on uncertain tax positions as a component of Income tax expense, which was a benefit of $ 6.2 million, an expense of $ 7.9 million and a benefit of $ 0.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company records interest and penalties on uncertain tax positions as a component of Income tax expense, which was an expense of $ 0.2 million, a benefit of $ 6.2 million and an expense of $ 7.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The table below includes a reconciliation of the beginning and ending amount of gross unrecognized tax benefits (inclusive of associated interest and penalties).

2 unchanged sentences

Addition for tax positions taken in prior periods 13,514

Addition for tax positions taken in the current period 1,171

Reductions related to settlements with taxing authorities ( 4,160 )

Reductions resulting from a lapse of applicable statute of limitations ( 2,801 )

Other, including the impact of foreign currency translation and United States tax rate changes ( 16,897 )

Other, including the impact of foreign currency translation 1,314

Balance, December 31, 2023

Addition for tax positions taken in prior periods 6,436

Reductions for tax positions taken in prior periods ( 7,825 )

Reductions related to settlements with taxing authorities ( 9,255 )

Transfer from Former Parent, impact of foreign currency translation and other ( 473 )

Other, including the impact of foreign currency translation and United States tax rate changes 1,787

Reductions resulting from a lapse of applicable statute of limitations ( 51 )

Other, including the impact of foreign currency translation ( 3,092 )

Balance, December 31, 2024

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The Company is subject to audit by the United States, various states and foreign jurisdictions.

In accordance with the Tax Matters Agreement with Former Parent, the Company is the primary obligor for (i) ESAB separate company state returns for all periods;

(ii) unitary state returns that include only ESAB legal entities for all periods;

and (iii) ESAB separate foreign returns for all periods.

Pursuant to United States tax law, the Company filed its initial United States federal income tax return for the post-Separation period in October 2023.

The Company reviews its global tax provisions on a quarterly basis.

The Company accrues or adjusts contingent tax liabilities based on these reviews, the results of discussions and resolutions of matters with certain tax authorities, tax rulings and court decisions and the expiration of the statutes of limitations.

Due to the difficulty in predicting with reasonable certainty when tax audits will be fully resolved and closed, the range of reasonably possible significant increases or decreases in the liability for unrecognized tax benefits that may occur within the next 12 months is difficult to ascertain.

The Company does not believe the total amount of unrecognized benefits will change by a material amount within the next 12 months due to the settlement of audits and expirations of statutes of limitations.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The table below includes a breakout of income taxes paid for the year ended December 31, 2025.

Year Ended December 31,

(In thousands)

Federal $ 872

Foreign 90,379

Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:

India $ 11,833

Brazil 11,537

Switzerland 8,724

United Kingdom 6,765

Czech Republic 5,798

Goodwill and Intangible Assets

5 unchanged sentences

Goodwill attributable to acquisition (1)

44,505 46,691 91,196

Impact of foreign currency translation ( 4,675 ) ( 22,859 ) ( 27,534 )

2 unchanged sentences

Goodwill attributable to acquisitions (1)

2,500 217,128 219,628

Impact of foreign currency translation 14,812 63,269 78,081

1 unchanged sentence

$ 647,017 $ 1,302,685 $ 1,949,702

(1) Includes purchase accounting adjustments associated with acquisitions discussed in Note 5, “Acquisitions.”

The following table summarizes the Company’s Intangible assets, excluding Goodwill.

12 unchanged sentences

$ 1,140,910 $ ( 467,904 ) $ 889,474 $ ( 401,481 )

Amortization expense related to intangible assets of $ 36.0 million , $ 39.7 million and $ 35.6 million for the years ended December 31, 2024, 2023 and 2022, respectively, are included in the Selling, general and administrative expense in the Consolidated and Combined Statements of Operations.

The Company’s expected annual amortization expense for acquired intangible assets for the next five years is as follows.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Amortization expense related to intangible assets of $ 43.3 million , $ 36.0 million and $ 39.7 million for the years ended December 31, 2025, 2024 and 2023, respectively, is included in Selling, general and administrative expense in the Consolidated Statements of Operations.

The Company’s expected annual amortization expense for intangible assets for the next five years is as follows.

December 31, 2025

12 unchanged sentences

$ 381,876 $ 298,347

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Depreciation expense for the years ended December 31, 2025 , 2024 and 2023 was $ 40.7 million , $ 30.6 million and $ 30.0 million, respectively.

5 unchanged sentences

521,008 444,940

LIFO reserve — ( 4,279 )

allowance for excess, slow-moving and obsolete inventory ( 39,243 ) ( 41,229 )

$ 481,765 $ 403,711

At December 31, 2023, approximately 27.4 % of total inventories were valued using the LIFO method.

During 2024, the Company changed its costing methodology to only using FIFO method, as the Company believes FIFO is preferable given it provides a more consistent method for valuing inventory across the Company, better matches costs with revenues, improves comparability with peers and better reflects the current value of inventory at the balance sheet date.

Therefore, the Company recorded the pre-tax cumulative benefit related to this change in accounting principle of $ 4.3 million as a reduction of Cost of sales for the year ended December 31, 2024.

Refer to Note 2, “Summary of Significant Accounting Policies” for further information regarding this change in accounting policy.

The Company leases certain office spaces, warehouses, production facilities, vehicles and equipment.

4 unchanged sentences

The right-of-use lease asset is recorded on the Consolidated Balance Sheets, with the current lease liability being included in Accrued liabilities and noncurrent lease liability being included in Other liabilities.

During the year ended December 31, 2025, the Company recognized a non-cash transaction for a new material operating lease in the EMEA & APAC segment totaling approximately $ 29 million in Right-of-use lease asset and related lease liability.

Operating lease expense was $ 28.7 million, $ 24.9 million and $ 25.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2025

9 unchanged sentences

Operating leases 8.5 %

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Accrued and Other Liabilities

The table below includes a summarized breakout of Accrued and Other liabilities in the Consolidated Balance Sheets.

Accrued Liabilities and Other Liabilities

The table below includes a summarized breakout of Accrued liabilities and Other liabilities in the Consolidated Balance Sheets.

December 31, 2025 December 31, 2024

21 unchanged sentences

Warranty liability, end of period $ 12,573 $ 12,794

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s restructuring programs include a series of actions to reduce the structural costs of the Company.

1 unchanged sentence

Year Ended December 31, 2025

Balance at Beginning of Period Charges Payments Foreign Currency Translation Balance at End of Period

Balance at Beginning of Period Charges Payments Foreign Currency Translation and Other Balance at End of Period

(In thousands)

Restructuring and other related charges:

Termination benefits (1)

5 unchanged sentences

(2) Includes the cost of relocating associates, relocating equipment and other costs in connection with the closure and optimization of facilities and product lines.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31, 2024

1 unchanged sentence

(In thousands)

Restructuring and other related charges:

Termination benefits (1)

2 unchanged sentences

1,104 5,689 ( 5,112 ) ( 420 ) 1,261

Subtotal $ 7,818 18,654 $ ( 20,706 ) $ ( 67 ) $ 5,699

Non-cash charges (3)

$ 5,699 $ 10,227 $ ( 10,400 ) $ ( 420 ) $ 5,106

(1) Includes severance and other termination benefits, including outplacement services.

(2) Includes the cost of relocating associates, relocating equipment, lease termination expenses and other costs in connection with the closure and optimization of facilities and product lines.

(3) Includes impairment of long-lived assets in connection with the closure and optimization of facilities and product lines.

Benefit Plans

2 unchanged sentences

The Company uses December 31 st as the measurement date for all of its employee benefit plans.

During the year ended December 31, 2024, the Company recognized a non-cash pension settlement loss of $ 12.2 million related to the transfer of plan assets to a third party as part of externalizing the risk associated with a foreign defined benefit plan.

During the year ended December 31, 2022, the Company recognized a Pension settlement gain of $ 9.1 million related to a completed buy-out of a foreign defined benefit plan by a third party plus the merger of two Company pension plans resulting in one plan benefiting from the surplus assets in the other plan.

These amounts are reflected in the Pension settlement loss (gain) line item in the Consolidated and Combined Statements of Operations.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the total changes in the Company’s total and foreign pension benefits and plan assets and includes a statement of the plans’ funded status.

8 unchanged sentences

Plan amendments 1,671 ( 9 ) 1,671 ( 9 )

Actuarial (gain) loss ( 5,945 ) 802 1,178 335

Actuarial loss (gain) 1,109 ( 5,945 ) ( 1,721 ) 1,178

Foreign exchange effect 8,112 ( 5,386 ) 8,112 ( 5,386 )

8 unchanged sentences

Employer contributions 4,874 4,309 4,750 4,175

4,309 ( 857 ) 4,175 ( 1,015 )

Foreign exchange effect 1,930 ( 2,028 ) 1,930 ( 2,028 )

9 unchanged sentences

$ ( 34,290 ) $ ( 27,968 ) $ ( 47,247 ) $ ( 42,004 )

(1) The employer contribution amount for the year ended December 31, 2023 includes a refund of assets totaling $ 5.1 million to the Company arising from a completed wind up of a foreign defined benefit plan.

For pension plans with accumulated benefit obligations in excess of plan assets, the accumulated benefit obligation and fair value of plan assets were $ 56.3 million and $ 8.8 million, respectively, as of December 31, 2025 and $ 49.3 million and $ 6.3 million, respectively, as of December 31, 2024.

For pension plans with projected benefit obligations in excess of plan assets, the projected benefit obligation and fair value of plan assets were $ 62.3 million and $ 11.8 million, respectively, as of December 31, 2025 and $ 52.4 million and $ 7.2 million, respectively, as of December 31, 2024.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Expected contributions to the Company’s pension benefit plans for the year ending December 31, 2026 are $ 5.2 million.

9 unchanged sentences

2031 – 2035 77,553 29,705

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s primary investment objective for its pension plan assets is to provide a source of retirement income for the plans’ participants and beneficiaries.

3 unchanged sentences

The asset allocation is monitored and rebalanced as required, as frequently as on a quarterly basis in some instances.

The target allocation for plan assets varies by plan and jurisdiction.

The target allocation for plan assets varies by plan and jurisdiction, and in various locations (including the United States) has been adjusted to reduce investment risk during the year ended December 31, 2025.

The table below shows the actual allocation percentages for the Company’s pension plan assets.

8 unchanged sentences

Equity securities — % 4 %

Fixed income securities 15 % 48 %

Fixed income 14 % 15 %

Cash and cash equivalents 1 % 1 %

3 unchanged sentences

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The table below summarizes the Company’s pension plan assets for each fair value hierarchy level for the periods presented (see Note 17, “Fai r Value Measurements” for further description of the levels within the fair value hierarchy).

2 unchanged sentences

Total Measured at Net Asset Value (1)

(In thousands) (In thousands)

(In thousands)

United States Plans:

22 unchanged sentences

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The following table sets forth the components of net periodic benefit (income) cost and Other comprehensive income of the Company’s total and foreign defined benefit pension plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth the components of net periodic benefit cost and Other comprehensive income (loss) of the Company’s total and foreign defined benefit pension plans.

All Pension Benefits Foreign Pension Benefits

2 unchanged sentences

(In thousands)

Components of Net Periodic Benefit Cost (Income):

Components of Net Periodic Benefit Cost:

Service cost $ 1,466 $ 1,429 $ 1,439 $ 1,466 $ 1,429 $ 1,439

1 unchanged sentence

Amortization 1,500 1,634 1,206 155 130 40

Settlement loss (gain) 12,155 — ( 9,114 ) 12,155 — ( 9,114 )

Settlement loss (1)

— 12,155 — — 12,155 —

Other 122 ( 179 ) — 122 ( 179 ) ( 331 )

Expected return on plan assets ( 7,917 ) ( 9,410 ) ( 11,391 ) ( 881 ) ( 1,038 ) ( 2,475 )

Net periodic benefit cost (income) $ 14,457 $ 2,424 $ ( 8,670 ) $ 15,073 $ 2,821 $ ( 6,553 )

Change in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Gain) Loss:

Transfer from Former Parent (1)

$ — $ — $ 53,134 $ — $ — $ —

Current year net actuarial (gain) loss ( 9,598 ) ( 7,021 ) 949 ( 483 ) 1,984 ( 12,262 )

Current year prior service cost ( 9 ) 175 862 ( 9 ) 175 862

Net periodic benefit cost 3,646 14,457 2,424 3,375 15,073 2,821

Change in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):

Current year net actuarial loss (gain) 1,501 ( 9,598 ) ( 7,021 ) ( 777 ) ( 483 ) 1,984

Current year prior service cost (income) 1,620 ( 9 ) 175 1,620 ( 9 ) 175

Less amounts included in net periodic benefit cost:

1 unchanged sentence

Settlement / divestiture / other loss ( 114 ) ( 455 ) ( 1,079 ) ( 114 ) ( 454 ) ( 1,079 )

Amortization of prior service cost 42 38 ( 1,067 ) 42 38 ( 1,067 )

Total recognized in Other comprehensive income $ ( 11,696 ) $ ( 9,462 ) $ 49,471 $ ( 1,076 ) $ 1,040 $ ( 13,248 )

(1) As part of the Separation, certain United States defined benefit plans, formerly sponsored by the Former Parent were transferred to the Company as of March 21, 2022 (“Transfer Date”).

Each component of net periodic benefit cost (income) is included in the Company’s Consolidated and Combined Statements of Operations for the years ended December 31, 2024, 2023 and 2022.

Service cost is included within Selling, general and administrative expense with the non-service costs net of expected return on plan assets and settlement loss (gain) included within Interest expense and other, net.

Settlement loss (gain) is recorded within Pension settlement loss (gain) on the Company’s Consolidated and Combined Statement of Operations.

Amortization of prior service cost (income) 6 42 38 6 42 38

Total recognized in Other comprehensive income (loss) $ 1,507 $ ( 11,696 ) $ ( 9,462 ) $ 574 $ ( 1,076 ) $ 1,040

(1) During the year ended December 31, 2024, the Company recognized a non-cash pension settlement loss of $ 12.2 million related to the transfer of plan assets to a third party as part of externalizing the risk associated with a foreign defined benefit plan.

Each component of net periodic benefit cost is included in the Company’s Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023.

Service cost is included within Selling, general and administrative expense with the non-service costs net of expected return on plan assets and settlement loss included within Interest expense and other, net.

Settlement loss is recorded within Pension settlement loss on the Company’s Consolidated Statement of Operations.

The table below shows the components of net unrecognized pension benefit cost included in AOCL in the Consolidated Balance Sheets that have not been recognized as a component of net periodic benefit cost.

Pension Benefits

(In thousands)

Net actuarial loss $ 49,797 $ 49,917

Prior service income ( 122 ) ( 81 )

Prior service cost (income) 1,505 ( 122 )

$ 51,302 $ 49,795

The key economic assumptions used in the measurement of the Company’s pension benefits are included in the table below.

Pension Benefits

The key economic assumptions used in the measurement of the Company’s pension benefit obligations are included in the table below.

Weighted-average discount rate:

2 unchanged sentences

Weighted-average rate of increase in compensation levels for active foreign plans (1)

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

(1) Weighted-average rate of increase is only applicable to plans with compensation increase assumptions.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The key economic assumptions used in the computation of net periodic benefit cost are as included in the table below.

Pension Benefits

Year Ended December 31,

15 unchanged sentences

(In thousands)

Term loans $ 385,000 $ 987,500

Term loan $ 350,000 $ 385,000

Senior unsecured notes 700,000 700,000

Revolving credit facility 185,000 —

Other debt 8,215 —

Total debt 1,243,215 1,085,000

Current portion of long-term debt ( 15,000 ) —

Current portion of debt ( 2,412 ) ( 15,000 )

Unamortized deferred financing fees ( 8,263 ) ( 9,261 )

Long-term debt $ 1,232,540 $ 1,060,739

Senior Notes, Term Loans and Revolving Credit Facility

On April 4, 2022, the Company entered into a credit agreement (as amended and restated from time-to-time, the “Credit Agreement”) in connection with the Separation.

The Credit Agreement initially consisted of a $ 750 million revolving credit facility (the “Revolving Facility”) with a maturity date of April 4, 2027, a Term A-1 loan with an initial aggregate principal amount of $ 400 million (the “Term Loan A-1 Facility”), with a maturity date of April 4, 2027 and a $ 600 million 364 -day senior term loan facility (the “Term Loan A-2 Facility”) with a maturity date of April 3, 2023.

The Revolving Facility contains a $ 300 million foreign currency sublimit and a $ 50 million swing line loan sub-facility.

On April 4, 2022, the Company drew down $ 1.2 billion available under the credit facilities made up of (i) $ 200 million under the Revolving Facility, (ii) $ 400 million under the Term Loan A-1 Facility and (iii) $ 600 million under the Term Loan A-2 Facility.

The Company used these proceeds to make payments to Enovis of $ 1.2 billion, which was used as part of the consideration for the contribution of certain assets and liabilities to the Company by Enovis in connection with the Separation.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

On June 28, 2022, the Company amended and restated the Credit Agreement by entering into Amendment No.

2 to Credit Agreement (the “Credit Agreement Amendment”).

The Credit Agreement Amendment provides for a $ 600 million term loan facility (the “Term Loan A-3 Facility,” collectively the “Term Facilities” with the Term A-1 Facility and Term A-2 Facility) with a maturity date of April 3, 2025 to refinance the Company’s existing Term Loan A-2 Facility.

Also on June 28, 2022, the Company borrowed the entire $ 600 million under Term Loan A-3 Facility to fund the repayment of the Term Loan A-2 Facility.

Senior Notes, Term Loan and Revolving Credit Facility

On April 4, 2022, the Company entered into a credit agreement that initially consisted of (i) a $ 750 million revolving credit facility with a maturity date of April 4, 2027, (ii) a senior term loan A-1 facility with an initial aggregate principal amount of $ 400 million, with a maturity date of April 4, 2027 and (iii) a $ 600 million 364 -day senior term loan A-2 facility with a maturity date of April 3, 2023.

The senior term loan A-2 facility was subsequently refinanced in June 2022 extending its maturity date to April 3, 2025 to become senior term loan A-3 facility.

On April 9, 2024, the Company issued $ 700 million in aggregate principal amount of 6.25 % senior notes due 2029 (the “Senior Notes”) governed by an indenture (the “Indenture”).

The Senior Notes have a contractual maturity interest rate of 6.25 % and maturity date of April 15, 2029.

The Company used the net proceeds from the Senior Notes to pay off its Term Loan A-3 Facility and pay fees associated with the offering.

As of December 31, 2024, the Credit Agreement and the Indenture consist of the following facilities:

• A $ 750 million Revolving Facility with a maturity date of April 4, 2027 with zero dollars drawn;

• A Term A-1 Facility with an aggregate principal amount of $ 385 million, with maturity dates through April 4, 2027;

The Company used the net proceeds from the Senior Notes to pay off its senior term loan A-3 facility and pay fees associated with the offering.

On October 16, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) that, among other things, provides for (i) a senior term loan A facility (the “Term Loan A Facility”) in an

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

aggregate principal amount of $ 350 million, and (ii) a senior revolving credit facility (the “Revolving Facility”) in the amount of $ 1.05 billion to replace the Company’s existing $ 400 million senior term loan A-1 facility and $ 750 million revolving credit facility and pay off the outstanding principal and interest thereunder.

Both facilities mature on October 16, 2030, subject to a springing maturity date under certain circumstances.

The Revolving Facility contains a $ 300 million foreign currency sublimit and a $ 50 million swing line loan sub-facility.

As of December 31, 2025, the A&R Credit Agreement and the Indenture consist of the following facilities:

• A $ 1.05 billion Revolving Facility with a maturity date of October 16, 2030, with $ 185 million drawn;

• A Term Loan A Facility with an aggregate principal amount of $ 350 million, with maturity dates through October 16, 2030;

• Senior Notes with an aggregate principal amount of $ 700 million with a maturity date of April 15, 2029.

The Credit Agreement and the Indenture contain customary covenants.

The A&R Credit Agreement and the Indenture contain customary covenants.

These covenants limit the ability of the Company and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments or pay dividends.

In addition, the Credit Agreement requires that the Company maintains certain financial covenants and the Company was in compliance with all of its debt covenants as of December 31, 2024.

The Credit Agreement and the Indenture contain various events of default (including failure to comply with the covenants under the Credit Agreement and related agreements) and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the Term A-1 Facility, Senior Notes and the Revolving Facility.

Certain United States subsidiaries of the Company have agreed to guarantee the obligations of the Company under the Credit Agreement and the Senior Notes.

Loans made under the Term A-1 Facility will bear interest, at the election of the Company, at either the base rate (as defined in the Credit Agreement) or at the term Secured Overnight Financing Rate (“SOFR”) plus an adjustment (as defined in the Credit Agreement), in each case, plus the applicable interest rate margin.

Loans made under the Revolving Facility will bear interest, at the election of the Company, at either the base rate or, (i) in the case of loans denominated in dollars, the term SOFR plus an adjustment or the daily simple SOFR plus an adjustment, (ii) in the case of loans denominated in Euros, the adjusted Euro Interbank Offered Rate (“EURIBOR”) and, (iii) in the case of loans denominated in sterling, Sterling Overnight Index Average (“SONIA”) plus an adjustment (as all such rates are defined in the Credit Agreement Amendment), in each case, plus the applicable interest rate margin.

In addition, the A&R Credit Agreement requires that the Company maintains certain financial covenants and the Company was in compliance with all of its debt covenants as of December 31, 2025.

The A&R Credit Agreement and the Indenture contain various events of default (including failure to comply with the covenants under the A&R Credit Agreement and related agreements) and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the Term Loan A Facility, Senior Notes and the Revolving Facility.

Certain United States subsidiaries of the Company have agreed to guarantee the obligations of the Company under the A&R Credit Agreement and the Senior Notes.

Loans made under the Term Loan A Facility will bear interest, at the election of the Company, at either the base rate (as defined in the A&R Credit Agreement) or at the term Secured Overnight Financing Rate (“SOFR”) plus an adjustment (as defined in the A&R Credit Agreement), in each case, plus the applicable interest rate margin.

Loans made under the Revolving Facility will bear interest, at the election of the Company, at either the base rate or, (i) in the case of loans denominated in Dollars, the term SOFR plus an adjustment or the daily simple SOFR plus an adjustment, (ii) in the case of loans denominated in Euros, the adjusted Euro Interbank Offered Rate (“EURIBOR”) and, (iii) in the case of loans denominated in Sterling, Sterling Overnight Index Average (“SONIA”) plus an adjustment (as all such rates are defined in the A&R Credit Agreement), in each case, plus the applicable interest rate margin.

The applicable interest rate margin changes based upon the Company’s total leverage ratio (ranging from 1.125 % to 1.750 % or in the case of the base rate margin, 0.125 % to 0.750 %).

Each swing line loan denominated in dollars will bear interest at the base rate plus the applicable interest rate margin.

To manage exposures to currency exchange rates and interest rates arising in Long-term debt, the Company entered into interest rate and cross-currency swap agreements.

To manage exposures to currency exchange rates and interest rates arising in Long-term debt, the Company has interest rate swap agreements.

Refer to Note 16, “Derivatives” for additional information.

As of December 31, 2024, the weighted-average interest rate of borrowings under the Credit Agreement and the Indenture was 5.24 %, including the net impact from the interest rate and cross-currency swaps and excluding accretion of deferred financing fees, and there was $ 750 million of borrowing capacity available on the Revolving Facility, subject to the Company meeting financial covenants and other requirements.

As of December 31, 2025, the weighted-average interest rate of borrowings under the A&R Credit Agreement and the Indenture was 5.40 %, excluding accretion of deferred financing fees.

There was approximately $ 865 million of borrowing capacity available on the Revolving Facility, subject to the Company meeting financial covenants and other requirements.

Other Indebtedness

In addition to the debt agreements discussed above, the Company has the ability to incur approximately $ 50 million of indebtedness pursuant to certain uncommitted credit lines, consisting of an uncommitted credit line that the Company currently has in place that the Company has used from time to time in the past for short-term working capital needs.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

In addition to the debt agreements discussed above, the Company also has the ability to incur approximately $ 50 million of indebtedness pursuant to certain uncommitted credit lines, consisting of an uncommitted credit line that the Company has used from time to time in the past for short-term working capital needs.

The Company is party to letter of credit facilities with an aggregate capacity of $ 113.3 million.

1 unchanged sentence

Deferred Financing Fees

In total, the Company had deferred financing fees of $ 9.9 million included in its Consolidated Balance Sheets as of December 31, 2024, which will be charged to Interest expense and other, net, over the term of the related debt instruments.

The costs associated with the Term Facilities and Senior Notes noted above will be amortized over the contractual term of the related facility and the costs associated with these will be amortized over the life of the Credit Agreement or the Indenture, respectively.

Of the $ 9.9 million, $ 0.6 million of deferred financing fees relating to the Revolving Facility are included in Other assets and $ 9.3 million of deferred financing fees relating to the Term Facilities and Senior Notes are recorded as a contra-liability within Long-term debt.

The Company had total deferred financing fees of $ 12.5 million included in its Consolidated Balance Sheets as of December 31, 2025, which will be charged to Interest expense and other, net, over the term of the related debt instruments.

The costs associated with the Term Loan A Facility and Senior Notes noted above will be amortized over the contractual term of the related facility.

Of the $ 12.5 million, $ 4.2 million of deferred financing fees relating to the Revolving Facility are included in Other assets and $ 8.3 million of deferred financing fees relating to the Term Loan A Facility and Senior Notes are recorded as a contra-liability within Long-term debt.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s minimum principal payments for the next five years are broken out in the table below.

1 unchanged sentence

(In thousands)

2025 $ 15,000

Total debt (1)

16 unchanged sentences

Refer to Note 15, “Debt” for further information.

As this interest rate swap was designated as a cash flow hedge, $ 5.5 million was deferred in AOCL and is being recognized in earnings over the period the originally forecasted hedged transaction impacts earnings.

The remaining $ 300 million swap is expected to continue to be hedged against the remaining floating-rate debt.

For the remaining swap, the spread was 1.250 % as of December 31, 2024.

This agreement involves the receipt of floating-rate amounts in exchange for fixed-rate interest payments over the life of the agreement without an exchange of the underlying principal amount.

This interest rate swap agreement is designated and qualifies as a cash flow hedge and as such, the gain or

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

loss on the derivative instrument due to the change in fair value is reported as a component of AOCL and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

If a derivative is deemed to be ineffective, the change in fair value of the derivative is recognized directly in earnings.

The Company did not have any ineffectiveness related to cash flow hedges during the year ended December 31, 2024.

The cash inflows and outflows associated with the Company’s interest rate swap agreements designated as cash flow hedges are classified in cash flows from operating activities in the accompanying Consolidated and Combined Statements of Cash Flows.

The Company expects a gain o f $ 0.7 million, net of tax, related to interest rate swap agreements to be reclassified from AOCL to earnings through such agreement’s maturity in April 2025 as the hedged transactions are realized.

The expected gain to be reclassified is based on current forward rates in active markets as of December 31, 2024.

The table below shows the effects of designated cash flow hedges on the Company’s Consolidated and Combined Statements of Operations.

Year Ended December 31,

Derivative type (Gain) recognized in the Consolidated and Combined Statements of Operations 2024 2023

(In thousands)

Interest rate swap agreement(s) Interest expense and other, net $ ( 9,104 ) $ ( 11,053 )

As this interest rate swap was designated as a cash flow hedge, $ 5.5 million was deferred in AOCL and was recognized in earnings over the period the originally forecasted hedged transaction impacts earnings.

The remaining $ 300 million swap was hedged against the remaining floating-rate debt through its maturity on April 3, 2025.

Therefore, the Company does not have any interest rate swaps outstanding as of the year ended December 31, 2025.

The cash inflows and outflows associated with the Company’s interest rate swap agreements designated as cash flow hedges were classified in cash flows from operating activities in the accompanying Consolidated Statements of Cash Flows.

Net Investment Hedges

2 unchanged sentences

The cross-currency swap agreements included provisions to exchange fixed-rate payments in U.S.

Dollar for fixed-rate payments in Euro and were designated and qualify as a net investment hedge.

Dollar for fixed-rate payments in Euro and were designated and qualified as a net investment hedge.

These contracts had a Euro aggregate notional amount of approximately € 270 million and a U.S.

Dollar aggregate notional amount of $ 275 million.

Prior to the maturity of these two cross-currency swaps, on June 25, 2024, the Company de-designated these swaps and entered into four new cross-currency swaps for the same above notional amounts that mature in October 2026.

Prior to the maturity of these two cross-currency swaps, on June 25, 2024, the Company de-designated these swaps and entered into four new cross-currency swaps for the same notional amounts that mature in October 2026.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On August 22, 2024, the Company entered into two additional cross-currency swap agreements, set to mature in October 2026.

3 unchanged sentences

The changes in the spot rate of these instruments are recorded in AOCL in equity partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in AOCL.

The Company uses the spot method of assessing hedge effectiveness and as such, the initial value of the hedge components excluded from the assessment of effectiveness is recognized in the Interest expense and other, net line item in the Consolidated and Combined Statement of Operations under a systematic and rational method over the life of the cross-currency swap agreements.

The Company uses the spot method of assessing hedge effectiveness and as such, the initial value of the hedge components excluded from the assessment of effectiveness is recognized in the Interest expense and other, net line item in the Consolidated Statement of Operations under a systematic and rational method over the life of the cross-currency swap agreements.

Any ineffective portions of net investment hedges are reclassified from AOCL into earnings during the period of change.

1 unchanged sentence

The Company did not have any ineffectiveness related to net investment hedges during the year ended December 31, 2025.

The cash inflows and outflows associated with the excluded components of the Company’s cross-currency swap agreements designated as net investment hedges are classified in operating activities in the accompanying Consolidated and Combined Statements of Cash Flows.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The table below shows the effects of the excluded components of designated net investment hedges on the Company’s Consolidated and Combined Statements of Operations.

Year Ended December 31,

Derivative type (Gain) recognized in the Consolidated and Combined Statements of Operations 2024 2023

Cross currency-swap agreements Interest expense and other, net $ ( 4,687 ) $ ( 4,779 )

The table below shows the fair value of the derivatives recognized in the Company’s Consolidated Balance Sheets.

4 unchanged sentences

Cross-currency swap agreements $ 48,778 $ — $ 1,830 $ —

Interest rate swap agreement(s) — 842 — 9,522

Total $ 1,830 $ 842 $ 22,232 $ 9,522

Interest rate swap agreement — — — 842

$ 48,778 $ — $ 1,830 $ 842

Derivatives Not Designated as Hedging Instruments

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Had these amounts been recognized on a gross basis, the impact would have been a $ 0.1 million increase in Other current assets with a corresponding increase in Accrued liabilities.

The Company recognized the following in its Consolidated and Combined Financial Statements related to its derivative instruments not designated in a hedging relationship:

Year Ended December 31,

Foreign currency contracts 2024 2023 2022

(In thousands)

Change in unrealized (loss) gain $ ( 616 ) $ ( 1,023 ) $ 1,338

Realized gain (loss) (1)

$ 1,490 $ ( 2,928 ) $ ( 17,601 )

(1) The year ended December 31, 2022 includes realized losses relating to certain corporate entities contributed to ESAB Corporation that are reflected within Interest expense and other, net, in the Consolidated and Combined Statements of Operations.

These realized losses are offset by unrealized gains which are also reflected within Interest expense and other, net, in the Consolidated and Combined Statements of Operations .

Fair Value Measurements

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ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

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Three Total Level

(In thousands) (In thousands)

(In thousands)

Cash equivalents $ 11,965 $ — $ — $ 11,965 $ 8,990 $ — $ — $ 8,990

9 unchanged sentences

The fair value of these investments approximate cost due to their short-term maturities and the high credit quality of the issuers of the underlying securities.

The Company measures the fair value of foreign currency contracts, cross-currency swap agreements and interest rate swap agreement(s) using Level Two inputs based on observable spot and forward rates in active markets.

The Company measures the fair value of foreign currency contracts, cross-currency swap agreements and interest rate swap agreement using Level Two inputs based on observable spot and forward rates in active markets.

Additionally, the fair value of derivatives designated in hedging relationships includes a credit valuation adjustment to appropriately incorporate nonperformance risk for the Company and the respective counterparty.

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Concentration of Credit Risk

Financial instruments potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable.

Financial instruments that are potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable.

Concentrations of credit risk are considered to exist when there are amounts collectible from multiple counterparties with similar characteristics, which could cause their ability to meet contractual obligations to be similarly impacted by economic or other conditions.

3 unchanged sentences

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Share Repurchase Program

On August 13, 2024, the Board of Directors authorized and approved a stock repurchase program to repurchase up to five million shares of the Company’s Common stock, par value $ 0.001 per share, from time-to-time on the open market, in privately negotiated transactions or as may otherwise be determined by the Company’s management in its discretion.

No repurchases of the Company’s Common stock have been made through the year ended December 31, 2024.

No repurchases of the Company’s Common stock have been made through the year ended December 31, 2025 since program inception.

The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions, applicable legal requirements and other factors.

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ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accumulated Other Comprehensive Loss Components

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$ ( 63,847 ) $ ( 613,907 ) $ ( 8,336 ) $ 11,102 $ ( 674,988 )

Other comprehensive (loss) income before reclassifications:

Amounts contributed by Former Parent (2)

( 50,504 ) ( 8,759 ) — — ( 59,263 )

Other comprehensive income (loss) before reclassifications:

Net actuarial gain 8,969 — — — 8,969

Foreign currency translation adjustment ( 3,285 ) ( 11,143 ) ( 8,879 ) — ( 23,307 )

Loss on long-term intra-entity foreign currency transactions — ( 83,105 ) — — ( 83,105 )

Gain on long-term intra-entity foreign currency transactions — 70,428 — — 70,428

Unrealized gain on cash flow hedges — — — 4,834 4,834

Other comprehensive (loss) income before reclassifications ( 48,679 ) ( 174,215 ) ( 8,336 ) 10,782 ( 220,448 )

Other comprehensive income (loss) before reclassifications 5,684 59,285 ( 8,879 ) 4,834 60,924

Amounts reclassified from Accumulated other comprehensive loss (1)(2)

( 1,642 ) — — ( 8,566 ) ( 10,208 )

Net current period Other comprehensive (loss) income ( 42,651 ) ( 174,215 ) ( 8,336 ) 11,102 ( 214,100 )

Net current period Other comprehensive income (loss) 4,042 59,285 ( 8,879 ) ( 3,732 ) 50,716

Balance at December 31, 2023

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( 146 ) — — ( 9,980 ) ( 10,126 )

Purchase related to noncontrolling interest — ( 1,706 ) — — ( 1,706 )

Net current period Other comprehensive income (loss) 9,453 ( 125,169 ) 15,968 ( 5,554 ) ( 105,302 )

1 unchanged sentence

( 50,352 ) ( 679,791 ) ( 1,247 ) 1,816 ( 729,574 )

Other comprehensive income (loss) before reclassifications:

Net actuarial gain 9,069 — — — 9,069

Other comprehensive (loss) income before reclassifications:

Net actuarial loss ( 1,811 ) — — — ( 1,811 )

Foreign currency translation adjustment ( 899 ) 224,018 ( 36,467 ) — 186,652

1 unchanged sentence

Unrealized gain on cash flow hedges — — — 16 16

Other comprehensive income (loss) before reclassifications 9,599 ( 123,463 ) 15,968 4,426 ( 93,470 )

Other comprehensive (loss) income before reclassifications ( 2,710 ) 229,466 ( 36,467 ) 16 190,305

Amounts reclassified from Accumulated other comprehensive loss (1)(2)

1,385 — — ( 1,832 ) ( 447 )

Purchase related to noncontrolling interest — ( 1,706 ) — — ( 1,706 )

Net current period Other comprehensive income (loss) 9,453 ( 125,169 ) 15,968 ( 5,554 ) ( 105,302 )

Net current period Other comprehensive (loss) income ( 1,325 ) 229,466 ( 36,467 ) ( 1,816 ) 189,858

Balance at December 31, 2025

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See Note 14, “Benefit Plans” for additional details.

(2) Includes unrecognized pension and other post-retirement costs and accumulated currency translation adjustments of certain entities that were part of the Corporate segment of the Former Parent and were transferred to ESAB Corporation in anticipation of the Separation.

(2) The amounts on this line within the Cash Flow Hedges column are a component of Interest expense and other, net.

1 unchanged sentence

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Share-Based Payments

In connection with the Separation, the Company adopted the 2022 Omnibus Incentive Plan (the “Stock Plan”) that became effective upon the Separation.

Outstanding equity awards of the Former Parent held by ESAB employees at the Separation date were converted into or replaced with awards of ESAB common stock under the Stock Plan, with the intent to maintain the economic value of the equity awards immediately before and after the Distribution.

The terms of the equity awards period, exercisability and vesting schedule, as applicable, generally continued unchanged.

Other than converted or replacement equity awards of ESAB issued in replacement of the Former Parent’s RSUs and stock options, the terms of the converted or replacement equity awards of ESAB (e.g., vesting date and expiration date) continued unchanged.

For the three months ended April 1, 2022, $ 0.7 million of stock-based compensation expense was allocated to the Company.

Following the Separation, the Company independently incurs stock compensation expenses as a stand-alone company.

The Company adopted the 2022 Omnibus Incentive Plan on April 4, 2022 (as subsequently amended and restated, effective as of May 8, 2025, the “Stock Plan”).

The Company measures and recognizes compensation expense related to share-based payments based on the fair value of the instruments issued.

Stock-based compensation expense is generally recognized as a component of Selling, general and administrative expense in the Consolidated and Combined Statements of Operations.

Stock-based compensation expense is generally recognized as a component of Selling, general and administrative expense in the Consolidated Statements of Operations.

Stock Options

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The Company recognizes compensation expense for stock option awards on a straight-line basis over the requisite service period of the entire award.

With limited exceptions, the employee must remain in service until the vesting date.

For the year ended December 31, 2025, the Stock-based compensation expense for the stock option awards was $ 3.0 million.

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Restricted Stock Units

During the year ended December 31, 2023 and 2022, the Company granted certain employees performance-based restricted stock units (“PRSUs”), the vesting of which is fully based on company specific performance metrics over a three-year performance period.

During the year ended December 31, 2023, the Company granted certain employees performance-based restricted stock units (“PRSUs”), the vesting of which is fully based on company specific performance metrics over a three-year performance period.

The awards also have a service requirement that equals the respective performance periods.

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The ultimate payout of PRSUs with a performance metric adjusts the cumulative expense based on its estimate and the percent of the requisite service period that has elapsed.

During the year ended December 31, 2024, the Company granted certain employees PRSUs, the calculation of the final achievement of which is based on Company-specific performance metrics as well as a modifier for the Company’s total shareholder return ranking among a peer group over a three-year performance period.

During the year ended December 31, 2024 and December 31, 2025, the Company granted certain employees PRSUs, the calculation of the final achievement of which is based on Company-specific performance metrics as well as a modifier for the Company’s total shareholder return ranking among a peer group over a three-year performance period.

The awards also have a service requirement that equals the respective performance periods.

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ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The activity of the Company’s PRSUs and RSUs is included in the table below.

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ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Commitments and Contingencies

Asbestos Contingencies

Certain entities that became subsidiaries of ESAB Corporation in connection with the Separation are the legal obligor for certain asbestos obligations including long-term asbestos insurance assets, long-term asbestos insurance receivables, accrued asbestos liabilities, long-term asbestos liabilities, asbestos indemnity expenses, asbestos-related defense costs and asbestos insurance recoveries related to the asbestos obligations from the Former Parent’s other legacy industrial businesses.

Certain subsidiaries of the Company are the legal obligor, or owner, for certain asbestos obligations including long-term asbestos insurance assets, long-term asbestos insurance receivables, accrued asbestos liabilities, long-term asbestos liabilities, asbestos indemnity expenses, asbestos-related defense costs and asbestos insurance recoveries related to the asbestos obligations of the Company’s other legacy industrial businesses.

As a result, the Company holds certain asbestos-related contingencies and insurance coverages.

These subsidiaries are each one of many defendants in a large number of lawsuits that claim personal injury as a result of exposure to asbestos from products manufactured or used with components that are alleged to have contained asbestos.

Such components were acquired from third-party suppliers and were not manufactured by any of the Company’s, or Former Parent’s, subsidiaries nor were the subsidiaries producers or direct suppliers of asbestos.

Such components were acquired from third-party suppliers and were not manufactured by any of the Company’s subsidiaries nor were the subsidiaries producers or direct suppliers of asbestos.

The manufactured products that are alleged to have contained or used asbestos generally were provided to meet the specifications of the subsidiaries’ customers, including the United States Navy.

The subs idiaries settle asbestos claims for amounts the Company considers reasonable given the facts and circumstances of each claim .

The annual average settlement payment per asbestos claimant has fluctuated during the past several years while the number of cases has steadily declined, except for 2024 when they have been substantially even versus prior year.

The Company expects fluctuations to continue in the future based upon, among other things, the number and type of claims settled in a particular period and the jurisdictions in which such claims arise.

To date, the majority of settled claims have been dismissed for no payment.

The Company has classified asbestos-related activity in Loss from discontinued operations in the Consolidated and Combined Statements of Operations.

This is consistent with the Former Parent’s classification on the basis that, pursuant to the purchase agreement from the Former Parent’s Fluid Handling business divestiture, the Former Parent retained its asbestos-related contingencies and insurance coverages.

However, as the Former Parent did not retain an interest in the ongoing operations of the business subject to the contingencies, asbestos-related activity was classified as part of Loss from discontinued operations, net of taxes in the Consolidated Statements of Operations of the Former Parent.

The annual number of cases and average settlement payment per asbestos claimant has fluctuated during the past several years.

The Company expects such settlement value fluctuations to continue in the future based upon, among other things, the number and type of claims settled in a particular period and the jurisdictions in which such claims arise.

To date, the majority of settled claims have been dismissed for no payment to plaintiffs.

The Company has classified asbestos-related activity in Loss from discontinued operations, net of taxes in the Consolidated Statements of Operations.

The Company has projected each subsidiary’s future asbestos-related liability costs with regard to pending and future unasserted claims based upon the Nicholson methodology.

The Nicholson methodology is a standard approach used by experts and has been accepted by numerous courts.

Consistent with the Former Parent, it is ESAB’s policy to record a liability for asbestos-related liability costs for the longest period of time that ESAB management can reasonably estimate.

The Company believes that it can reasonably estimate the asbestos-related liability for pending and future claims that will be resolved in the next 15 years and has recorded that liability as its best estimate.

It is ESAB’s policy to record a liability for asbestos-related liability costs for the longest period of time that ESAB management can reasonably estimate.

While it is reasonably possible that the subsidiaries will incur costs after this period, the Company does not believe the reasonably possible loss or a range of reasonably possible losses is estimable at the current time.

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Defense costs associated with asbestos-related liabilities as well as costs incurred related to efforts to recover insurance from the subsidiaries’ insurers are expensed as incurred.

Each subsidiary has separate insurance coverage acquired prior to Company ownership.

Each subsidiary has separate insurance coverage that was acquired prior to Company ownership.

The Company estimates the insurance assets for each subsidiary based upon the applicable policy language, expected recoveries and allocation methodologies and law pertaining to the affected subsidiary’s insurance policies.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The table below summarizes the Asbestos-related claims activity since December 31, 2023 and 2022, respectively.

The table below summarizes the Asbestos-related claims activity for the years ended December 31, 2025 and 2024, respectively.

Year Ended December 31,

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(2) Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants.

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(3) Excludes claims settled in Mississippi for which the majority of claims have historically been resolved for no payment and insurance recoveries.

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Projecting future events, such as new claims to be filed each year, the average cost of resolving each claim, coverage issues among layers of insurers, the method in which losses will be allocated to the various insurance policies, interpretation of the effect on coverage of various policy terms and limits and their interrelationships, the continuing solvency of various insurance companies, the amount of remaining insurance available, as well as the numerous uncertainties inherent in asbestos litigation could cause the actual liabilities and insurance recoveries to be higher or lower than those projected or recorded that could materially affect the Company’s financial condition, results of operations or cash flow.

From time to time, other asbestos allegations related to former businesses of the Former Parent are brought against the Company.

From time to time, other asbestos allegations related to the Company’s legacy industrial businesses are brought against the Company.

Management currently believes no loss is probable or estimable for these other matters.

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The Company is involved in various pending legal proceedings arising out of the ordinary course of the Company’s business.

None of these legal proceedings is expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company.

With respect to these proceedings, and the litigation and claims described in the proceeding paragraphs, management of the Company believes that it will either prevail, has adequate insurance coverage or has established appropriate accruals to cover potential liabilities.

None of these legal proceedings are expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company.

With respect to these proceedings, and the litigation and claims described in the preceding paragraphs, management of the Company believes that it will either prevail, has adequate insurance coverage or has established appropriate accruals to cover potential liabilities.

Legal costs related to proceedings or claims are recorded when incurred.

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There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these legal proceedings were to be determined adverse to the Company, there could be a material adverse effect on the financial condition, results of operations or cash flow of the Company.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Off-Balance Sheet Arrangements

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Segment Information

ESAB is a focused industrial compounder.

Our rich history of innovating products, workflow solutions and our business system, EBX, enables our purpose of Shaping the world we imagine TM.

Our products include fabrication technology advanced equipment, consumables, gas control equipment, robotics and digital solutions.

The Company conducts its operations through two reportable segments.

These segments consist of the “Americas,” which includes operations in North America and South America and “EMEA & APAC,” which includes Europe, Middle East, India, Africa and Asia Pacific.

We serve a global customer base across multiple markets through a combination of direct sales and third-party distribution channels.

Our customer base is highly diversified in the industrial end markets.

The Company’s management considers its Chief Operating Decision Maker (“CODM”) as Shyam Kambeyanda, President, Chief Executive Officer and Director.

The Company’s management and CODM evaluate the operating results of each reportable segments, including assessment of profit or loss, performance and allocation of resources, based upon Net sales and Adjusted EBITDA, which represents Net income from continuing operations excluding the impact of Income tax expense, Interest expense and other, net, Pension settlement loss (gain), Restructuring and other related charges, Separation costs, Acquisition - amortization and other related charges and Depreciation and other amortization .

Segment results reflect the allocation of corporate overhead costs, which primarily consist of Selling, general and administrative expense.

The Company’s management considers its Chief Operating Decision Maker (“CODM”) to be Shyam Kambeyanda, President, Chief Executive Officer and Director.

The Company’s management and CODM evaluate the operating results of each reportable segment, including assessment of profit or loss, performance and allocation of resources, based upon Net sales and Adjusted EBITDA, which represents Net income from continuing operations excluding the impact of Income tax expense, Interest expense and other, net, Pension settlement loss, Restructuring and other related charges, acquisition transaction, due

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

diligence and integration expenses, amortization of intangibles and fair value charges on acquired inventories and depreciation and other amortization .

Segment results reflect the allocation of overhead costs, which primarily consist of Selling, general and administrative expense.

The Company’s segment results are included in the table below.

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1,794,213 1,703,348 1,759,015

Allocated corporate overhead operating expense:

Allocated operating expense:

Americas 51,057 64,517 64,668

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$ 47,287 $ 51,779 $ 48,178

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

(1) For the years ended December 31, 2025, 2024 and 2023, the total Net sales originating from the United States were $ 579.3 million, $ 595.6 million and $ 619.1 million, respectively.

(2) The following is a reconciliation of Net income from continuing operations to Adjusted EBITDA:

(2) The following is a reconciliation of Net income from continuing operations to Adjusted EBITDA on a consolidated basis:

Year Ended December 31,

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Interest expense and other, net 83,910 64,890 85,074

Pension settlement loss (gain) 12,155 — ( 9,136 )

Pension settlement loss — 12,155 —

Restructuring and other related charges (1)

27,756 10,227 24,110

Separation costs (2)

Acquisition - amortization and other related charges (2)

2 unchanged sentences

Adjusted EBITDA $ 559,710 $ 528,774 $ 501,102

ESAB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) I ncludes severance and other termination benefits, including outplacement services, as well as the cost of relocating associates, relocating equipment, lease termination expenses, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines .

(2) I ncludes non-recurrin g charges and employee costs related to the planning and execution of t he Separation within the Selling, general and administrative expense line within the Consolidated and Combined Statements of Operations.

(3) Includes transaction expenses, amortization of intangibles, fair value charges on acquired inventories and integration expenses.

(2) Includes transaction, diligence and integration expenses totaling $ 31.5 million, $ 4.2 million and $ 2.6 million for the years ended December 31, 2025, 2024 and 2023, respectively, and amortization of intangibles and fair value charges on acquired inventories totaling $ 40.5 million, $ 30.3 million and $ 34.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Company’s investments in equity method investees and total assets by segment are included in the table below.

(In thousands)

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$ 4,766,094 $ 4,033,975

The detail of the Company’s property, plant and equipment, net by geography are included in the table below.

(In thousands)

Property, plant and equipment, net (1) :

United States $ 73,036 $ 68,398

Czech Republic $ 75,028 $ 55,554

United States 72,617 73,036

Germany 48,245 11,191

India 31,437 31,506

Mexico 23,464 20,495

Poland 17,227 14,661

Russia 12,225 15,550

Other foreign countries 131,085 106,565

1 unchanged sentence

(1) As the Company does not allocate all long-lived assets, specifically intangible assets, to each individual country, evaluation of long-lived assets in total is impracticable.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Related Party Transactions

Related Party Agreements

On April 4, 2022, in connection with the Separation, the Company entered into several agreements with Enovis that govern the Separation and provide a framework for the relationship between the parties going forward including a separation and distribution agreement, transition services agreement, tax matters agreement, employee matters agreements, stockholders and registration rights agreement, intellectual property matters agreement and license agreement for EBX.

Separation and Distribution Agreement

The Company entered into a separation and distribution agreement (the “Separation Agreement”) with Enovis immediately prior to the distribution of the Company’s common stock to Enovis stockholders.

The Separation Agreement sets forth the Company’s agreements with Enovis regarding the principal actions to be taken in connection with the Separation.

The Separation Agreement contains provisions that, among other things, relate to (i) assets, liabilities and contracts to be transferred, assumed and assigned to each of ESAB and Enovis as part of the Separation, (ii) cash distribution made to Enovis in partial consideration of the transfer of ESAB Assets to the Company in connection with the Separation and (iii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of ESAB’s business with ESAB and financial responsibility for the obligations and liabilities of Enovis’s remaining business with Enovis.

Transition Services Agreement

The transition services agreement sets forth the terms and conditions pursuant to which the Company and its subsidiaries and Enovis and its subsidiaries will provide to each other various services.

As of the year ended December 31, 2024, the related obligations have been closed out.

Tax Matters Agreement

The tax matters agreement governs the Company’s and Enovis’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes.

Employee Matters Agreement

The employee matters agreement sets forth, among other things, the allocation of assets, liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters in connection with the Separation, including the treatment of outstanding equity and other incentive awards and certain retirement and welfare benefit obligations.

Stockholders and Registration Rights Agreement

The stockholders and registration rights agreement sets forth the rights of the stockholders when requiring the Company to facilitate the resale of shares.

Intellectual Property Matters Agreement

The intellectual property matters agreement sets forth the terms and conditions pursuant to which Enovis and the Company have mutually granted certain personal, generally irrevocable, non-exclusive, worldwide and royalty-free rights to use certain intellectual property.

The Company and Enovis are able to sublicense their rights in connection with activities relating to their businesses, but not for independent use by third parties.

EBX License Agreement

The EBX license agreement sets forth the terms and conditions pursuant to which Enovis has granted a royalty-free, non-exclusive, worldwide and nontransferable license to the Company to use EBX, solely in support of its businesses.

The Company will be able to sublicense such license solely to direct and indirect wholly-owned subsidiaries.

In addition, under the EBX license agreement, Enovis and the Company each license to each other improvements made by such party to EBX during the first two years of the term of the EBX license agreement.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Allocated Expenses

Prior to the Separation, the Company operated as part of the Former Parent and not as a stand-alone company.

Accordingly, the Former Parent allocated certain shared costs to the Company that are reflected as expenses in these financial statements.

These amounts included, but were not limited to, items such as general management and executive oversight, compliance, human resources, procurement and legal functions and financial management, including public company reporting, consolidated tax filings and tax planning.

Management considered the allocation methodologies used by the Former Parent to be reasonable and to appropriately reflect the related expenses attributable to the Company for purposes of the three months ended April 1, 2022 combined financial statements;

however, the expenses reflected in these financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if the Company had operated as a separate stand-alone entity.

The Company had no stock-based compensation plans prior to the Separation;

however, certain employees of the Company participated in the Former Parent’s stock-based compensation plans, which provided for the grants of stock options and RSUs among other types of awards.

The expense associated with the Company's employees who participated in the plans of the Former Parent was allocated to the Company in the accompanying Consolidated and Combined Statements of Operations through the date of Separation.

The Company’s allocated expenses from the Former Parent were $ 6.0 million for the three months ended April 1, 2022, and is included in the Selling, general and administrative expense in the Consolidated and Combined Statements of Operations.

Following the Separation, the Company independently incurs expenses as a stand-alone company.

Refer to Note 14, “Benefit Plans,” for allocations of net periodic benefit associated with a Former Parent sponsored benefit plan.

Subsequent Events

The dividend of $ 6.1 million included in Accrued liabilities in the Consolidated Balance Sheets at December 31, 2025 was paid on January 16, 2026, to stockholders of record as of December 31, 2025.

On February 18, 2025, the Company entered into an agreement to acquire Bavaria Schweisstechnik, a European provider of submerged-arc welding applications, for approximately € 60 million of cash consideration.

This acquisition is expected to be completed during 2025, subject to the receipt of applicable regulatory approvals and customary closing conditions.

On January 31, 2026, the Company entered into an agreement to acquire Eddyfi Technologies (“Eddyfi”), a global leader in advanced inspection and monitoring technologies headquartered in Quebec, Canada, for approximately $ 1.45 billion.

The acquisition is expected to be funded with a combination of cash on hand, debt and approximately $ 318 million of fully committed equity.

The Company obtained a commitment for a $1.0 billion 364-day senior unsecured bridge term loan credit facility from JPMorgan Chase Bank, N.A., which will be available to fund the cash consideration for the acquisition and related fees and expenses.

This acquisition is expected to be completed in mid-2026, subject to the receipt of applicable regulatory approvals and customary closing conditions.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data