ITT INC.

Previous wording

All comparisons included within Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to the comparable three months ended March 30, 2024, unless stated otherwise.

Current wording

All comparisons included within Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to the comparable three and six months ended June 29, 2024, unless stated otherwise.

Previous wording

In early 2025, the U.S. government announced or extended tariffs on a range of imported goods, including certain industrial components and raw materials, as part of ongoing trade actions involving China and other countries. In response, a number of countries including China and several key U.S. trading partners implemented or expanded retaliatory tariffs on various U.S.-origin goods. These reciprocal trade measures have contributed to increased volatility in global markets and heightened uncertainty regarding international trade policies. As a result, we are experiencing greater complexity and uncertainty in managing our cost structure, sourcing strategies and global supply chain. The tariffs have the potential to increase our input costs and may affect the pricing and competitiveness of some of our products, particularly those that rely on imported materials or components. While we have not experienced a material impact on our business to date, we are continuing to evaluate the situation and assess mitigation strategies, including supply chain adjustments and pricing actions. The ultimate impact of these tariffs on our operations and financial results is currently uncertain and will depend on the scope, duration, and potential expansion of the measures implemented.

Current wording

In early 2025, the U.S. government announced or extended tariffs on a range of imported goods, including certain industrial components and raw materials, as part of ongoing trade actions involving China and other countries. In response, a number of countries including China and several key U.S. trading partners implemented or expanded retaliatory tariffs on various U.S.-origin goods. While certain U.S. tariff rates were subsequently paused or reduced for a limited period under ongoing trade negotiations, the overall tariff environment remains fluid. These trade measures have contributed to increased volatility in global markets and heightened uncertainty regarding international trade policies. As a result, we are experiencing greater complexity and uncertainty in managing our cost structure, sourcing strategies and global supply chain. The tariffs have the potential to increase our input costs and may affect the pricing and competitiveness of some of our products, particularly those that rely on imported materials or components. While we have not experienced a material impact on our business to date, we are continuing to evaluate the situation and assess mitigation strategies, including supply chain adjustments and pricing actions. The ultimate impact of these tariffs on our operations and financial results is currently uncertain and will depend on the scope, duration, and potential expansion or expiration of the measures implemented.

Previous wording

Inflationary pressures, driven by factors such as supply chain disruptions and the ongoing Russia-Ukraine and Middle East conflicts, have continued into 2025 and have led to increased prices for energy and raw materials we use in our production processes, including commodities such as steel, oil, copper and tin. Additionally, the manufacturing industry continues to experience a skilled labor shortage, which has created difficulties in attracting and retaining factory employees and has resulted in higher labor costs. We have been able to offset most of these impacts through pricing actions and productivity savings, which we continue to pursue. Future impacts on our business and financial results as a result of these conditions are not estimable at this time, and depend, in part, on the extent to which these conditions improve or worsen, which remains uncertain. For additional discussion of the risks related to global macroeconomic conditions, see Part I, Item IA, “Risk Factors” in our 2024 Annual Report.

Current wording

Inflationary pressures, driven by factors such as supply chain disruptions and the ongoing Russia-Ukraine and broader Middle East conflicts, have continued into 2025 and have led to increased prices for energy and raw materials we use in our production processes, including commodities such as steel, oil, copper and tin. Recent escalations in the conflict involving Israel and Iran have contributed to heightened regional instability and volatility in global energy markets, further pressuring input costs. Additionally, the manufacturing industry continues to experience a skilled labor shortage, which has created difficulties in attracting and retaining factory employees and has resulted in higher labor costs. We have been able to offset most of these impacts through pricing actions and productivity savings, which we continue to pursue. Future impacts on our business and financial results as a result of these conditions are not estimable at this time, and depend, in part, on the extent to which these conditions improve or worsen, which remains uncertain. For additional discussion of the risks related to global macroeconomic conditions, see Part I, Item IA, “Risk Factors” in our 2024 Annual Report.

Previous wording

The following table provides a summary of key performance indicators for the first quarter of 2025 as compared to the first quarter of 2024.

Current wording

The following table provides a summary of key performance indicators for the second quarter of 2025 as compared to the second quarter of 2024.

Previous wording

Our first quarter 2025 results are summarized below:

Current wording

Our second quarter 2025 results are summarized below:

Previous wording

•Operating income of $150.9 increased by $1.0 primarily due to benefits from pricing actions and productivity savings, partially offset by higher material, labor and restructuring costs, unfavorable foreign currency impacts, and temporary acquisition amortization.

Current wording

•Operating income of $175.1 increased by $15.4 primarily due to benefits from pricing actions, productivity savings, and higher volumes, including contributions from Svanehøj and kSARIA, which were partially offset by higher material and labor, unfavorable foreign currency transaction impacts, and temporary acquisition amortization.

Previous wording

•Income from continuing operations was $1.33 per diluted share, a decrease of $0.02 as compared to the prior year, primarily due to higher interest and tax expenses. Adjusted income from continuing operations was $1.45 per diluted share, an increase of $0.03 as compared to the prior year.

Current wording

•Income from continuing operations was $1.52 per diluted share, an increase of $0.07 as compared to the prior year, primarily due to higher operating income and a lower weighted-average share count, partially offset by the loss of earnings from the Wolverine divestiture in 2024 and higher interest and income tax expenses. Adjusted income from continuing operations was $1.64 per diluted share, an increase of $0.15 as compared to the prior year.

Previous wording

Gross profit for the three months ended March 29, 2025 and March 30, 2024 was $316.3 and $301.5, respectively, reflecting gross margins of 34.6% and 33.1%. The increases in gross profit and margin for both periods were primarily driven by benefits from pricing actions andproductivity savings, partially offset by increases in material and labor costs.

Current wording

Gross profit for the three months ended June 28, 2025 and June 29, 2024 was $346.8 and $316.8, respectively, reflecting gross margins of 35.7% and 35.0%, respectively. Gross profit for the six months ended June 28, 2025 and June 29, 2024 was $663.1 and $618.3, respectively, reflecting gross margins of 35.2% and 34.0%, respectively. The increases in gross profit and margin for both periods were primarily driven by benefits from pricing actions, net savings from productivity and sourcing initiatives, partially offset by unfavorable sales mix.

Previous wording

Sales and marketing expenses increased $3.1 for the three months ended March 29, 2025, primarily driven by higher personnel costs and the additions of kSARIA and Svanehøj, partially offset by the divestiture of the Wolverine business.

Current wording

Sales and marketing expenses increased $6.4 and $9.5 for the three and six months ended June 28, 2025, respectively. The increases in both periods were primarily driven by the acquisition of kSARIA and higher selling expenses in IP, partially offset by the divestiture of the Wolverine business.

Previous wording

Research and development expenses decreased $3.1 for the three months ended March 29, 2025, respectively, primarily driven by the divestiture of Wolverine in the prior year and timing of R&D projects.

Current wording

Research and development expenses decreased $0.7 and $3.8 for the three and six months ended June 28, 2025, respectively, primarily driven by the divestiture of Wolverine in the prior year and timing of R&D projects.

Previous wording

MT operating income for the three months ended March 29, 2025 decreased $3.0, primarily due to the prior year divestiture of Wolverine and unfavorable foreign currency impacts, partially offset by benefits from pricing and productivity actions.

Current wording

MT operating income for the three and six months ended June 28, 2025 was flat and decreased $3.0, respectively, as the prior year divestiture of Wolverine and unfavorable foreign currency impacts were offset by benefits from productivity and higher volume.

Previous wording

Other corporate costs for the three months ended March 29, 2025 decreased $1.7 primarily due to favorable foreign currency impacts.

Current wording

Other corporate costs for the three and six months ended June 28, 2025 increased $4.2 and $2.5, respectively, primarily due to higher incentive-based compensation costs and offset by foreign currency impacts.

Previous wording

The increase in total interest and non-operating expenses, net for the three months ended March 29, 2025 was primarily driven by higher outstanding debt.

Current wording

Total interest and non-operating expenses, net for the three and six months ended June 28, 2025 increased $5.3 and $7.5, respectively, primarily due to higher outstanding debt during the 2025 periods, partially offset by lower average interest rates on commercial paper borrowings.

Previous wording

We manage our worldwide cash requirements considering available funds among the many subsidiaries through which we conduct business and the cost effectiveness with which those funds can be accessed. We support our growth and expansion in markets outside of the U.S. through the enhancement of existing products and development of new products, increased capital spending, and potential foreign acquisitions. We look for opportunities to access cash balances in excess of local operating requirements to meet our global liquidity needs in a cost-efficient manner. We transfer cash between certain international subsidiaries and the U.S. when it is cost effective to do so. During the three months ended March 29, 2025, we had net cash distributions from foreign countries to the U.S. of $378.0. During the year ended December 31, 2024, we had net cash distributions from foreign countries to the U.S. of $230.4. The timing and amount of any additional future distributions will be evaluated based on our jurisdictional cash needs.

Current wording

We manage our worldwide cash requirements considering available funds among the many subsidiaries through which we conduct business and the cost effectiveness with which those funds can be accessed. We support our growth and expansion in markets outside of the U.S. through the enhancement of existing products and development of new products, increased capital spending, and potential foreign acquisitions. We look for opportunities to access cash balances in excess of local operating requirements to meet our global liquidity needs in a cost-efficient manner. We transfer cash between certain international subsidiaries and the U.S. when it is cost effective to do so. During the six months ended June 28, 2025, we had net cash distributions from foreign countries to the U.S. of $536.9. During the year ended December 31, 2024, we had net cash distributions from foreign countries to the U.S. of $230.4. The timing and amount of any additional future distributions will be evaluated based on our jurisdictional cash needs.

Previous wording

The amount and timing of dividends payable on our common stock are within the sole discretion of our Board of Directors and will be based on, and affected by, several factors, including our financial position and results of operations, available cash, expected capital spending plans, prevailing business conditions, and other factors the Board of Directors deems relevant. Therefore, we cannot provide any assurance as to what level of dividends, if any, will be paid in the future. In the first quarter of 2025, we declared a dividend of $0.351 per share for shareholders of record on March 6, 2025, which was a 10% increase from the quarterly dividends of $0.319 that were declared in 2024. Dividend payments during the three months ended March 29, 2025 amounted to $28.7.

Current wording

The amount and timing of dividends payable on our common stock are within the sole discretion of our Board of Directors and will be based on, and affected by, several factors, including our financial position and results of operations, available cash, expected capital spending plans, prevailing business conditions, and other factors the Board of Directors deems relevant. Therefore, we cannot provide any assurance as to what level of dividends, if any, will be paid in the future. In the second quarter of 2025, we declared a dividend of $0.351 per share for shareholders of record on June 2, 2025, which was a 10% increase from the quarterly dividends of $0.319 that were declared in 2024. Dividend payments during the six months ended June 28, 2025 amounted to $56.2.

Previous wording

From time to time, the Company may repurchase shares of its stock on the open market. The timing of any repurchases and the actual number of shares repurchased depends on a variety of factors, including remaining authorization under existing Board-approved share repurchase programs, the Company’s stock price, restrictions under the Company’s debt obligations, other uses for capital, the dilutive impact of shares issued during the period related to the Company’s long-term incentive plans, impacts on the value of remaining shares, and market and economic conditions. During the three months ended March 29, 2025, we spent $100.8 on open-market share repurchases under our share repurchase programs. We did not complete any open-market repurchases during the three months ended March 30, 2024. All repurchased shares are retired immediately following the repurchases.

Current wording

From time to time, the Company may repurchase shares of its stock on the open market. The timing of any repurchases and the actual number of shares repurchased depends on a variety of factors, including remaining authorization under existing Board-approved share repurchase programs, the Company’s stock price, restrictions under the Company’s debt obligations, other uses for capital, the dilutive impact of shares issued during the period related to the Company’s long-term incentive plans, impacts on the value of remaining shares, and market and economic conditions. During the six months ended June 28, 2025, we spent $500.1 on open-market share repurchases under our share repurchase programs. During the six months ended June 29, 2024, we spent $79.0 on open-market share repurchases under our share repurchase programs. All repurchased shares are retired immediately following the repurchases. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for additional information.

Previous wording

In the three months ended March 29, 2025, we initiated borrowings under the European commercial paper program to complete the repayment of the kSARIA Credit Agreement and fund share repurchase activity. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

Current wording

In the six months ended June 28, 2025, we borrowed under the European commercial paper program to partially refinance the Company’s U.S. commercial paper. The proceeds of the 2025 Term Loan Credit Agreement were used to refresh the U.S. commercial paper capacity and for other general corporate purposes. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

Previous wording

On August 5, 2021, we entered into a revolving credit facility agreement with a syndicate of third party lenders including Bank of America, N.A., as administrative agent (the 2021 Revolving Credit Agreement). The 2021 Revolving Credit Agreement matures in August 2026 and provides for an aggregate principal amount of up to $700 of (i) revolving extensions of credit (the revolving loans) outstanding at any time, and (ii) letters of credit for a face amount of up to $100 at any time outstanding. Subject to certain conditions, we are permitted to terminate permanently the total commitments and reduce commitments by a minimum aggregate amount of $10 or any whole multiple of $1 in excess thereof. Borrowings under the credit facility are available in U.S. dollars, Euros, British pound sterling or any other currency that may be requested by us, subject to the approval of the administrative agent and each lender. We are permitted to request that lenders increase the commitments under the facility by up to $350 for a maximum aggregate principal amount of $1,050; however, this is subject to certain conditions and therefore may not be available to us. As of March 29, 2025 and December 31, 2024, we had no outstanding borrowings under the 2021 Revolving Credit Agreement. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

Current wording

On August 5, 2021, we entered into a revolving credit facility agreement with a syndicate of third-party lenders including Bank of America, N.A., as administrative agent (the 2021 Revolving Credit Agreement). The 2021 Revolving Credit Agreement matures in August 2026 and provides for an aggregate principal amount of up to $700 of (i) revolving extensions of credit (the revolving loans) outstanding at any time, and (ii) letters of credit for a face amount of up to $100 at any time outstanding. Subject to certain conditions, we are permitted to terminate permanently the total commitments and reduce commitments by a minimum aggregate amount of $10 or any whole multiple of $1 in excess thereof. Borrowings under the credit facility are available in U.S. dollars, Euros, British pound sterling or any other currency that may be requested by us, subject to the approval of the administrative agent and each lender. We are permitted to request that lenders increase the commitments under the facility by up to $350 for a maximum aggregate principal amount of $1,050; however, this is subject to certain conditions and therefore may not be available to us. As of June 28, 2025 and December 31, 2024, we had no outstanding borrowings under the 2021 Revolving Credit Agreement.

Previous wording

The kSARIA Credit Agreement had a maturity of three years and provided for a term loan of $464, which had been borrowed and was used to finance the Company’s acquisition of kSARIA on September 12, 2024. During the first quarter of 2025, the Company made loan repayments of $229.0, representing the remaining outstanding balance on the kSARIA Credit Agreement, and the kSARIA Credit Agreement was terminated. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

Current wording

The kSARIA Credit Agreement had a maturity of three years and provided for a term loan of $464 which had been borrowed and was used to finance the Company’s acquisition of kSARIA on September 12, 2024. During the first quarter of 2025, the Company made loan repayments of $229, representing the remaining outstanding balance on the kSARIA Credit Agreement, and the kSARIA Credit Agreement was terminated. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

Previous wording

On April 30, 2025, the Company entered into a credit agreement (the 2025 Credit Agreement) among the Company, as borrower, certain of our subsidiaries, as guarantors, each lender from time to time party thereto, and U.S. Bank National Association, as the administrative agent, sole lead arranger and sole bookrunner.

Current wording

On April 30, 2025, the Company entered into a credit agreement (as amended, the 2025 Term Loan Credit Agreement) among the Company, as borrower, certain of our subsidiaries, as guarantors, each lender from time to time party thereto, and U.S. Bank National Association, as the administrative agent. The 2025 Term Loan Credit Agreement has a maturity of two years and provides for a term loan of $750. Proceeds of the term loan were applied to pay down the Company’s U.S. commercial paper capacity and for other general corporate purposes, including working capital needs. In connection with the entry into the 2025 Revolving Credit Agreement described below, on July 30, 2025, the Company and lenders entered into an amendment to the 2025 Term Loan Credit Agreement to modify certain covenant baskets and other terms (including amendments to the leverage ratio definition) to conform to the 2025 Revolving Credit Agreement.

Previous wording

The 2025 Credit Agreement has a maturity of two years and provides for a term loan of $750.0, all of which had been borrowed on April 30, 2025. Proceeds of the term loan will be applied to pay down the Company’s U.S. commercial paper capacity and for other general corporate purposes, including working capital needs.

Current wording

The 2025 Term Loan Credit Agreement has a maturity of two years and provides for a term loan of $750. Proceeds of the term loan were applied to pay down the Company’s U.S. commercial paper capacity and for other general corporate purposes, including working capital needs.

Previous wording

Borrowings under the 2025 Credit Agreement bear interest at an annual rate equal to, at the Company’s option, either (i) term secured overnight financing rate (Term SOFR) plus a margin ranging from 0.875% to 1.375%, or (ii) an alternate base rate plus a margin ranging from 0.0% to 0.375%, with the applicable margin determined by reference to the Company’s debt ratings set forth in the 2025 Credit Agreement. The loans under the 2025 Credit Agreement may be prepaid by the Company at any time, in whole or in part, without penalty or premium, subject to certain conditions.

Current wording

Borrowings under the 2025 Term Loan Credit Agreement bear interest at an annual rate equal to, at the Company’s option, either (i) term secured overnight financing rate (Term SOFR) plus a margin ranging from 0.875% to 1.375%, or (ii) an alternate base rate plus a margin ranging from 0.0% to 0.375%, with the applicable margin determined by reference to the Company’s debt ratings set forth in the 2025 Term Loan Credit Agreement. The loans under the 2025 Term Loan Credit Agreement may be prepaid by the Company at any time, in whole or in part, without penalty or premium, subject to certain conditions.

Previous wording

The 2025 Credit Agreement contains customary affirmative and negative covenants, as well as financial covenants (e.g., leverage ratio), that are similar to those contained in our 2021 Revolving Credit Agreement.

Current wording

The 2025 Term Loan Credit Agreement contains customary affirmative and negative covenants. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

Previous wording

Our principal source of liquidity is our cash flow generated from operating activities, which provides us with the ability to meet the majority of our short-term funding requirements. The following table summarizes net cash provided by or used in operating, investing, and financing activities from continuing operations, as well as net cash from discontinued operations.

Current wording

Our principal source of liquidity is our cash flow generated from operating activities, which provides us with the ability to meet the majority of our short-term funding requirements. The following table summarizes net cash provided by or used in operating, investing, and financing activities from continuing operations.

Previous wording

The increase in net cash from operating activities of $55.6 was primarily due to favorable working capital from timing of accounts receivable collections, higher customer advanced payments and lower compensation payments in the current year.

Current wording

The increase in net cash from operating activities of $51.6 was primarily due to favorable working capital from timing of accounts receivable collections, higher customer advanced payments, and lower compensation payments in the current year.

Previous wording

The decrease in net cash used in investing activities of $394.6 was mainly driven by the prior year acquisition of Svanehøj, partially offset by an increase in capital expenditures. Refer to Note 19, Acquisitions, to the Consolidated Condensed Financial Statements for further information.

Current wording

The decrease in net cash used in investing activities of $403.6 was mainly driven by the prior year acquisition of Svanehøj. Refer to Note 19, Acquisitions, to the Consolidated Condensed Financial Statements for further information.

Previous wording

Reconciliations of revenue to organic revenue for the three months ended March 29, 2025 are provided below.

Current wording

Reconciliations of revenue to organic revenue for the three and six months ended June 28, 2025 are provided below.

Previous wording

Reconciliations of operating income to adjusted operating income (loss) for the three months ended March 29, 2025 and March 30, 2024 are provided below.

Current wording

Reconciliations of operating income to adjusted operating income (loss) for the three and six months ended June 28, 2025 and June 29, 2024 are provided below.

Previous wording

Reconciliations of adjusted income from continuing operations attributable to ITT to income from continuing operations attributable to ITT and adjusted income from continuing operations attributable to ITT per diluted share to income from continuing operations attributable to ITT per diluted share (EPS) for the three months ended March 29, 2025 and March 30, 2024 are provided below. Per share amounts are reported in ones and may not calculate due to rounding.

Current wording

Reconciliations of adjusted income from continuing operations attributable to ITT to income from continuing operations attributable to ITT and adjusted income from continuing operations attributable to ITT per diluted share to income from continuing operations attributable to ITT per diluted share (EPS) for the three and six months ended June 28, 2025 and June 29, 2024 are provided below. Per share amounts are reported in ones and may not calculate due to rounding.

Previous wording

(a)Other tax-related special items for the three months ended March 29, 2025 and March 30, 2024, include tax expense (benefit) on undistributed foreign earnings of $2.5 and $1.8, respectively, and other tax special items of $0.9 and ($0.1), respectively.

Current wording

(a)The three and six months ended June 28, 2025 include tax expense on distributions of non-U.S. income of $4.3 and $3.6, tax expense on undistributed foreign earnings of $0.9 and $3.4, and other tax expense special items of $1.4 and $2.8, respectively.