What changed in this filing

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Item 1. Financial Statements

2023-10-25 compared with 2023-07-26 · 141 added, 94 removed, 474 unchanged (33% of the section changed)

3 unchanged sentences

($ in millions, except share and per share amounts)

June 30, 2023 December 31, 2022

September 29, 2023 December 31, 2022

Current assets:

Cash and equivalents $ 714.1 $ 709.2

Trade accounts receivable less allowance for doubtful accounts of $ 40.4 at June 30, 2023 and $ 43.9 at December 31, 2022

Trade accounts receivable less allowance for doubtful accounts of $ 39.6 at September 29, 2023 and $ 43.9 at December 31, 2022

Finished goods 222.7 215.3

4 unchanged sentences

Total current assets 2,469.3 2,477.0

Property, plant and equipment, net of accumulated depreciation of $ 789.2 at June 30, 2023 and $ 754.5 at December 31, 2022

Property, plant and equipment, net of accumulated depreciation of $ 803.0 at September 29, 2023 and $ 754.5 at December 31, 2022

Other assets 479.3 455.8

13 unchanged sentences

$ 0.01 par value, 2.0 billion shares authorized;

362.7 million issued and 351.9 million outstanding at June 30, 2023;

363.4 million issued and 351.4 million outstanding at September 29, 2023;

361.5 million issued and 352.9 million outstanding at December 31, 2022

11 unchanged sentences

($ and shares in millions, except per share amounts)

Three Months Ended Six Months Ended

June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022

Three Months Ended Nine Months Ended

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Sales of products and software $ 1,258.9 $ 1,227.7 $ 3,786.3 $ 3,609.8

26 unchanged sentences

($ in millions)

Three Months Ended Six Months Ended

June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022

Three Months Ended Nine Months Ended

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Net earnings $ 218.0 $ 189.9 $ 600.6 $ 528.0

28 unchanged sentences

Balance, June 30, 2023 351.9 $ 3.6 $ 3,778.7 $ ( 572.0 ) $ 7,075.4 $ ( 319.9 ) $ 6.0

Net earnings for the period — — — — 218.0 $ — $ —

Dividends to common shareholders — — — — ( 24.6 ) — —

Other comprehensive income (loss) — — — — — ( 45.9 ) —

Common stock-based award activity 0.7 — 54.8 — — — —

Common stock repurchases ( 1.0 ) — — ( 78.8 ) — — —

Shares withheld for taxes ( 0.2 ) — ( 11.5 ) — — — —

Change in noncontrolling interests — — — — — — ( 0.2 )

Balance, September 29, 2023 351.4 $ 3.6 $ 3,822.0 $ ( 650.8 ) $ 7,268.8 $ ( 365.8 ) $ 5.8

Common Stock Additional Paid-In Capital Treasury Shares Retained Earnings Accumulated

21 unchanged sentences

Balance, July 1, 2022 355.6 $ 3.6 $ 3,651.2 $ ( 242.9 ) $ 6,374.5 $ ( 342.1 ) $ 5.1

Net earnings for the period — — — — 189.9 — —

Dividends to common shareholders — — — — ( 24.8 ) — —

Other comprehensive income (loss) — — — — — ( 111.6 ) —

Common stock-based award activity 0.2 — 28.3 — — — —

Common stock repurchases ( 2.0 ) — — ( 133.2 ) — — —

Shares withheld for taxes — — ( 2.1 ) — — — —

Change in noncontrolling interests — — — — — — ( 0.2 )

Balance, September 30, 2022 353.8 $ 3.6 $ 3,677.4 $ ( 376.1 ) $ 6,539.6 $ ( 453.7 ) $ 4.9

See the accompanying Notes to Consolidated Condensed Financial Statements.

2 unchanged sentences

($ in millions)

Six Months Ended

June 30, 2023 July 1, 2022

Nine Months Ended

September 29, 2023 September 30, 2022

Cash flows from operating activities:

13 unchanged sentences

Payments for additions to property, plant and equipment ( 73.7 ) ( 59.7 )

Proceeds from sale of property 4.9 —

Cash paid for acquisitions, net of cash received ( 57.7 ) ( 15.2 )

Proceeds from sale of property 7.2 —

Proceeds from sale of business — 6.6

Net cash used in investing activities ( 124.2 ) ( 68.3 )

2 unchanged sentences

Proceeds from borrowings (maturities greater than 90 days), net of issuance costs — 396.9

Repayment of borrowings (maturities greater than 90 days) ( 250.0 ) —

Payment of 0.875 % convertible senior notes due 2022

22 unchanged sentences

In our opinion, the accompanying financial statements contain all adjustments, which consist of only normal, recurring accruals necessary to fairly present our financial position, results of operations, comprehensive income, stockholders’ equity, and cash flows for the periods presented.

The results of operations for the three and six months ended June 30, 2023, are not necessarily indicative of the results for the full year.

The results of operations for the three and nine months ended September 29, 2023, are not necessarily indicative of the results for the full year.

Russia Ukraine Conflict

1 unchanged sentence

In the second quarter of 2022, the Company exited business operations in Russia, other than for ASP’s sterilization products, which are exempt from international sanctions as humanitarian products.

In the three and six-month periods ended July 1, 2022, the Company recorded pre-tax charges of $ 16.2 million primarily relating to the write-off of net assets, the write-off of the cumulative translation adjustment in earnings for legal entities deemed substantially liquidated, and to record provisions for employee severance and legal contingencies.

In the three and nine-month periods ended September 30, 2022, the Company recorded pre-tax charges of $ 1.1 million and $ 17.3 million, respectively, primarily relating to the write-off of net assets, the cumulative translation adjustment in earnings for legal entities deemed substantially liquidated, and to record provisions for employee severance and legal contingencies.

These costs are identified as the “Russia exit and wind down costs” in the Condensed Consolidated Statements of Earnings.

The exit activities were completed in 2022 and we did not incur additional charges in 2023.

The exit activities were completed in 2022.

Accumulated Other Comprehensive Loss

1 unchanged sentence

subsidiaries.

During the second quarter of 2022, our ¥ 14.4 billion Yen-denominated term loan and our € 275 million Euro-denominated term loan were designated as net investment hedges of our investment in applicable foreign operations.

We recognized after-tax foreign currency transaction gains of $ 5.1 million and $ 3.6 million, respectively, during the three-month periods ended June 30, 2023 and July 1, 2022, and gains of $ 3.4 million and $ 3.6 million, respectively, during the six-month periods ended June 30, 2023 and July 1, 2022, on the debt that was deferred in the foreign currency translation component of Accumulated other comprehensive income (loss) (“AOCI”) as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries.

We have designated our outstanding ¥ 14.4 billion Yen-denominated term loan and our € 275 million Euro-denominated term loan as net investment hedges of our investment in applicable foreign operations.

We recognized after-tax foreign currency transaction gains of $ 9.6 million and $ 14.6 million during the three-month periods ended September 29, 2023 and September 30, 2022, respectively, and gains of $ 13.0 million and $ 18.3 million during the nine-month periods ended September 29, 2023 and September 30, 2022, respectively, on the debt that was deferred in the foreign currency translation component of Accumulated Other Comprehensive Income (Loss) (“AOCI”) as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries.

Any amounts deferred in AOCI will remain until the hedged investment is sold or substantially liquidated.

We recorded no ineffectiveness from our net investment hedges during the three and six-month periods ended June 30, 2023 and July 1, 2022.

We recorded no ineffectiveness from our net investment hedges during the three and nine-month periods ended September 29, 2023 and September 30, 2022.

The changes in AOCI by component are summarized below ($ in millions):

adjustments Pension & post-retirement plan benefit adjustments (a)

For the Three Months Ended June 30, 2023:

Balance, March 31, 2023 $ ( 288.0 ) $ ( 24.3 ) $ ( 312.3 )

For the Three Months Ended September 29, 2023:

Balance, June 30, 2023 $ ( 295.4 ) $ ( 24.5 ) $ ( 319.9 )

Other comprehensive income (loss) before reclassifications, net of income taxes ( 46.0 ) ( 0.4 ) ( 46.4 )

Amounts reclassified from accumulated other comprehensive income (loss):

Amounts reclassified from AOCI into income:

Increase (decrease) — 0.6 (b)

Income tax impact — ( 0.1 ) ( 0.1 )

Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — ( 0.2 ) ( 0.2 )

Amounts reclassified from AOCI into income, net of income taxes

Net current period other comprehensive income (loss), net of income taxes ( 46.0 ) 0.1 ( 45.9 )

Balance, June 30, 2023 $ ( 295.4 ) $ ( 24.5 ) $ ( 319.9 )

For the Three Months Ended July 1, 2022:

Balance, April 1, 2022 $ ( 162.1 ) $ ( 61.8 ) $ ( 223.9 )

Balance, September 29, 2023 $ ( 341.4 ) $ ( 24.4 ) $ ( 365.8 )

For the Three Months Ended September 30, 2022:

Balance, July 1, 2022 $ ( 280.7 ) $ ( 61.4 ) $ ( 342.1 )

Other comprehensive income (loss) before reclassifications, net of income taxes ( 112.4 ) — ( 112.4 )

Amounts reclassified from accumulated other comprehensive income (loss):

Amounts reclassified from AOCI into income:

Increase (decrease) — 1.2 (b)

Income tax impact — ( 0.4 ) ( 0.4 )

Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes 2.7 0.4 3.1

Amounts reclassified from AOCI into income, net of income taxes

Net current period other comprehensive income (loss), net of income taxes ( 112.4 ) 0.8 ( 111.6 )

Balance, July 1, 2022 $ ( 280.7 ) $ ( 61.4 ) $ ( 342.1 )

Balance, September 30, 2022 $ ( 393.1 ) $ ( 60.6 ) $ ( 453.7 )

adjustments Pension & post-retirement plan benefit adjustments (a)

For the Six Months Ended June 30, 2023:

For the Nine Months Ended September 29, 2023:

Balance, December 31, 2022 $ ( 301.4 ) $ ( 24.3 ) $ ( 325.7 )

Other comprehensive income (loss) before reclassifications, net of income taxes ( 40.0 ) ( 0.4 ) ( 40.4 )

Amounts reclassified from accumulated other comprehensive income (loss):

Amounts reclassified from AOCI into income:

Increase (decrease) — 0.2 (b)

Income tax impact — 0.1 0.1

Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — ( 0.2 ) ( 0.2 )

Amounts reclassified from AOCI into income, net of income taxes

Net current period other comprehensive income (loss) ( 40.0 ) ( 0.1 ) ( 40.1 )

Balance, June 30, 2023 $ ( 295.4 ) $ ( 24.5 ) $ ( 319.9 )

For the Six Months Ended July 1, 2022:

Balance, September 29, 2023 $ ( 341.4 ) $ ( 24.4 ) $ ( 365.8 )

For the Nine Months Ended September 30, 2022:

Balance, December 31, 2021 $ ( 122.7 ) $ ( 62.3 ) $ ( 185.0 )

Other comprehensive income (loss) before reclassifications, net of income taxes ( 273.1 ) — ( 273.1 )

Amounts reclassified from accumulated other comprehensive income (loss):

Amounts reclassified from AOCI into income:

Increase (decrease) 2.7 2.3 (b)

Income tax impact — ( 0.6 ) ( 0.6 )

Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes 2.7 0.9 3.6

Amounts reclassified from AOCI into income, net of income taxes

Net current period other comprehensive income (loss) ( 270.4 ) 1.7 ( 268.7 )

Balance, July 1, 2022 $ ( 280.7 ) $ ( 61.4 ) $ ( 342.1 )

Balance, September 30, 2022 $ ( 393.1 ) $ ( 60.6 ) $ ( 453.7 )

(a) Includes balances relating to defined benefit plans, supplemental executive retirement plans, and other postretirement employee benefit plans.

1 unchanged sentence

Allowances for Doubtful Accounts

All trade accounts and unbilled receivables are reported in the Consolidated Condensed Balance Sheets adjusted for any write-offs and net of allowances for credit losses.

All trade accounts and unbilled receivables are recorded in the Consolidated Condensed Balance Sheets adjusted for any write-offs and net of allowances for credit losses.

The allowances for credit losses represent management’s best estimate of the credit losses expected from our unbilled and trade accounts receivable portfolios over the life of the underlying assets.

Additions to the allowances are charged to current period earnings, amounts determined to be uncollectible are charged directly against the allowances, while amounts recovered on previously written-off accounts increase the allowances.

During the three and six-month periods ending June 30, 2023 and July 1, 2022, the activity was immaterial.

During the three and nine-month periods ending September 29, 2023 and September 30, 2022, the activity was immaterial.

Restructuring

2 unchanged sentences

We incurred these costs to position ourselves to provide superior products and services to customers in a cost-efficient manner, while taking into consideration the impact of broad economic uncertainties.

During the three and six-month periods ended June 30, 2023, we incurred charges of $ 10.7 million and $ 28.3 million, respectively.

These charges are included in Cost of sales and Selling, general, and administrative expenses in the Consolidated Condensed Statements of Earnings.

Accrued restructuring costs were $ 14.2 million as of June 30, 2023 and are included within Accrued expenses and other current liabilities in the Consolidated Condensed Balance Sheets.

restructuring charges we expect to recognize during the year ending December 31, 2023 under this discrete plan are approximately $ 30 to $ 35 million.

During the three and nine-month periods ended September 29, 2023, we incurred charges of $ 0.9 million and $ 29.2 million, respectively.

These charges are recorded within Cost of sales and Selling, general, and administrative expenses in the Consolidated Condensed Statements of Earnings.

Accrued restructuring costs were $ 10 million as of September 29, 2023 and are recorded within Accrued expenses and other current liabilities in the Consolidated Condensed Balance Sheets.

During the third quarter, the plan was amended due to on-going macroeconomic and external conditions.

As a result, we now expect to recognize approximately $ 60 to $ 65 million under this discrete plan during the year ending December 31, 2023.

Convertible Senior Notes

9 unchanged sentences

We consider the applicability and impact of all ASUs.

Any recently issued ASUs were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s result of operations, financials position or cash flows.

Any recently issued ASUs were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s result of operations, financial position or cash flows.

ACQUISITIONS AND DIVESTITURES

We continually evaluate potential mergers and acquisitions that align with our business portfolio strategy.

We have completed a number of acquisitions that have been accounted for as purchases of businesses and resulted in the recognition of goodwill in our financial statements.

This goodwill arises when the purchase price for an acquired business exceeds its identifiable assets, net of liabilities.

The purchase price for acquired businesses reflect a number of factors, including the future earnings and cash flow potential of the business, the strategic fit and resulting synergies from the complementary portfolio of the acquired business to our existing operations, industry expertise, and market access.

During the three and nine month periods ended September 29, 2023, we made three acquisitions (“the Q3 2023 acquisitions”) in our Intelligent Operating Solutions segment for an aggregate cash consideration of $ 59.0 million, which includes an immaterial deferred payment, net of acquired cash.

The Q3 2023 acquisitions accelerate our strategy and strengthen our product portfolio, providing world-class solutions to our customers.

We recorded approximately $ 36.2 million of goodwill related to the acquisitions, which is not tax deductible, as well as $ 19.9 million of intangible assets, primarily consisting of customer relationships, technology, and trade names.

All other acquired assets and assumed liabilities are immaterial.

The purchase price allocation is provisional and is subject to further adjustments as additional information becomes available concerning the fair value of the assets acquired and liabilities assumed.

We make appropriate adjustments to purchase price allocations prior to completion of the applicable measurement period, as required and as soon as practicable.

On September 30, 2022, we completed the sale of our Therapy Physics product line, which was reported in our Advanced Healthcare Solutions segment, to an unrelated third party for total consideration of $ 9.6 million.

As a result of the sale, in the three and nine month periods ended September 30, 2022, we recorded a net realized pre-tax gain totaling $ 2.3 million, net of transaction costs, which is recorded within Other non-operating expense, net in the Consolidated Condensed Statements of Earnings.

The divestiture of this product line did not represent a strategic shift with a major effect on the Company’s operations and financial results and therefore the divested product line is not reported as a discontinued operation.

Subsequent Event

On October 22, 2023, we entered into a definitive agreement to acquire EA Elektro-Automatik Holding GmbH, a leading supplier of high-power electronic test solutions for energy storage, mobility, hydrogen, and renewable energy applications, for a total purchase price of approximately $ 1.665 billion in cash.

The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close early in the first quarter of 2024.

The following is a roll forward of our carrying value of goodwill by segment ($ in millions):

Balance, Intelligent Operating Solutions Precision Technologies Advanced Healthcare Solutions Total Goodwill

Intelligent Operating Solutions Precision Technologies Advanced Healthcare Solutions Total Goodwill

Balance, December 31, 2022 $ 4,074.4 $ 1,810.2 $ 3,163.9 $ 9,048.5

Attributable to acquisitions

36.2 — — 36.2

Foreign currency translation and other 0.9 ( 15.4 ) ( 11.5 ) ( 26.0 )

Balance, June 30, 2023 $ 4,087.9 $ 1,805.1 $ 3,158.9 $ 9,051.9

Balance, September 29, 2023 $ 4,111.5 $ 1,794.8 $ 3,152.4 $ 9,058.7

FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where our assets and liabilities are required to be carried at fair value, and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards.

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where certain assets and liabilities are required to be carried at fair value, and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards.

This hierarchy prioritizes the inputs into three broad levels as follows:

9 unchanged sentences

(Level 3) Total

June 30, 2023

September 29, 2023

Deferred compensation liabilities $ — $ 36.3 $ — $ 36.3

2 unchanged sentences

Certain management employees participate in our nonqualified deferred compensation programs that permit such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment.

All amounts deferred under such plans are unfunded, unsecured obligations and are included in Other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets.

All amounts deferred under such plans are unfunded, unsecured obligations and are recorded within Other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets.

Participants may choose among alternative earnings rates for the amounts they defer, which are primarily based on investment options within our defined contribution plans for the benefit of U.S.

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However, these assets are required to be assessed for impairment whenever events or circumstances indicate that their carrying value may not be fully recoverable, and at least annually for goodwill and indefinite-lived intangible assets.

We evaluated events or circumstances that may indicate the carrying value of our non-financial assets may not be fully recoverable during the three and six-month periods ended June 30, 2023, and recorded no material impairments.

We evaluated events or circumstances that may indicate the carrying value of our non-financial assets may not be fully recoverable during the three and nine-month periods ended September 29, 2023, and recorded no material impairments.

We evaluated events and circumstances that, during the three and nine month periods ended September 30, 2022, indicated the carrying value of the equity investment in a third-party entity held by our Intelligent Operating Solutions segment was no

longer recoverable.

As a result, in the three and nine month periods ended September 30, 2022, we recorded a pre-tax impairment loss of $ 8.1 million to write down an investment to fair value.

The loss was recorded within Other non-operating expense, net in our Consolidated Condensed Statement of Earnings.

Fair Value of Financial Instruments

The carrying amount and fair value of financial instruments are as follows ($ in millions):

June 30, 2023 December 31, 2022

September 29, 2023 December 31, 2022

Carrying Amount Fair Value Carrying Amount Fair Value

1 unchanged sentence

Long-term debt, net of current maturities 1,982.1 1,795.6 2,251.6 2,078.1

As of June 30, 2023 and December 31, 2022, the current portion of long-term debt and long-term debt, net of current maturities were categorized as Level 1.

As of September 29, 2023 and December 31, 2022, the current portion of long-term debt and long-term debt, net of current maturities were categorized as Level 1.

The fair values of long-term borrowings were based on quoted market prices.

2 unchanged sentences

The components of our debt were as follows ($ in millions):

June 30, 2023 December 31, 2022

September 29, 2023 December 31, 2022

dollar-denominated commercial paper $ 151.1 $ 405.0

7 unchanged sentences

Long-term debt, carrying value 2,732.0 3,251.3

current portion of long-term debt 999.9 999.7

current portion of long-term debt, carrying value

Long-term debt, net of current maturities $ 1,982.1 $ 2,251.6

Refer to Note 11 of our 2022 Annual Report on Form 10-K for further details of our debt financing.

Delayed-Draw Term Loan due 2023

On August 24, 2023, we repaid $ 250 million of the Delayed-Draw Term Loan Due 2023, which is prepayable at our option without premium or penalty.

The amount repaid may not be reborrowed.

The remaining principal is due on December 14, 2023.

Other Liquidity Sources

3 unchanged sentences

Interest expense on commercial paper is paid at maturity and is generally based on our credit ratings at the time of issuance and prevailing short-term interest rates.

The details of our outstanding Commercial Paper Programs as of June 30, 2023 were as follows ($ in millions):

The details of our outstanding Commercial Paper Programs as of September 29, 2023 were as follows ($ in millions):

Carrying value (a)

3 unchanged sentences

Credit support for the Commercial Paper Programs is provided by a five-year $ 2.0 billion senior unsecured revolving credit facility that expires on October 18, 2027 (the “Revolving Credit Facility”) which, to the extent not otherwise providing credit support for our commercial paper programs, can also be used for working capital and other general corporate purposes.

As of June 30, 2023, no borrowings were outstanding under the Revolving Credit Facility.

As of September 29, 2023, no borrowings were outstanding under the Revolving Credit Facility.

We classified our borrowings outstanding under the Commercial Paper Programs as Long-term debt in the accompanying Consolidated Condensed Balance Sheets as we had the intent and ability, as supported by availability under the Revolving Credit Facility, to refinance these borrowings for at least one year from the balance sheet date.

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Service sales include revenues from extended warranties, post-contract customer support (“PCS”), maintenance contracts or services, contract labor to perform ongoing service at a customer location, services related to previously sold products, and software implementation services.

Contract Assets — In certain circumstances, we record contract assets which include unbilled amounts typically resulting from sales under contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is not only

subject to the passage of time.

Contract assets were $ 97 million as of June 30, 2023 and $ 82 million as of December 31, 2022.

Contract assets are recorded in Prepaid expenses and other current assets in our Consolidated Condensed Balance Sheets.

Contract assets were $ 108 million as of September 29, 2023 and $ 82 million as of December 31, 2022.

Contract assets are recorded within Prepaid expenses and other current assets in our Consolidated Condensed Balance Sheets.

Contract Costs — We incur and capitalize incremental costs to obtain certain contracts, typically sales-related commissions where the amortization period is greater than one year and costs associated with assets used by our customers in certain service arrangements.

As of June 30, 2023 and December 31, 2022, we had $ 48 million and $ 42 million, respectively, in net revenue-related contract costs primarily related to certain software contracts.

Revenue-related contract costs are recorded in the Prepaid expenses and other current assets and Other assets line items in our Consolidated Condensed Balance Sheets.

As of September 29, 2023 and December 31, 2022, we had $ 48 million and $ 42 million, respectively, in net revenue-related contract costs primarily related to certain software contracts.

Revenue-related contract costs are recorded within Prepaid expenses and other current assets and Other assets in our Consolidated Condensed Balance Sheets.

These assets have estimated useful lives between three and five years .

1 unchanged sentence

We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue.

The current portion of deferred revenue is included in Accrued expenses and other current liabilities and the noncurrent portion of deferred revenue is included in Other long-term liabilities in our Consolidated Condensed Balance Sheets.

The current portion of deferred revenue is recorded within Accrued expenses and other current liabilities and the noncurrent portion of deferred revenue is recorded within Other long-term liabilities in our Consolidated Condensed Balance Sheets.

Our contract liabilities consisted of the following ($ in millions):

June 30, 2023 December 31, 2022

September 29, 2023 December 31, 2022

Deferred revenue - current $ 513.5 $ 509.6

1 unchanged sentence

Total contract liabilities $ 554.6 $ 547.6

During the three and six-month periods ended June 30, 2023, we recognized revenue related to our contract liabilities at December 31, 2022 of $ 113 million and $ 288 million.

The change in our contract liabilities from December 31, 2022 to June 30, 2023 was primarily due to the timing of billings and revenue recognized for subscription-based software contracts, PCS and extended warranty services.

During the three and nine-month periods ended September 29, 2023, we recognized revenue related to our contract liabilities at December 31, 2022 of $ 80 million and $ 368 million, respectively.

The change in our contract liabilities from December 31, 2022 to September 29, 2023 was primarily due to the timing of billings and revenue recognized for subscription-based software contracts, PCS and extended warranty services.

Remaining Performance Obligations — Our remaining performance obligations represent the transaction price of firm, non-cancelable orders and the average contract value for software contracts, for which work has not been performed.

1 unchanged sentence

The aggregate remaining performance obligations attributable to each of our segments is as follows ($ in millions):

June 30, 2023

September 29, 2023

Intelligent Operating Solutions $ 564.3

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We disaggregate revenue from contracts with customers by sales of products and software and services, geographic location, and end market for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Disaggregation of revenue for the three-month period ended June 30, 2023 is presented as follows ($ in millions):

Disaggregation of revenue for the three-month period ended September 29, 2023 is presented as follows ($ in millions):

Total Intelligent Operating Solutions Precision Technologies Advanced Healthcare Solutions

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(a) Direct sales by end market include sales made through third-party distributors where we have visibility into the end customer.

Disaggregation of revenue for the three-month period ended July 1, 2022 is presented as follows ($ in millions):

Disaggregation of revenue for the three-month period ended September 30, 2022 is presented as follows ($ in millions):

Total Intelligent Operating Solutions Precision Technologies Advanced Healthcare Solutions

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(a) Direct sales by end market include sales made through third-party distributors where we have visibility into the end customer.

Disaggregation of revenue for the six-month period ended June 30, 2023 is presented as follows ($ in millions):

Disaggregation of revenue for the nine-month period ended September 29, 2023 is presented as follows ($ in millions):

Total Intelligent Operating Solutions Precision Technologies Advanced Healthcare Solutions

21 unchanged sentences

(a) Direct sales by end market include sales made through third-party distributors where we have visibility into the end customer.

Disaggregation of revenue for the six-month period ended July 1, 2022 is presented as follows ($ in millions):

Disaggregation of revenue for the nine-month period ended September 30, 2022 is presented as follows ($ in millions):

Total Intelligent Operating Solutions Precision Technologies Advanced Healthcare Solutions

21 unchanged sentences

(a) Direct sales by end market include sales made through third-party distributors where we have visibility into the end customer.

Our effective tax rates for the three and six-month period ended June 30, 2023 were 16.5 % and 16.1 %, respectively, as compared to 16.9 % and 15.3 %, respectively, for the three and six-month period ended July 1, 2022.

The decrease in the effective tax rate for the three-month period ended June 30, 2023 as compared to the three-month period ended July 1, 2022 was primarily due to effect of Russia exit and wind down costs for which no tax benefit was recognized during the three-month period ending July 1, 2022.

The increase in the effective tax rate for the six-month period ended June 30, 2023 as compared to the six-month period ended July 1, 2022 was primarily due to uncertain tax position reserves released during the six-month period ending July 1, 2022.

Our effective tax rates for the three and six-month periods ended June 30, 2023, differ from the U.S.

Our effective tax rates for the three and nine-month period ended September 29, 2023 were 15.2 % and 15.8 %, respectively, as compared to 12.7 % and 14.4 %, respectively, for the three and nine-month period ended September 30, 2022.

The increase in the effective tax rate for the three-month period ended September 29, 2023 as compared to the three-month period ended September 30, 2022 was primarily due to a change in non-recurring permanent differences recognized.

The increase in the effective tax rate for the nine-month period ended September 29, 2023 as compared to the nine-month period ended September 30, 2022 was primarily due to uncertain tax position reserves recorded.

Our effective tax rates for the three and nine-month periods ended September 29, 2023, differ from the U.S.

federal statutory rate of 21% due primarily to the impact of credits and deductions provided by law and changes in our uncertain tax position reserves.

4 unchanged sentences

The 2016 Stock Incentive Plan (the “Stock Plan”), provides for the grant of stock appreciation rights, restricted stock units, and performance stock units (collectively, “Stock Awards”), stock options, or any other stock-based award.

As of June 30, 2023, approximately 14 million shares of our common stock were available for subsequent issuance under the Stock Plan.

As of September 29, 2023, approximately 14 million shares of our common stock were available for subsequent issuance under the Stock Plan.

For a full description of our Stock Plan, refer to Note 17 of our 2022 Annual Report on Form 10-K.

2 unchanged sentences

The following summarizes the components of our stock-based compensation expense under the Stock Plan ($ in millions):

Three Months Ended Six Months Ended

June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022

Three Months Ended Nine Months Ended

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Stock Awards:

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Total stock-based compensation expense, net of income taxes $ 25.1 $ 18.9 $ 73.0 $ 56.8

The following summarizes the unrecognized compensation cost for the Stock Plan awards as of June 30, 2023.

The following summarizes the unrecognized compensation cost for the Stock Plan awards as of September 29, 2023.

This compensation cost is expected to be recognized over a weighted average period of approximately two years , representing the remaining service period related to the awards.

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We generally accrue estimated warranty costs at the time of sale.

In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained.

In general, manufactured products are warrantied against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained.

Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product.

1 unchanged sentence

The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known.

During the six-month periods ending June 30, 2023 and July 1, 2022, warranty related activity was immaterial.

Operating lease cost for the three-month periods ended June 30, 2023 and July 1, 2022 was $ 12 million and $ 14 million, respectively.

Operating lease costs for the six-month periods ended June 30, 2023 and July 1, 2022 was $ 24 million and $ 29 million, respectively.

During the six-month periods ended June 30, 2023 and July 1, 2022, cash paid for operating leases included in operating cash flows was $ 24 million and $ 26 million, respectively.

Right-of-use (“ROU”) assets obtained in exchange for operating lease obligations were $ 18 million and $ 6 million during the six-month periods ended June 30, 2023 and July 1, 2022, respectively.

Operating lease ROU assets were $ 158 million and $ 162 million as of June 30, 2023 and December 31, 2022, respectively.

Operating lease liabilities were $ 166 million and $ 169 million as of June 30, 2023 and December 31, 2022, respectively.

Operating lease ROU assets and operating lease liabilities are reported on the Consolidated Condensed Balance Sheets within Other assets, Accrued expenses and Other current liabilities and Other long-term liabilities, respectively.

During the nine-month periods ending September 29, 2023 and September 30, 2022, warranty related activity was immaterial.

Operating lease cost for both the three-month periods ended September 29, 2023 and September 30, 2022 was $ 13 million.

Operating lease costs for the nine-month periods ended September 29, 2023 and September 30, 2022 was $ 37 million and $ 42 million, respectively.

During the nine-month periods ended September 29, 2023 and September 30, 2022, cash paid for operating leases included in operating cash flows was $ 36 million and $ 38 million, respectively.

Right-of-use (“ROU”) assets obtained in exchange for operating lease obligations were $ 29 million and $ 18 million during the nine-month periods ended September 29, 2023 and September 30, 2022, respectively.

Operating lease ROU assets were $ 157 million and $ 162 million as of September 29, 2023 and December 31, 2022, respectively.

Operating lease liabilities were $ 165 million and $ 169 million as of September 29, 2023 and December 31, 2022, respectively.

Operating lease ROU assets and operating lease liabilities are recorded in the Consolidated Condensed Balance Sheets within Other assets, Accrued expenses and other current liabilities, and Other long-term liabilities, respectively.

NET EARNINGS PER SHARE

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Diluted EPS is similarly calculated, except that the calculation includes the dilutive effect of the assumed conversion of 0.875 % Convertible Notes and associated issuance of shares under the if-converted method, while outstanding in 2022, and the assumed issuance of shares under stock-based compensation plans under the treasury stock method, except where the inclusion of such shares would have an anti-dilutive impact.

Anti-dilutive options excluded from the diluted EPS calculation for both the three and six-month periods ended June 30, 2023 were 2.7 million, and were 7.7 million and 7.5 million for the three and six-month periods ended July 1, 2022, respectively.

Anti-dilutive options excluded from the diluted EPS calculation for the three and nine-month periods ended September 29, 2023 were 0.1 million and 0.5 million, respectively, and were 7.3 million for both the three and nine-month periods ended September 30, 2022.

Information related to the calculation of net earnings per share of common stock is summarized as follows ($ and shares in millions, except per share amounts):

Three Months Ended Six Months Ended

June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022

Three Months Ended Nine Months Ended

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Net earnings $ 218.0 $ 189.9 $ 600.6 $ 528.0

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Second quarter 0.07 24.6

Third quarter 0.07 24.6

Total $ 0.21 $ 73.9

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Second quarter 0.07 24.9

Third quarter 0.07 24.8

Total $ 0.21 $ 74.8

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The repurchase program may be suspended or discontinued at any time by the Board of Directors.

During the three and six-month periods ended June 30, 2023, the Company purchased 2 million shares of its common stock at an average price of $ 64.54 .

During the three and six-month periods ended July 1, 2022, the Company purchased 3 million and 4 million shares of its common stock at an average share price of $ 59.71 and $ 60.71 , respectively.

As of June 30, 2023, there were 11 million shares remaining for repurchase under the program.

During the three and nine-month periods ended September 29, 2023, the Company purchased 1 million and 3 million shares of its common stock at an average price of $ 78.74 and $ 69.27 , respectively.

During the three and nine-month periods ended September 30, 2022, the Company purchased 2 million and 6 million shares of its common stock at an average share price of $ 66.57 and $ 62.67 , respectively.

As of September 29, 2023, there were 10 million shares remaining for repurchase under the program.

SEGMENT INFORMATION

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Our segment results are as follows ($ in millions):

Three Months Ended Six Months Ended

June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022

Three Months Ended Nine Months Ended

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Intelligent Operating Solutions $ 644.3 $ 613.7 $ 1,929.5 $ 1,831.4

13 unchanged sentences

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-Q

Item 1. Financial Statements