DANAHER CORP /DE/

Previous wording

You should read this discussion along with the Company’s MD&A and audited financial statements and Notes thereto as of and for the year ended December 31, 2025, included in the Company’s 2025 Annual Report and the Company’s Consolidated Condensed Financial Statements and related Notes as of and for the three-month period ended March 27, 2026 included in this Quarterly Report on Form 10-Q (“Report”).

Current wording

You should read this discussion along with the Company’s MD&A and audited financial statements and Notes thereto as of and for the year ended December 31, 2025, included in the Company’s 2025 Annual Report and the Company’s Consolidated Condensed Financial Statements and related Notes as of and for the three and six-month periods ended June 26, 2026 included in this Quarterly Report on Form 10-Q (“Report”).

Previous wording

Certain statements included or incorporated by reference in this Report, in other documents we file with or furnish to the Securities and Exchange Commission, in our press releases, webcasts, conference calls, presentations, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of tariff or other trade-related impacts, revenue, expenses, profit, profit margins, asset values, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, customer demand, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof (including our pending acquisition of Masimo Corporation, which is further described in Note 2), divestitures, spin-offs, split-offs, initial public offerings, other securities offerings or other distributions, strategic opportunities, stock repurchases, dividends, executive compensation and potential executive stock sales or purchases; growth, declines and other trends in markets we sell into; future, new or modified laws, regulations, accounting pronouncements or public policy changes; regulatory approvals and the timing and conditionality thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future currency exchange rates and fluctuations in those rates; the potential or anticipated direct or indirect impact of public health crises, climate change, military or geopolitical conflicts or other man-made or natural disasters on our business, results of operations and/or financial condition; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Danaher intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “assume,” “continue,” “should,” “could,” “intend,” “will,” “plan,” “aim,” “expect,” “estimate,” “project,” “target,” “can,” “may,” “possible,” “potential,” “upcoming,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.

Current wording

Certain statements included or incorporated by reference in this Report, in other documents we file with or furnish to the Securities and Exchange Commission, in our press releases, webcasts, conference calls, presentations, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of tariff or other trade-related impacts, revenue, expenses, profit, profit margins, asset values, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, customer demand, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof (including our integration of Masimo and the anticipated benefits of such acquisition, which is further described in Note 2), divestitures, spin-offs, split-offs, initial public offerings, other securities offerings or other distributions, strategic opportunities, stock repurchases, dividends, executive compensation and potential executive stock sales or purchases; growth, declines and other trends in markets we sell into; future, new or modified laws, regulations, accounting pronouncements or public policy changes; regulatory approvals and the timing and conditionality thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future currency exchange rates and fluctuations in those rates; the potential or anticipated direct or indirect impact of public health crises, climate change, military or geopolitical conflicts or other man-made or natural disasters on our business, results of operations and/or financial condition; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Danaher intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “assume,” “continue,” “should,” “could,” “intend,” “will,” “plan,” “aim,” “expect,” “estimate,” “project,” “target,” “can,” “may,” “possible,” “potential,” “upcoming,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.

Previous wording

•Economic, political, geopolitical, legal, compliance, social and business factors, both in the U.S. and outside the U.S., can negatively affect our business and financial statements. For example, the 2025 change in the U.S. administration as well as recent Supreme Court decisions have resulted in policy, regulatory and economic changes, challenges and uncertainty, including with respect to tariffs and healthcare-related topics. In addition, recent escalation of conflict in the Middle East has heightened geopolitical instability and economic uncertainty.

Current wording

•Economic, political, geopolitical, legal, compliance, social and business factors, both in the U.S. and outside the U.S., can negatively affect our business and financial statements. For example, the 2025 change in the U.S. administration as well as recent Supreme Court decisions have resulted in policy, regulatory and economic changes, challenges and uncertainty, including with respect to tariffs and healthcare-related topics. In addition, conflict in the Middle East has heightened geopolitical instability and economic uncertainty.

Previous wording

•The inability to consummate acquisitions at our historical rate and appropriate prices, realize the economic benefits of consummated acquisitions or to make appropriate investments that support our long-term strategy, can negatively impact our business. Our acquisition of businesses (including our pending acquisition of Masimo Corporation), investments, joint ventures and other strategic relationships can also negatively impact our business and financial statements and our indemnification rights may not fully protect us from liabilities related thereto.

Current wording

•The inability to consummate acquisitions at our historical rate and appropriate prices, realize the economic benefits of consummated acquisitions or to make appropriate investments that support our long-term strategy, can negatively impact our business. Our acquisition of businesses (including our recent acquisition of Masimo), investments, joint ventures and other strategic relationships can also negatively impact our business and financial statements and our indemnification rights may not fully protect us from liabilities related thereto.

Previous wording

•From time to time our outstanding debt has increased significantly as a result of acquisitions and other factors, and we expect to incur additional debt. For example, the Company expects to incur debt to finance a portion of the purchase price for our pending acquisition of Masimo Corporation. Our indebtedness may limit our operations and use of cash flow and negatively impact our credit ratings; and failure to comply with our indebtedness-related covenants could adversely affect our business and financial statements.

Current wording

•From time to time our outstanding debt has increased significantly as a result of acquisitions and other factors, and we expect to incur additional debt. For example, the Company incurred debt to finance a portion of the purchase price for our acquisition of Masimo. Our indebtedness may limit our operations and use of cash flow and negatively impact our credit ratings; and failure to comply with our indebtedness-related covenants could adversely affect our business and financial statements.

Previous wording

During the first quarter of 2026, the Company’s overall revenues and core sales increased 3.5% and 0.5%, respectively, compared to the comparable period of 2025. The increase in core sales is due to higher core sales in the Biotechnology and Life Sciences segments that were largely offset by lower core sales in the Diagnostics segment. In the three-month period ended March 27, 2026, the impact of foreign currency increased reported sales by 3.0%. Price changes did not have a significant impact on sales growth on a year-over-year basis during the three-month period ended March 27, 2026 and are reflected as a component of core sales above. For the definitions of “core sales” and “acquisitions” refer to “—Results of Operations” below.

Current wording

During the second quarter of 2026, the Company’s overall revenues and core sales increased 5.5% and 3.0%, respectively, compared to the comparable period of 2025. Core sales excluding respiratory testing increased 4.5% during the second quarter of 2026 compared to the comparable period of 2025. The increase in core sales in the second quarter of 2026 was due to higher core sales in the Life Sciences segment, and to a lesser extent in the Biotechnology and Diagnostics segments. Acquisitions contributed 1.5% to the increase in sales and the impact of foreign currency increased reported sales by 1.0% during the three-month period ended June 26, 2026. For the six-month period ended June 26, 2026, the Company’s overall revenues and core sales increased 4.5% and 2.0%, respectively, compared to the comparable period of 2025. Core sales excluding respiratory testing increased 4.0% during the six-month period ended June 26, 2026 compared to the comparable period of 2025. The increase in core sales was due to higher core sales in the Biotechnology and Life Sciences segments, partially offset by lower core sales in the Diagnostics segment. During the six-month period ended June 26, 2026, acquisitions contributed 0.5% to the increase in sales and the impact of foreign currency increased reported sales by 2.0%. Price decreases of 0.5% negatively impacted sales growth on a year-over-year basis during the three-month period ended June 26, 2026 while price changes did not have a significant impact on sales growth on a year-over-year basis during the six-month period. Price changes are reflected as a component of core sales above. For the definitions of “core sales,” “core sales excluding respiratory testing” and “acquisitions” refer to “—Results of Operations” below.

Previous wording

Geographically, the Company’s sales in the three-month period ended March 27, 2026 in developed markets increased year-over-year by 3% and core sales in developed markets were down slightly as mid-single digit core sales decreases in North America were largely offset by a mid-single digit increase in Western Europe. The decrease in core sales in developed markets was primarily driven by decreases in the Diagnostics and Life Sciences segments, partially offset by increased year-over-year core sales in the Biotechnology segment. For the same period, sales in high-growth markets increased year-over-year by 6% and core sales were up low-single digits driven primarily by a mid-single digit increase in core revenue in China. In the high-growth markets, the Biotechnology and Life Sciences segments’ increase in demand was partially offset by core sales declines in the Diagnostics segment. High-growth markets represented approximately 27% of the Company’s total sales in the first quarter of 2026. For additional information regarding the Company’s sales by geographical region during the three-month periods ended March 27, 2026 and March 28, 2025, refer to Note 4 to the accompanying Consolidated Condensed Financial Statements.

Current wording

Geographically, the Company’s sales in the three-month period ended June 26, 2026 in developed markets increased year-over-year by 2% and core sales in developed markets were down slightly due to a low-single digit core sales decrease in Western Europe and a slight decline in core sales in North America. The decrease in core sales in developed markets was primarily driven by the Biotechnology segment due to difficult prior year comparisons and the Diagnostics segment due to lower respiratory sales. For the same period, sales in high-growth markets increased year-over-year by 15% and core sales were up more than 10% driven by increases across all three segments and across all major high-growth market regions. High-growth markets represented approximately 31% of the Company’s total sales in the second quarter of 2026. For additional information regarding the Company’s sales by geographical region during the three and six-month periods ended June 26, 2026 and June 27, 2025, refer to Note 4 to the accompanying Consolidated Condensed Financial Statements.

Previous wording

Currency exchange rates increased reported sales by approximately 3.0% for the three-month period ended March 27, 2026, compared to the comparable period of 2025, primarily due to the exchange rates of the U.S. dollar compared to the euro and other major currencies. In future periods, strengthening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of March 27, 2026 would adversely impact the Company’s sales and results of operations on an overall basis, and weakening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of March 27, 2026 would positively impact the Company’s sales and results of operations. In addition to the translational exchange rate risk to sales, the Company also faces transactional exchange rate risk from transactions with customers in countries outside the U.S. and from intercompany transactions between affiliates. Transactional exchange rate risk (and any resulting gains or losses) arises from the purchase and sale of goods and services in currencies other than the Company’s functional currency or the functional currency of its applicable subsidiary.

Current wording

Currency exchange rates increased reported sales by approximately 1.0% and 2.0%, respectively, for the three and six-month periods ended June 26, 2026, compared to the comparable periods of 2025, primarily due to the exchange rates of the U.S. dollar compared to the euro and other major currencies. In future periods, strengthening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of June 26, 2026 would adversely impact the Company’s sales and results of operations on an overall basis, and weakening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of June 26, 2026 would positively impact the Company’s sales and results of operations. In addition to the translational exchange rate risk to sales, the Company also faces transactional exchange rate risk from transactions with customers in countries outside the U.S. and from intercompany transactions between affiliates. Transactional exchange rate risk (and any resulting gains or losses) arises from the purchase and sale of goods and services in currencies other than the Company’s functional currency or the functional currency of its applicable subsidiary.

Previous wording

Danaher operates a diversified global supply chain and sources parts and materials globally. In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”), which the U.S. administration relied on to impose certain tariffs, does not authorize the administration to impose tariffs. On March 4, 2026, the U.S. Court of International Trade ordered the U.S. Customs and Border Protection (“CBP”) to process refunds of the IEEPA tariffs, although the Court immediately suspended the order while the CBP determines a refund process. The IEEPA tariffs remain subject to ongoing litigation between the administration and other parties. In response to the U.S. Supreme Court ruling mentioned above, the administration announced plans to implement new tariffs under alternative statutory authority. The full impact of the U.S. Supreme Court’s ruling and the administration’s response, including the timing and extent of any refunds and the impact of the new tariffs, remain uncertain. The tariffs enacted in 2025 and in the first quarter of 2026 did not have a material impact on the Company’s business or financial statements in the periods presented.

Current wording

Danaher operates a diversified global supply chain and sources parts and materials globally. In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”), which the U.S. administration relied on to impose certain tariffs, does not authorize the imposition of such tariffs. On March 4, 2026, the U.S. Court of International Trade ordered the U.S. Customs and Border Protection (“CBP”) to process refunds of the IEEPA tariffs, and the CBP has begun accepting and processing applications for refunds on certain IEEPA tariffs. The IEEPA tariffs remain subject to ongoing litigation between the administration and other parties. In response to the U.S. Supreme Court ruling mentioned above, the administration implemented new tariffs under alternative statutory authority. The Company intends to pursue any refunds to which it is entitled. To the extent the Company recovers refunds in periods subsequent to the second quarter of 2026, the Company will recognize earnings for the refunds, less any amounts due to customers. The full impact of the U.S. Supreme Court’s ruling and the administration’s response, including the timing and extent of refunds and the impact of the new tariffs, remain uncertain. The tariffs enacted in 2025 and in the first half of 2026 and related refunds did not have a material impact on the Company’s business or financial statements in the periods presented.

Previous wording

While the Company did not experience material interruption to its supply chain or operations in the first quarter of 2026 as a result of the conflict in the Middle East, the Company did experience delays and higher logistics costs in the delivery of goods to customers in the region. The conflict has significantly reduced the export of oil and natural gas from the Persian Gulf, creating upward pressure on oil and natural gas prices, and has also disrupted and increased the costs of certain other supplies. Refer to “Part II - Other Information - Item 1A - Risk Factors” for a further discussion of the risks relating to the conflict in the Middle East. To the extent the conflict continues and/or escalates, the negative impacts noted above may continue or increase, the risks referenced above may eventuate and demand for the Company’s products could be adversely affected.

Current wording

While the Company did not experience material interruption to its supply chain or operations in the first half of 2026 as a result of the conflict in the Middle East, the Company did experience delays and higher logistics costs in the delivery of goods to customers in the region. The conflict has significantly reduced the export of oil and natural gas from the Persian Gulf, creating upward pressure on oil and natural gas prices, and has also disrupted and increased the costs of certain other supplies. Refer to “Part II - Other Information - Item 1A - Risk Factors” for a further discussion of the risks relating to the conflict in the Middle East. To the extent the conflict continues and/or escalates, the negative impacts noted above may continue or increase, the risks referenced above may eventuate and demand for the Company’s products could be adversely affected.

Previous wording

Core sales growth (decline) should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting this non-GAAP financial measure provides useful information to investors by helping identify underlying growth trends in Danaher’s business and facilitating comparisons of Danaher’s revenue performance with its performance in prior and future periods and to Danaher’s peers. Management also uses this non-GAAP financial measure to measure the Company’s operating and financial performance and uses core sales growth as one of the performance measures in the Company’s executive short-term cash incentive compensation program. The Company excludes the effect of currency translation from this measure because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestiture-related items because the nature, size, timing and number of acquisitions and divestitures can vary dramatically from period-to-period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult.

Current wording

Core sales growth (decline) and the related measure of core sales excluding respiratory testing (collectively, the “core sales measures”) should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting these non-GAAP financial measures provides useful information to investors by helping identify underlying growth trends in Danaher’s business and facilitating comparisons of Danaher’s revenue performance with its performance in prior and future periods and to Danaher’s peers. Management also uses these measures to assess the Company’s operating and financial performance and uses core sales growth as one of the performance measures in the Company’s executive short-term cash incentive compensation program. The Company excludes the effect of currency translation from these measures because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestiture-related items because the nature, size, timing and number of acquisitions and divestitures can vary dramatically from period-to-period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult. The Company deems acquisition-related transaction costs incurred in a given period to be significant (generally relating to the Company’s larger acquisitions) if it determines that such costs exceed the range of acquisition-related transaction costs typical for Danaher in a given period.

Previous wording

Operating profit margins increased 40 basis points from 22.2% during the three-month period ended March 28, 2025 to 22.6% for the three-month period ended March 27, 2026.

Current wording

Operating profit margins increased 520 basis points from 12.8% during the three-month period ended June 27, 2025 to 18.0% for the three-month period ended June 26, 2026.

Previous wording

First quarter 2026 vs. first quarter 2025 operating profit margin comparisons were favorably impacted by:

Current wording

Second quarter 2026 vs. second quarter 2025 operating profit margin comparisons were favorably impacted by:

Previous wording

First quarter 2026 vs. first quarter 2025 operating profit margin comparisons were unfavorably impacted by:

Current wording

Second quarter 2026 vs. second quarter 2025 operating profit margin comparisons were unfavorably impacted by:

Previous wording

•Higher first quarter 2026 core sales and improvements in leverage in the Company’s operational and administrative cost structure, net of the impact of product mix - 40 basis points

Current wording

•Higher first half of 2026 core sales and improvements in leverage in the Company’s operational and administrative cost structure, net of the impact of product mix - 15 basis points

Previous wording

Price increases in the segment contributed 2.0% to sales growth on a year-over-year basis during the three-month period ended March 27, 2026 and are reflected as a component of core sales above.

Current wording

Price increases in the segment contributed 1.5% to sales growth on a year-over-year basis in both periods and are reflected as a component of core sales above.

Previous wording

Total segment sales increased 11.5% during the three-month period. The increase in segment sales in the three-month period was led by increased core sales, and to a lesser extent by the impact of currency exchange rates. The year-over-year increase in total segment core sales was led by increased sales of consumables, partially offset by lower equipment sales. Geographically, the increase in core sales was led by Western Europe and China, partially offset by North America.

Current wording

Total segment sales increased 4.0% and 7.5% during the three and six-month periods, respectively. The increase in segment sales in both the three and six-month periods was led by increased core sales, and to a lesser extent by the impact of currency exchange rates. In the three-month period ended June 26, 2026, the year-over-year increase in total segment core sales was led by increased sales of consumables and to a lesser extent, higher equipment sales. The year-over-year increase in total segment core sales in the six-month period ended June 26, 2026 was led by increased sales of consumables, partially offset by lower equipment sales. Geographically, the increase in core sales in the three-month period ended June 26, 2026 was led by China, partially offset by Western Europe and North America. The decrease in core sales in developed markets was primarily driven by difficult prior year comparisons. The increase in core sales in the six-month period ended June 26, 2026 was led by China and Western Europe, partially offset by North America.

Previous wording

Amortization of intangible assets as a percentage of sales decreased during the three-month period ended March 27, 2026 as compared to the comparable period of 2025, primarily as a result of the increase in sales.

Current wording

Amortization of intangible assets as a percentage of sales decreased during both the three and six-month periods ended June 26, 2026 as compared to the comparable periods of 2025, primarily as a result of the increase in sales.

Previous wording

Price changes in the segment did not have a significant impact on sales growth on a year-over-year basis during the three-month period ended March 27, 2026 and are reflected as a component of core sales above.

Current wording

Price increases did not have a significant impact on sales growth on a year-over-year basis during both the three and six-month periods ended June 26, 2026 and are reflected as a component of core sales above.

Previous wording

Total segment sales increased 3.5% during the three-month period ended March 27, 2026. The sales increase was primarily driven by currency exchange rates, and to a lesser extent an increase in core sales. The year-over-year increase in total segment core sales in the three-month period ended March 27, 2026 was driven by an increase in consumables sales, partially offset by decreased demand for equipment. Demand from academic and government customers was muted in the first quarter, with some areas of improving activity. The Company continues to see a gradual improvement in large pharma and biopharma customers. Geographically, the core sales increase was led by China.

Current wording

Total segment sales increased 5.5% and 4.5%, respectively, during the three and six-month periods ended June 26, 2026. The sales increase in both periods was primarily driven by increased core sales, and to a lesser extent currency exchange rates in the six-month period. The year-over-year increase in total segment core sales in both the three and six-month periods ended June 26, 2026 was driven by an increase in consumables sales and to a lesser extent higher demand for equipment. Over the first half of 2026, demand from applied, pharmaceutical, biopharmaceutical and biotechnology customers continued to strengthen and demand from academic and government customers improved modestly, but remains muted overall. Geographically, the core sales increase was led by the high-growth markets in both periods.

Previous wording

The year-over-year increase in segment core sales in the three-month period was led by the filtration business and the life sciences consumables businesses. The year-over-year core sales increase in the filtration business was driven by increased demand in the microelectronic end-market, primarily in China. In the life sciences consumables businesses the year-over-year core sales increase was primarily driven by increased demand for plasmids products, partially offset by lower demand for gene reading and gene writing and editing products. In the life science instruments businesses, core sales decreased year-over-year as lower equipment demand more than offset increased demand for consumables, driven by the microscopy and mass spectrometry businesses.

Current wording

The year-over-year increase in segment core sales in both the three and six-month periods was led by the filtration business and to a lesser extent, the life sciences instruments and life sciences consumables businesses. The year-over-year core sales increase in the filtration business in both periods was driven by higher demand for microelectronic and energy products. In the three-month period ended June 26, 2026, the increase in core sales in the life science instruments businesses was driven by higher demand for consumables in the flow cytometry and lab automation solutions business and mass spectrometry businesses and increased demand for equipment in the microscopy and mass spectrometry businesses. The increase in core sales in the life science instruments businesses in the six-month period ended June 26, 2026 was driven by increased demand for consumables, partially offset by lower equipment demand.

Previous wording

•Higher first quarter 2026 core sales, net of the impact of changes in leverage from the Company’s operations and administrative cost structure and the impact of currency exchange rates - 140 basis points

Current wording

•Higher second quarter 2026 core sales, net of the impact of product mix and the impact of changes in leverage from the Company’s operations and administrative cost structure - 210 basis points

Previous wording

Price decreases in the segment of 2.0%, attributable to the volume-based procurement program in China and the impact of sales promotions, negatively impacted the year-over-year change in sales during the three-month period ended March 27, 2026 and are reflected as a component of core sales above.

Current wording

Price decreases in the segment of 1.5% in both the three and six-month periods ended June 26, 2026, primarily attributable to the volume-based procurement program in China and the impact of sales promotions in the six-month period ended June 26, 2026, negatively impacted the year-over-year change in sales and are reflected as a component of core sales above.

Previous wording

Total segment sales decreased 1.5% during the three-month period primarily as a result of decreased core sales, partially offset by the impact of currency exchange rates. The decrease in segment core sales was primarily driven by decreased year-over-year demand for respiratory tests in the molecular diagnostics business, partially offset by increased demand in the clinical diagnostics businesses. Geographically, the core sales decrease was led by North America and China. The core sales decrease in China was partially attributable to the pricing impact of China’s volume-based procurement program and healthcare reimbursement changes.

Current wording

Total segment sales increased 7.0% and 2.5%, respectively, during the three and six-month periods ended June 26, 2026 primarily as a result of the Masimo Acquisition. In the three-month period ended June 26, 2026, core sales growth and the impact of currency exchange rates also contributed to the increase in segment sales. In the three-month period ended June 26, 2026, increased demand in the clinical diagnostics businesses more than offset decreased demand for respiratory tests in the molecular diagnostics business. Core sales excluding respiratory testing increased 5.0% during the three-month period ended June 26, 2026. During the six-month period ended June 26, 2026, segment sales increased as result of the Masimo Acquisition and the impact of currency exchange rates, partially offset by decreased core sales. The decrease in segment core sales in the six-month period ended June 26, 2026 was primarily driven by decreased year-over-year demand for respiratory tests in the molecular diagnostics business, partially offset by increased demand in the clinical diagnostics businesses. Core sales excluding respiratory testing increased 4.0% during thesix-month period ended June 26, 2026. Geographically, the core sales increase in the three-month period ended June 26, 2026 was led by North America, Middle East and Western Europe, partially offset by declines in China. Geographically, the core sales decrease in the six-month period ended June 26, 2026 was led by China, North America and Western Europe, partially offset by the Middle East. The core sales decrease in China in both periods was partially attributable to the pricing impact of China’s volume-based procurement program and healthcare reimbursement changes, which has moderated as the Company began to move beyond the most significant year-over-year impacts of these changes that began in late 2024.

Previous wording

During the three-month period ended March 27, 2026, core sales in the molecular diagnostics business declined year-over-year as increased core sales of non-respiratory tests were more than offset by decreased core sales of respiratory tests. The decreased demand for respiratory tests was driven primarily by a less severe respiratory season in the first quarter of 2026 compared to the comparable period of 2025. The relative severity of the upcoming respiratory season and the timing of customer purchases in the first quarter of 2026 in preparation of such respiratory season could adversely impact demand for such tests over the remainder of 2026. In the segment’s clinical diagnostics businesses core sales increased year-over-year in the first quarter of 2026, led by the clinical lab business, and to a lesser extent by the pathology diagnostics business. In the clinical lab businesses, increased year-over-year core sales outside of China, led by North America, more than offset core sales declines in China in the three-month period.

Current wording

During both the three and six-month periods ended June 26, 2026, core sales in the molecular diagnostics business declined year-over-year as increased core sales of non-respiratory tests were more than offset by decreased core sales of respiratory tests. The decreased demand for respiratory tests was driven primarily by a less severe respiratory season in the first half of 2026 compared to the comparable period of 2025. The relative severity of the upcoming respiratory season and customer purchases in the first half of 2026 in preparation for such respiratory season could adversely impact demand for such tests over the remainder of 2026. In the segment’s clinical diagnostics businesses, core sales increased year-over-year in both the three and six-month periods, led by the clinical lab business, and to a lesser extent by the acute care diagnostics and pathology diagnostics businesses. In the clinical lab businesses, increased year-over-year core sales in North America and in the high growth markets outside of China, more than offset core sales declines in China in the three and six-month periods.

Previous wording

Operating profit margin decreased 140 basis points during the three-month period ended March 27, 2026 as compared to the comparable period of 2025. The following factors unfavorably impacted year-over-year operating profit margin:

Current wording

Operating profit margin decreased 710 basis points during the three-month period ended June 26, 2026 as compared to the comparable period of 2025. The following factors unfavorably impacted year-over-year operating profit margin:

Previous wording

•Lower first quarter 2026 core sales and the impact of product mix, net of improvements in leverage in the segment’s operational and administrative cost structure - 75 basis points

Current wording

•Lower first half of 2026 core sales and the impact of product mix, net of improvements in leverage in the Company’s operational and administrative cost structure - 125 basis points

Previous wording

Cost of sales increased year-over-year during the three-month period ended March 27, 2026 as compared to the comparable period in 2025. The increase was primarily due to the impact of higher year-over-year sales volumes and currency exchange rates. These increases were partially offset by a $15 million impairment charge related to a facility in the Biotechnology segment recorded in 2025.

Current wording

Cost of sales increased year-over-year during both the three and six-month periods ended June 26, 2026 as compared to the comparable periods in 2025. The increase was primarily due to the impact of higher year-over-year sales volumes, the impact of recently acquired businesses and a $46 million acquisition-related charge associated with the fair value adjustment to inventory recorded in connection with the Masimo Acquisition in the second quarter of 2026. In the six-month period ended June 26, 2026, these increases were partially offset by a $15 million impairment charge related to a facility in the Biotechnology segment recorded in 2025.

Previous wording

Year-over-year gross profit margin decreased during the three-month period ended March 27, 2026 as compared to the comparable period in 2025 primarily due to product mix, the impact of currency exchange rates and tariff costs, partially offset by the impact of continued productivity improvement initiatives and higher year-over-year sales volumes. Gross margin was also impacted by the facility impairment recorded in 2025, referenced above.

Current wording

Year-over-year gross profit margin decreased during both the three and six-month periods ended June 26, 2026 as compared to the comparable periods in 2025 primarily due to the impact of product mix and the fair value adjustment to inventory in 2026, referenced above, partially offset by the facility impairment recorded in 2025, referenced above in the six-month period.

Previous wording

R&D expenses (consisting principally of internal and contract engineering personnel costs) as a percentage of sales declined slightly during the three-month period ended March 27, 2026 as compared to the comparable period of 2025.

Current wording

R&D expenses (consisting principally of internal and contract engineering personnel costs) as a percentage of sales decreased slightly during both the three and six-month periods ended June 26, 2026 as compared to the comparable periods of 2025, primarily as a result of the increase in sales.

Previous wording

For a description of the Company’s other income (expense), net during the three-month periods ended March 27, 2026 and March 28, 2025, refer to Note 7 to the accompanying Consolidated Condensed Financial Statements.

Current wording

For a description of the Company’s other income (expense), net during the three and six-month periods ended June 26, 2026 and June 27, 2025, refer to Note 7 to the accompanying Consolidated Condensed Financial Statements.

Previous wording

Interest income of $27 million for the three-month period ended March 27, 2026 was $21 million higher than the comparable period of 2025, due primarily to higher average cash balances in 2026 compared to 2025.

Current wording

Interest income of $61 million and $88 million for the three and six-month periods ended June 26, 2026, respectively, was $53 million higher and $74 million higher than the comparable periods of 2025, due primarily to higher average cash balances in 2026 compared to 2025.

Previous wording

For the three-month period ended March 27, 2026, there was no net discrete tax impact, as the release of reserves for uncertain tax positions due to the expiration of statutes of limitations was offset by charges related to changes in estimates associated with prior period uncertain tax positions.

Current wording

For the three-month period ended June 26, 2026, net discrete tax charges of $21 million increased the effective tax rate by 1.9% and related primarily to changes in estimates associated with prior period uncertain tax positions, partially offset by benefits from the release of reserves for uncertain tax positions resulting from audit settlements.

Previous wording

For the three-month period ended March 28, 2025, net discrete tax benefits of $10 million reduced the effective tax rate by 0.9% and related primarily to changes in estimates of prior year tax filing positions, release of reserves for uncertain tax positions due to the expiration of statutes of limitations and excess tax benefits from stock-based compensation, net of charges related to changes in estimates associated with prior period uncertain tax positions.

Current wording

For the six-month period ended June 26, 2026, net discrete tax charges of $21 million increased the effective tax rate by 0.9% and related primarily to changes in estimates associated with prior period uncertain tax positions, partially offset by benefits from the release of reserves for uncertain tax positions resulting from audit settlements and expiration of statutes of limitations.

Previous wording

The Company and its subsidiaries are routinely examined by various U.S. and non-U.S. taxing authorities. The IRS has completed substantially all of the examinations of the Company’s federal income tax returns through 2015 and is currently examining certain of the Company’s federal income tax returns for 2016 through 2022. In addition, the Company has subsidiaries in Canada, China, Denmark, France, Germany, India, Italy, Switzerland, the United Kingdom and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2024.

Current wording

The Company and its subsidiaries are routinely examined by various U.S. and non-U.S. taxing authorities. The IRS has completed substantially all of the examinations of the Company’s federal income tax returns through 2015 and is currently examining certain of the Company’s federal income tax returns for 2016 through 2022. In addition, the Company has subsidiaries in Canada, China, Denmark, France, Germany, India, Singapore, Spain and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2024.

Previous wording

Comprehensive income decreased by approximately $1.9 billion for the three-month period ended March 27, 2026 as compared to the comparable period of 2025. For the three-month period ended March 27, 2026, the decrease in comprehensive income was primarily driven by increased losses from foreign currency translation adjustments and decreased gains from cash flow hedge adjustments, partially offset by higher net earnings. The Company recorded foreign currency translation losses of $394 million and gains of approximately $1.4 billion for the three-month periods ended March 27, 2026 and March 28, 2025, respectively. The foreign currency translation losses in the three-month period ended March 27, 2026 were primarily driven by the change in the exchange rates between the U.S. dollar, Swedish krona and the euro. Foreign currency translation adjustments reflect the gain or loss resulting from the impact of the change in currency exchange rates on the Company’s foreign operations as they are translated to the Company’s reporting currency, the U.S. dollar. The Company recorded gains of $7 million and $156 million from cash flow hedge adjustments related to the Company’s cross-currency swap derivative contracts for the three-month periods ended March 27, 2026 and March 28, 2025, respectively.

Current wording

Comprehensive income decreased by $930 million and approximately $2.8 billion for the three and six-month periods ended June 26, 2026, respectively, as compared to the comparable periods of 2025. For the three and six-month periods ended June 26, 2026, the decrease in comprehensive income was primarily driven by increased losses from foreign currency translation adjustments and cash flow hedge adjustments, partially offset by higher net earnings. The Company recorded foreign currency translation losses of $149 million and gains of approximately $1.0 billion for the three-month periods ended June 26, 2026 and June 27, 2025, respectively. The Company recorded foreign currency translation losses of $543 million and gains of approximately $2.5 billion for the six-month periods ended June 26, 2026 and June 27, 2025, respectively. The foreign currency translation losses in both the three and six-month periods ended June 26, 2026 were primarily driven by the change in the exchange rates between the U.S. dollar, Swedish krona and the euro. Foreign currency translation adjustments reflect the gain or loss resulting from the impact of the change in currency exchange rates on the Company’s foreign operations as they are translated to the Company’s reporting currency, the U.S. dollar. The Company recorded losses of $53 million and $46 million from cash flow hedge adjustments related to the Company’s cross-currency swap derivative contracts for the three and six-month periods ended June 26, 2026, respectively, as compared to gains of $13 million and $169 million for the comparable periods of 2025.

Previous wording

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and believes that its operating cash flow, cash on hand and other sources of liquidity will be sufficient to allow it to continue investing in existing businesses (including capital expenditures), consummating strategic acquisitions and investments (including the Company’s pending acquisition of Masimo, which is further described in Note 2), paying interest and servicing debt, paying dividends and funding restructuring activities, as well as to repurchase common stock when deemed appropriate and manage its capital structure on a short-term and long-term basis.

Current wording

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and believes that its operating cash flow, cash on hand and other sources of liquidity will be sufficient to allow it to continue investing in existing businesses (including capital expenditures), consummating strategic acquisitions and investments, paying interest and servicing debt, paying dividends and funding restructuring activities, as well as to repurchase common stock when deemed appropriate and manage its capital structure on a short-term and long-term basis.

Previous wording

As of March 27, 2026, the Company held approximately $5.7 billion of cash and cash equivalents.

Current wording

As of June 26, 2026, the Company held approximately $4.3 billion of cash and cash equivalents.

Previous wording

Operating cash flows were approximately $1.3 billion for the first three months of 2026, an increase of $23 million, or 2%, as compared to the comparable period of 2025. The year-over-year change in operating cash flows from 2025 to 2026 was primarily attributable to the following factors:

Current wording

Operating cash flows were approximately $2.9 billion for the first six months of 2026, an increase of $219 million, or 8%, as compared to the comparable period of 2025. The year-over-year change in operating cash flows from 2025 to 2026 was primarily attributable to the following factors:

Previous wording

•2026 operating cash flows reflected an increase of $75 million in net earnings for the first three months of 2026 as compared to the comparable period in 2025.

Current wording

•2026 operating cash flows reflected an increase of $390 million in net earnings for the first six months of 2026 as compared to the comparable period in 2025.