What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-29 · 105 added, 145 removed, 188 unchanged (57% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Fortive Corporation (“Fortive,” the “Company,” “we,” “us,” or “our”) innovates essential technologies to keep the world safe and productive.

Fortive Corporation (“Fortive,” the “Company,” “we,” “us,” or “our”) innovates essential technologies to keep our world safe and productive.

Our strategic segments - Intelligent Operating Solutions (“IOS”) and Advanced Healthcare Solutions (“AHS”) - include iconic inventor brands with leading positions in their markets.

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Accordingly, the accompanying consolidated condensed financial statements for all periods presented reflect this business as a discontinued operation.

Unless otherwise indicated, all references in this report refer to continuing operations.

Refer to Note 2 of the consolidated condensed financial statements for additional information.

Unless otherwise indicated, all amounts in this quarterly report refer to continuing operations.

Refer to Note 2 for additional information.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of management.

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impact of government actions, including tariffs, other trade policies, government spending and tax laws;

management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, strategic opportunities, stock repurchases, and dividends;

management’s plans and strategies for future operations, including statements relating to anticipated operating performance, capital allocation, financing, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, strategic opportunities, financing, stock repurchases, and dividends;

growth, declines and other trends in markets we sell into, including the expected impact of trade and tariff policies;

the anticipated impacts and benefits of the completed separation of Ralliant;

new or modified laws, regulations and accounting pronouncements;

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foreign currency exchange rates and fluctuations in those rates;

impact of changes to tax laws;

general economic and capital markets conditions, including expected impact of inflation or interest rate changes;

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Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments, and other factors they believe to be appropriate.

Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements.

Accordingly, you should not

place undue reliance on any such forward-looking statements.

Forward-looking statements are not guarantees of future performance and actual results may differ materially from

the results, developments and business decisions contemplated by our forward-looking statements.

Accordingly, you should not place undue reliance on any such forward-looking statements.

Important factors that could cause actual results to differ materially from those envisaged in the forward-looking statements include, among others, the following:

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• 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.

• Our ability to attract, develop, and retain senior leaders and other key employees is critical to our success.

• Disruptions in, or breaches in security of, our information technology systems have adversely affected, and in the future could adversely affect, our business.

• Our ability to successfully manage leadership transitions and attract, develop, and retain senior leaders and other key employees is critical to our success.

• Disruptions in, or breaches in security of, our information technology systems, exfiltration of confidential or sensitive data, and other cyberattacks have adversely affected, and in the future could adversely affect, our business.

• 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.

• 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.

• Our restructuring activities could have long-term adverse effects on our business.

• Work stoppages, works council campaigns, and other labor disputes could adversely impact our productivity and results of operations.

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• 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.

• Our restructuring activities could have long-term adverse effects on our business.

• 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.

• Climate change, or legal or regulatory measures to address climate change, may negatively affect us.

• We 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.

• We use artificial intelligence in our business and in certain of 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.

Risk Related to Our International Operations

• International economic, political, legal, trade policies, compliance, and business factors could negatively affect our financial results.

• Trade relations between the United States and other countries, including imposition of tariffs and related uncertainty thereof, and the impact on cost and demand resulting therefrom could continue to have a material adverse effect on our business and financial results.

• International economic, political, legal, compliance, and business factors, including the continuing conflicts in the Middle East and in Ukraine, could negatively affect our financial results.

• Trade relations between the United States and other countries have been volatile and could have a material adverse effect on our business and financial results.

• Foreign currency exchange rates, including the volatility thereof, may adversely affect our financial results.

Risk Related to Our Acquisitions, Investments, and Dispositions

• Any inability to consummate acquisitions at appropriate prices, and to make appropriate investments and capital allocation that support our long-term strategy, could negatively impact our growth rate and stock price.

Risk Related to Our Investments and Dispositions

• Our strategy requires us to execute and deliver disciplined capital allocation.

• Our acquisition of businesses, investments, joint ventures, and other strategic relationships could negatively impact our financial results.

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• Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial results.

• Potential indemnification liabilities to Ralliant Corporation (“Ralliant”) and Vontier Corporation (“Vontier”) pursuant to the respective separation agreements could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.

• Potential indemnification liabilities to Ralliant and Vontier Corporation (“Vontier”) pursuant to the respective separation agreements could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.

Risk Related to Regulatory and Compliance Matters

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In addition, audits by tax authorities could result in additional tax payments for prior periods.

• We could incur significant liability if our separation from Danaher, our separation of our Automation and Specialty business, our separation of Vontier, or our separation of Ralliant (collectively, the “Separation Transactions”) is determined to be a taxable transaction.

• We could incur significant liability if our separation from Danaher, our separation of Vontier, or our separation of Ralliant (together, the “Separation Transactions”) are determined to be taxable transactions.

• Changes in U.S.

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See “Item 1A.

Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in this Quarterly Report on Form 10-Q for further discussion regarding reasons that actual results may differ materially from the results, developments, and business decisions contemplated by our forward-looking statements.

Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made (or such earlier date as may be specified in such statement).

Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for further discussion regarding reasons that actual results may differ materially from the results, developments, and business decisions contemplated by our forward-looking statements.

in such statement).

We do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

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Management believes the exclusion of the effect of acquisitions and divestitures and currency translation may facilitate the assessment of underlying business trends and may assist in comparisons of long-term performance.

References to sales volume from existing businesses refer to the impact of both price and unit sales.

References to core sales growth refer to the impact of both price and unit sales.

Business Trends

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ongoing geopolitical events;

global economic and consumer trends and sentiments;

wars and hostilities in the Middle East and in Ukraine, including the corresponding impact on energy costs, interest rates, cybersecurity, international trade, and global economic conditions;

monetary policies;

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uncertainties in governmental policies on international trade, regulations, sanctions, and healthcare;

prolonged government shutdown;

operational challenges from tariffs;

operational challenges from existing, new, increased, or uncertain status of tariffs, including in some cases, subsequent rollbacks, refunds, or suspensions;

foreign exchange rate volatility, including the impact of unhedged foreign currency debts;

reduction in U.S.

government spending due to H.R.1, also known as the One Big Beautiful Bill Act;

government spending due to H.R.1, also known as the One Big Beautiful Bill Act (“OBBBA”);

and overall fiscal policies, including investment and taxation policy initiatives being considered in the U.S.;

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and the impact from the Separation.

The development of tariffs and trade relations remains uncertain.

While most of the reciprocal tariffs have been implemented in August of 2025, certain of these tariffs have been temporarily postponed until November of 2025, with periodic escalation.

For additional discussion of risks related to tariffs and trade relations, please refer to the risk factor, “Trade relations between the United States and other countries, including the imposition of new or increased tariffs and related uncertainty thereof, could have a material adverse effect on our business and financial results” in Part II, Item 1A.

Risk Factors of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2025.

In addition, our financial outlook is subject to the impact of the Supreme Court of the United States ruling invalidating certain tariffs imposed under the International Emergency Economic Powers Act (the “IEEPA Ruling”).

Impacts may include changes to operational and transaction costs;

potential legislative or executive actions to reimpose similar tariffs;

pricing or cost responses by customers, suppliers, and other supply chain partners;

and actions by other countries, including changes to counter‑tariffs or related trade agreements.

In addition, there remains uncertainty regarding the amount of, and process for obtaining, refunds of invalidated tariffs from the government and our vendors, as well as the potential for refund requests from our customers.

We continue to monitor the conditions above and deploy the Fortive Business System (“FBS”), including tools and processes to leverage existing sourcing strategies and optimize production and logistics to actively manage these challenges and utilize pricing, cost and productivity actions and other countermeasures designed to offset the aforementioned dynamics.

RESULTS OF OPERATIONS

The following table summarizes total aggregate year-over-year sales growth and the components thereof for the third quarter as compared to the comparable period of 2024:

Components of Sales Growth

% Change Three Months Ended September 26, 2025 vs.

Comparable 2024 Period

% Change Nine Months Ended September 26, 2025 vs.

The following table summarizes total aggregate year-over-year sales growth and the components thereof for the first quarter as compared to the comparable period of 2025:

% Change Three Months Ended April 3, 2026 vs.

Comparable 2025 Period

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Excluding impact of:

Acquisitions and divestitures (a)

Currency exchange rates (2.4) %

Core revenue growth (Non-GAAP)

Sales in the three months ended September 26, 2025 (the “quarter” or the “third quarter”) were driven by favorable pricing of 2.6%, partially offset by volume decline of 0.7%.

Sales in the nine months ended September 26, 2025 (“year-to-date period”) were driven by favorable pricing of 2.3%, partially offset by volume decline of 1.2%.

Geographically, in the third quarter, core revenue growth was driven primarily by strengthening demand in North America, led by the IOS segment, partially offset by modest declines in Europe, Middle East, and Africa (“EMEA”), mostly in Europe.

In the year-to-date period, core revenue growth was driven by moderate growth in North America in both segments, partially offset by modest declines in EMEA, mostly in Europe.

For further detail, refer to the Intelligent Operating Solutions and Advanced Healthcare Solutions sections below.

(a) Amount rounded to zero.

Sales in the three months ended April 3, 2026 (the “quarter” or the “first quarter”) were driven by favorable pricing of 2.2%, volume growth of 3.1%, in part driven by additional year-over-year selling days in the quarter, and favorable foreign currency translation.

Geographically, in the first quarter, core revenue growth was driven primarily by strong demand in North America and Western Europe.

Refer to the IOS and AHS segment sections for further detail.

Operating Profit Margins

In the third quarter and year-to-date period, respectively, operating profit margin was 15.5% and 16.3%, comparing to 17.1% and 16.8% in the comparable period of 2024, resulting in a decrease of 160 basis points and 50 basis points:

• The year-over-year increase in price and gains from productivity measures through our FBS initiatives partially offset by volume declines, higher employee compensation, and unfavorable impacts from tariffs net of countermeasures — favorable 205 basis points and 105 basis points, in the third quarter and year-to-date period, respectively

• The year-over year effect of all other items in the third quarter including -370 basis points primarily from incremental stock-based compensation costs related to the Separation, +25 basis points from amortization of existing businesses and -20 basis points in discrete restructuring charges — unfavorable 365 basis points

• The year-over year effect of all other items in the year-to-date period including -125 basis points primarily from incremental stock-based compensation costs related to the Separation , -45 basis points in discrete restructuring charges, +15 basis points from amortization of existing businesses — unfavorable 155 basis points

INTELLIGENT OPERATING SOLUTIONS

In the first quarter, operating profit margin was 17.9%, compared to 16.6% in the comparable period of 2025, resulting in an increase of 130 basis points due to:

• The year-over-year favorable impacts from pricing, higher volume, reductions of excess cost through organizational streamlining, the favorable impact of foreign currency exchange rates and increased productivity measures through our FBS initiatives, partially offset by higher employee compensation and the unfavorable net impact of tariffs and related countermeasures — favorable 125 basis points

• The year-over-year effect of all other items in the first quarter including +50 basis points from amortization expense for existing businesses, partially offset by -20 basis points from unfavorable acquisition and divestiture-related impacts, and -25 basis points from discrete restructuring plans — favorable 5 basis points

INTELLIGENT OPERATING SOLUTIONS (IOS)

Selected Financial Data

Three Months Ended Nine Months Ended

($ in millions) September 26, 2025 September 27, 2024 September 26, 2025 September 27, 2024

Three Months Ended

($ in millions) April 3, 2026 March 28, 2025

Sales $ 743.2 $ 690.9

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Components of Sales Growth

% Change Three Months Ended September 26, 2025 vs.

Comparable 2024 Period

% Change Nine Months Ended September 26, 2025 vs.

% Change Three Months Ended April 3, 2026 vs.

Comparable 2025 Period

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Excluding impact of:

Acquisitions and divestitures

Currency exchange rates (2.5) %

Core revenue growth (Non-GAAP)

Sales growth in the third quarter and year-to-date period were driven by favorable pricing of 2.4%, and 2.1%, respectively, including countermeasures to mitigate unfavorable tariff impacts.

Volume declined slightly in the third quarter, and declined modestly in the year-to-date period, driven by declines in professional instrumentation, partially offset by increases in facilities and asset lifecycle software and gas detection.

Geographically, in the third quarter, core revenue growth was driven primarily by solid growth in North America, partially offset by declines in EMEA, mostly in Europe.

In the year to date period, core revenue growth was driven by moderate growth in North America, partially offset by modest declines in EMEA, mostly in Europe.

In the third quarter and year-to-date period, operating profit margin increased 110 basis points and 60 basis points, respectively, as compared to the comparable periods of 2024:

• The year-over-year increase in price and gains achieved from productivity measures through our FBS initiatives partially offset by volume decline, higher employee compensation, and unfavorable impact from tariffs net of

countermeasures — favorable 110 basis points and 90 basis points, in the third quarter and year-to-date period, respectively

• The year-over year effect of all other items in the third quarter, including +20 basis points from amortization of existing businesses, offset by -20 basis points in discrete restructuring charges — relatively flat

• The year-over year effect of all other items in the year-to-date period, including -55 basis points in discrete restructuring charges, offset by +20 basis points from amortization from existing businesses, and +5 basis points from lower acquisition and divestiture-related costs — unfavorable 30 basis points

ADVANCED HEALTHCARE SOLUTIONS

Sales growth in the first quarter was driven by favorable pricing of 2.1% across the segment, volume growth of 3.1%, primarily driven by facilities and asset lifecycle software and gas detection products, and favorable currency translation.

Geographically, in the first quarter, core revenue growth was driven primarily by strong demand in North America and Western Europe.

In the first quarter, operating profit margin decreased 20 basis points, as compared to the comparable period of 2025, due to:

• The year-over-year effect of favorable pricing, higher volume, organizational streamlining, favorable impact from foreign currency exchange rates and increased productivity measures through our FBS initiatives, more than offset by higher employee compensation, the unfavorable net impact of tariffs and related countermeasures, and unfavorable mix — unfavorable 15 basis points

• The year-over-year effect of all other items in the first quarter, including + 35 basis points from amortization expense for existing businesses, more than offset by -10 basis points in unfavorable acquisition and divestiture-related impacts, and -30 basis points from discrete restructuring plans — unfavorable 5 basis points

ADVANCED HEALTHCARE SOLUTIONS (AHS)

Selected Financial Data

Three Months Ended Nine Months Ended

($ in millions) September 26, 2025 September 27, 2024 September 26, 2025 September 27, 2024

Three Months Ended

($ in millions) April 3, 2026 March 28, 2025

Sales $ 326.2 $ 302.2

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Components of Sales Growth

% Change Three Months Ended September 26, 2025 vs.

Comparable 2024 period

% Change Nine Months Ended September 26, 2025 vs.

% Change Three Months Ended April 3, 2026 vs.

Comparable 2025 period

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Excluding impact of:

Acquisitions and divestitures — %

Currency exchange rates (2.1) %

Core revenue growth (Non-GAAP)

Sales growth in the third quarter was primarily driven by favorable pricing of 3.0%.

Volume declined modestly driven by reduced demand for sterilization equipment due to uncertainty surrounding hospital responses to recent changes in healthcare policy, partially offset by modest volume increases in healthcare software.

Sales growth in the year-to-date period was driven by favorable pricing of 2.8%.

Volume declined moderately resulting from demand decline in sterilization equipment and biomedical test products partially offset by growth in healthcare software and dosimetry services.

Geographically, in the third quarter, core revenue growth was driven by a modest increase in North America.

In the year-to-date period, core revenue was relatively stable with modest increases in North America mostly offset by moderate declines in Latin America and EMEA driven mostly by Europe.

In the third quarter and year-to-date period, operating profit margin increased 150 basis points and 40 basis points, respectively, as compared to the comparable periods of 2024:

• Year-over-year increases due to favorable pricing, gains from productivity measures through our FBS initiatives partially offset by moderate volume decline and higher employee compensation — favorable 120 basis points and favorable 30 basis points, in the third quarter and year-to-date period, respectively

• The year-over-year effect of amortization from existing businesses — favorable 30 basis points and 10 basis points, in the third quarter and year-to-date period, respectively

Sales growth in the first quarter was driven by favorable pricing of 2.3% across the segment and volume growth of 3.5% which was driven by increased demand for sterilization products and dosimetry services, as well as favorable currency translation.

Geographically, in the first quarter, core revenue growth was primarily driven by strong growth in North America.

In the first quarter, operating profit margin increased 280 basis points as compared to the comparable period of 2025, due to:

• Year-over-year favorable impact from pricing, volume, organizational streamlining, foreign currency exchange rates, and productivity measures through our FBS initiatives, partially offset by higher employee compensation — favorable 215 basis points

• The year-over-year effect of all other items in the first quarter, including + 80 basis points from amortization expense for existing businesses, offset by -5 basis points from net effects of acquired and divested businesses, and -10 basis points from discrete restructuring plans — favorable 65 basis points

COST OF SALES AND GROSS PROFIT

Three Months Ended Nine Months Ended

($ in millions) September 26, 2025 September 27, 2024 September 26, 2025 September 27, 2024

Three Months Ended

($ in millions) April 3, 2026 March 28, 2025

Sales $ 1,069.4 $ 993.1

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Gross profit margin 63.2 % 64.2 %

The year-over-year increase in gross profit during both the third quarter and year-to-date period was driven by favorable pricing and gains from productivity measures and FBS initiatives, partially offset by volume decline, higher employee compensation, di screte restructuring charges, and unfavorable tariff impacts.

The year-over-year increase in gross profit was driven by favorable pricing, higher volume, and favorable impact from foreign currency exchange rates, partially offset by higher employee compensation and the net effect of tariffs and related countermeasures.

OPERATING EXPENSES

Three Months Ended Nine Months Ended

Three Months Ended

($ in millions)

September 26, 2025 September 27, 2024 September 26, 2025 September 27, 2024

April 3, 2026 March 28, 2025

Sales $ 1,069.4 $ 993.1

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R&D as a % of sales 6.2 % 6.4 %

The year-over-year increase in SG&A during both the third quarter and year-to-date period were primarily due to incremental stock-based compen sation related to the Separation incurred in 2025, higher employee compensation costs, and discrete restructuring charges, all partially offset by benefits from productivity measures through our FBS initiatives.

R&D, consisting principally of internal and contract engineering personnel costs, remained relatively flat during the third quarter and increased slightly during the year-to-date period as compared to the comparable period of 2024 due to ongoing investments in innovation.

The year-over-year increase in SG&A was primarily due to higher employee compensation costs, in part from additional days in the quarter, and targeted growth investments to support innovation and commercial initiatives, partially offset by reductions of excess cost through organizational streamlining and benefits from productivity measures through our FBS initiatives.

R&D, consisting principally of internal and contract engineering personnel costs, increased during the first quarter as compared to the comparable period of 2025 due to ongoing investments in innovation.

NON-OPERATING INCOME (EXPENSE), NET

Interest costs

Net interest expense for the third quarter and year-to-date period was $25.4 million and $89.5 million as compared to $37.1 million and $119.8 million in the comparable periods in 2024.

The year-over-year decrease in net interest expense was primarily due to a decrease in outstanding debt and lower interest rates on floating rate debt instruments.

Interest Expense, net

Net interest expense for the first quarter of $31.6 million was relatively flat as compared to $32.0 million in the comparable period in 2025.

For discussion of our outstanding indebtedness, refer to Note 4 to the consolidated condensed financial statements.

Other non-operating income (expense), net

Other non-operating income for the third quarter and year-to-date period was $0.8 million and $3.1 million, as compared to expense of $25.8 million and $58.2 million in the comparable periods in 2024.

The year-over-year change in both the third quarter and year-to-date was primarily due to losses from our equity investments recognized in the comparable prior year periods.

Additionally, in the first quarter of 2024, there was a charitable contribution made to the Fortive Foundation, a related party, without any donor imposed conditions or restrictions.

Our effective tax (benefit) rate for the three and nine months ended September 26, 2025 was 13.3% and 16.4%, respectively, as compared to (2.2)% and 11.3%, respectively, for the three and nine months ended September 27, 2024.

The increase in the effective tax rate for the three months ended September 26, 2025 as compared to the three months ended September 27, 2024 was primarily related to changes in applicable statutory tax rates, resulting in a discrete benefit in the comparable prior year period.

The increase in the effective tax rate for the nine months ended September 26, 2025 as compared to the nine months ended September 27, 2024 was primarily related to changes in applicable statutory tax rates.

Our effective tax rate for the three and nine months ended September 26, 2025, differs from the U.S.

Our effective tax rate for the three months ended April 3, 2026 was 16.6%, as compared to 15.8% for the three months ended March 28, 2025.

The increase in the effective tax rate for the three months ended April 3, 2026 as compared to the three months ended March 28, 2025 was primarily related to the mix of earnings between jurisdictions and the impact of discrete items.

Our effective tax rate for the three months ended April 3, 2026, differs 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.

Globally, the Company monitors legislative action and OECD initiatives related to global taxation.

The impact of the OECD framework for a “Pillar Two” global minimum corporate income tax rate of fifteen percent (15%) has been included within the provision for income taxes.

On June 28, 2025, the OECD released a statement recognizing an agreement between OECD and the G20 to recognize the U.S.

minimum tax rules to exempt U.S.

multinationals certain portions of the Pillar Two framework.

We continue to monitor further guidance and legislative developments related to the Pillar Two framework.

H.R.1, also known as the One Big Beautiful Bill Act, enacted in the U.S on July 4, 2025 resulted in significant income tax provisions with effective dates spanning from 2025 through 2027.

Changes from H.R.1 include modifications to allow for immediate expensing of certain business investments and provides certain permanent extensions and modifications to the U.S.

international tax framework.

There is no material impact of H.R.1 to our continuing operations financial statements.

Foreign cumulative earnings remain subject to foreign remittance taxes.

We have made an election regarding the amount of earnings that we do not intend to repatriate due to local working capital needs, local law restrictions, high foreign remittance costs, previous investments in physical assets and acquisitions, or future growth needs.

For most of our foreign operations, we make an assertion regarding the amount of earnings in excess of intended repatriation that are expected to be held for indefinite reinvestment.

No provisions for foreign remittance taxes have been made with respect to earnings that are planned to be reinvested indefinitely.

The amount of foreign remittance taxes that may be applicable to such earnings is not readily determinable given local law restrictions that may apply to a portion of such earnings, unknown changes in foreign tax law that may occur during the applicable restriction periods caused by applicable local corporate law for cash repatriation, and the various tax planning alternatives we could employ if we repatriated these earnings.

COMPREHENSIVE INCOME

Comprehensive income decreased by $267 million during the third quarter as compared to the comparable period in 2024 due to unfavorable changes in foreign currency translation of $100 million, partially offset by a $6 million increase in net earnings from continuing operations.

Additionally, there was a $172 million decrease in net earnings from discontinued operations.

Comprehensive income decreased by $55 million during the year-to-date period as compared to the comparable period in 2024 due primarily to favorable changes in foreign currency translation adjustments of $176 million and a $52 million increase in net earnings from continuing operations.

Comprehensive income decreased by $105 million during the first quarter as compared to the comparable period in 2025 due to unfavorable changes in foreign currency translation of $72 million, partially offset by a $24 million increase in net earnings from continuing operations and a $3 million increase from hedge adjustments.

Additionally, there was a $59 million decrease in net earnings from discontinued operations.

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We generate substantial cash from operating activities and believe that our operating cash flow and other sources of liquidity, which consist of available cash, our revolving credit facility, and access to commercial paper, bank loans, and capital markets, will be sufficient to allow us to continue funding and investing in our existing businesses, consummate strategic acquisitions, execute strategic separations, repurchase common stock, make interest and principal payments on our outstanding indebtedness, fulfill our contractual obligations, and manage our capital structure on a short and long-term basis.

As of September 26, 2025, we held approximately $431 million of cash and equivalents that were invested in highly liquid investment-grade instruments with a maturity of 90 days or less, of which approximately 93% was held outside of the United States.

We have generally satisfied any short-term liquidity needs that are not met through operating cash flows and available cash through issuances of commercial paper under our U.S.

dollar-denominated commercial paper program.

Credit support for this program 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 the commercial paper programs, can also be used for working capital and other general corporate purposes.

As of September 26, 2025, no borrowings were outstanding under the Revolving Credit Facility.

As of April 3, 2026, we held approximately $356 million of cash and equivalents that were invested in highly liquid investment-grade instruments with a maturity of 90 days or less, of which approximately 90% was held outside of the United States.

We generally satisfy any short-term liquidity needs that are not met through operating cash flows and available cash primarily through issuances under our Commercial Paper Programs, which are supported by our $2.0 billion Revolving Credit Facility.

In addition to providing support for our Commercial Paper Programs, the Revolving Credit Facility can also be used for working capital and other general corporate purposes.

As of April 3, 2026, no borrowings were outstanding under the Revolving Credit Facility.

We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions.

The availability of the Revolving Credit Facility as a standby liquidity facility to repay maturing commercial paper is an important factor in maintaining the existing credit ratings of the Commercial Paper Programs when we have outstanding

We expect to limit any future borrowings under the Revolving Credit Facility to amounts that would leave sufficient credit available under the facility to allow us to borrow, if needed, and repay any outstanding commercial paper as it matures.

Our ability to access the commercial paper market, and the related costs of these borrowings, is affected by the strength of our credit rating and market conditions.

Any downgrade in our credit rating would increase the cost of borrowing under our commercial paper programs and the Credit Agreement, and could limit or preclude our ability to issue commercial paper.

If our access to the commercial paper market is adversely affected due to a downgrade, change in market conditions, or otherwise, we would expect to rely on a combination of available cash, operating cash flow, and the Revolving Credit Facility to provide short-term funding.

In such event, the cost of borrowings under the Revolving Credit Facility could be higher than the historic cost of commercial paper borrowings.

On June 7, 2023, we filed with the SEC an “automatic shelf” registration statement (the “Shelf Registration Statement”).

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In addition, our access to the capital markets and other financing sources is impacted by any change in our credit rating.

If changes in financial markets or other areas of the economy or downgrade in our credit rating adversely affect our access to the capital markets and other financing sources, we would expect to rely on a combination of available cash and existing available capacity under our credit facilities to provide short-term funding.

As of September 26, 2025, we expect to have sufficient liquidity to satisfy our cash needs for the foreseeable future.

existing available capacity under our credit facilities to provide short-term funding.

As of April 3, 2026, we expect to have sufficient liquidity to satisfy our cash needs for the foreseeable future.

Refer to Note 4 of the consolidated condensed financial statements for additional information regarding our financing activities and indebtedness.

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Following is an overview of our cash flows and liquidity ($ in millions):

Nine Months Ended

September 26, 2025 September 27, 2024

Three Months Ended

April 3, 2026 March 28, 2025

Total operating cash provided by continuing operations $ 220.4 $ 191.8

Purchases of property, plant and equipment $ (26.6) $ (21.1)

Proceeds from sale of property 0.4 0.8

Cash paid for acquisitions, net of cash received — (3.7)

All other investing activities (0.1) (1.0)

Total investing cash used in continuing operations $ (26.7) $ (22.1)

Net proceeds from (repayments of) commercial paper borrowings $ 105.8 $ (571.2)

Net proceeds from commercial paper borrowings

$ 591.7 $ 80.7

Repurchase of common shares (500.2) (202.6)

Payment of dividends (18.4) (27.2)

Proceeds from borrowings (maturities greater than 90 days), net of issuance costs — 1,733.5

Repayment of borrowings (maturities greater than 90 days) (292.9) —

Proceeds from Ralliant Dividend 1,150.0 —

All other financing activities (8.7) 8.1

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Operating cash flows from continuing operations can fluctuate significantly from period-to-period as working capital needs and the timing of payments for income taxes, interest, pension funding, and other items impact reported cash flows.

Operating cash flows from continuing operations were $692 million during the year-to-date period, representing a decrease of $9 million when compared to the comparable period of 2024.

Operating cash flows from continuing operations were $220 million during the first quarter, representing an increase of $29 million when compared to the comparable period of 2025.

The year-over-year change in operating cash flows was primarily attributable to the following factors:

• Year-over-year increase of $46 million in Operating cash flows from net earnings, net of non-cash items (Amortization, Depreciation, Stock-based compensation, and Loss from equity investments).

• The aggregate changes in accounts receivable, inventories, and trade accounts payable generated $12 million of cash during the year-to-date period as compared to generating $48 million in the comparable period of 2024.

The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories, and trade accounts payable depends upon how effectively we manage the cash conversion cycle, which generally represents the number of

days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers, and can be significantly impacted by the timing of collections and payments in a period.

• The aggregate changes in prepaid expenses and other assets, and accrued expenses and other liabilities used $85 million of cash in the year-to-date period as compared to using $66 million of cash in the comparable period of 2024.

The year-over-year changes were driven by timing differences related to contract assets, contract liabilities, and payments of income taxes and interest.

• Year-over-year increase of $27 million in operating cash flows from net earnings, net of non-cash items (Amortization, Depreciation, and Stock-based compensation).

• The aggregate cash generated from accounts receivable was entirely offset by cash used in inventories and trade accounts payable during the first quarter.

The aggregate changes in accounts receivable, inventories, and trade accounts payable generated $18 million in the comparable period of 2025.

The amount of cash flow generated from or used in a period depends upon how effectively we manage the cash conversion cycle, which can be impacted by timing of revenue and collection from customers, vendor cash disbursement, and purchases of materials and components for certain businesses.

• The aggregate changes in prepaid expenses and other assets, and accrued expenses and other liabilities used $51 million of cash in the first quarter as compared to using $71 million of cash in the comparable period of 2025.

The year-over-year changes were driven primarily by timing differences related to contract assets, contract liabilities, and payments of interest.

Investing Activities

Investing cash outflows from continuing operations were $5 million less than the prior year.

The current year had higher capital expenditures offset by cash inflows related to acquisitions and divestments.

Investing cash outflows from continuing operations in the first quarter were $5 million greater than the comparable period of 2025, driven by higher capital expenditures.

Capital expenditures are made primarily for increasing production capacity, replacing aged equipment, supporting product development initiatives for hardware and software offerings, improving information technology systems, and purchasing equipment that is used in revenue arrangements with customers.

Financing Activities

Financing cash flows from continuing operations consist primarily of cash flows associated with the issuance and repayment of debt and commercial paper, payments of cash dividends to shareholders and share repurchases.

In the year-to-date period, financing activities from continuing operations used cash of $863 million, reflecting the following transactions:

Financing cash flows from continuing operations consist primarily of issuances and repayments of debt and commercial paper, payments of cash dividends to shareholders and share repurchases.

In the first quarter, financing activities from continuing operations used cash of $229 million, reflecting the following transactions:

• We incurred $592 million in net commercial paper borrowings.

• We received a cash dividend of $1.15 billion from Ralliant in connection with the Separation (the “Ralliant Dividend”).

• We repurchased 25.2 million shares of our common stock for approximately $1,345 million, with $426 million from the Ralliant Dividend.

• On July 15, 2025, we used approximately $294 million of the Ralliant Dividend to redeem €252 million of the outstanding principal of the 3.7% Euro-denominated senior unsecured notes due 2026.

• On July 24, 2025 and July 25, 2025, we used approximately $421 million of the Ralliant Dividend to repay the outstanding principal of the Euro Term Loan and Yen Term Loan.

• We repurchased 8.9 million shares of our common stock for approximately $500 million.

• We made dividend payments to common shareholders totaling $18 million.

In the comparable 2024 period, financing activities from continuing operations used cash of $297 million, reflecting the following transaction:

• We repaid $571 million in net commercial paper borrowings.

• On January 2, 2024, we drew down $450 million of the Delayed-Draw Term Loan due 2024.

• On February 13, 2024, we completed the sale of our registered offering of the 2026 Notes and the 2029 Notes, yielding net proceeds of approximately $1.3 billion.

• On February 13 2024, Fortive repaid $1.0 billion in outstanding principal of the Delayed-Draw Term Loan due 2024, using net proceeds from the 2026 Notes and 2029 Notes.

• On February 13, 2026, Fortive repaid upon maturity the $292.9 million of outstanding principal of the 3.7% Euro-denominated senior unsecured notes due 2026 using net proceeds from the commercial paper programs.

In the comparable 2025 period, financing activities from continuing operations used cash of $141 million, reflecting the following transactions:

• We incurred $81 million in net commercial paper borrowings.

• We repurchased 2.5 million shares of our common stock for approximately $203 million.

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CRITICAL ACCOUNTING ESTIMATES

There were no material changes during the three and nine-month periods ended September 26, 2025 to the items we disclosed as our critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10-K.

There were no material changes during the three-month periods ended April 3, 2026 to the items we disclosed as our critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report on Form 10-K.

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 2. Management’s Discussion and Analysis