What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-07-24 · 121 added, 94 removed, 571 unchanged (27% of the section changed)

3 unchanged sentences

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

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

Current assets:

37 unchanged sentences

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

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Sales of products and software $ 1,293.4 $ 1,258.9 $ 3,902.2 $ 3,786.3

28 unchanged sentences

($ in millions)

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Net earnings $ 221.6 $ 218.0 $ 624.1 $ 600.6

28 unchanged sentences

Balance, June 28, 2024 350.3 $ 3.7 $ 3,937.3 $ ( 870.4 ) $ 7,852.3 $ ( 423.6 ) $ 6.5

Net earnings for the period — — — — 221.6 $ — $ —

Dividends to common shareholders — — — — ( 27.8 ) — —

Other comprehensive income (loss) — — — — — 89.4 —

Common stock-based award activity 0.5 — 49.1 — — — —

Common stock repurchases ( 3.8 ) — — ( 272.4 ) — — —

Shares withheld for taxes ( 0.1 ) — ( 4.3 ) — — — —

Change in noncontrolling interests — — — — — — 0.1

Balance, September 27, 2024 346.9 $ 3.7 $ 3,982.1 $ ( 1,142.8 ) $ 8,046.1 $ ( 334.2 ) $ 6.6

Common Stock Additional Paid-In Capital Treasury

14 unchanged sentences

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

Other comprehensive income — — — — — ( 7.6 ) —

Other comprehensive income (loss)

— — — — — ( 7.6 ) —

Common stock-based award activity 0.5 — 52.3 — — — —

3 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

See the accompanying Notes to Consolidated Condensed Financial Statements.

2 unchanged sentences

($ in millions)

Six Months Ended

June 28, 2024 June 30, 2023

Nine Months Ended

September 27, 2024 September 29, 2023

Cash flows from operating activities:

3 unchanged sentences

Depreciation 68.7 63.9

Stock-based compensation expense 53.1 55.7

Stock-based compensation

Gain on sale of property

Loss from divestiture

Loss from equity investments

Change in trade accounts receivable, net 64.6 25.0

38 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 28, 2024, are not necessarily indicative of the results for the full year.

The results of operations for the three and nine months ended September 27, 2024, are not necessarily indicative of the results for the full year.

Reclassification of certain prior year amounts in the Consolidated Condensed Statements of Cash Flows have been made to conform to current year presentation.

Pending Separation Into Two Independent, Publicly Traded Companies

On September 4, 2024, we announced our intention to separate into two independent, publicly traded companies (the “Separation”).

The Separation will create (i) a technology solutions company, retaining the Fortive name, with a portfolio of the brands currently operating under Fortive’s IOS and AHS business segments, focused on resilient, high-quality recurring growth by delivering productivity, safety, and reliability value to customers, and (ii) a global industrial company (“NewCo”) consisting of our brands currently operating under the PT segment with a focus on powerful secular growth trends by leveraging mission critical technologies in test and measurement, specialty sensors, and aerospace and defense subsystems.

The Separation is expected to be structured in a tax-free manner for Fortive shareholders.

The Company is targeting to complete the Separation by the fourth quarter of 2025, subject to the satisfaction of certain conditions, including, among others, final approval of Fortive’s Board of Directors, satisfactory completion of financing, receipt of a favorable opinion of legal counsel and/or a private letter ruling from the U.S.

Internal Revenue Service with respect to the tax treatment of the transaction for U.S.

federal income tax purposes, the effectiveness of a Form 10 registration statement filed with the SEC, and other regulatory approvals.

All assets, liabilities, revenues and expenses of NewCo are included in the consolidated results of the Company in the accompanying consolidated condensed financial statements.

Segment Realignment and Divestiture

2 unchanged sentences

In June 2024, we divested and transferred ownership of Invetech, excluding the Motion Solution Business, to its management team (the “Invetech Divestiture”).

As a result of the divestiture, in the three and six-month periods ended June 28, 2024, we recorded a net realized loss of $ 25.6 million, which is identified as “Loss from divestiture” in the Consolidated Condensed Statements of Earnings.

As a result of the divestiture, in the nine-month period ended September 27, 2024, we recorded a net realized loss of $ 25.6 million, which is identified as “Loss from divestiture” in the Consolidated Condensed Statements of Earnings.

The divested businesses accounted for less than 1.0 % of total revenue and less than 1.0 % of total assets for the fiscal year ended December 31, 2023.

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subsidiaries.

As of June 28, 2024, our outstanding € 500 million Euro-denominated senior unsecured notes due 2026, € 700 million Euro-denominated senior unsecured notes due 2029, € 275 million Euro-denominated term loan, and ¥ 14.4 billion Yen-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 $ 13.0 million and $ 5.1 million during the three-month periods ended June 28, 2024 and June 30, 2023, respectively, and gains of $ 21.4 million of $ 3.4 million during the six-month periods ended June 28, 2024 and June 30, 2023, 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.

As of September 27, 2024, our outstanding € 500 million Euro-denominated senior unsecured notes due

2026, € 700 million Euro-denominated senior unsecured notes due 2029, € 275 million Euro-denominated term loan, and ¥ 14.4 billion Yen-denominated term loan were designated as net investment hedges of our investment in applicable foreign operations.

We recognized after-tax foreign currency transaction losses of $ 59.7 million and gains of $ 9.6 million during the three-month periods ended September 27, 2024 and September 29, 2023, respectively, and losses of $ 38.3 million and gains of $ 13.0 million during the nine-month periods ended September 27, 2024 and September 29, 2023, 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 28, 2024 and June 30, 2023.

We recorded no ineffectiveness from our net investment hedges during the three and nine-month periods ended September 27, 2024 and September 29, 2023.

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 28, 2024:

Balance, March 29, 2024 $ ( 368.2 ) $ ( 34.3 ) $ ( 402.5 )

For the Three Months Ended September 27, 2024:

Balance, June 28, 2024 $ ( 389.3 ) $ ( 34.3 ) $ ( 423.6 )

Other comprehensive income (loss) before reclassifications, net of income taxes 89.3 — 89.3

4 unchanged sentences

Net current period other comprehensive income (loss), net of income taxes 89.3 0.1 89.4

Balance, September 27, 2024 $ ( 300.0 ) $ ( 34.2 ) $ ( 334.2 )

For the Three Months Ended September 29, 2023:

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

For the Three Months Ended June 30, 2023:

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

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

Amounts reclassified from AOCI into income:

Increase (decrease) — ( 0.5 ) (c)

Increase (decrease) — 0.6 (b)

Income tax impact — ( 0.1 ) ( 0.1 )

Amounts reclassified from AOCI into income, net of income taxes

— ( 0.2 ) ( 0.2 )

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 )

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

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

(b) This amount relates to the cumulative translation adjustment recognized in earnings upon the Invetech Divestiture.

Refer to Note 1 for additional details.

(c) This component of AOCI is included in the computation of net periodic pension cost (refer to Note 11 in our 2023 Annual Report on Form 10-K for additional details).

(b) This component of AOCI is included in the computation of net periodic pension cost (refer to Note 11 in our 2023 Annual Report on Form 10-K for additional details).

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

For the Six Months Ended June 28, 2024:

For the Nine Months Ended September 27, 2024:

Balance, December 31, 2023 $ ( 291.7 ) $ ( 34.4 ) $ ( 326.1 )

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Net current period other comprehensive income (loss) ( 8.3 ) 0.2 ( 8.1 )

Balance, June 28, 2024 $ ( 389.3 ) $ ( 34.3 ) $ ( 423.6 )

For the Six Months Ended June 30, 2023:

Balance, September 27, 2024 $ ( 300.0 ) $ ( 34.2 ) $ ( 334.2 )

For the Nine Months Ended September 29, 2023:

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

5 unchanged sentences

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

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

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

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

6 unchanged sentences

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 28, 2024 and June 30, 2023, the activity was immaterial.

During the three and nine-month periods ending September 27, 2024 and September 29, 2023, the activity was immaterial.

Property Sale

On March 14, 2024, we sold land and certain office buildings in our PT segment for $ 90 million, for which we received $ 20 million in cash proceeds and a $ 70 million promissory note secured by a letter of credit, with principal due in August and November 2024.

We received $ 10 million of principal in August and the remaining is due in November 2024.

The promissory note is recorded within Prepaid expenses and other current assets.

During the six-month period ended June 28, 2024, we recorded a gain on sale of property of $ 63.1 million in the Consolidated Condensed Statements of Earnings.

During the nine-month period ended September 27, 2024, we recorded a gain on sale of property of $ 63.1 million in the Consolidated Condensed Statements of Earnings.

Concurrently, using a portion of the proceeds from the property sale, we entered into an arm’s length transaction with the Fortive Foundation (the “Foundation”), pledging a charitable contribution of $ 20 million, which had no donor imposed conditions or restrictions.

The Foundation, a not-for-profit entity established to expand our philanthropic efforts, is a related party due to certain Fortive executives serving as members of the entity’s board of directors.

The charitable contribution is recorded within the “Other non-operating expense, net” line in the Consolidated Condensed Statements of Earnings and the liability related to the pledged donation is recorded within Accrued expenses and other current liabilities in the Consolidated Condensed Balance Sheets.

The charitable contribution is recorded within the “Other non-operating expense, net” line in the Consolidated Condensed Statements of Earnings.

In the third quarter of 2024, $ 20 million of the promissory note due in November 2024 was reassigned to the Foundation.

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.

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 and $ 26 million as of June 28, 2024 and December 31, 2023 and are recorded within Accrued expenses and other current liabilities in the Consolidated Condensed Balance Sheets.

Accrued restructuring costs were immaterial as of September 27, 2024 and were $ 26 million as of December 31, 2023, and are recorded within Accrued expenses and other current liabilities in the Consolidated Condensed Balance Sheets.

Recently Issued Accounting Standard

15 unchanged sentences

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.

The purchase price allocation is provisional and is subject to further adjustments as we finalize the measurement of the acquired tangible and intangible assets and liabilities, as well as the associated income tax considerations.

The preliminary fair value of the net assets acquired was based on several estimates and assumptions.

The purchase price allocations for the acquisition in 2024 and the fourth quarter of 2023 are provisional and subject to further adjustments as we finalize the measurement of the acquired tangible and intangible assets and liabilities, as well as the associated income tax considerations.

The preliminary fair value of the net assets acquired was based on estimates and assumptions.

Significant assumptions include the discount rates and certain assumptions that form the basis of the forecasted results of the acquired business including earnings before interest and amortization (“EBITDA”), revenue growth rates, royalty rates and attrition rates.

As additional information necessary to complete the valuation is obtained and analyzed, we will make appropriate adjustments to purchase price allocations prior to completion of the applicable measurement period, as required and as soon as practicable.

During the three and six-month periods ended June 28, 2024, immaterial adjustments were made to the purchase price allocation of prior year acquisitions.

During the three and nine-month periods ended September 27, 2024, immaterial adjustments were made to the purchase price allocation of prior year acquisitions.

On January 3, 2024, we acquired EA Elektro-Automatik Holding GmbH (“EA”), a leading supplier of high-power electronic test solutions for energy storage, mobility, hydrogen, and renewable energy applications.

3 unchanged sentences

We recorded approximately $ 1.17 billion of goodwill within our PT segment related to the EA acquisition, which is not tax deductible.

For the three and six-month periods ended June 28, 2024, we incurred approximately $ 0.2 million and $ 27.4 million, respectively, of pretax transaction-related costs related to the EA acquisition, which were primarily for banking fees, legal fees, and amounts paid to other third-party advisers.

For the three and nine-month periods ended September 27, 2024, we incurred approximately $ 1.9 million and $ 29.3 million, respectively, of pretax transaction-related costs related to the EA acquisition, which were primarily for banking fees, legal fees, and amounts paid to other third-party advisers.

These costs were recorded within Selling, general, and administrative expenses in the Consolidated Condensed Statement of Earnings.

The following table summarizes the preliminary estimated acquisition date fair values of the assets acquired and liabilities assumed as of June 28, 2024 ($ in millions):

The following table summarizes the preliminary estimated acquisition date fair values of the assets acquired and liabilities assumed as of September 27, 2024 ($ in millions):

Accounts receivable $ 19.6

14 unchanged sentences

Measurement period adjustments for prior year acquisitions

( 1.1 ) — — ( 1.1 )

Attributable to acquisitions

1 unchanged sentence

Foreign currency translation and other 10.9 19.5 ( 3.0 ) 27.4

Balance, June 28, 2024 $ 4,135.1 $ 2,980.1 $ 3,101.3 $ 10,216.5

Balance, September 27, 2024 $ 4,160.4 $ 3,048.6 $ 3,113.3 $ 10,322.3

Due to the Segment Realignment, the beginning goodwill balances for PT and AHS have been recast to conform to the revised segment presentation.

2 unchanged sentences

The following summarizes the gross carrying value and accumulated amortization for each major category of intangible asset ($ in millions):

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

8 unchanged sentences

Finite-lived intangible assets are amortized over the shorter of their legal or estimated useful lives.

During the six-month period ended June 28, 2024, we acquired finite-lived intangible assets, consisting of customer relationships, developed technology, and trade names, with a weighted average life of approximately 9 years as a result of the EA acquisition.

During the nine-month period ended September 27, 2024, we acquired finite-lived intangible assets, consisting of customer relationships, developed technology, and trade names, with a weighted average life of approximately nine years as a result of the EA acquisition.

Refer to Note 2 for additional information on the intangible assets acquired.

12 unchanged sentences

(Level 3) Total

June 28, 2024

September 27, 2024

Deferred compensation liabilities $ — $ 46.8 $ — $ 46.8

9 unchanged sentences

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 28, 2024, and recorded no 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 27, 2024, and recorded no material impairments.

During the three-month periods ended September 27, 2024 and September 29, 2023, we recorded a loss from equity investments of $ 26.1 million and $ 3.8 million, respectively.

During the nine-month periods ended September 27, 2024 and September 29, 2023, we recorded a loss from equity investments of $ 39.4 million and $ 12.9 million, respectively.

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 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

Carrying Amount Fair Value Carrying Amount Fair Value

2 unchanged sentences

3,451.8 3,407.3 3,646.2 3,539.4

As of June 28, 2024 and December 31, 2023, the current portion of long-term debt and long-term debt, net of current maturities were categorized as Level 1.

As of September 27, 2024 and December 31, 2023, the current portion of long-term debt and long-term debt, net of current maturities were categorized as Level 1.

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

2 unchanged sentences

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

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

dollar-denominated commercial paper $ 675.0 $ 1,251.2

29 unchanged sentences

The 2026 Notes and 2029 Notes contain customary covenants.

None of these covenants are considered restrictive to our operations and as of June 28, 2024, we were in compliance with all of our covenants.

None of these covenants are considered restrictive to our operations and as of September 27, 2024, we were in compliance with all of our covenants.

Delayed-Draw Term Loan due 2024

7 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 28, 2024 were as follows ($ in millions):

The details of our outstanding Commercial Paper Programs as of September 27, 2024 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 28, 2024, no borrowings were outstanding under the Revolving Credit Facility.

As of September 27, 2024, 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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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 $ 109 million as of June 28, 2024 and $ 108 million as of December 31, 2023.

Contract assets were $ 121 million as of September 27, 2024 and $ 108 million as of December 31, 2023.

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 28, 2024 and December 31, 2023, we had $ 52 million and $ 51 million, respectively, in net revenue-related contract costs primarily related to certain software contracts.

As of September 27, 2024 and December 31, 2023, we had $ 59 million and $ 51 million, respectively, in net revenue-related contract costs primarily related to certain software contracts.

Revenue-related contract costs are recorded within Other assets in our Consolidated Condensed Balance Sheets.

4 unchanged sentences

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

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

Deferred revenue - current $ 510.8 $ 544.6

1 unchanged sentence

Total contract liabilities $ 559.5 $ 590.4

During the three and six-month periods ended June 28, 2024, we recognized revenue related to our contract liabilities at December 31, 2023 of $ 121 million and $ 317 million, respectively.

The change in our contract liabilities from December 31, 2023 to June 28, 2024 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 27, 2024, we recognized revenue related to our contract liabilities at December 31, 2023 of $ 91 million and $ 408 million, respectively.

The change in our contract liabilities from December 31, 2023 to September 27, 2024 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 28, 2024

September 27, 2024

Intelligent Operating Solutions $ 593.5

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Refer to Note 1 for further information on the realignment.

Disaggregation of revenue for the three-month period ended June 28, 2024 is presented as follows ($ in millions):

Disaggregation of revenue for the three-month period ended September 27, 2024 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 to the end customer.

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 to the end customer.

Disaggregation of revenue for the six-month period ended June 28, 2024 is presented as follows ($ in millions):

Disaggregation of revenue for the nine-month period ended September 27, 2024 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 to 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

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

Our effective tax rates for the three and six-month periods ended June 28, 2024 were 14.7 % and 13.0 %, respectively, as compared to 16.5 % and 16.1 %, respectively, for the three and six-month periods ended June 30, 2023.

The decrease in the effective tax rate for the three-month period ended June 28, 2024 as compared to the three-month period ended June 30, 2023 was primarily related to change in valuation allowances, resulting in a benefit in the three-month period ended June 28, 2024.

The decrease in the effective tax rate for the six-month period ended June 28, 2024 as compared to the six-month period ended June 30, 2023 was primarily related to cash repatriation, resulting in a discrete tax credit, and changes in valuation allowances in the six-month period ended June 28, 2024.

Our effective tax rates for the three and six-month periods ended June 28 2024, 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.

Our effective tax rates for the three and nine-month periods ended September 27, 2024 were 4.6 % and 10.2 %, respectively, as compared to 15.2 % and 15.8 %, respectively, for the three and nine-month periods ended September 29, 2023.

The decrease in the effective tax rate for the three-month period ended September 27, 2024 as compared to the three-month period ended September 29, 2023 was primarily related to changes in applicable statutory tax rates, resulting in a benefit in the three-month period ended September 27, 2024.

The decrease in the effective tax rate for the nine-month period ended September 27, 2024 as compared to the nine-month period ended September 29, 2023 was primarily related to cash repatriation resulting in a discrete tax credit, changes in applicable statutory tax rates, and changes in valuation allowances in the nine-month period ended September 27, 2024.

Our effective tax rates for the three and nine-month periods ended September 27, 2024, differ from the U.S.

federal statutory rate of 21% due primarily to the impact of credits and deductions provided by law, including those associated with state income taxes, and changes in our uncertain tax position reserves.

STOCK-BASED COMPENSATION

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 28, 2024, approximately 12 million shares of our common stock were available for subsequent issuance under the Stock Plan.

As of September 27,

2024, approximately 12 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 15 of our 2023 Annual Report on Form 10-K.

Stock-based Compensation Expense

Stock-based Compensation

Stock-based compensation has been recognized as a component of Selling, general and administrative expenses in the Consolidated Condensed Statements of Earnings based on the portion of the awards that are ultimately expected to vest.

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

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Stock Awards:

10 unchanged sentences

Total stock-based compensation expense, net of income taxes $ 23.5 $ 25.1 $ 68.8 $ 73.0

The following summarizes the unrecognized compensation cost for the Stock Plan awards as of June 28, 2024.

The following summarizes the unrecognized compensation cost for the Stock Plan awards as of September 27, 2024.

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.

10 unchanged sentences

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 three and six-month periods ended June 28, 2024 and June 30, 2023, warranty related activity was immaterial.

Operating lease costs for both the three-month periods ended June 28, 2024 and June 30, 2023 were $ 12 million.

Operating lease costs for the six-month periods ended June 28, 2024 and June 30, 2023 were $ 25 million and $ 24 million, respectively.

During both the six-month periods ended June 28, 2024 and June 30, 2023, cash paid for operating leases included in operating cash flows was $ 24 million.

Right-of-use (“ROU”) assets obtained in exchange for operating lease obligations were $ 10 million and $ 18 million during the six-month periods ended June 28, 2024 and June 30, 2023, respectively.

Operating lease ROU assets were $ 159 million and $ 155 million as of June 28, 2024 and December 31, 2023, respectively.

Operating lease liabilities were $ 166 million and $ 164 million as of June 28, 2024 and December 31, 2023, 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.

Other Matters

We discovered that a subsidiary of ours made certain incorrect representations regarding status as a small business concern as defined by the Small Business Act for certain contracts that it was awarded by the Defense Logistics Agency (“DLA”).

As a result, on January 26, 2024, we voluntarily notified the Department of Defense Office of Inspector General (“OIG”) and the DLA of this matter.

We currently do not expect this matter to have a material adverse effect on our financial condition or results of operations.

However, resolution of this matter could subject us to fines or penalties, and we cannot provide assurance as to the timing or outcome of such resolution.

During the three and nine-month periods ended September 27, 2024 and September 29, 2023, warranty related activity was immaterial.

Operating lease costs for the three-month periods ended September 27, 2024 and September 29, 2023 were $ 12 million and $ 13 million, respectively.

Operating lease costs for both the nine-month periods ended September 27, 2024 and September 29, 2023 were $ 37 million.

During both the nine-month periods ended September 27, 2024 and September 29, 2023, cash paid for operating leases included in operating cash flows was $ 36 million.

Right-of-use (“ROU”) assets obtained in exchange for

operating lease obligations were $ 30 million and $ 29 million during the nine-month periods ended September 27, 2024 and September 29, 2023, respectively.

Operating lease ROU assets were $ 174 million and $ 155 million as of September 27, 2024 and December 31, 2023, respectively.

Operating lease liabilities were $ 181 million and $ 164 million as of September 27, 2024 and December 31, 2023, 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 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 the three and six-month periods ended June 28, 2024 were 1.3 million and 1.2 million, respectively, and were 2.7 million for both the three and six-month periods ended June 30, 2023.

Anti-dilutive options excluded from the diluted EPS calculation for the three and nine-month periods ended September 27, 2024 were 1.5 million and 1.2 million, respectively, and were 0.1 million and 0.5 million for the three and nine-month periods ended September 29, 2023.

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 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Net earnings $ 221.6 $ 218.0 $ 624.1 $ 600.6

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Second quarter 0.08 28.0

Third quarter 0.08 27.8

Total $ 0.24 $ 83.9

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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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On February 17, 2022, the Company's Board of Directors approved a share repurchase program authorizing the Company to repurchase up to 20 million shares of the Company's outstanding common stock from time to time on the open market or in privately negotiated transactions.

On January 23, 2024, the Company’s Board of Directors increased the number of shares authorized under the share repurchase program by an additional 11 million shares, with 14.2 million shares remaining authorized under the share repurchase program as of September 27, 2024.

There is no expiration date for the repurchase program, and the timing and amount of repurchases under the program are determined by the Company's management based on market conditions and other factors.

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

As of December 31, 2023, there were 9 million shares remaining for repurchase under the program.

On January 23, 2024, the Company’s Board of Directors increased the number of shares authorized under the share repurchase program by an additional 11 million shares.

During both the three and six-month periods ended June 28, 2024 and June 30, 2023, the Company purchased 2 million shares of its common stock at an average share price of $ 76.43 and $ 64.54 , respectively.

As of June 28, 2024, there were 18 million shares remaining for repurchase under the program.

During the three and nine-month periods ended September 27, 2024, the Company purchased 3.8 million and 5.8 million shares of its common stock at an average share price of $ 70.87 and $ 72.78 , respectively.

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 share price of $ 78.74 and $ 69.27 , respectively.

SEGMENT INFORMATION

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

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Intelligent Operating Solutions $ 661.2 $ 644.3 $ 2,003.9 $ 1,929.5

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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