ITT INC.
For the period ended Dec 31, 2025. Filed Feb 9, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 9, 2026
ITT$205.55+4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-10.
0000216228-25-000014
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsKey Performance Indicators and Non-GAAP MeasuresCritical Accounting EstimatesCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-09.
0000216228-26-000012
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsKey Performance Indicators and Non-GAAP MeasuresCritical Accounting EstimatesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 161 previous paragraphs and 161 current paragraphs.
93 unchanged; 28 reworded; 39 added; 37 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (39)
Current report
Effective January 1, 2025, the Company changed its method of determining the cost for certain inventories from a last-in, first-out (LIFO) to first-in, first out (FIFO) for all inventories previously accounted for under LIFO. For additional information on the change in accounting principle, refer to Note 1, Description of Business and Basis of Presentation. Management’s discussion and analysis of financial condition and results of operations have been adjusted to reflect the change in accounting principle.
Current report
•Revenue of $3,938.5 increased $307.8, or 8.5%, due to growth in each of our three business segments. IP drove significant growth with pump projects, CCT saw strength across connectors and components within the aerospace and defense markets, and MT continued to outperform with share gains in automotive and strength in rail, resulting in total ITT organic revenue growth of 4.8% for the year. In addition, the 2025 results included incremental revenue of $161.5, primarily from our 2024 acquisition of kSARIA, and benefitted from favorable foreign currency translation of $64.6. The 2024 Wolverine divestiture reduced our total revenue growth by $89.2.
Current report
•Operating income of $684.5 increased $6.4, as benefits from higher volume, productivity and pricing, and contributions from acquisitions more than offset the prior year gain on sale of the Wolverine business of $47.8, cost inflation, increased restructuring, acquisition-related expenses, and unfavorable sales mix. Adjusted operating income increased 11.2%.
Current report
•Income from continuing operations was $6.11 per diluted share, a decrease of 3.3%, which primarily reflects the prior year gain on sale of Wolverine, a higher effective tax rate, and increased interest expense, partially offset by a lower weighted average share count. Adjusted EPS was $6.72, an increase of 14.3%, reflecting the strength in core operations throughout the year.
Current report
•Capital expenditures over $120 for the second year in a row, reflecting our continued commitment to fund future growth through capacity expansion, productivity and innovation.
Current report
•Enter into a definitive agreement to acquire SPX FLOW for $4,775 to be funded through a combination of cash and equity.
Current report
Throughout 2025, global macroeconomic conditions evolved against a backdrop of geopolitical uncertainty and shifting market demands. While these dynamics created areas of variability, the Company continued to apply disciplined execution and strategic investment across its businesses. In 2026 we expect demand to remain firm, but with variation between industrial end markets. In addition, changes in tariffs and trade policies, geopolitical and energy market risk, workforce availability and cost, technology transformation and cost inflation are factors that we are watching that may impact our performance going forward.
Current report
Tariffs and Trade Policies: Ongoing tariff regimes and changes in global trade frameworks may influence input costs and sourcing patterns. At the same time, these dynamics reinforce the value of our multi‑sourcing, localization, and regional manufacturing strategies. We also continue to monitor developments associated with the United States‑Mexico‑Canada Agreement (USMCA) and ensure that our operations, supply‑chain partners, and cross‑border flows remain compliant with its requirements. Adhering to USMCA rules of origin, documentation standards, and regional content thresholds helps support stable access to North American markets, reduces potential trade-related disruptions, mitigates trade duties, and lowers costs.
Current report
Geopolitical and Energy Market Risk: Geopolitical developments may impact supply chains, energy pricing trends, and defense-related procurement. For example, while such factors can shift project timing in certain Industrial Process markets, our growing presence in critical flow technologies and resilient aftermarket channels helps balance exposure. Moreover, select programs in Connect & Control Technologies may benefit from sustained investments in defense and security. Overall, our portfolio evolution aims to strengthen durability across macro cycles.
Current report
Workforce Availability and Cost: Tight labor markets and specialized skill requirements remain industry‑wide considerations. We continue to address these trends through talent development and selective automation, which help maintain high levels of quality and delivery performance. These efforts strengthen our long‑term operational capabilities and support sustainable growth.
Current report
Technology Transformation: Accelerating advancements in automation, data analytics, and artificial intelligence continue to reshape manufacturing and industrial solutions. We view this shift as an opportunity to further enhance efficiency, reliability, and customer value but it also exposes us to additional cyber related risks and the possibility that our competitors are able to adapt and utilize this technology at a faster pace and with greater success than we do, We are expanding digital investments across operations and product lines, including technologies that improve energy efficiency and reduce operating costs for customers.
Current report
Supply Chain and Cost Inflation: We continue to experience variability in material availability, logistics conditions, and input costs caused by supply chain disruptions, geopolitical developments and tariff pressures. We are using dual‑sourcing strategies, long‑term agreements, strengthened supplier partnerships, and targeted inventory buffers to support consistent delivery performance and help mitigate potential impacts.
Current report
Sustainability and Energy Transition: Evolving environmental expectations and customer decarbonization initiatives are influencing product design and purchasing priorities. These trends create meaningful opportunities across our portfolio, particularly in energy efficient solutions, advanced flow technologies, and cryogenic/compressor systems supporting liquid natural gas, ammonia, hydrogen, and CO₂ applications. We are continuing to invest in product innovation and operational sustainability, which enhances our ability to support customers in meeting their current and future requirements.
Current report
Agreement to Acquire SPX FLOW
Current report
We continue to grow our core businesses and enhance the ITT portfolio further through mergers and acquisitions, reshaping the portfolio towards attractive pump applications and defense and aerospace interconnect markets, while reducing our automotive exposure. On December 4, 2025, we entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with LSF11 Redwood Parent, L.P., LSF11 Redwood TopCo LLC (the "Target") and ITT Industries Holdings, Inc., our wholly owned subsidiary, to acquire SPX FLOW, Inc. ("SPX FLOW"), a subsidiary of the Target and a leading provider of pumps, valves, mixers, aftermarket services, and other flow and process solutions (the "Acquisition"), for an aggregate purchase price of approximately $4,775 payable at closing of the Acquisition, comprised of $4,075 in cash and 3,839,824 shares of our common stock, subject to customary closing conditions, including regulatory approvals. We expect the acquisition of SPX FLOW to add critical equipment and adjacent flow and process technologies that will extend ITT’s capabilities to address complex customer challenges across a wide variety of key growth markets, including food & beverage, personal care, industrial, chemical, energy, and mining.
Current report
MT revenue for the year ended December 31, 2025 decreased $19.6 primarily driven by the prior year divestiture of the Wolverine business which generated $89.1 of revenue during 2024. This decline was partially offset by strength in Friction original equipment reflecting our market outperformance and growth across our KONI business. The current year also benefited from favorable foreign currency translation $44.0. Excluding the impact from the divestiture and foreign currency translation, organic revenue increased $25.5, or 1.9%.
Current report
IP revenue for the year ended December 31, 2025 increased $135.2, driven primarily by growth in pump projects, reflecting strength across markets and geographies. The current year also included growth from acquisitions of $26.1 and benefited from favorable foreign currency translation of $15.7. Excluding the impacts from acquisitions and foreign currency translation, organic revenue increased $93.4, or 6.9%.
Current report
CCT revenue for the year ended December 31, 2025 increased $191.9, including growth from acquisitions of $135.4 and favorable foreign currency translation of $5.0. Excluding the impacts from acquisitions and foreign currency translation, organic revenue increased $51.5, or 6.2%, reflecting growth in connectors of 5% and components of 7%, primarily within the aerospace and defense markets. Revenue growth was partially offset by slower demand for electric vehicle charging applications.
Current report
General and administrative (G&A) expenses increased $71.3 for the year ended December 31, 2025, primarily driven by higher incentive-based compensation, restructuring expenses, acquisition-related expenses, and unfavorable foreign currency translation.
Current report
Research and development (R&D) expenses decreased $5.5 for the year ended December 31, 2025, primarily driven by the divestiture of Wolverine in the prior year and by the completion of certain R&D projects during 2025.
Current report
MT operating income for the year ended December 31, 2025 decreased $38.7, driven by the $47.8 gain on sale of the Wolverine business recognized in 2024, as well as the loss of income following the divestiture, and unfavorable foreign currency, pricing and sales mix impacts, and higher restructuring costs. The decrease was partially offset by productivity and supply chain savings and benefits from sales volume growth.
Current report
IP operating income for the year ended December 31, 2025 increased $36.7, driven by benefits from pricing actions, higher sales volume, net savings from supply chain, restructuring, and productivity initiatives, lower acquisition-related expenses, and favorable foreign currency impacts. The increase was partially offset by unfavorable sales mix and higher incentive-based compensation costs.
Current report
CCT operating income for the year ended December 31, 2025 increased $32.1, driven by benefits from pricing actions, net savings from productivity, sourcing, and restructuring initiatives, higher sales volume, and contributions from kSARIA. The increase was partially offset by higher strategic investment costs, and temporary acquisition related amortization associated with kSARIA.
Current report
Corporate & Other costs increased $23.7 for the year ended December 31, 2025, primarily due to higher incentive-based compensation costs, M&A-related professional service costs, and charitable contributions. The increase was partially offset by favorable foreign currency impacts.
Current report
Interest expense increased $11.5 due to higher average outstanding debt during 2025, unfavorable interest on uncertain tax positions, and financing costs associated with a bridge loan facility related to the financing of the pending SPX FLOW acquisition. These drivers were partially offset by lower average interest rates on commercial paper borrowings. Interest income increased $4.1 due to a higher cash on deposit following receipt of $1.3 billion in proceeds from our December 2025 common stock public offering. Other non-operating income net increased $1.5 due to a gain on sale of an equity method investment.
Current report
Recent Income Tax Legislation
Current report
In October 2021, more than 135 countries and jurisdictions agreed to participate in a “two-pillar” international tax approach developed by the Organisation for Economic Co-operation and Development (the "OECD"), which includes establishing a global minimum corporate tax rate of 15 percent. The OECD published Tax Challenges Arising from the Digitalisation of the Economy — Global Anti-Base Erosion Model Rules (Pillar Two) in December 2021 and subsequently issued additional commentary and administrative guidance clarifying several aspects of the model rules. Since the model rules have been released, many countries have enacted Pillar Two-related laws, many of which became effective on January 1, 2024 with additional laws effective on January 1, 2025. As of December 31, 2025, Pillar Two did not have a significant impact on our 2025 financial statements.
Current report
On January 5, 2026, the OECD released a Pillar Two Administrative Guidance package containing the Side-by-Side Safe Harbor (the "SbS"). Under the SbS, Multinational Enterprises headquartered in a jurisdiction that has a Qualified SbS Regime are eligible for the SbS election. The United States is listed as a jurisdiction with a Qualified SbS Regime. By making the SbS election, top-up taxes under the Income Inclusion Rule (the "IIR") and Undertaxed Profits Rule (the "UTPR") are set to zero. Note, however, that the SbS does not have an impact on the application of Pillar 2 Qualified Domestic Minimum Top-up Taxes (the "QDMTT"). Jurisdictions are required to implement the SbS effective for fiscal years beginning on or after January 1, 2026 (or at the earliest practicable date where there are constitutional or other superior law constraints preventing retroactive adoption). ITT will monitor the adoption of SbS in each jurisdiction and intends to elect the SbS where available.
Current report
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international) and expanding certain Inflation Reduction Act incentives while accelerating the phase-out of others. We have applied the capitalization and amortization requirements under Section 174, as amended by the One Big Beautiful Bill Act (the "OBBBA"), in the current year. The application of these provisions did not have a material impact on the effective tax rate for the year. We will continue to assess their effect on the effective tax rate in future periods.
Current report
On July 30, 2025, we entered into a revolving credit facility agreement with a syndicate of third-party lenders including U.S. Bank National Association ("US Bank"), as administrative agent (the "2025 Revolving Credit Agreement"). Upon its effectiveness, the 2025 Revolving Credit Agreement replaced the revolving credit facility agreement that we entered into on August 5, 2021, 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 was terminated on July 30, 2025 with no outstanding balances remaining. The 2025 Revolving Credit Agreement matures in July 2030 and provides for an aggregate principal amount of up to $1,100. The 2025 Revolving Credit Agreement provides for a potential increase of commitment of up to $550 for a possible maximum of $1,650 in aggregate commitments at the request of the Company and with the consent of the institutions providing such increase of commitments.
Current report
The 2025 Revolving Credit Agreement contains customary affirmative and negative covenants that, among other things, will limit or restrict our ability to: incur additional debt or issue guarantees; create certain liens; merge or consolidate with another person; sell, transfer, lease or otherwise dispose of all or substantially all of our assets and liquidate or dissolve. Additionally, the 2025 Revolving Credit Agreement requires us not to permit the ratio of consolidated total indebtedness net of unrestricted cash in excess of $100 to consolidated earnings before interest, taxes, depreciation, amortization and other special, extraordinary, unusual, or non-recurring items (adjusted consolidated EBITDA) (leverage ratio) to exceed 3.50 to 1.00, with a qualified acquisition step up immediately following such qualified acquisition of 4.00 to 1.00 for four quarters, 3.75 to 1.00 for two quarters thereafter, and returning to 3.50 to 1.00 thereafter.
Current report
Borrowings under the 2025 Revolving 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 0.785% to 1.150%, or (ii) an alternate base rate plus a margin ranging from 0% to 0.150%, with the applicable margin determined by reference to the Company’s debt ratings set forth in the 2025 Revolving Credit Agreement. There is a commitment fee under the 2025 Revolving Credit Agreement ranging from 0.090% to 0.225% of commitments under the 2025 Revolving Credit Agreement. As of December 31, 2025, we had no outstanding borrowings under the 2025 Revolving Credit Agreement and all financial covenants (e.g., leverage ratio) were within the prescribed thresholds.
Current report
2025 Term Loan Credit Agreement
Current report
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, 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.
Current report
Total outstanding borrowings under the Amended 2025 Term Loan Credit Agreement were $520.0 as of December 31, 2025. Borrowings under the 2025 Term Loan Credit Agreement bear interest at an annual rate equal to, at the Company’s option, either (i) 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. During 2025, the Company made repayments of $230.0. The 2025 Term Loan Credit Agreement contains customary affirmative and negative covenants.
Current report
The increase in net cash from financing activities of $494.0 was primarily driven by proceeds of $1,314.1 from the issuance of common stock to finance the pending acquisition of SPX FLOW. These proceeds were partially offset by a year-over-year change in commercial paper activity of $451.8 and increased repurchases of ITT common stock of $416.5 in the current year.
Current report
(a)Acquisition-related costs for 2025 primarily relate to fees incurred to effectuate the agreement to acquire SPX FLOW, including $2.1 of interest-related costs.
Current report
(b)Other pre-tax special items for the full year 2025 include interest expense associated with uncertain tax positions.
Current report
Our effective tax rate reflects the impact of foreign and U.S. taxes on the undistributed earnings of all foreign subsidiaries because these earnings are considered not indefinitely reinvested outside of the U.S. ITT uses U.S. earnings and profits to estimate the undistributed local statutory foreign earnings. ITT is indefinitely reinvested in the excess of financial reporting over tax basis in its foreign subsidiaries that exceeds undistributed U.S. earnings and profits.
Removed paragraphs (37)
Previous report
•Revenue of $3,630.7 increased $347.7 primarily due to the acquisitions of Svanehøj and kSARIA which contributed $230.1 to total revenue growth. The increase was also due to higher sales volume, particularly within IP's project pump and short cycle businesses, MT's Friction OEM and KONI rail businesses, and CCT's connectors business, and pricing actions. This was offset by the Wolverine and Matrix divestitures, which reduced total revenue by $79.0, and unfavorable foreign currency translation of $24.7.
Previous report
•Operating income of $676.0 increased $147.8, primarily due to higher revenue and a $47.8 gain on sale of the Wolverine business in MT, partially offset by higher material, labor, overhead, M&A costs, and unfavorable sales mix.
Previous report
•Income from continuing operations was $6.30 per diluted share, an increase of $1.33 as compared to the prior year. The increase was primarily due to higher operating income, and lower share count resulting from open-market share repurchases executed during the year, partially offset by higher interest due to acquisition-related debt, and higher corporate expenses.
Previous report
•In January, we acquired Svanehøj for $407.6, a leading provider of customized critical liquid and cryogenic pumps for liquefied gas applications for the marine sector. This acquisition expands our international footprint and positions us to benefit from the energy transition.
Previous report
•In July, we completed the sale of Wolverine business for a price of $186.2 (or $177.9, net of cash divested).
Previous report
•In September, we acquired kSARIA for a preliminary purchase price of $461.8. kSARIA is a leading manufacturer of mission-critical cable assembly and networking application solutions primarily for the aerospace and defense market. See Note 21, Acquisitions, Investments, and Divestitures, to the Consolidated Financial Statements for further information.
Previous report
•We increased our capital expenditures by 15% compared to the previous year reflecting our commitment to innovation and growth, capacity expansion, and green energy, including solar installations.
Previous report
During 2024, geopolitical uncertainty, supply chain disruptions, labor shortages, and raw material constraints impacted the Company's performance. These items are described further below.
Previous report
Middle East Conflict
Previous report
The conflict in the Middle East has been ongoing throughout 2024. Our operations in Israel are limited to Habonim Industrial Valves and Actuators Ltd. (Habonim), which we acquired in April 2022 as part of our IP segment. While there has been no material impact on our business to date, further escalation of this conflict could result in further supply chain disruptions, inflation, workforce disruptions, demand fluctuations, or the inability to fulfill customer requests in the region. We are closely monitoring this situation, however, we are unable to reasonably estimate future impacts on our business and financial results at this time.
Previous report
Inflationary Pressures
Previous report
Inflationary pressures, driven by factors such as supply chain disruptions and the ongoing Russia-Ukraine and Middle East conflicts, 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 1A, Risk Factors, herein.
Previous report
MT revenue for the year ended December 31, 2024 decreased $10.0 primarily due to the loss of $68.7 of revenue as a result of the divestiture of Wolverine in July 2024. Our Friction business grew 4% due to strong OEM and aftermarket demand. Additionally, our KONI and Axtone businesses grew 15% and 6% respectively, due to strength in our rail business. The current year period also benefited from favorable foreign currency translation of $9.7. Excluding the impact from foreign currency translation and the divestiture, organic revenue increased $68.4 or 4.9%.
Previous report
IP revenue for the year ended December 31, 2024 increased $231.4 primarily driven by the acquisition of Svanehøj, which closed in January 2024 and contributed $156.2 to total revenue growth. Our pump project revenue grew 19%, primarily within the energy and chemical markets, and the short cycle business grew 5% primarily within the energy and industrial markets. The current year period also benefited by $13.0 from favorable foreign currency translation. Excluding the impacts from the acquisition and foreign currency translation, organic revenue increased $88.2 or 7.8%.
Previous report
CCT revenue for the year ended December 31, 2024 increased $125.7 primarily driven by our acquisitions of kSARIA in September 2024 and Micro-Mode in May 2023, which contributed $73.9 to total revenue growth. In addition, connector sales grew 12%, primarily within the aerospace and defense markets, and component sales grew 8%, primarily within the defense and industrial markets. Revenue growth for the year was partially offset by a weaker demand for electric vehicle charging applications and the loss of $10.2 of revenue from our Matrix business which we divested in December 2023. Excluding the impacts from acquisition, divestiture, and foreign currency translation, organic revenue increased $64.0 or 9.3%.
Previous report
General and administrative (G&A) expenses increased $2.1 for the year ended December 31, 2024. The increase was primarily driven by the acquisitions of Svanehøj and kSARIA, and a prior year gain of $3.7 associated with a lease termination, partially offset by the divestiture of the Wolverine business and lower incentive compensation cost.
Previous report
Research and development (R&D) expenses increased $13.7 for the year ended December 31, 2024, primarily driven by acquisitions, higher personnel costs and continued strategic investments to support innovation and new product development, partially offset by the divestiture of the Wolverine business.
Previous report
MT operating income for the year ended December 31, 2024 increased $83.8 primarily due to a $47.8 gain on sale of the Wolverine business. In addition, operating income benefited from higher revenue and savings from productivity and sourcing initiatives as well as lower material and overhead costs. Operating income growth was partially offset by higher labor costs and strategic investments.
Previous report
IP operating income for the year ended December 31, 2024 increased $32.7, driven by higher revenue, as discussed above, savings from productivity and sourcing initiatives. The increase was partially offset by higher material, labor, overhead, M&A costs, and unfavorable sales mix.
Previous report
CCT operating income for the year ended December 31, 2024 increased $38.6, driven by higher revenue, as discussed above, and productivity savings. This was partially offset by a prior year net loss on the sale of businesses of $8.1, and higher material, labor, overhead costs, and incentive-based compensation in the current year.
Previous report
Corporate & Other costs increased $7.3 for the year ended December 31, 2024, primarily driven by the impact of a prior year gain of $3.7 associated with a lease termination and higher legal expenses in the current year. The increase was partially offset by favorable foreign currency impacts and lower incentive-based compensation.
Previous report
The increase in interest and other non-operating expense, net for the year ended December 31, 2024 was primarily due to higher interest expense related to our long-term debt in connection with our acquisitions of Svanehøj and kSARIA and a higher average interest rate on our commercial paper borrowings. In 2023 we had $1.4 of interest expense related to a tax audit settlement in Italy, as discussed below in the section titled "Income Tax Expense."
Previous report
We are closely monitoring the potential passage of new U.S. and foreign tax legislation, which could result in substantial changes to the current U.S. or foreign tax systems. In October 2021, the Organization for Economic Cooperation and Development (OECD) and G20 Finance Ministers reached an agreement, known as Base Erosion and Profit Shifting (BEPS) Pillar Two, which is a multi-jurisdictional plan of action to address base erosion and profit shifting. On December 20, 2021, the OECD released the Model GloBE Rules for Pillar Two defining a 15% global minimum tax rate for large multinational corporations. Countries are implementing legislation with widespread adoption of the Model GloBE Rules for Pillar Two. We continue to evaluate the Model GloBE Rules for Pillar Two and related legislation, and their potential impacts. Continuing enactment of these regulations could increase the amount of global corporate income tax paid by the Company. These increases could have a material adverse effect on our effective tax rate. As the effects of a change in U.S. or foreign tax law must be recognized in the period in which the new legislation is enacted, should new legislation be signed into law, our financial results could be materially impacted. As of December 31, 2024, Pillar Two taxes have not had a significant impact on ITT's financial statements.
Previous report
We operate in various tax jurisdictions and are subject to examination by tax authorities in these jurisdictions. We are currently under examination in several jurisdictions including Czechia, Germany, Hong Kong, India, Italy, Japan, the U.S. and Venezuela. The calculation of our tax liability for unrecognized tax benefits includes dealing with uncertainties in the application of complex tax laws and regulations in various tax jurisdictions. Due to the complexity of some uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit. Over the next 12 months, the net amount of the tax liability for unrecognized tax benefits in foreign and domestic jurisdictions is not expected to change by a significant amount.
Previous report
The increase in commercial paper outstanding from December 31, 2023 to December 31, 2024 was primarily related to acquisition activity that was partially financed using commercial paper, and timing of repayments. See Note 17, Capital Stock, and Note 21, Acquisitions, Investments, and Divestitures, for further information.
Previous report
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 (as amended, 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 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 December 31, 2024 and 2023, we had no outstanding borrowings under the 2021 Revolving Credit Agreement. See Note 14, Debt, to the Consolidated Financial Statements for further information.
Previous report
See Note 14, Debt, for further information.
Previous report
Italian Term Loan
Previous report
On January 12, 2024, ITT Italia S.r.l. (“ITT Italia”), an indirect wholly owned subsidiary of ITT, entered into a facility agreement (the “ITT Italia Credit Agreement”), among the Company, as a guarantor, ITT Italia, as borrower, and BNP Paribas, Italian Branch, as bookrunner, sole underwriter and global coordinator, mandated lead arranger and agent.
Previous report
The ITT Italia Credit Agreement had an initial maturity of three years and provided for term loan borrowings in an aggregate principal amount of €300 million (or $328.9), €275 million (or $301.5) of which were used to finance the Company’s acquisition of Svanehøj, which closed on January 19, 2024. During the third quarter of 2024, ITT Italia repaid €175, representing the remaining outstanding balance on the ITT Italia Credit Agreement. Year-to-date repayments of the facility agreement totaled €275. See Note 14, Debt, for further information.
Previous report
The increase in net cash from financing activities of $667.2 was primarily driven by long-term debt issued to finance the current year acquisitions and higher cash inflows of $505.5 associated with commercial paper borrowings due to timing of repayments. The term loan borrowing used to partially fund the Svanehøj acquisition was fully repaid during 2024 and the term loan borrowing to fund the kSARIA acquisition was partially repaid. Additionally, there were higher repurchases of ITT common stock of $44.5 in the current year.
Previous report
On October 30, 2019, the Board of Directors approved our current program, an indefinite term $500 open-market share repurchase program (the 2019 Plan). During 2024, we exhausted the remaining capacity under the 2019 Plan. All repurchased shares are retired immediately following the repurchases. During the years ended December 31, 2024 and 2023, we spent $104.5 and $60.0, respectively, on open-market share repurchases under the share repurchasing plans.
Previous report
(a)Includes income from a recovery of costs associated with the 2020 lease termination of a legacy site.
Previous report
(a)Relates to the sale of our Wolverine business in July 2024 and Matrix business in December 2023. See Note 21, Acquisitions, Investments, and Divestitures, to the Consolidated Financial Statements for further information.
Previous report
(b)2023 primarily includes income of $3.7 from a recovery of costs associated with the 2020 lease termination of a legacy site, partially offset by interest expense of $1.4 related to a tax audit settlement in Italy.
Previous report
(d)2023 tax-related special items include benefits from valuation allowance reversals of $(16.4), a settlement expense primarily related to a tax audit in Italy of $14.4, the tax impact on distributions of $7.5, an amendment of our federal tax return of $(4.9), and other of $(2.6).
Previous report
Our effective tax rate reflects the impact of certain undistributed foreign earnings for which we have not provided U.S. taxes because these earnings are considered indefinitely reinvested outside of the U.S. We plan foreign earnings remittance amounts based on projected cash flow needs, as well as the working capital and long-term investment requirements of our foreign subsidiaries and our domestic operations. Based on these assumptions, we estimate the amount we will distribute to the U.S. and accrue U.S. and foreign taxes on these planned foreign remittance amounts. Material changes in our estimates of cash, working capital and long-term investment requirements in the various jurisdictions in which we do business could impact our effective tax rate. Our provision for income taxes could be adversely impacted by changes in our geographic mix of earnings or changes in the enacted tax rates in the jurisdictions in which we conduct our business.
Reworded paragraphs (28)
Previous wording
•We repurchased 0.8 shares of common stock on the open market for $104.8.
Current wording
•Executed repurchases of 3.8 shares of common stock on the open market for $521.0.
Previous wording
•We paid $104.7 in dividends to our shareholders. Our dividends declared in 2024 of $1.28 per share represented a 10% increase over the dividends per share declared of $1.16 in 2023.
Current wording
•$111.0 in dividend payments to our shareholders. Our dividends declared in 2025 of $1.40 per share represented a 10% increase over the dividends per share declared of $1.28 in 2024.
Previous wording
Gross profit for 2024 was $1,247.3, reflecting a gross margin of 34.4%. Gross profit for 2023 was $1,107.3, reflecting a gross margin of 33.7%. The increases in gross profit and gross margin were primarily driven by higher revenue, including pricing actions, described above in the section titled"Revenue", partially offset by increases in material and labor costs, as discussed above in the section titled"Global Macroeconomic Conditions".
Current wording
Gross profit for 2025 was $1,392.4, reflecting a gross margin of 35.4%. Gross profit for 2024 was $1,249.4, reflecting a gross margin of 34.4%. The increases in gross profit and gross margin were primarily driven by benefits from pricing actions and volume growth, net savings from productivity and sourcing initiatives and favorable foreign currency translation, partially offset by unfavorable sales mix.
Previous wording
Sales and marketing expenses increased $31.7 for the year ended December 31, 2024, primarily driven by the additions of kSARIA and Svanehøj, as well as higher personnel and other selling and marketing-related costs to support higher sales activity. The increase was partially offset by the divestiture of the Wolverine business.
Current wording
Sales and marketing expenses increased $23.0 for the year ended December 31, 2025, primarily driven by higher personnel, commissions, and other selling and marketing-related costs to support higher sales activity, as well as increased intangible amortization expenses.
Previous wording
Gain on sale of businesses includes $47.8 related to our July 2024 sale of the Wolverine business which was previously held within our MT segment. The 2023 loss on sale of businesses includes a $15.3 loss due to the divestiture of our Matrix business, partially offset by a gain on sale of a product line, both previously held within our CCT segment.
Current wording
Gain on sale of businesses includes $47.8 related to our July 2024 sale of the Wolverine business which was previously held within our MT segment.
Previous wording
The lower effective tax rate in 2024 compared to 2023 primarily resulted from the Company recording a tax benefit of $6.7 from valuation allowance reversals on U.S. state deferred tax assets and a $5.7 tax benefit of U.S. tax on foreign earnings in 2024. ITT recorded a deferred tax asset of $29.1 on the $138.4 capital loss realized on the Wolverine divestiture. As the Company does not currently anticipate having capital gains sufficient to utilize the capital loss, a full valuation allowance was recorded against the deferred tax asset. The higher rate in 2023 was also due to expense of $14.2 relating to a tax audit in Italy covering tax years 2016-2022. The 2023 expense includes $6.8 of U.S. tax on foreign earnings. These tax expenses were offset by $16.1 from valuation allowance reversals on deferred tax assets in Germany. ITT also recognized tax benefits of $4.9 from the filing of an amended 2017 consolidated federal tax return in 2023.
Current wording
The higher effective tax rate in 2025 compared to 2024 primarily resulted from the jurisdictional mix of earnings and was driven, in part, by losses generated in entities subject to a valuation allowance. In addition, the company recorded a $4.9 tax expense of U.S. tax on foreign earnings in 2025. The lower rate in 2024 was also due to the company recording a benefit of $6.7 from valuation allowance reversals on U.S. state deferred tax assets and a $5.7 tax benefit of U.S. tax on foreign earnings in 2024.
Previous wording
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the Inflation Reduction Act) into law. The Inflation Reduction Act includes a new corporate alternative minimum tax (the Corporate AMT) of 15% on the adjusted financial statement income (AFSI) of corporations with an average AFSI exceeding $1.0 billion over a three-year period. The Corporate AMT was effective for the Company beginning in 2023. Given the AFSI threshold, the Corporate AMT was not applicable to the Company in 2024, but the Corporate AMT may have potential impacts on our future U.S. tax expense, cash taxes and effective tax rate. Additionally, the Inflation Reduction Act imposes a 1% excise tax on the fair market value of net stock repurchases made after December 31, 2022. The impact of this provision was not material in 2024 and future impacts will be dependent on the extent of share repurchases made in future periods.
Current wording
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the Inflation Reduction Act) into law. The Inflation Reduction Act includes a new corporate alternative minimum tax (the Corporate AMT) of 15% on the adjusted financial statement income (the "AFSI") of corporations with an average AFSI exceeding $1.0 billion over a three-year period. The Corporate AMT was effective for the Company beginning in 2023. Given the AFSI threshold, the Corporate AMT was not applicable to the Company in 2025, but the Corporate AMT may have potential impacts on our future U.S. tax expense, cash taxes and effective tax rate. Additionally, the Inflation Reduction Act imposes a 1% excise tax on the fair market value of net stock repurchases made after December 31, 2022. The excise tax on stock repurchases has been appropriately recognized and disclosed in the accompanying consolidated financial statements in this Form 10-K.
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. Net cash distributions from foreign countries to the U.S. during the years ended December 31, 2024 and 2023 were $230.4 and $357.5, respectively. The timing and amount of any additional future distributions remains under evaluation 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. Net cash distributions from foreign countries to the U.S. during the years ended December 31, 2025 and 2024 were $577.5 and $230.4, respectively. The timing and amount of any additional future distributions remains under evaluation based on our jurisdictional cash needs.
Previous wording
As of December 31, 2024, we have access to short- and long-term funding sources. These include access to the capital markets through a commercial paper program, as well as $700 of available borrowing capacity under our 2021 Revolving Credit Agreement (defined below), which may potentially be expanded to $1,050 under the agreement. In addition, we have market access to secure longer-term funding, if needed. Our commercial paper program is supported by our 2021 Revolving Credit Agreement and our policy is to maintain unused committed bank lines of credit in an amount greater than outstanding commercial paper balances. These sources of capital are described further below.
Current wording
As of December 31, 2025, we have access to short- and long-term funding sources. These include access to the capital markets through a commercial paper program, as well as $1,100 of available borrowing capacity under our 2025 Revolving Credit Agreement (defined below), which may potentially be expanded to $1,650 under the agreement. In addition, we have market access to secure longer-term funding, if needed. Our commercial paper program is supported by our 2025 Revolving Credit Agreement and our policy is to maintain unused committed bank lines of credit in an amount greater than outstanding commercial paper balances. These sources of capital are described further below and within Note 15, Debt.
Previous wording
When available and economically feasible, we have accessed the commercial paper market through programs in place in the U.S. and Europe to supplement cash flows generated internally and to provide additional short-term funding.
Current wording
When available and economically feasible, we have accessed the commercial paper market through programs in place in the U.S. and Europe to supplement cash flows generated internally and to provide additional short-term funding. The following table presents our outstanding commercial paper borrowings.
Previous wording
All outstanding commercial paper for both periods had maturity terms of less than three months from the date of issuance. Our average daily outstanding commercial paper balance for the years ended 2024 and 2023 was $338.5 and $366.9, respectively, and the maximum outstanding commercial paper during each of those respective years was $455.0 and $669.9.
Current wording
In the year ended December 31, 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 (defined below) were used to refresh the U.S. commercial paper capacity and for other general corporate purposes. All outstanding commercial paper for both periods had maturity terms of less than three months from the date of issuance. Our average daily outstanding commercial paper balance for the years ended 2025 and 2024 was $525.5 and $338.5, respectively, and the maximum outstanding commercial paper during each of those respective years was $1,113.5 and $455.0.
Previous wording
On September 12, 2024, the Company entered into a credit agreement (the kSARIA Credit Agreement) among the Company, as borrower, 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 September 12, 2024, the Company entered into a credit agreement (the kSARIA Credit Agreement) among the Company, as borrower, each lender from time to time party thereto, and U.S. Bank National Association, as the administrative agent, sole lead arranger and sole bookrunner. 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 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.
Previous wording
In November 2024, Moody's upgraded ITT's senior unsecured rating, from Baa2 to Baa1. The upgraded ratings reflect ITT's conservative capital structure, product and geographic diversification, installed base, sizeable aftermarket revenue, solid EBITDA margins, and good financial flexibility. There were no other changes to our credit ratings during 2024. Please refer to the rating agency websites and press releases for more information.
Current wording
In November 2024, Moody's upgraded ITT's senior unsecured rating, from Baa2 to Baa1. The upgraded ratings reflect ITT's conservative capital structure, product and geographic diversification, installed base, sizable aftermarket revenue, solid EBITDA margins, and good financial flexibility. In December 2025, the rating agencies, Standard and Poor's, Moody’s Investors Service, and Fitch Ratings reaffirmed ITT’s investment‑grade credit ratings with a stable outlook. Please refer to the rating agency websites and press releases for more information.
Previous wording
The increase in net cash from operating activities of $24.6 was primarily driven by higher operating income and favorable net working capital impacts primarily from focused inventory management and timing of accounts receivable collections, offset by higher compensation payments in the current year.
Current wording
The increase in net cash from operating activities of $106.2 was primarily due to higher customer advance payments, favorable timing of accounts receivable collections, and lower compensation payments in the current year.
Previous wording
The increase in net cash used in investing activities of $636.9 was primarily driven by the acquisitions of kSARIA and Svanehøj, offset by the proceeds from the divestiture of the Wolverine business. Refer to Note 21, Acquisitions, Investments, and Divestitures, for further information.
Current wording
The decrease in net cash used in investing activities of $698.1 was primarily driven by the prior M&A activity related to the acquisitions of kSARIA and Svanehøj, partially offset by the divestiture of the Wolverine business, which resulted in a net outflow of $686.9. Refer to Note 22, Acquisitions, Investments, and Divestitures, for further information. Capital expenditures, while exceeding $120 for the second year in a row, decreased $2.6 during 2025 and we received government incentives of $7.9 for our capital investment projects in Italy.
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, a number of 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. Aggregate dividends declared in 2024 were $104.8, compared to $95.9 in 2023, reflecting annual per share amounts of $1.276 and $1.160, respectively. In the first quarter of 2025, we declared a quarterly dividend of $0.351 per share for shareholders of record on March 6, 2025, which will be paid on March 31, 2025.
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, a number of 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. Aggregate dividends declared in 2025 were $111.0, compared to $104.8 in 2024, reflecting annual per share amounts of $1.404 and $1.276, respectively. In the first quarter of 2026, we declared a quarterly dividend of $0.386 per share for shareholders of record on March 6, 2026, which will be paid on April 6, 2026.
Previous wording
On October 4, 2023, the Board of Directors approved an indefinite term $1,000 open-market share repurchase program (the 2023 Plan). There was $975.0 of remaining capacity left under the 2023 Plan as of December 31, 2024. In February 2025, the Company repurchased 0.2 shares for $25.6 under the 2023 Plan.
Current wording
On October 4, 2023, the Board of Directors approved an indefinite term $1,000 open-market share repurchase program (the 2023 Plan). There is $455.0 of remaining capacity left under the 2023 Plan as of December 31, 2025. During the years ended December 31, 2025 and 2024, we spent $525.0 and $104.0, respectively, on open-market share repurchases under the 2023 plan. See Note 18, Capital Stock for more information.
Previous wording
Our non-U.S. pension plans, which are typically not funded due to local regulations, had a decrease in projected benefit obligation of$12.0 during 2024, primarily due to foreign currency impacts, the settlement of a plan in connection with the divestiture of Wolverine and a higher discount rate. Our other employee-related benefit plans are generally unfunded plans as well. The projected benefit obligation of these plans declined by $8.2 during 2024 due to an increase in the discount rate.
Current wording
Our non-U.S. pension plans, which are typically not funded due to local regulations, had a decrease in projected benefit obligation of$0.3 during 2025, primarily due to an actuarial gain of $6.8 and benefits paid of $3.7, offset by foreign currency translation of $7.8. Our other employee-related benefit plans are generally unfunded plans as well. The projected benefit obligation of these plans increased by $0.6 during 2025 due to interest costs of $2.6 and an actuarial loss of $1.7, offset by benefits paid of $3.9.
Previous wording
Contributions to our U.S. and non-U.S. pension and other postretirement plans were $10.5 and $9.5 during 2024 and 2023, respectively, which were used to fund participant benefits. We currently estimate 2025 contributions to our pension and other postretirement benefits plans of approximately $10.
Current wording
Contributions to our U.S. and non-U.S. pension and other postretirement plans were $9.0 and $10.5 during 2025 and 2024, respectively, which were used to fund participant benefits. We currently estimate 2026 contributions to our pension and other postretirement benefits plans of approximately $10.
Previous wording
In addition to the amounts presented in the table above, we have recorded liabilities for uncertain tax positions of $6.5 in our Consolidated Balance Sheet as of December 31, 2024. This amount has been excluded from the contractual obligations table due to an inability to reasonably estimate the timing of payments in individual years.
Current wording
In addition to the amounts presented in the table above, we have recorded liabilities for uncertain tax positions of $9.5 in our Consolidated Balance Sheet as of December 31, 2025. This amount has been excluded from the contractual obligations table due to an inability to reasonably estimate the timing of payments in individual years.
Previous wording
(b)Represents the projected timing of payments for benefits earned to date and the expectation that certain future service will be earned by current active employees for our pension and other employee-related benefit plans. See Note 15, Postretirement Benefit Plans, for additional financial information related to our postretirement obligations.
Current wording
(b)Represents the projected timing of payments for benefits earned to date and the expectation that certain future service will be earned by current active employees for our pension and other employee-related benefit plans. See Note 16, Postretirement Benefit Plans, to the Consolidated Financial Statements for additional financial information related to our postretirement obligations.
Previous wording
(c)Other long-term obligations include amounts recorded in our Consolidated Balance Sheet as of December 31, 2024, including estimated environmental payments and employee compensation agreements. We estimate based on historical experience that we will spend, on average, approximately $5 per year on environmental investigation and remediation. A portion of our environmental investigation and remediation costs are legally mandated through various orders and agreements with state and federal oversight agencies. As of December 31, 2024, our recorded environmental liability was $54.9. See Note 18, Commitments and Contingencies, to the Consolidated Financial Statements for further information.
Current wording
(c)Other long-term obligations include amounts recorded in our Consolidated Balance Sheet as of December 31, 2025, including estimated environmental payments and employee compensation agreements. We estimate based on historical experience that we will spend, on average, approximately $4 to 8 per year on environmental investigation and remediation. A portion of our environmental investigation and remediation costs are legally mandated through various orders and agreements with state and federal oversight agencies. As of December 31, 2025, our recorded environmental liability was $56.1. See Note 19, Commitments and Contingencies, to the Consolidated Financial Statements for further information.
Previous wording
We had $176.5 of guarantees, letters of credit and similar arrangements outstanding as of December 31, 2024, primarily pertaining to commercial or performance guarantees and insurance matters. We have not recorded any material loss contingencies under these guarantees, letters of credit and similar arrangements as of December 31, 2024 as the likelihood of nonperformance by the underlying obligors is considered remote. From time to time, we may provide certain third-party guarantees that may be affected by various conditions and external factors, some of which could require that payments be made under such guarantees. We do not consider the maximum exposure or current recorded liabilities under our third-party guarantees to be material either individually or in the aggregate. We do not believe such payments would have a material adverse impact on our financial statements.
Current wording
We had $219.1 of guarantees, letters of credit and similar arrangements outstanding as of December 31, 2025, primarily pertaining to commercial or performance guarantees and insurance matters. We have not recorded any material loss contingencies under these guarantees, letters of credit and similar arrangements as of December 31, 2025 as the likelihood of nonperformance by the underlying obligors is considered remote. From time to time, we may provide certain third-party guarantees that may be affected by various conditions and external factors, some of which could require that payments be made under such guarantees. We do not consider the maximum exposure or current recorded liabilities under our third-party guarantees to be material either individually or in the aggregate. We do not believe such payments would have a material adverse impact on our financial statements.
Previous wording
Reconciliations of operating income (loss) to adjusted operating income (loss) for the years ended December 31, 2024 and 2023 are provided below.
Current wording
Reconciliations of operating income to adjusted operating income for the years ended December 31, 2025 and 2024 are provided below.
Previous wording
(c)2024 includes tax expense on distributions of $12.5, tax benefit from valuation allowance impacts of ($6.7), tax benefit on undistributed foreign earnings of ($5.7), tax benefit related to the Micro Mode acquisition of ($2.2), tax expense from tax rate change impacts of $1.6, and other tax expense items totaling $1.0.
Current wording
(d)2024 includes tax expense on distributions of $12.5, tax benefit from valuation allowance impacts of ($6.7), tax benefit on undistributed foreign earnings of ($5.7), tax benefit related to the Micro-Mode acquisition of ($2.2), tax expense from tax rate change impacts of $1.6, and other tax expense items totaling $1.0.
Previous wording
We adjust our liability for uncertain tax positions in light of changing facts and circumstances; however, the ultimate resolution of a tax examination may differ from the amounts recorded in the financial statements for a number of reasons, including the Company’s decision to settle rather than litigate a matter, relevant legal precedent related to similar matters, and the Company’s success in supporting its filing positions with the tax authorities. If our estimate of tax liabilities proves different than the ultimate outcome, such differences will affect the provision for income taxes in the period in which such determination is made.
Current wording
We adjust our liability for uncertain tax positions in light of changing facts and circumstances; however, the ultimate resolution of a tax examination may differ from the amounts recorded in the financial statements for a number of reasons, including the Company’s decision to settle rather than litigate a matter, relevant legal precedent related to similar matters, and the Company’s success in supporting its filing positions with the tax authorities. If our estimate of tax liabilities proves different than the ultimate outcome, such differences will affect the provision for income taxes in the period in which such determination is made. Over the next 12 months, the net amount of the tax liability for unrecognized tax benefits in foreign and domestic jurisdictions is not expected to change by a significant amount.
Previous wording
We are subject to various federal, state, local, and foreign environmental laws and regulations that require environmental assessment or remediation efforts. Accruals for environmental exposures are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. Significant judgment is required to determine both the likelihood of a loss and the estimated amount of loss. Engineering studies, probability techniques, historical experience, and other factors are used to identify and evaluate remediation alternatives and their related costs in estimating our reserve for environmental liabilities. Our environmental reserve of $54.9 at December 31, 2024, represents management’s estimate of undiscounted costs expected to be incurred related to environmental assessment or remediation efforts, including related legal fees, without regard to potential recoveries from insurance companies or other third parties. Our estimated liability is reduced to reflect the participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective share of the relevant costs and that share can be reasonably estimated. Our environmental accruals are reviewed quarterly and adjusted if needed based on progress of investigation and remediation efforts and as additional technical or legal information become available, such as the impact of negotiations with regulators and other potentially responsible parties, settlements, rulings, advice of legal counsel, and other current information.
Current wording
We are subject to various federal, state, local, and foreign environmental laws and regulations that require environmental assessment or remediation efforts. Accruals for environmental exposures are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. Significant judgment is required to determine both the likelihood of a loss and the estimated amount of loss. Engineering studies, probability techniques, historical experience, and other factors are used to identify and evaluate remediation alternatives and their related costs in estimating our reserve for environmental liabilities. Our environmental reserve of $56.1 at December 31, 2025, represents management’s estimate of undiscounted costs expected to be incurred related to environmental assessment or remediation efforts, including related legal fees, without regard to potential recoveries from insurance companies or other third parties. Our estimated liability is reduced to reflect the participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective share of the relevant costs and that share can be reasonably estimated. Our environmental accruals are reviewed quarterly and adjusted if needed based on progress of investigation and remediation efforts and as additional technical or legal information become available, such as the impact of negotiations with regulators and other potentially responsible parties, settlements, rulings, advice of legal counsel, and other current information.
Previous wording
Although it is not possible to predict with certainty the ultimate costs of environmental remediation, the reasonably possible high-end of our estimated environmental liability range at December 31, 2024 was $95.9. See Note 18, Commitments and Contingencies, to the Consolidated Financial Statements for more information.
Current wording
Although it is not possible to predict with certainty the ultimate costs of environmental remediation, the reasonably possible high-end of our estimated environmental liability range at December 31, 2025 was $97.3. See Note 19, Commitments and Contingencies, to the Consolidated Financial Statements for more information.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(c)2025 includes tax expense on distributions of non-U.S. income of $12.6, tax expense on undistributed foreign earnings of $4.9, tax expense from tax rate change impacts of $1.8, and other tax expense special items of $0.8.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The following table presents our outstanding commercial paper borrowings. See Note 14, Debt, for further information.
Previous report — wording carried elsewhere
The kSARIA Credit Agreement has a maturity of three years and provides 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. Total outstanding borrowings under the kSARIA Credit Agreement were $229 as of December 31, 2024. See Note 14, Debt, for further information.
Previous report — wording carried elsewhere
See Note 17, Capital Stock for more information.