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Risk Related to Our Business Operations
−Removed: Conditions in the global economy, the markets we serve and the financial markets may adversely affect our business and financial statements.
−Removed: Our business is impacted by general economic conditions, and adverse economic conditions arising from any slower global economic growth, reduced demand or consumer confidence, energy, manufacturing or component supply constraints arising from the international conflicts, including Russian invasion of Ukraine and the Israel-Hamas war, high inflation rates and the corresponding interest rate policies, volatility in currency and credit markets, actual or anticipated default on sovereign debt, changes in global trade policies, unemployment and underemployment rates, reduced levels of capital expenditures, changes in government fiscal and monetary policies, government deficit reduction and budget negotiation dynamics, sequestration, other austerity measures, political and social instability, other geopolitical conflict, sanctions, natural disasters, terrorist attacks, and other challenges affect us and our distributors, customers, and suppliers, including having the effect of:
+Added: Conditions in the global economy, the markets we serve, and the financial markets may adversely affect our business and financial results.
+Added: Our business is impacted by general economic conditions, and adverse economic conditions arising from any slower global economic growth, reduced demand or consumer confidence, energy, manufacturing or component supply constraints arising from international conflicts, high inflation rates and the corresponding interest rate policies, volatility in currency and credit markets, actual or anticipated default on sovereign debt, changes in global trade policies, unemployment and underemployment rates, reduced levels of capital expenditures, changes in government fiscal and monetary policies, political initiatives targeted at reducing government funding, government deficit reduction and budget negotiation dynamics, sequestration, other austerity measures, political and social instability, other geopolitical conflict, sanctions, natural disasters, public health crises, terrorist attacks, and other challenges affect us and our distributors, customers, and suppliers, including having the effect of:
• reducing demand for our products, software, and services, limiting the financing available to our customers and suppliers, increasing order cancellations, and resulting in longer sales cycles and slower adoption of new technologies;
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Limitations on the ability of customers, suppliers, or financial counterparties to access credit at interest rates and on terms that are acceptable to them could lead to insolvencies of key suppliers and customers, limit or prevent customers from obtaining credit to finance purchases of our products and services, and cause delays in the delivery of key products from suppliers.
−Removed: If growth in the global economy or in any of the markets we serve slows for a significant period, if there is significant deterioration in the global economy or such markets, if there is instability in global capital and credit markets, or if improvements in the global economy do not benefit the markets we serve, our business and financial statements would be adversely affected.
+Added: If growth in the global economy or in any of the markets we serve slows for a significant period, if there is significant deterioration in the global economy or such markets, if there is instability in global capital and credit markets, or if improvements in the global economy do not benefit the markets we serve, our business and financial results would be adversely affected.
If we cannot adjust our manufacturing capacity, supply chain management or the purchases required for our manufacturing activities to reflect changes in market conditions, customer demand and supply chain disruptions, our profitability may suffer.
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If these or other suppliers encounter financial, operating, quality, or other difficulties or if our relationship with them changes, including as a result of contractual disputes, we might not be able to quickly establish or qualify replacement sources of supply.
−Removed: The supply chains for our businesses could also be disrupted by supplier capacity constraints, operational or quality issues, bankruptcy or exiting of the business for other reasons, decreased availability of key raw materials or commodities, and external events such as natural disasters, severe weather events that are occurring more frequently or with more intense effects as a result of global climate change, pandemic health issues, war, terrorist actions, governmental actions, and legislative or regulatory changes, among others.
+Added: The supply chains for our businesses could also be disrupted by supplier capacity constraints, operational or quality issues, bankruptcy or exiting of the business for other reasons, decreased availability of key raw materials or commodities, and external events such as natural disasters, severe weather events that are occurring more frequently or with more intense effects as a result of global climate change, public health crises, war, terrorist actions, governmental actions, and legislative or regulatory changes, among others.
Any of these factors could result in production interruptions, delays, extended lead times, and inefficiencies.
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In addition, due to the highly competitive nature of the industries that we serve, the cost-containment efforts of our customers, and the terms of certain contracts we are party to, if commodity or component prices rise we may be unable to pass along cost increases through higher prices.
−Removed: If we are unable to fully recover higher commodity or component costs through price increases or offset these increases through cost reductions, or if there is a time delay between the increase in costs and our ability to recover or offset these costs, we could experience lower margins and profitability and our financial statements could be adversely affected.
+Added: If we are unable to fully recover higher commodity or component costs through price increases or offset these increases through cost reductions, or if there is a time delay between the increase in costs and our ability to recover or offset these costs, we could experience lower margins and profitability and our financial results could be adversely affected.
Our growth could suffer if the markets into which we sell our products and services decline, do not grow as anticipated, or experience cyclicality.
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Our quarterly sales and profits depend substantially on the volume and timing of orders received during the fiscal quarter, which are difficult to forecast.
−Removed: Any decline or lower than expected growth in our served markets could diminish demand for our products and services, which could adversely affect our financial statements.
+Added: Any decline or lower than expected growth in our served markets could diminish demand for our products and services, which could adversely affect our financial results.
Certain of our businesses operate in industries that may experience periodic, cyclical downturns.
In addition, in certain of our businesses, demand depends on customers’ capital spending budgets, and product and economic cycles can affect the spending decisions of these entities.
−Removed: Demand for our products and services is also sensitive to changes in customer order patterns, which may be affected by announced price changes, changes in incentive programs, new product introductions, and customer inventory levels.
+Added: Demand for our products and services is also sensitive to changes in customer order patterns, which
+Added: may be affected by announced price changes, changes in incentive programs, new product introductions, and customer inventory levels.
Any of these factors could adversely affect our growth and results of operations in any given period.
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Because of the range of the products and services we sell and the variety of markets we serve, we encounter a wide variety of competitors.
−Removed: please see the section entitled “Business-Competition” for additional details.
−Removed: In order to compete effectively, we must retain longstanding relationships with major customers and continue to grow our business by establishing relationships with new customers, continually developing new or enhanced products and services to maintain and expand our brand recognition and leadership position in various product and service categories, and penetrating new markets, including high-growth markets.
−Removed: Our failure to compete effectively and/or pricing pressures resulting from competition may adversely impact our financial statements, and our expansion into new markets may result in greater-than-expected risks, liabilities and expenses.
+Added: See “Business—Competition.” In order to compete effectively, we must retain longstanding relationships with major customers and continue to grow our business by establishing relationships with new customers, continually developing new or enhanced products and services to maintain and expand our brand recognition and leadership position in various product and service categories, and penetrating new markets, including high-growth markets.
+Added: Our failure to compete effectively and/or pricing pressures resulting from competition may adversely impact our financial results, and our expansion into new markets may result in greater-than-expected risks, liabilities and expenses.
Our growth depends in part on the timely development and commercialization and customer acceptance of new and enhanced products and services based on technological innovation.
We generally sell our products and services in industries that are characterized by rapid technological changes, frequent new product introductions and changing industry standards.
−Removed: If we do not develop innovative new and enhanced products and
−Removed: services on a timely basis, our offerings will become obsolete over time and our competitive position and financial statements will suffer.
+Added: If we do not develop innovative new and enhanced products and services on a timely basis, our offerings will become obsolete over time and our competitive position and financial results will suffer.
Our success will depend on several factors, including our ability to:
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Even if we successfully innovate and develop new and enhanced products and services, we may incur substantial costs in doing so, and our profitability may suffer.
−Removed: If we are unable to recruit and retain key employees, our business may be harmed.
−Removed: Much of our future success and our ability to realize the benefit of our acquisitions and execute our portfolio strategy depends on our ability to attract and retain key employees, including our senior management.
+Added: Our ability to attract, develop, and retain senior leaders and other key employees is critical to our success.
+Added: Our future performance is dependent upon our ability to attract, motivate and retain executives and other key employees.
+Added: The loss of services of executives and other key employees or the failure to attract, motivate and develop new executives or other key employees could prevent us from successfully implementing and executing business strategies, and therefore adversely affect our financial results.
In particular, the markets for highly skilled employees and leaders in the technology and healthcare industries remain competitive.
+Added: Our success also depends on our ability to attract, develop and retain a talented employee base.
Our brand, our culture, our ability to provide competitive compensation, our locations of operations, and our reputation are important to our ability to recruit and retain key employees in these competitive markets.
−Removed: If we are not competitive or successful in our recruiting efforts, if we cannot attract or retain key employees, or if we do not adequately ensure effective succession planning or transfer of knowledge for our key employees, our ability to deliver and execute on our operational, development, or portfolio strategies would be adversely affected.
−Removed: Significant disruptions in, or breaches in security of, our information technology systems have adversely affected, and in the future could adversely affect, our business.
−Removed: We rely on information technology systems, some of which are managed by third parties and some of which are managed on a decentralized, independent basis by our operating companies, to process, transmit, and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers, and other business partners), and to manage or support a variety of critical business processes and activities.
+Added: If we are not competitive or successful in our recruiting efforts, if we cannot attract or retain key employees, or if we do not adequately ensure effective succession planning or transfer of knowledge for our key employees, or if our employees leave us given uncertainties relating to the separation, resulting in the inability to operate our business with employees possessing the appropriate expertise, our ability to deliver and execute on our operational, development, or portfolio strategies would be adversely affected.
+Added: Disruptions in, or breaches in security of, our information technology systems have adversely affected, and in the future could adversely affect, our business.
+Added: We rely on information technology systems, some of which are managed by third parties and some of which are managed on a decentralized, independent basis by our operating companies, to process, transmit, and store electronic information (including
+Added: sensitive data such as confidential business information and personally identifiable data relating to employees, customers, and other business partners), and to manage or support a variety of critical business processes and activities.
These systems may be damaged, disrupted, accessed, or shut down due to attacks by computer hackers, nation states, cyber-criminals, computer viruses, error or malfeasance by employee or former employees, power outages, hardware failures, telecommunication or utility failures, catastrophes, or other similar events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.
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Increasing use of artificial intelligence may increase these risks.
−Removed: Any of the attacks, breaches, or other disruptions or damage described above, as well as corresponding remediation efforts, can disrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer and business partner relationships and our reputation, or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws, and increased costs for security and remediation, each of which could adversely affect our business and financial statements.
−Removed: We may use artificial intelligence in our business and in our products, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
−Removed: We may incorporate artificial intelligence (“AI”) solutions into our products, services and features, and we may leverage AI, including generative AI, in our product development, our operations, and our software programming.
−Removed: Our competitors or other third parties may incorporate AI into their products or operational processes more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.
−Removed: In addition, there are significant risks involved in developing and deploying AI and there can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability.
−Removed: For example, our AI-related efforts, particularly those related to generative AI, subject us to risks related to accuracy, intellectual property infringement or misappropriation, data privacy, and cybersecurity, among others.
−Removed: It is also uncertain how various laws related to online services, intermediary liability, and other issues will apply to content generated by AI.
−Removed: AI also presents emerging ethical issues, and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.
−Removed: The rapid evolution of AI, including the regulation of AI by government or other regulatory agencies, will require significant resources to develop, test and maintain our platforms, offerings, services, and features to implement AI ethically and minimize any unintended harmful impacts.
−Removed: Defects and unanticipated use or inadequate disclosure with respect to our products (including software) or services could adversely affect our business, reputation, and financial statements.
+Added: Any of the attacks, breaches, or other disruptions or damage described above, as well as corresponding remediation efforts, can disrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer and business partner relationships and our reputation, or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws, and increased costs for security and remediation, each of which could adversely affect our business and financial results.
+Added: Defects and unanticipated use or inadequate disclosure with respect to our products (including software) or services could adversely affect our business, reputation, and financial results.
Manufacturing or design defects impacting safety, cybersecurity, or quality issues (or the perception of such issues) for our products and services can lead to personal injury, death, property damage, data loss, or other damages.
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Recalls, downtime, removals, and product liability and similar claims (regardless of their validity or ultimate outcome) can result in significant costs, as well as negative publicity and damage to our reputation that could reduce demand for our products and services.
−Removed: Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns, or inventory levels of, key distributors and other channel partners could adversely affect our financial statements.
+Added: Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns, or inventory levels of, key distributors and other channel partners could adversely affect our financial results.
Certain of our businesses sell a significant amount of their products to key distributors and other channel partners that have valuable relationships with customers and end-users.
Some of these distributors and other partners also sell our competitors’ products or compete with us directly, and if they favor competing products for any reason they may fail to market our products effectively.
−Removed: Adverse changes in our relationships with these distributors and other partners, or adverse developments in their financial condition, performance, or purchasing patterns, could adversely affect our financial statements.
+Added: Adverse changes in our relationships with these distributors and other partners, or adverse developments in their financial condition, performance, or purchasing patterns, could adversely affect our financial results.
The levels of inventory maintained by our distributors and other channel partners, and changes in those levels, can also significantly impact our results of operations in any given period.
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In addition, delays in implementing planned restructuring activities or other productivity improvements, unexpected costs, or failure to meet targeted improvements may diminish the operational or financial benefits we realize from such actions.
−Removed: Any of the circumstances described above could adversely impact our business and financial statements.
+Added: Any of the circumstances described above could adversely impact our business and financial results.
Work stoppages, works council campaigns, and other labor disputes could adversely impact our productivity and results of operations.
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If we suffer loss to our facilities, supply chains, distribution systems, or information technology systems due to catastrophe or other events, our operations could be seriously harmed.
−Removed: Our facilities, supply chains, distribution systems, and information technology systems are subject to catastrophic loss due to fire, flood, earthquake, hurricane, public health crisis, war, terrorism, or other natural or man-made disasters, including those
−Removed: caused by climate change and other climate-related causes.
+Added: Our facilities, supply chains, distribution systems, and information technology systems are subject to catastrophic loss due to fire, flood, earthquake, hurricane, public health crises, war, terrorism, or other natural or man-made disasters, including those caused by climate change and other climate-related causes.
If any of these facilities, supply chains, or systems were to experience a catastrophic loss, it could disrupt our operations, delay production and shipments, result in defective products or services, damage customer relationships and our reputation, and result in legal exposure and large repair or replacement expenses.
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If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights.
−Removed: We own numerous patents, trademarks, copyrights, trade secrets, and other intellectual property and licenses to intellectual property owned by others, which in aggregate are important to our business.
+Added: We own numerous patents, trademarks, copyrights, trade secrets, and other intellectual property and have licenses to intellectual property owned by others, which in aggregate are important to our business.
The intellectual property rights that we obtain, however, may not be sufficiently broad or otherwise may not provide us a significant competitive advantage, and patents may not be issued for pending or future patent applications owned by or licensed to us.
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There can be no assurance that these agreements will adequately protect our trade secrets and other proprietary rights and will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information, or that third parties will not otherwise gain access to our trade secrets or other proprietary rights.
−Removed: Our failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect our intellectual property or detect or prevent circumvention or unauthorized use of such property, and the cost of enforcing our intellectual property rights could adversely impact our competitive position and financial statements.
+Added: Our failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect our intellectual property or detect or prevent circumvention or unauthorized use of such property, and the cost of enforcing our intellectual property rights could adversely impact our business, including our competitive position, and financial results.
Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses, or licensing expenses or be prevented from selling products or services.
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Our intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of infringement or misappropriation.
−Removed: In addition, as a result of such claims of infringement or misappropriation, we could lose our rights to critical technology, be unable to license critical technology or sell critical products and services, be required to pay substantial damages or license fees with respect to the infringed rights, or be required to redesign our products at substantial cost, any of which could adversely impact our competitive position and financial statements.
−Removed: Even if we successfully defend against claims of infringement or misappropriation, we may incur significant costs and diversion of management attention and resources, which could adversely affect our financial statements.
−Removed: We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our financial statements.
−Removed: We are subject to a variety of litigation and other legal and regulatory proceedings incidental to our business (or the business operations of previously owned entities), including claims for damages arising out of the use of products or services and claims relating to intellectual property matters, employment matters, tax matters, commercial disputes, disputes with our supplier or vendors, competition and sales and trading practices, environmental matters, personal injury, insurance coverage, and acquisition or divestiture-related matters, as well as regulatory investigations or enforcement.
+Added: In addition, as a result of such claims of infringement or misappropriation, we could lose our rights to critical technology, be unable to license critical technology or sell critical products and services, be required to pay substantial damages or license fees with respect to the infringed rights, be required to license technology or other intellectual property rights from others, be required to cease marketing, manufacturing, or using certain products, or be required to redesign, re-engineer, or re-brand our products at substantial cost, any of which could adversely impact our competitive position and financial results.
+Added: Third-party intellectual property rights may also make it more difficult or expensive for us to meet market demand for particular product or design innovations.
+Added: If we are required to seek licenses under patents or other intellectual property rights of others, we may not be able to acquire these licenses on acceptable terms, if at all.
+Added: Even if we successfully defend against claims of infringement or misappropriation, we may incur significant costs and diversion of management attention and resources, which could adversely affect our business and financial results.
+Added: We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our financial results.
+Added: We are subject to a variety of litigation and other legal and regulatory proceedings incidental to our business (or the business operations of previously owned entities), including claims for damages arising out of the use of products or services and claims relating to intellectual property matters, employment matters, tax matters, commercial disputes, disputes with our suppliers or vendors, competition and sales and trading practices, environmental matters, personal injury, insurance coverage, and acquisition or divestiture-related matters, as well as regulatory investigations or enforcement.
We may also become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties, or indemnities provided in connection with, divested businesses.
−Removed: These lawsuits may include claims for compensatory damages, punitive and consequential damages, and/or injunctive relief.
−Removed: The defense of these lawsuits may divert our management’s attention, we may incur significant expenses in defending these lawsuits, we may experience disruption in supply or sales, and we may be required to pay damage awards or settlements or become subject to equitable remedies that could adversely affect our operations and financial statements.
+Added: These lawsuits may include claims for compensatory damages,
+Added: punitive and consequential damages, and/or injunctive relief.
+Added: The defense of these lawsuits may divert our management’s attention, we may incur significant expenses in defending these lawsuits, we may experience disruption in supply or sales, and we may be required to pay damage awards or settlements or become subject to equitable remedies that could adversely affect our operations and financial results.
Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against such losses.
−Removed: In addition, developments in proceedings in any given period may require us to adjust the loss contingency estimates that we have recorded in our financial statements, record estimates for liabilities or assets that we were previously unable to estimate, or pay cash settlements or judgments.
−Removed: Any of these developments could adversely affect our financial statements in any particular period.
−Removed: We cannot assure you that our liabilities
−Removed: in connection with litigation and other legal and regulatory proceedings will not exceed our estimates or adversely affect our financial statements and reputation.
+Added: In addition, developments in proceedings in any given period may require us to adjust the loss contingency estimates that we have recorded in our financial results, record estimates for liabilities or assets that we were previously unable to estimate, or pay cash settlements or judgments.
+Added: Any of these developments could adversely affect our financial results in any particular period.
+Added: We cannot assure you that our liabilities in connection with litigation and other legal and regulatory proceedings will not exceed our estimates or adversely affect our financial results and reputation.
+Added: Climate change, or legal or regulatory measures to address climate change, may negatively affect us.
+Added: Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to our operations.
+Added: Physical risk resulting from acute changes (such as hurricane, tornado, wildfire or flooding) or chronic changes (such as droughts, heat waves or sea level changes) in climate patterns can adversely impact our facilities and operations and disrupt our supply chains and distribution systems.
+Added: Concern over climate change can also result in new or additional legal or regulatory requirements designed to reduce greenhouse gas emissions and/or mitigate the effects of climate change on the environment (such as taxation of, or caps on the use of, carbon-based energy).
+Added: Any such new or additional legal or regulatory requirements, including extensive disclosure requirements in various jurisdictions, including in the E.U.
+Added: and domestically, may increase the costs associated with, or disrupt, sourcing, manufacturing and distribution of our products, which may adversely affect our business and financial results.
+Added: In addition, any failure to adequately address stakeholder expectations with respect to environmental, social and governance matters may result in the loss of business, adverse reputational impacts, diluted market valuations and challenges in attracting and retaining customers and talented employees.
+Added: We may use artificial intelligence in our business and in our products, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
+Added: We may incorporate artificial intelligence (“AI”) solutions into our products, services and features, and we may leverage AI, including generative AI, in our product development, our operations, and our software programming.
+Added: Our competitors or other third parties may incorporate AI into their products or operational processes more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.
+Added: In addition, there are significant risks involved in developing and deploying AI and there can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability.
+Added: For example, our AI-related efforts, particularly those related to generative AI, subject us to risks related to accuracy, intellectual property infringement or misappropriation, data privacy, and cybersecurity, among others.
+Added: It is also uncertain how various laws related to online services, intermediary liability, and other issues will apply to content generated by AI.
+Added: AI also presents emerging ethical issues, and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.
+Added: The rapid evolution of AI, including the regulation of AI by government or other regulatory agencies, will require significant resources to develop, test and maintain our platforms, offerings, services, and features to implement AI ethically and minimize any unintended harmful impacts.
Risk Related to our International Operations
−Removed: International economic, political, legal, compliance, and business factors could negatively affect our financial statements.
+Added: International economic, political, legal, compliance, and business factors could negatively affect our financial results.
In 2024, approximately 46% of our sales were derived from customers outside the United States.
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• interruption in the transportation of materials to us and finished goods to our customers;
−Removed: • impact of geopolitical conflict, including the Russian invasion of Ukraine and the Israel-Hamas war;
+Added: • impact of geopolitical conflict;
• differences in terms of sale, including payment terms;
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• unexpected changes in laws or regulatory requirements, including negative changes in tax laws in the U.S.
−Removed: and in the countries in which we manufacture or sell our products;
+Added: and in countries in which we manufacture or sell our products;
• limitations on ownership and on repatriation of earnings and cash;
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• differing protection of intellectual property.
−Removed: Any of these risks could negatively affect our financial statements and growth.
−Removed: Trade relations between China and the United States could have a material adverse effect on our business and financial statements.
−Removed: We have experienced growth in various end markets in China.
−Removed: During 2023, sales in China accounted for approximately 11% of our total sales for the year.
−Removed: In addition, we have numerous facilities in China, many of which serve multiple Fortive operating companies in manufacturing, distribution, product design, and selling, general and administrative functions.
−Removed: There continues to be significant uncertainty about the future relationship between the United States and China, including with respect to trade policies, treaties, government regulations, and tariffs.
+Added: Any of these risks could negatively affect our financial results and growth rate.
+Added: Trade relations between the United States and other countries could have a material adverse effect on our business and financial results.
+Added: We participate in various end markets outside the United States.
+Added: During 2024, sales outside the United States accounted for approximately 46% of our total sales for the year.
+Added: In addition, we have several facilities outside the United States, many of which serve multiple Fortive operating companies in manufacturing, distribution, product design, and selling, general and administrative functions.
+Added: There continues to be significant uncertainty about the future relationship between the United States and other countries, including with respect to trade policies, treaties, government regulations, sanctions and tariffs.
In particular, there continues to be uncertainty about U.S.
−Removed: foreign trade policy with respect to China, including any changes to the trade policies that may be adopted by the Biden administration.
−Removed: Any increased trade barriers or restrictions on global trade, especially trade with China, could adversely impact our business and financial statements.
−Removed: Foreign currency exchange rates may adversely affect our financial statements.
+Added: foreign trade policy with respect to China, including any changes to the trade policies that may be adopted by the Trump administration.
+Added: Any increased sanctions, tariffs or other trade barriers or restrictions on global trade, especially trade with China, could adversely impact our business and financial results.
+Added: Foreign currency exchange rates, including the volatility thereof, may adversely affect our financial results.
Sales and purchases in currencies other than the U.S.
dollar expose us to fluctuations in foreign currencies relative to the U.S.
−Removed: dollar and may adversely affect our financial statements.
+Added: dollar and may adversely affect our financial results.
Overall strengthening of the U.S.
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dollar could result in unfavorable translation effects.
−Removed: In addition, certain of our businesses transact in a currency other than the business’ functional currency, and movements in the transaction currency relative to the functional currency could also result in unfavorable exchange rate effects.
+Added: In addition, certain of our businesses transact in a currency other than the business’s functional currency, and movements in the transaction currency relative to the functional currency could also result in unfavorable exchange rate effects.
We also face exchange rate risk from our investments in subsidiaries owned and operated in foreign countries and borrowings denominated in foreign currencies.
Risk Related to Our Acquisitions, Investments, and Dispositions
−Removed: Any inability to consummate acquisitions at our anticipated rate and at appropriate prices could negatively impact our growth rate and stock price.
−Removed: Our ability to grow revenues, earnings, and cash flow at or above our anticipated rates depends in part upon our ability to identify and successfully acquire and integrate businesses at appropriate prices and realize anticipated synergies.
−Removed: We may not be able to consummate acquisitions at rates anticipated, which could adversely impact our growth rate and our stock price.
−Removed: Acquisitions that align with our portfolio strategy may be difficult to identify and execute for a number of reasons, including high valuations, competition among prospective buyers, the availability of affordable funding in the capital markets and the need to satisfy applicable closing conditions and obtain antitrust and other regulatory approvals on acceptable terms.
−Removed: In addition, competition for acquisitions may result in higher purchase prices.
−Removed: Changes in accounting or regulatory requirements or instability in the credit markets could also adversely impact our ability to consummate acquisitions.
−Removed: Our acquisition of businesses, joint ventures, and strategic relationships could negatively impact our financial statements.
−Removed: As part of our business strategy we acquire businesses and enter other strategic relationships in the ordinary course, some of which may be material;
−Removed: please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) for additional details.
−Removed: These acquisitions and strategic relationships involve a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the following, any of which could adversely affect our financial statements:
−Removed: • any acquired business, technology, service, or product could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with our anticipated timetable;
−Removed: • we may incur or assume significant debt in connection with our acquisitions or strategic relationships;
−Removed: • acquisitions or strategic relationships could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term;
+Added: Our plans to separate into two independent, publicly traded companies may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits, including the anticipated tax treatment.
+Added: On September 4, 2024, we announced our intention to separate our Precision Technologies segment business into an independent publicly-traded company (the “Separation”), which will be named Ralliant.
+Added: The Separation will create (i) a technology solutions company, retaining the Fortive name, with a portfolio of the brands currently operating under Fortive’s Intelligent Operating Solutions and Advanced Healthcare Solutions business segments, focused on resilient, high-quality recurring growth by delivering productivity and safety to customers, and (ii) a global technology company consisting of our brands currently operating under the Precision Technologies segment with a focus on precision instruments and highly engineered products essential for breakthrough innovation and aligned to powerful secular trends.
+Added: The Separation is intended to qualify as a tax-free spin-off for Fortive shareholders for U.S.
+Added: federal income tax purposes.
+Added: The Company is targeting completion of the Separation early in the third quarter of 2025, subject to the satisfaction of certain conditions, including,
+Added: 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.
+Added: Internal Revenue Service with respect to the tax treatment of the transaction for U.S.
+Added: federal income tax purposes, the effectiveness of a Form 10 registration statement filed with the SEC, and other regulatory approvals.
+Added: All assets, liabilities, revenues and expenses of Ralliant are included in the consolidated results of the Company in the accompanying consolidated financial statements.
+Added: Our ability to effectuate the Separation, the structure of the Separation, and the anticipated benefits of the Separation may be adversely and materially impacted by adverse market conditions, possible delays in obtaining various tax rulings, regulatory approvals or clearances or otherwise satisfying the required conditions of the Separation, costs or inefficiencies associated with dis-synergies related to the Separation, uncertainty of the financial markets, our business performance, and unanticipated delays in establishing infrastructure or processes for Ralliant.
+Added: In addition, the costs and resources required to effectuate the Separation may be significantly higher than what we currently anticipate.
+Added: Executing the Separation will also require significant time and attention from management, which could distract them from other tasks in operating our business and result in performance shortfalls.
+Added: The pendency of the Separation could negatively impact the market price of our common stock, and even if the Separation is completed, we cannot assure you that the Separation will yield greater benefits to the Company and its shareholders than if the Separation had not occurred.
+Added: Following the Separation, the combined value of the common stock of the two publicly-traded companies may not be equal to or greater than what the value of our common stock would have been had the Separation not occurred.
+Added: In addition, if the Separation is ultimately not consummated, the Company will have incurred costs, which may be significant, without realizing the anticipated benefits.
+Added: Any inability to consummate acquisitions at our anticipated rate and at appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price.
+Added: Our ability to grow revenue, earnings, and cash flow at or above our anticipated rates depends in part upon our ability to identify and successfully acquire and integrate businesses at appropriate prices and realize anticipated synergies, and to make appropriate investments that support our long-term strategy.
+Added: We may not be able to consummate acquisitions at anticipated rates, which could adversely impact our growth rate and our stock price.
+Added: Acquisitions and investments that align with our portfolio strategy may be difficult to identify and execute for a number of reasons, including high valuations, competition among prospective buyers, the availability of affordable funding in the capital markets and the need to satisfy applicable closing conditions and obtain antitrust and other regulatory approvals on acceptable terms.
+Added: In addition, competition for acquisitions and investments may result in higher purchase prices.
+Added: Changes in accounting or regulatory requirements or instability in the credit markets could also adversely impact our ability to consummate acquisitions and investments.
+Added: Our acquisition of businesses, investments, joint ventures, and other strategic relationships could negatively impact our financial results.
+Added: As part of our business strategy we acquire businesses, make investments, and enter into joint ventures and other strategic relationships in the ordinary course, some of which may be material;
+Added: please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) for additional details.
+Added: These acquisitions, investments, joint ventures, and strategic relationships involve a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the following, any of which could adversely affect our financial results:
+Added: • any business, technology, service, or product that we acquire or invest in could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with our anticipated timetable, or we could fail to operate any such business profitably;
+Added: • we may incur or assume significant debt in connection with our acquisitions, investments, joint ventures, or strategic relationships, which could also cause a deterioration of our credit ratings, result in increased borrowing costs and interest expense, and diminish our future access to the capital markets;
+Added: • acquisitions, investments, joint ventures, or strategic relationships could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term;
• pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period to period;
−Removed: • acquisitions or strategic relationships could create demands on our management, operational resources, and financial and internal control systems that we are unable to effectively address;
+Added: • acquisitions, investments, joint ventures, or strategic relationships could create demands on our management, operational resources, and financial and internal control systems that we are unable to effectively address;
• we could experience difficulty in integrating personnel, operations, and financial and other controls and systems and retaining key employees and customers;
−Removed: • we may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition or strategic relationship;
−Removed: • we may assume by acquisition or strategic relationship unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies, or exposure to regulatory sanctions resulting from the acquired company’s activities and the realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position, or cause us to fail to meet our public financial reporting obligations;
−Removed: • in connection with acquisitions, we may enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations, and indemnification obligations, which may have unpredictable financial results;
−Removed: • in connection with acquisitions, we have recorded significant goodwill and other intangible assets on our balance sheet and if we are not able to realize the value of these assets, we may be required to incur charges relating to the impairment of these assets;
−Removed: • we may have interests that diverge from those of strategic partners and we may not be able to direct the management and operations of the strategic relationship in the manner we believe is most appropriate, exposing us to additional risk.
+Added: • we may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition, investment, joint venture, or strategic relationship;
+Added: • we may assume by acquisition or strategic relationship unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies, or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities and the realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position, or cause us to fail to meet our public financial reporting obligations;
+Added: • in connection with acquisitions and joint ventures, we may enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations, and indemnification obligations, which may have unpredictable financial results;
+Added: • in connection with acquisitions and investments, we have recorded significant goodwill and other intangible assets on our balance sheet and if we are not able to realize the value of these assets, we may be required to incur charges relating to the impairment of these assets;
+Added: • we may have interests that diverge from those of our joint venture partners or other strategic partners and we may not be able to direct the management and operations of the joint venture or other strategic relationship in the manner we believe is most appropriate, exposing us to additional risk.
The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities.
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We cannot assure you that these indemnification provisions will protect us fully or at all, and as a result we may face
−Removed: unexpected liabilities that adversely affect our financial statements.
−Removed: Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial statements.
+Added: unexpected liabilities that adversely affect our financial results.
+Added: Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial results.
We continually assess the strategic fit of our existing businesses and may divest or otherwise dispose of businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment.
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In addition, divestitures or other dispositions may dilute our earnings per share, have other adverse financial and accounting impacts and distract management, and disputes may arise with buyers.
−Removed: In addition, we have retained responsibility for and/or have agreed to indemnify buyers against some known and unknown contingent liabilities related to a number of businesses we have sold or disposed.
−Removed: The resolution of these contingencies has not had a material effect on our financial statements but we cannot be certain that this favorable pattern will continue.
+Added: In addition, we have retained responsibility for and/or have agreed to indemnify buyers against some known and unknown contingent liabilities related to a number of businesses we have sold or disposed of.
+Added: The resolution of these contingencies has not had a material effect on our financial results but we cannot be certain that this favorable pattern will continue.
Potential indemnification liabilities to Vontier pursuant to the separation agreement could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.
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We develop, configure, and market our products and services to meet customer needs created by these regulations and standards.
−Removed: These regulations and standards are complex, change frequently, have tended to become more stringent over time, and may be inconsistent across jurisdictions.
−Removed: Any significant change or delay in implementation in any of these regulations or standards (or in the interpretation, application, or enforcement thereof) could reduce or delay demand for our products and services, increase our costs of producing or delay the introduction of new or modified products and services, or could restrict our existing activities, products, and services.
+Added: These regulations and standards are complex, change frequently, have tended to become more
+Added: stringent over time, and may be inconsistent across jurisdictions.
+Added: Any significant change or delay in implementation in any of these regulations or standards (or in the interpretation, application, or enforcement thereof) could reduce or delay demand for our products and services, increase our costs of producing or delay the introduction of new or modified products and services, or restrict our existing activities, products, and services.
In addition, in certain of our markets our growth depends in part upon the introduction of new regulations or implementation of industry standards on the timeline we expect.
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In addition, regulatory deadlines or industry standard implementation timelines may result in substantially different levels of demand for our products and services from period to period.
−Removed: Our reputation, ability to do business, and financial statements may be impaired by improper conduct by any of our employees, agents, or business partners.
+Added: Our reputation, ability to do business, and financial results may be impaired by improper conduct by any of our employees, agents, or business partners.
We cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by employees, agents, or business partners of ours (or of businesses we acquire or partner with) that would violate U.S.
and/or non-U.S.
−Removed: laws, including the laws governing payments to government officials, bribery, fraud, kickbacks, and false claims, sales and
−Removed: marketing practices, conflicts of interest, competition, export and import compliance, money laundering, and data privacy.
+Added: laws, including the laws governing payments to government officials, bribery, fraud, kickbacks, and false claims, sales and marketing practices, conflicts of interest, competition, export and import compliance, and data privacy.
In particular, the U.S.
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Any such improper actions or allegations of such acts could damage our reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions and related shareholder lawsuits, could lead to substantial civil and criminal, monetary and non-monetary penalties and could cause us to incur significant legal and investigatory fees.
−Removed: In addition, though we rely on our suppliers to adhere to our supplier standards of conduct, material violations of such standards of conduct could occur that could have a material effect on our financial statements.
−Removed: Our operations, products, and services expose us to the risk of environmental, health, and safety liabilities, costs, and violations that could adversely affect our reputation and financial statements.
+Added: In addition, though we rely on the third parties with whom we do business to adhere to the law and to our high standards of conduct, material violations of such standards of conduct could occur that could have a material effect on our financial results.
+Added: Our operations, products, and services expose us to the risk of environmental, health, and safety liabilities, costs, and violations that could adversely affect our reputation and financial results.
Our operations, products and services are subject to environmental laws and regulations, which impose limitations on the discharge of pollutants into the environment and establish standards for the use, generation, treatment, storage, and disposal of hazardous and non-hazardous wastes.
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Failure to comply with any of these laws could result in civil and criminal, monetary and non-monetary penalties and damage to our reputation.
−Removed: In addition, we cannot provide assurance that our costs of complying with current or future environmental protection and health and safety laws will not exceed our estimates or adversely affect our financial statements.
+Added: In addition, we cannot provide assurance that our costs of complying with current or future environmental protection and health and safety laws will not exceed our estimates or adversely affect our financial results.
Moreover, any accident that results in significant personal injury or property damage, whether occurring during development, manufacturing, servicing, use, or storage of our products, may result in significant production interruption, delays, or claims for substantial damages caused by personal injuries or property damage, harm to our reputation, and reduction in morale among our employees, any of which may adversely and materially affect our results of operations.
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We may also become subject to additional remedial, compliance or personal injury costs due to future events such as changes in existing laws or regulations, changes in agency direction or enforcement policies, developments in remediation technologies, changes in the conduct of our operations and changes in accounting rules.
−Removed: For additional information regarding these risks, please refer to Note 14 to the consolidated financial statements.
−Removed: We cannot assure you that our liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed our estimates or adversely affect our reputation and financial statements or that we will not be subject to additional claims for personal injury or remediation in the future based on our past, present or future business activities.
−Removed: Our businesses are subject to extensive regulation;
−Removed: failure to comply with those regulations could adversely affect our financial statements and reputation.
−Removed: In addition to the environmental, health, safety, anti-corruption, and other regulations noted above, our businesses are subject to extensive regulation by U.S.
+Added: For additional information regarding these risks, please refer to Note 13 to the consolidated financial results.
+Added: We cannot assure you that our liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed our estimates or adversely affect our reputation and financial results or that we will not be subject to additional claims for personal injury or remediation in the future based on our past, present or future business activities.
+Added: Our businesses are subject to extensive regulation, including healthcare regulations;
+Added: failure to comply with those regulations could adversely affect our financial results and our business, including our reputation.
+Added: In addition to the environmental, health, safety, anticorruption, data privacy, and other regulations noted elsewhere in this Annual Report, our businesses are subject to extensive regulation by U.S.
governmental and self-regulatory entities at the supranational, federal, state, local, and other jurisdictional levels, including the following:
−Removed: • we are required to comply with various import laws and export control and economic sanctions laws, which may affect our transactions with certain customers, business partners, and other persons and dealings between our employees and subsidiaries.
+Added: • we are required to comply with various import laws and export control and economic sanctions laws, which may affect our transactions with certain customers, business partners, and other persons and dealings between our employees and between our subsidiaries.
In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products, services, and technologies.
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Compliance with the various import laws that apply to our businesses can restrict our access to, and increase the cost of obtaining, certain products and at times can interrupt our supply of imported inventory.
−Removed: • we also have agreements to sell products and services to government entities and are subject to various statutes and regulations that apply to companies doing business with government entities.
+Added: We may also face audits or investigations by one or more domestic or foreign government agencies relating to our compliance with these regulations.
+Added: An adverse outcome in any such audit or investigation could subject us to fines or other penalties;
+Added: • we also have agreements to sell products and services to government entities and are subject to various statutes, regulations and other requirements that apply to companies doing business with government entities (approximately $417 million of our 2024 sales were made to the U.S.
+Added: federal government).
The laws governing government contracts differ from the laws governing private contracts.
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Our agreements with government entities may be subject to termination, reduction, or modification at the convenience of the government or in the event of changes in government requirements, reductions in federal spending and other factors, and we may underestimate our costs of performing under the contract.
−Removed: Government contracts that have been awarded to us following a bid process
−Removed: could become the subject of a bid protest by a losing bidder, which could result in loss of the contract.
+Added: In certain cases, a governmental entity may require us to pay back amounts it has paid to us.
+Added: Government contracts that have been awarded to us following a bid process could become the subject of a bid protest by a losing bidder, which could result in loss of the contract.
We are also subject to investigation and audit for compliance with the requirements governing government contracts.
+Added: An adverse outcome in any such investigation or audit could subject us to fines or other penalties;
• we are also required to comply with increasingly complex and changing data privacy regulations in multiple jurisdictions that regulate the collection, use, protection, and transfer of personal data, including the transfer of personal data between or among countries.
1 unchanged sentence
We may also face audits or investigations by one or more domestic or foreign government agencies relating to our compliance with these regulations.
−Removed: An adverse outcome under any such investigation or audit could subject us to fines or other penalties.
+Added: An adverse outcome in any such audit or investigation could subject us to fines or other penalties.
That or other circumstances related to our collection, use, and transfer of personal data could cause a loss of reputation in the market and/or adversely affect our business and financial position;
11 unchanged sentences
These changes could negatively impact our business or financial position.
−Removed: For example, we recently discovered that Gems Sensors, Inc., an entity that has been merged into Setra Systems, Inc.
−Removed: and now operates as Gems Setra, made certain incorrect representations regarding its 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").
−Removed: 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.
−Removed: While we are continuing to investigate, we currently do not expect this matter to have a material adverse effect on our financial condition or results of operations.
−Removed: However, resolution of this matter could subject us to fines or penalties, and we cannot assure you of the timing or outcome of such resolution.
These are not the only regulations that our businesses must comply with.
−Removed: The regulations we are subject to have tended to become more stringent over time and may be inconsistent across jurisdictions.
+Added: Generally, regulations we are subject to have tended to become more stringent over time and may be inconsistent across jurisdictions.
We, our representatives, and the industries in which we operate may at times be under review and/or investigation by regulatory authorities.
1 unchanged sentence
Compliance with these and other regulations may also affect our returns on investment, require us to incur significant expenses, or modify our business model or impair our flexibility in modifying product, marketing, pricing, or other strategies for growing our business.
−Removed: Our products and operations are also often subject to the rules of industrial standards bodies such as the International Standards Organization, and failure to comply with these rules could result in withdrawal of certifications needed to sell our products and services and otherwise adversely impact our financial statements.
+Added: Our products and operations are also often subject to the rules of industrial standards bodies such as the International Standards Organization, and failure to comply with these rules could result in withdrawal of certifications needed to sell our products and services and otherwise adversely impact our financial results.
For additional information regarding these risks, please refer to the section entitled “Business—Regulatory Matters.”
−Removed: Climate change, or legal or regulatory measures to address climate change, may negatively affect us.
−Removed: Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to our operations.
−Removed: Physical risk resulting from acute changes (such as hurricane, tornado, wildfire or flooding) or chronic changes (such as droughts, heat waves or sea level changes) in climate patterns can adversely impact our facilities and operations and disrupt our supply chains and distribution systems.
−Removed: Concern over climate change can also result in new or additional legal or regulatory requirements designed to reduce greenhouse gas emissions and/or mitigate the effects of climate change on the environment (such as taxation of, or caps on the use of, carbon-based energy).
−Removed: Any such new or additional legal or regulatory requirements, including extensive disclosure requirements in various jurisdictions, including in the E.U.
−Removed: and domestically, may increase the costs associated with, or disrupt, sourcing, manufacturing and distribution of our products, which may adversely affect our business and financial statements.
−Removed: In addition, any failure to adequately address stakeholder expectations with respect to environmental, social and governance matters may result in the loss of business, adverse reputational impacts, diluted market valuations and challenges in attracting and retaining customers and talented employees.
Risk Related to Our Tax and Accounting Matters
−Removed: Changes in our effective tax rates or exposure to additional income tax liabilities or assessments could affect our profitability.
+Added: Changes in our effective tax rates or exposure to additional tax liabilities or assessments could affect our profitability.
In addition, audits by tax authorities could result in additional tax payments for prior periods.
−Removed: We are subject to income and transaction taxes in the United States and in multiple foreign jurisdictions.
−Removed: As such, changes to applicable tax laws or policies, including interpretations or retroactive applications thereof, could result in a material change in our tax provision, cash taxes paid, and effective tax rate.
+Added: We are subject to income, transaction and other taxes in the United States and in multiple foreign jurisdictions.
+Added: Our future income tax rates could be volatile and difficult to predict due to changes in business profit by jurisdiction, changes in the amount and recognition of deferred tax assets and liabilities, or by changes in tax laws, regulations, or accounting principles.
+Added: For example, the Organisation for Economic Co-operation and Development continues to advance proposals for modernizing international tax rules, including the introduction of global minimum tax standards.
+Added: We closely monitor changes to tax laws, regulations, accounting principles, and global tax standards;
+Added: and at the time of a change, the related expense or benefit recorded may be material to the quarter and year of change.
Furthermore, certain tax laws are inherently ambiguous requiring subjective interpretation on the application thereof.
−Removed: Our interpretation and the corresponding amount of income taxes we pay is, and may in the future continue to be, subject to audits by U.S.
+Added: Our interpretation and the corresponding amount of taxes we pay is, and may in the future continue to be, subject to audits by U.S.
federal, state, and local tax authorities and by non-U.S.
tax authorities.
−Removed: If these audits result in payments or assessments different from our reserves, our future results may include unfavorable adjustments to our tax liabilities and our financial statements could be adversely affected.
−Removed: Foreign remittance taxes have not been provided for on undistributed earnings of certain of our non-U.S.
−Removed: subsidiaries to the extent such earnings are considered to be indefinitely reinvested in the operations of those subsidiaries.
−Removed: If our intentions regarding reinvestment of such earnings change, or we determine to repatriate earnings from foreign jurisdictions that had previously been considered permanently reinvested under existing accounting standards, then our income tax provision, cash taxes paid, and effective tax rate could increase.
−Removed: In addition, changes by the U.S.
−Removed: in relation to international tax reform could increase uncertainty and may adversely affect our income tax provision, cash taxes paid, and effective tax rate.
−Removed: Comprehensive tax reform was enacted through the Tax Cuts and Jobs Act of 2017 (the “TCJA”) which includes numerous provisions that impact U.S.
−Removed: corporate tax rates, business-related exclusions, deductions, and credits.
−Removed: The taxing authorities continue to issue regulations and guidance, some with retrospective application, to the provisions of the TCJA, and we expect this to continue for the foreseeable future.
−Removed: Any future adjustments resulting from retrospective regulations and guidance issued will be considered a discrete income tax expense or benefit in the period guidance is issued.
−Removed: For example, the TCJA eliminated the deduction of certain domestic and foreign research and development expenditures beginning on January 1, 2022 and requires capitalization and amortization of such expenditures over a specified period;
−Removed: any revision, regulation, or new guidance to this rule may impact our future income tax provision, cash taxes paid, and effective tax rate.
−Removed: Furthermore, changes in multilateral agreements and the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting project undertaken by the Organisation for Economic Co-operation and Development (the “OECD”) and could significantly increase our tax provision, cash taxes paid, and effective tax rate.
−Removed: The OECD has issued significant global tax policy changes that include both expanded reporting as well as technical global tax policy changes and many countries in which we operate have implemented tax law and administrative changes to align with new OECD policies.
−Removed: For example, in October 2021, OECD announced an agreed framework for an expansion of the taxing rights of market countries and to establish a global minimum corporate tax rate.
−Removed: In December 2021, OECD published detailed model rules for a global minimum corporate tax rate of fifteen percent which will require multilateral agreement(s) and/or country-specific legislative action to be effective.
−Removed: A global minimum corporate tax rate and any other implemented changes could significantly increase tax uncertainty due to differing interpretations and increased audit scrutiny.
−Removed: We could incur significant liability if any of our separation from Danaher, our separation of our Automation and Specialty business or our separation of Vontier (collectively, the “Separation Transactions”) is determined to be a taxable transaction.
−Removed: We have received an opinion from outside tax counsel to the effect that each of the Separation Transactions qualifies as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code.
−Removed: The opinion relies on certain facts, assumptions, representations, and undertakings from the applicable parties regarding the past and future conduct of the
−Removed: companies’ respective businesses and other matters.
+Added: If these audits result in payments or assessments different from our reserves, our future results may include unfavorable adjustments to our tax liabilities and our financial results could be adversely affected.
+Added: We could incur significant liability if our separation from Danaher, our separation of our Automation and Specialty business, or our separation of Vontier or our pending separation of the PT segment (collectively, the “Separation Transactions”) are determined to be a taxable transaction.
+Added: We have received or expect to receive an opinion from outside tax counsel to the effect that each of the Separation Transactions qualifies as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code.
+Added: The opinion relies or will rely on certain facts, assumptions, representations, and undertakings from the applicable parties regarding the past and future conduct of the companies’ respective businesses and other matters.
If any of these facts, assumptions, representations, or undertakings are incorrect or not satisfied, our stockholders and we may not be able to rely on the applicable opinion of tax counsel and could be subject to significant tax liabilities.
6 unchanged sentences
GAAP could adversely affect our reported financial results and may require significant changes to our internal accounting systems and processes.
−Removed: We prepare our consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”).
+Added: We prepare our consolidated financial results in conformity with generally accepted accounting principles in the United States of America (“GAAP”).
These principles are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to interpret and create appropriate accounting principles and guidance.
5 unchanged sentences
Any charges relating to such impairments would adversely affect our results of operations in the periods recognized.
−Removed: Refer to Note 2 and Note 6 to the consolidated financial statements for a description of our policies relating to goodwill and acquired intangibles.
+Added: Refer to Note 2 and Note 5 to the consolidated financial results for a description of our policies relating to goodwill and acquired intangibles.
Risk Related to Our Financing Activities
−Removed: We have incurred a significant amount of debt, and our debt will increase further if we incur additional debt and do not retire existing debt.
+Added: We have incurred a significant amount of debt, and our debt obligations, including the cost of such debt, will increase further if we incur additional debt and do not retire existing debt, our credit rating declines, or if the applicable interest rates rise.
As of December 31, 2024, we had approximately $3.7 billion of long-term debt, including the current portion of long-term debt, on a consolidated basis.
14 unchanged sentences
The covenants in our credit agreement include a debt-to-EBITDA ratio.
−Removed: Please refer to Note 10 to the consolidated financial statements for additional details.
+Added: Please refer to Note 9 to the consolidated financial results for additional details.
Our ability to comply with these restrictions and covenants may be affected by events beyond our control.
1 unchanged sentence
Also, an acceleration of the debt under one of our debt instruments would trigger an event of default under other of our debt instruments.
−Removed: Risk Related to Shareholder Rights
−Removed: Certain provisions in our amended and restated certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock.
−Removed: Our amended and restated certificate of incorporation (“Restated Certificate of Incorporation”) and amended and restated bylaws (“Amended and Restated Bylaws”) contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with the Board of Directors (the “Board”) rather than to attempt an unsolicited takeover not approved by the Board.
−Removed: These provisions include, among others:
−Removed: • the inability of our shareholders to act by written consent;
−Removed: • rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;
−Removed: • the right of the Board to issue preferred stock without shareholder approval;
−Removed: • the ability of our directors, and not shareholders, to fill vacancies (including those resulting from an enlargement of the Board) on the Board.
−Removed: In addition, because we have not chosen to be exempt from Section 203 of the Delaware General Corporation Law (the “DGCL”), this provision could also delay or prevent a change of control that our shareholders may favor.
−Removed: Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15% of the outstanding voting stock of a Delaware corporation (an “interested stockholder”) shall not engage in any business combination with that corporation, including by merger, consolidation, or acquisitions of additional shares, for a three-year period following the date on which the person became an interested stockholder, unless (i) prior to such time, the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
−Removed: (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan);
−Removed: or (iii) on or subsequent to such time the business combination is approved by the board of directors of such corporation and authorized at a meeting of shareholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.
−Removed: We believe these provisions will protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with the Board and by providing the Board with more time to assess any acquisition proposal.
−Removed: These provisions are not intended to make our company immune from takeovers.
−Removed: However, these provisions will apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that the Board determines is not in the best interests of our company and our shareholders.
−Removed: These provisions may also prevent or discourage attempts to remove and replace incumbent directors.
−Removed: Our amended and restated certificate of incorporation designates the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could discourage lawsuits against us and our directors and officers.
−Removed: Our amended and restated certificate of incorporation provides that unless the Board otherwise determines, the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of our company, any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to our company or our shareholders, any action asserting a claim against our company or any of our directors or officers arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or any action asserting a claim against our company or any of our directors or officers governed by the internal affairs doctrine.
−Removed: This exclusive forum provision may limit the ability of our shareholders to bring a claim in a judicial forum that such shareholders find favorable for disputes with our company or our directors or officers, which may discourage such lawsuits against our company and our directors and
−Removed: This exclusive forum provision would not apply to claims brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.
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.